HB1035: HB1035 Georgia Homeownership Protection Act of 2026; enact

26 LC 62 0241 House Bill 1035 By: Representatives Scott of the 76th, Davis of the 87th, Schofield of the 63rd, Greene of the 154th, Taylor of the 92nd, and others A BILL TO BE ENTITLED AN ACT To amend Titles 36, 44, 46, and 48 of the Official Code of Geor gia Annotated, relating to1 local government, property, public utilities and public transpo rtation, and revenue and2 taxation, respectively, so as to prohibit local governments fro m adding unpaid service3 charges to the ad valorem tax roll for purposes of tax executio n or tax sale of an owner4 occupied dwelling; to prohibit foreclosure sales based on liens from condominium and5 property owners' associations for unpaid assessments; to provid e for assessments from6 condominium associations and property owners' associations to b e considered unsecured7 debts; to prohibit forced sales of owner occupied dwellings for nontax service charges; to8 prohibit utilities from foreclosing on owner occupied dwellings for unpaid service fees; to9 prohibit tax sales based on nontax service charges; to provide for civil remedies and10 penalties; to make conforming changes; to provide for a short title; to provide for an effective11 date and applicability; to provide for related matters; to repeal conflicting laws; and for other12 purposes.13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:14 H. B. 1035 - 1 - 26 LC 62 0241 SECTION 1.15 This Act shall be known and may be cited as the "Georgia Homeownership Protection Act16 of 2026."17 SECTION 2.18 Title 36 of the Official Code of Georgia Annotated, relating to local government, is amended19 in Chapter 80, relating to general provisions relative to provi sions applicable to counties,20 municipal corporations, and other governmental entities, by adding a new Code section to21 read as follows:22 "36-80-32.23 Counties, municipalities, local authorities, or local boards shall not certify, transfer, or add24 any unpaid water, sewer, storm-water, solid waste, or other service charges of a residential25 account to the ad valorem tax roll for purposes of tax executio n or tax sale of an owner26 occupied dwelling."27 SECTION 3.28 Title 44 of the Official Code of Georgia Annotated, relating to property, is amended in Code29 Section 44-3-80, relating to allocation of and liability for co mmon expenses and how30 assessments made, by revising subsection (g) as follows:31 "(g) A condominium instrument recorded on or after July 1, 2015, shall not authorize the32 board of directors to impose:33 (1) Except as provided in subsections (a) and (b) of this Code section and subsections (a)34 and (b) (c) of Code Section 44-3-109, a special assessment fee per unit in excess of35 one-sixth of the annual common expense assessment for the unit levied pursuant to36 subsection (c) of this Code section per fiscal year without the approval of a majority of37 the unit owners; or38 H. B. 1035 - 2 - 26 LC 62 0241 (2) A monthly maintenance fee increase in excess of the percentage equal to the annual39 rate of inflation as measured by the Consumer Price Index for All Urban Consumers for40 the immediately preceding 12 month period may be disapproved by unit owners holding41 a majority of the association vote."42 SECTION 4.43 Said title is further amended by revising Code Section 44-3-109 , relating to lien for44 assessments, personal obligation of unit owner, notice and fore closure, lapse, right to45 statement of assessments, and effect of failure to furnish statement, as follows:46 "44-3-109.47 (a) All sums lawfully assessed by the association against any unit owner or condominium48 unit, whether for the share of the common expenses pertaining to that condominium unit,49 for fines, or otherwise, and all reasonable charges made to any unit owner or condominium50 unit for materials furnished or services rendered by the association at the owner's request51 to or on behalf of the unit owner or condominium unit, shall, f rom the time the same52 become due and payable, be the personal obligation of the unit owner and constitute a lien53 in favor of the association on the condominium unit, which shal l be unenforceable by54 foreclosure or power of sale against an owner occupied dwelling prior and superior to all55 other liens whatsoever except:56 (1) Liens for ad valorem taxes on the condominium unit;57 (2) The lien of any first priority mortgage covering the unit and the lien of any mortgage58 recorded prior to the recording of the declaration;59 (3) The lessor's lien provided for in Code Section 44-3-86; and60 (4) The lien of any secondary purchase money mortgage covering the unit, provided that61 neither the grantee nor any successor grantee on the mortgage is the seller of the unit.62 H. B. 1035 - 3 - 26 LC 62 0241 (b) The recording of the declaration pursuant to this article shall constitute record notice63 of the existence of the lien, and no further recordation of any claim of lien for assessments64 shall be required.65 (b)(c)(1) To the extent that the condominium instruments provide, the p ersonal66 obligation of the unit owner and the lien for assessments shall also include:67 (1)(A) A late or delinquency charge not in excess of the greater of $10.00 or 10 percent68 of the amount of each assessment or installment thereof not paid when due;69 (2)(B) At a rate not in excess of 10 percent per annum, interest on each assessment or70 installment thereof and any delinquency or late charge pertaining thereto from the date71 the same was first due and payable; and72 (3)(C) The costs of collection, including court costs, the expenses of sale, any expenses73 required for the protection and preservation of the unit, and reasonable attorney's fees74 actually incurred; and75 (4) The fair rental value of the condominium unit from the time of the institution of an76 action until the sale of the condominium at foreclosure or until the judgment rendered in77 the action is otherwise satisfied.78 (2) Such assessments shall only be collectable as an unsecured debt. No lien created79 pursuant to this Code section may be foreclosed or enforced by power of sale against an80 owner occupied dwelling.81 (c)(d) Not less than 30 days after notice is sent by certified mail or statutory overnight82 delivery, return receipt requested, to the unit owner both at the address of the unit and at83 any other address or addresses which the unit owner may have designated to the association84 in writing, the lien may be foreclosed by the association by an action, judgment, and85 foreclosure in the same manner as other liens for the improvement of real property, subject86 to superior liens or encumbrances, but any such court order for judicial foreclosure shall87 not affect the rights of holders of superior liens or encumbrances to exercise any rights or88 powers afforded to them under their security instruments. The notice provided for in this89 H. B. 1035 - 4 - 26 LC 62 0241 subsection shall specify the amount of the assessments then due and payable together with90 authorized late charges and the rate of interest accruing there on. No foreclosure action91 against a lien arising out of this subsection shall be permitted unless the amount of the lien92 is at least $2,000.00. Unless prohibited by the condominium instruments, the association93 shall have the power to bid on the unit at any foreclosure sale and to acquire, hold, lease,94 encumber, and convey the same. The lien for assessments shall lapse and be of no further95 effect, as to assessments or installments thereof, together wit h late charges and interest96 applicable thereto, four years after the assessment or installm ent first became due and97 payable. Any provision authorizing foreclosure of a lien created pursu ant to this Code98 section shall be void.99 (d)(e) Any unit owner, mortgagee of a unit, person having executed a contract for the100 purchase of a condominium unit, or lender considering the loan of funds to be secured by101 a condominium unit shall be entitled upon request to a statement from the association or102 its management agent setting forth the amount of assessments past due and unpaid together103 with late charges and interest applicable thereto against that condominium unit. Such104 request shall be in writing, shall be delivered to the registered office of the association, and105 shall state an address to which the statement is to be directed . Failure on the part of the106 association to mail or otherwise furnish such statement regarding amounts due and payable107 at the expiration of such five-day period with respect to the condominium unit involved to108 such address as may be specified in the written request therefor within five business days109 from the receipt of such request shall cause the lien for assessments created by this Code110 section to be extinguished and of no further force or effect as to the title or interest acquired111 by the purchaser or lender, if any, as the case may be, and their respective successors and112 assigns, in the transaction contemplated in connection with such request. The information113 specified in such statement shall be binding upon the associati on and upon every unit114 owner. Payment of a fee not exceeding $10.00 may be required a s a prerequisite to the115 issuance of such a statement if the condominium instruments so provided.116 H. B. 1035 - 5 - 26 LC 62 0241 (e)(f) Nothing in this Code section shall be construed to prohibit a ctions maintainable117 pursuant to Code Section 44-3-76 to recover sums for which subs ection (a) of this Code118 section creates a lien."119 SECTION 5.120 Said title is further amended in Code Section 44-3-117, relatin g to application to121 subcondominiums, creation of subcondominium, subassociation, insurance, effect of certain122 liens, eminent domain, description of certain units, and assessments, by revising subsection123 (g) as follows:124 "(g) Not less than 30 days after notice is sent by certified ma il or statutory overnight125 delivery, return receipt requested, to the subunit owner both at the address of the subunit126 and at any other address or addresses which the subunit owner may have designated to the127 master association in writing, the lien of the master association may be foreclosed by the128 master association by an action, judgment, and foreclosure in t he same manner as other129 liens for the improvement of real property, subject to superior liens or encumbrances, but130 any such court order for judicial foreclosure shall not affect the rights of holders of superior131 liens or encumbrances to exercise any rights or powers afforded to them under their132 security instruments. The notice provided for in this subsection shall specify the amount133 of the assessments then due and payable together with authorized late charges and the rate134 of interest accruing thereon. No foreclosure action against a lien arising out of this135 subsection shall be permitted unless the amount of the lien is at least $2,000.00. Unless136 prohibited by the master condominium instruments, the master association shall have the137 power to bid on the subunit at any foreclosure sale and to acquire, hold, lease, encumber,138 and convey the same. The lien for assessments shall lapse and be of no further effect, as139 to assessments or installments thereof, together with late char ges and interest applicable140 thereto, four years after the assessment or installment first became due and payable. Any141 H. B. 1035 - 6 - 26 LC 62 0241 provision authorizing foreclosure of a lien created pursuant to this Code section shall be142 void."143 SECTION 6.144 Said title is further amended by revising Code Section 44-3-206, relating to foreclosure by145 owners' association, procedure, and effect of sale, as follows:146 "44-3-206.147 (a) An owners' association may foreclose its lien upon a time-share estate in accordance148 with subsection (c) of Code Section 44-3-109 or with Code Section 44-3-207 or may149 foreclose its lien under a power of sale that such owners' association shall have under this150 Code section in order to sell a time-share estate for the purpose of paying any or all unpaid151 assessments and other charges owed by the owner of such time-share estate.152 (b)(1) In order for an owners' association to foreclose its li en upon a time-share estate153 under a power of sale, a notice of sale shall be:154 (A) Accomplished in writing sent by registered or certified mail or statutory overnight155 delivery, return receipt requested, to the property address of the owner most recently156 provided to the owners' association no later than 30 days prior to the date of the157 proposed sale and shall be deemed given on the official postmar k day or the day on158 which it is received for delivery by a commercial delivery firm;159 (B) Provided in writing to any lien holder, sent by registered or certified mail or160 statutory overnight delivery, return receipt requested; and161 (C) Provided by advertising the time, place, and terms of said sale in a newspaper in162 which sheriff's advertisements are published in the county wher e the development is163 located, once a week during the four calendar weeks immediately preceding the164 calendar week of the date of such sale.165 (2) Any sale pursuant to this subsection shall occur on a legal sale day within the legal166 hours of sale at the legal place of sale in the county where the development is located.167 H. B. 1035 - 7 - 26 LC 62 0241 (c) A sale undertaken as authorized by this Code section shall divest the owner of all right,168 title, interest, and equity that such owner has in or to the ti me-share estate and shall vest169 fee simple title to the time-share estate in the purchaser or p urchasers at said sale. The170 proceeds of said sale shall be applied first in accordance with the lien priorities set forth in171 paragraphs (1) through (4) of subsection (a) of Code Section 44 -3-109, after which any172 remaining proceeds shall be applied to the payment in full of such unpaid assessments and173 other charges and next to the payment of all expenses actually incurred by the owners'174 association in connection with said proceedings, including atto rneys' fees, and any175 remaining proceeds shall be paid to the owner. The owners' ass ociation may bid at said176 sale and purchase the time-share estate.177 (d) For the purpose of carrying out and effectuating the power of sale authorized by this178 Code section, the owners' association shall be constituted the true and lawful179 attorney-in-fact of such owner to sell such time-share estate, as provided in this Code180 section, and convey the same to the purchaser or purchasers at said sale in as full and ample181 a manner as such owner could do in person. The power and agenc y hereby granted are182 coupled with an interest and are irrevocable by death or otherwise."183 SECTION 7.184 Said title is further amended in Code Section 44-3-207, relating to time-share estates, trustee185 foreclosures, and requirements, by revising subparagraph (a)(1) (A) and paragraph (4) of186 subsection (e) as follows:187 "(a)(1)(A) In order to sell a time-share estate for the purpose of paying any or all188 unpaid assessments and other charges owed by the owner of such time-share estate, an189 owners' association, or its managing agent on behalf of the own er's association, may190 foreclose its lien for all assessments and other charges assess ed by the owners'191 association upon a time-share estate pursuant to the time-share instrument or192 subsections (a) and (b) of Code Section 44-3-109, in accordance with:193 H. B. 1035 - 8 - 26 LC 62 0241 (i) The judicial foreclosure procedure of subsection (c) of Code Section 44-3-109 or194 44-3-232, as applicable;195 (ii) The trustee foreclosure procedure under this Code section; or196 (iii)(ii) The nonjudicial foreclosure procedure under Code Section 44-3-206."197 "(4) The proceeds of the trustee foreclosure sale shall be applied first in accordance with198 the lien priorities set forth in paragraphs (1) through (4) of subsection (a) of Code Section199 44-3-109, after which any remaining proceeds shall be applied to the payment in full of200 such unpaid assessments and other charges or mortgage obligations, as applicable, and201 next to the payment of all expenses actually incurred by the ow ners' association in202 connection with the trustee foreclosure proceedings, including attorneys' attorney's fees. 203 Any remaining proceeds shall be paid to the prior owner of the time-share estate. The204 owners' association or mortgagee, as applicable, may bid at the sale and purchase the205 time-share estate and receive a credit up to the amount of unpaid assessments and other206 charges or mortgage obligations, as applicable, and all expenses actually incurred by the207 owners' association or mortgagee, as applicable, in connection w i t h t h e t r u s t e e208 foreclosure proceedings, including attorney's fees."209 SECTION 8.210 Said title is further amended in Code Section 44-3-225, relating to assessment of expenses,211 exemption from liability, and liability for unpaid assessments, by revising subsection (c) as212 follows:213 "(c) Unless otherwise provided in the instrument and except as provided in subsection (d)214 of this Code section, the grantee in a conveyance of a lot shal l be jointly and severally215 liable with the grantor thereof for all unpaid assessments against the latter up to the time216 of the conveyance without prejudice to the grantee's right to recover from the grantor the217 amounts paid by the grantee; provided, however, that, if the grantor or grantee shall request218 a statement from the association as provided in subsection (d)(e) of Code Section 44-3-232,219 H. B. 1035 - 9 - 26 LC 62 0241 such grantee and his or her successors, successors-in-title, and assigns shall not be liable220 for nor shall the property owners' association lot conveyed be subject to a lien for any221 unpaid assessments against such grantor in excess of any amount set forth in the statement."222 SECTION 9.223 Said title is further amended by revising Code Section 44-3-232 , relating to assessments224 against lot owners as constituting lien in favor of association, additional charges against lot225 owners, procedure for foreclosing lien, and obligation to provide statement of amounts due,226 as follows:227 "44-3-232.228 (a) All sums lawfully assessed by the association against any lot owner or property owners'229 association lot, whether for the share of the common expenses pertaining to that lot, fines,230 or otherwise, and all reasonable charges made to any lot owner or lot for materials231 furnished or services rendered by the association at the owner's request to or on behalf of232 the lot owner or lot, shall, from the time the sums became due and payable, be the personal233 obligation of the lot owner and constitute a lien in favor of the association on the lot, which234 shall be unenforceable by foreclosure or power of sale against an owner occupied dwelling.235 prior and superior to all other liens whatsoever except:236 (1) Liens for ad valorem taxes on the lot;237 (2) The lien of any first priority mortgage covering the lot and the lien of any mortgage238 recorded prior to the recording of the declaration; or239 (3) The lien of any secondary purchase money mortgage covering the lot, provided that240 neither the grantee nor any successor grantee on the mortgage is the seller of the lot.241 (b) The recording of the declaration pursuant to this article shall constitute record notice242 of the existence of the lien, and no further recordation of any claim of lien for assessments243 shall be required.244 H. B. 1035 - 10 - 26 LC 62 0241 (b)(c)(1) To the extent that the instrument provides, the personal obli gation of the lot245 owner and the lien for assessments shall also include:246 (1)(A) A late or delinquency charge not in excess of the greater of $10.00 or 10 percent247 of the amount of each assessment or installment thereof not paid when due;248 (2)(B) At a rate not in excess of 10 percent per annum, interest on each assessment or249 installment thereof and any delinquency or late charge pertaining thereto from the date250 the same was first due and payable; and251 (3)(C) The costs of collection, including court costs, the expenses required for the252 protection and preservation of the lot, and reasonable attorney's fees actually incurred;253 and254 (4) The fair rental value of the lot from the time of the institution of an action until the255 sale of the lot at foreclosure or until judgment rendered in th e action is otherwise256 satisfied.257 (2) Such assessments shall only be collectable as an unsecured debt. No lien created258 pursuant to this Code section may be foreclosed or enforced by power of sale against an259 owner occupied dwelling.260 (c)(d) Not less than 30 days after notice is sent by certified mail o r statutory overnight261 delivery, return receipt requested, to the lot owner both at the address of the lot and at any262 other address or addresses which the lot owner may have designated to the association in263 writing, the lien may be foreclosed by the association by an ac tion, judgment, and court264 order for foreclosure in the same manner as other liens for the improvement of real265 property, subject to superior liens or encumbrances, but any such court order for judicial266 foreclosure shall not affect the rights of holders of superior liens or encumbrances to267 exercise any rights or powers afforded to them under their security instruments. The notice268 provided for in this subsection shall specify the amount of the assessments then due and269 payable together with authorized late charges and the rate of interest accruing thereon. No270 foreclosure action against a lien arising out of this subsection shall be permitted unless the271 H. B. 1035 - 11 - 26 LC 62 0241 amount of the lien is at leas t $2,000.00. Unl ess prohibited by the instrument, the272 association shall have the power to bid on the lot at any forec losure sale and to acquire,273 hold, lease, encumber, and convey the same. The lien for assessments shall lapse and be274 of no further effect, as to assessments or installments thereof , together with late charges275 and interest applicable thereto, four years after the assessment or installment first became276 due and payable. Any provision of this article authorizing foreclosure of a li en created277 pursuant to this Code section shall be void.278 (d)(e) Any lot owner, mortgagee of a lot, person having executed a c ontract for the279 purchase of a lot, or lender considering the loan of funds to b e secured by a lot shall be280 entitled upon request to a statement from the association or its management agent setting281 forth the amount of assessments past due and unpaid together with late charges and interest282 applicable thereto against that lot. Such request shall be in writing, shall be delivered to283 the registered office of the association, and shall state an address to which the statement is284 to be directed. Failure on the part of the association, within five business days from the285 receipt of such request, to mail or otherwise furnish such statement regarding amounts due286 and payable at the expiration of such five-day period with resp ect to the lot involved to287 such address as may be specified in the written request therefo r shall cause the lien for288 assessments created by this Code section to be extinguished and of no further force or289 effect as to the title or interest acquired by the purchaser or lender, if any, as the case may290 be, and their respective successors and assigns, in the transac tion contemplated in291 connection with such request. The information specified in such statement shall be binding292 upon the association and upon every lot owner. Payment of a fe e not exceeding $10.00293 may be required as a prerequisite to the issuance of such a statement if the instrument so294 provides.295 (e)(f) Nothing in this Code section shall be construed to prohibit a ctions maintainable296 pursuant to Code Section 44-3-223 to recover sums for which subsection (a) of this Code297 section creates a lien."298 H. B. 1035 - 12 - 26 LC 62 0241 SECTION 10.299 Said title is further amended in Code Section 44-14-15, relatin g to fee for a future300 conveyance and limited circumstances, by revising paragraph (3) of subsection (c) as301 follows:302 "(3) A property owners' association formed for the purposes of exercising the powers of303 an association of property owners that has not been formed pursuant to or which has not304 adopted the provisions of Article 6 of Chapter 3 of this title, the 'Georgia Property305 Owners' Association Act,' provided that such association shall comply with subsection306 (d)(e) of Code Section 44-3-232;"307 SECTION 11.308 Said title is further amended in Part 1 of Article 7 of Chapter 14, relating to foreclosure in309 general, by adding new Code sections to read as follows:310 "44-14-166.311 (a) Notwithstanding any other provision of law, no person or g overnment entity shall312 commence a foreclosure, a tax sale, a tax execution sale, a sal e of a lien, or any other313 involuntary forfeiture of an own er occupied dwe lling based on n onpayment of nontax314 service charges.315 (b) A foreclosure or involuntary sale of an owner occupied dwelling may be commenced316 for nonpayment of ad valorem or other taxes or default under a duly recorded purchase317 money mortgage.318 (c) A foreclosure or involuntary transfer of title made pursua nt to subsection (a) of this319 Code section shall be void and may be set aside upon petition by the owner.320 H. B. 1035 - 13 - 26 LC 62 0241 44-14-167.321 (a) Any lien by a property owners' association or condominium association for nontax322 service charges, including but not limited to assessments and fines, shall not be enforceable323 by foreclosure or power of sale against an owner occupied dwelling.324 (b) Any lien by a property owners' association or condominium association for nontax325 service charges on an owner occupied dwelling shall be considered a personal unsecured326 obligation of the owner, collectable only by an action for a money judgment.327 (c) Any contractual or recorded provision authorizing foreclos ure or power of sale for328 nontax service charges shall be deemed void and unenforceable against public policy.329 (d) Nothing in this Code section shall impair the right of a p roperty owners' association330 or condominium association to:331 (1) Suspend the use of common area amenities for delinquency;332 (2) Levy reasonable late charges; and333 (3) Record a notice of delinquency for informational purposes.334 44-14-168.335 (a) Property owners harmed by a violation of Code Section 36-8 0-32, 44-14-166,336 44-14-167, or 48-3-29, may bring a civil action for:337 (1) Declaratory and injunctive relief setting aside any sale or transfer;338 (2) Actual damages;339 (3) Statutory damages of not more than $5,000.00 per violation; and340 (4) Reasonable attorney's fees and costs.341 (b) The Attorney General may bring a civil action seeking a pe nalty of not more than342 $10,000.00 per violation.343 (c) Any deed or transfer recorded in violation of Code Section 36-80-32, 44-14-166,344 44-14-167, or 48-3-29 shall not provide bonafide purchaser prot ection and such345 instruments shall be considered void."346 H. B. 1035 - 14 - 26 LC 62 0241 SECTION 12.347 Title 46 of the Official Code of Georgia Annotated, relating to public utilities and public348 transportation, is amended by adding a new Code section to read as follows:349 "46-1-7.350 (a) Utilities and local authorities may pursue collections for unpaid service charges by civil351 action but shall not obtain or enforce a lien resulting in foreclosure or tax sale of an owner352 occupied dwelling.353 (b) Service disconnections of essential water and sewage services shall comply with due354 process, notice, medical hardship, and payment plan protections adopted by the355 commission."356 SECTION 13.357 Title 48 of the Official Code of Georgia Annotated, relating to revenue and taxation, is358 amended in Article 1 of Chapter 3, relating to general provisions relative to tax executions,359 by adding a new Code section to read as follows:360 "48-3-29.361 No tax commissioner, tax collector, or other official shall issue a tax execution or conduct362 a sale of an owner occupied dwelling based solely or in part on nontax service charge."363 SECTION 14.364 This Act shall become effective on July 1, 2026, and shall to apply to all foreclosure actions365 filed on or after such date.366 SECTION 15.367 All laws and parts of laws in conflict with this Act are repealed.368 H. B. 1035 - 15 -