HB1219: HB1219 Property; require new property owners' associations to be subject to Georgia Property Owners' Association Act

26 LC 62 0309 House Bill 1219 By: Representatives Lewis-Ward of the 115th, Powell of the 33rd, Hugley of the 141st, Greene of the 154th, Mitchell of the 88th, and others A BILL TO BE ENTITLED AN ACT To amend Article 6 of Chapter 3 of Tittle 44 of the Official Co de of Georgia Annotated,1 relating to property owners' associations, so as to require new property owners' associations2 to be subject to the Georgia Property Owners' Association Act; to require property owners'3 associations to vote on whether to be subject to such acts, res pectively; to provide for4 termination of property owners' associations; to provide for pr ocedures for a vote to5 terminate a property owners' association; to provide for court approval of termination plans;6 to provide for procedures to terminate a property owners' assoc iation; to provide for a7 termination trustee; to provide for powers and duties; to provide for penalties; to provide for8 related matters; to repeal conflicting laws; and for other purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 Article 6 of Chapter 3 of Title 44 of the Official Code of Geor gia Annotated, relating to12 property owners' associations, is amended by revising subsectio n (a) of and adding a new13 subsection to Code Section 44-3-235, relating to applicability of article, to read as follows:14 "(a) This article shall apply to all property which is submitted to this article on or before15 June 30, 2026. This article shall apply to all associations created on or after July 1, 2026,16 H. B. 1219 - 1 - 26 LC 62 0309 regardless of whether the property is submitted to this article. This article shall also apply17 to any association of owners subject to a recorded declaration of covenants upon property,18 which covenants are administered by an owners' association in w hich membership is19 mandatory for all owners of lots in the development, which decl aration is amended in20 accordance with Code Section 44-3-222 in order to submit the property owners' association21 to this article; provided, however, that any amendment must shall conform the instrument22 creating the property owners' association to this article, and the property owners'23 development shall thereafter be deemed to be submitted to this article."24 "(d) By its next annual meeting or meeting required to be held by the instrument, any25 association in existence prior to July 1, 2026, shall hold a meeting of the members to vote26 on whether to amend the instrument to specify if this article applies to the association. The27 association shall obtain the affirmative approval of a majority of the voting interests, or the28 approval of the required number of members specified in the instrument if specified in such29 instruments, at a meeting of the membership at which a quorum has been attained in order30 to amend the instrument pursuant to this paragraph."31 SECTION 2.32 Said article is further amended by adding a new Code section to read as follows:33 "44-3-236.34 (a) An association may by terminated by a plan of termination that meets the requirements35 of this Code section and is approved by the superior court in w hich the association is36 located.37 (b)(1) A lot owner intending to terminate a property owners' association in which he or38 she is a member shall provide the board a petition for a plan of termination that is signed39 by at least 20 percent of the voting members of the association. The board shall hold a40 meeting of the members within 60 days after receipt of the sign ed petition. A voting41 interest of the association shall not be suspended for any reason for the purpose of signing42 H. B. 1219 - 2 - 26 LC 62 0309 the petition or determining whether the 20 percent threshold for such petition has been43 met.44 (2) Notice of such meeting shall include:45 (A) A copy of the proposed plan of termination;46 (B) An explanation of how the common areas and the assets of the association will be47 managed or transferred; and48 (C) The manner in which the voting will take place.49 (3) If the board fails to call a meeting within the time period specified by paragraph (1)50 of this subsection, any member may petition the superior court in which the association51 is located for an order compelling the association to comply with this subsection.52 (c)(1) When considering a plan of termination, the total votin g interests of the53 association shall include all voting interests. A voting interest of the association shall not54 be suspended for any reason when voting on termination.55 (2) A lot owner desiring to reject a plan of termination shall do so either by voting in56 person or by proxy to reject the plan or by delivering a writte n objection to the57 association before or at such meeting.58 (3) If the members reject a plan of termination, no plan of te rmination shall be59 considered for at least 18 months after the date of the rejection.60 (d) If a plan of termination is approved, the board shall submit such plan to the superior61 court in which the association is located. The court shall examine the plan of termination62 and determine its procedural sufficiency. Within 45 days of re ceipt of the plan of63 termination, the court shall enter an order accepting the plan of termination or denying the64 plan of termination for procedural efficiencies. If the court determines that the plan of65 termination meets the requirements of this Code section, the co urt shall authorize the66 termination and the termination may proceed.67 H. B. 1219 - 3 - 26 LC 62 0309 (e)(1) A plan of termination and the consents or joinders of lot owners shall be recorded68 in the public records of each county in which any portion of th e association is located. 69 Such plan is only effective on recordation or at a later date specified in the plan.70 (2) Upon recordation or the date specified in the plan of term ination, there shall be71 appointed a termination trustee. The board shall be appointed as the termination trustee72 unless another person is appointed in the plan of termination. If the board is not the73 termination trustee, the person appointed in the plan of termination shall have the same74 powers and duties as the board as listed in subsection (f) of t his Code section. If the75 board is unable, unwilling, or fails to act as termination trustee, a lot owner may petition76 the superior court of the county in which the association is lo cated to appoint a77 termination trustee.78 (f) The approval of a plan of termination does not terminate t he board, which shall79 continue in existence with all powers and duties such board had before approval of the80 plan. Notwithstanding any provision to the contrary in the dec laration or bylaws, after81 approval of a plan of termination, the board shall:82 (1) Employ directors, agents, and other persons to liquidate o r conclude the board's83 affairs;84 (2) Conduct the affairs of the association as necessary for the liquidation or termination;85 (3) Carry out contracts and collect, pay, and settle debts and claims for and against the86 association;87 (4) Defend suits brought against the association;88 (5) Sue in the name of the association for all sums due or owed to the association or to89 recover any association property;90 (6) Perform any act necessary to maintain, repair, or demolish unsafe or uninhabitable91 improvements or other association property;92 H. B. 1219 - 4 - 26 LC 62 0309 (7) Sell at public or private auction or exchange, convey, or otherwise dispose of assets93 of the association for an amount deemed to be in the best interests of the association and94 execute bills of sale and deeds of conveyance in the name of the association;95 (8) Collect and receive rents, profits, accounts receivable, i ncome, maintenance fees,96 special assessments, or insurance proceeds for the association; and97 (9) Contract and do anything in the name of the association wh ich is proper or98 convenient to terminate the affairs of the association.99 (g)(1) All remaining association funds after the payment of an y lawful debts must be100 distributed equally among members or as otherwise provided in the plan of termination.101 (2) A member shall not be held personally liable for unpaid ob ligations beyond the102 member's regular assessments or special assessments that existe d before the vote of103 termination.104 (h) If the board fails to hold the meeting pursuant to subsection (b) of this Code section,105 obstructs the termination process, or refuses to record the dec ision of the members to106 terminate, a member may file a petition with the superior court in which the association is107 located for a court order to:108 (1) Verify compliance with the procedural requirements of this Code section;109 (2) Order the Secretary of State to dissolve the association; or110 (3) Appoint a termination trustee to manage the distribution of assets and resolution of111 liabilities.112 (i)(1) An officer or director of the association shall not:113 (A) Fail to call or notice a meeting after the receipt of a va lid petition for a plan of114 termination;115 (B) Spend association funds to campaign for or against a plan of termination; or116 (C) Conceal any financial or property records relevant to a plan of termination.117 (2) Any person in violation of paragraph (1) of this subsection shall be subject to:118 (A) A civil penalty of up to $5,000.00 per violation;119 H. B. 1219 - 5 - 26 LC 62 0309 (B) Removal from office by court order; or120 (C) Personal liability for legal fees incurred by petitioners."121 SECTION 3.122 All laws and parts of laws in conflict with this Act are repealed.123 H. B. 1219 - 6 -