HB 512: Property owners' associations; revise provisions

House Bill 512

By: Representatives Lewis-Ward of the 115th, Hugley of the 141st, Washburn of the 144th, Powell of the 33rd, Campbell of the 35th, and others

A BILL TO BE ENTITLED

AN ACT

To amend Chapter 3 of Title 44 of the Official Code of Georgia Annotated, relating to regulation of specialized land transactions, so as to revise provisions related to property owners' associations; to require such associations to provide annual certificates of good standing for the payment of assessments and other charges; to require such associations to offer participation in alternative dispute resolution prior to the creation of a lien for unpaid assessments and other charges; to provide for the issuance of statements of accounts; to provide for information required in and the manner of requesting and providing such statements; to provide for the effect of failure to furnish such statements as required; to provide for alternative dispute resolution policies and requirements therefor; to provide for definitions; to amend Code Section 44-14-15 of the Official Code of Georgia Annotated, relating to fee for a future conveyance and limited circumstances relative to property, so as to provide for a cross-reference; to provide for related matters; to provide for applicability; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Chapter 3 of Title 44 of the Official Code of Georgia Annotated, relating to regulation of specialized land transactions, is amended by revising subsection (c) of Code Section 44-3-225, relating to assessment of expenses, exemption from liability, and liability for unpaid assessments, and by adding a new subsection to read as follows: "(c) Unless otherwise provided in the instrument and except as provided in subsection (d) of this Code section, the grantee in a conveyance of a lot shall be jointly and severally liable with the grantor thereof for all unpaid assessments against the latter up to the time of the conveyance without prejudice to the grantee's right to recover from the grantor the amounts paid by the grantee; provided, however, that, if the grantor or grantee shall request a statement of account from the association as provided in subsection (d) of Code Section 44-3-232 44-3-236, such grantee and his or her successors, successors-in-title successors in title, and assigns shall not be liable for nor shall the property owners' association lot conveyed be subject to a lien for any unpaid assessments against such grantor in excess of any amount set forth in the statement."

"(e) For each lot for which all assessments and other amounts due to the association have been paid in full, the association or its authorized agent shall provide the lot owner a certificate stating that such lot is in good standing within 45 days of the end of each fiscal year and without cost to the lot owner."

SECTION 2.

Said chapter is further amended by revising subsections (a), (d), and (e) of Code Section 44-3-232, relating to assessments against lot owners as constituting lien in favor of association, additional charges against lot owners, procedure for foreclosing lien, and obligation to provide statement of amounts due, as follows:

"(a)(1) All sums lawfully assessed by the association against any lot owner or property owners' association lot, whether for the share of the common expenses pertaining to that lot, fines, or otherwise, and all reasonable charges made to any lot owner or lot for materials furnished or services rendered by the association at the owner's request to or on behalf of the lot owner or lot, shall, from the time the sums became due and payable, be the personal obligation of the lot owner, and shall, from the time the association completes its requirements pursuant to Code Section 44-3-237, constitute a lien in favor of the association on the lot prior and superior to all other liens whatsoever except: (1)(A) Liens for ad valorem taxes on the lot;

(2)(B) The lien of any first priority mortgage covering the lot and the lien of any mortgage recorded prior to the recording of the declaration; or (3)(C) The lien of any secondary purchase money mortgage covering the lot, provided that neither the grantee nor any successor grantee on the mortgage is the seller of the lot.

(2) The recording of the declaration pursuant to this article shall constitute record notice of the existence of the lien provided for in paragraph (1) of this subsection, and no further recordation of any claim of lien for assessments shall be required." "(d) Any lot owner, mortgagee of a lot, person having executed a contract for the purchase of a lot, or lender considering the loan of funds to be secured by a lot shall be entitled upon request to a statement from the association or its management agent setting forth the amount of assessments past due and unpaid together with late charges and interest applicable thereto against that lot. Such request shall be in writing, shall be delivered to the registered office of the association, and shall state an address to which the statement is to be directed. Failure on the part of the association, within five business days from the receipt of such request, to mail or otherwise furnish such statement regarding amounts due and payable at the expiration of such five-day period with respect to the lot involved to such address as may be specified in the written request therefor shall cause the lien for assessments created by this Code section to be extinguished and of no further force or effect as to the title or interest acquired by the purchaser or lender, if any, as the case may be, and their respective successors and assigns, in the transaction contemplated in connection with such request. The information specified in such statement shall be binding upon the association and upon every lot owner. Payment of a fee not exceeding $10.00 may be required as a prerequisite to the issuance of such a statement if the instrument so provides.

(e) Nothing in this Code section shall be construed to prohibit actions maintainable pursuant to Code Section 44-3-223 to recover sums for which subsection (a) of this Code section creates a lien."

SECTION 3.

Said chapter is further amended by adding new Code sections to read as follows:

"44-3-236.

(a) Within ten business days after receiving a written or electronic request for a statement of account from a lot owner or the lot owner's designee, a mortgage lender, or a mortgagee of a lot or the designee of such mortgagee of a lot, the association shall issue a statement of account as provided for in this Code section. A request for a statement of account shall be considered received at the time it is sent if transmitted by electronic means or by hand delivery, within three days if transmitted by first-class mail, and upon delivery if transmitted by statutory overnight delivery.

(b) Each association shall designate on its public website or otherwise publish the name of a person or entity with a street or email address for receipt of a request for a statement of account. A statement of account may be prepared and issued by an officer, authorized agent, or authorized representative of the association, including any authorized agent, authorized representative, or employee of a management company authorized to complete the statement of account on behalf of the board or association. The statement of account shall be provided by email, electronic download, hand delivery, first-class mail, or statutory overnight delivery to the requester on the date of its issuance.

(c) A statement of account as provided for in this Code section shall contain all of the following information regarding the property for which the transaction is to occur:

(1) Date of issuance;

(2) Name of the lot owner or owners as reflected in the books and records of the association;

(3) Lot designation and address;

(4) Assigned parking or garage space number, as reflected in the books and records of the association, as applicable;

(5) Attorney's name and contact information if the account is delinquent and has been turned over to an attorney for collection;

(6) Name of the requester;

(7) Assessment information and other information:

(A) The amount of the regular periodic assessment levied against the lot and the frequency of such assessment;

(B) The date through which the regular periodic assessments have been paid;

(C) The due date for the next installment of the regular periodic assessment and the amount due;

(D) An itemized list of all assessments, special assessments, and other moneys owed to the association for the lot as of the date of issuance of the statement of account; and

(E) An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the statement of account. In calculating the amounts that are scheduled to become due, the association may assume that any delinquent amounts will remain delinquent during the effective period of the statement of account; and

(8) Additional information:

(A) Any open violation of any rule or regulation notice to the lot owner in the association official records;

(B) A list of and contact information for all other associations of which the lot owner is a member by virtue of ownership of the lot;

(C) A copy of the current covenants and bylaws of the association and a copy of the rules and regulations adopted by the association;

(D) A copy of the association's certificate of insurance for any insurance provided by the association for the lot or the name, address, email address, and telephone number of the association's insurance provider of any such insurance; and

(E) The signature of an officer or authorized agent of the association.

(d) A statement of account issued pursuant to this Code section shall have a 30 day effective period. If additional information is needed or a mistake related to the statement of account becomes known to the association or its agent within the effective period, an amended statement of account may be delivered and become effective if a sale or refinancing of the lot has not been completed during such effective period. An amended statement of account shall be delivered on the date of issuance and a new 30 day effective period shall begin on such date.

(e) An association waives the right to collect any moneys owed in excess of the amounts specified in the statement of account from any person and such person's successors or assigns who in good faith rely upon such statement of account.

(f) If the association or its agent fails to disclose in the statement of account the correct amount of an assessment, a special assessment, or other moneys owed to the association, the purchaser of the lot shall not be obligated to pay the incorrectly disclosed amount and any lien for the incorrectly disclosed amount owed to the association shall be extinguished. (g)(1) An association's authorized agent may charge the association a reasonable fee for the preparation and issuance of a statement of account which shall not exceed $250.00.

(2) If a statement of account is requested on an expedited basis and issued within three business days after the request, the association's authorized agent may charge the association an additional fee of $50.00.

(3) Neither the association nor its authorized agent shall charge the requester of a statement of account pursuant to this Code section any fees associated with the preparation and issuance of the statement of account as provided for in this Code section.

44-3-237.

(a) As used in this Code section, the term 'alternative dispute resolution' means mediation, arbitration, conciliation, or any other nonjudicial procedure that involves a neutral third party in the decision-making process.

(b)(1) An association shall adopt a written policy providing for a fair, reasonable, and expeditious alternative dispute resolution procedure for resolving any dispute regarding sums assessed by the association.

(2) The association shall provide a copy of such policy to each lot owner annually and shall make a copy of such policy available to a lot owner upon request.

(c) In developing an alternative dispute resolution procedure pursuant to this Code section, an association shall make maximum, reasonable use of available local alternative dispute resolution programs involving a neutral third party, including low-cost mediation programs.

(d) A fair, reasonable, and expeditious alternative dispute resolution procedure shall, at a minimum, satisfy all of the following requirements:

(1) The procedure may be invoked by a lot owner. A request invoking the procedure shall be in writing;

(2) The procedure shall provide for prompt deadlines. The procedure shall state the maximum time for the association to act on a request invoking the procedure;

(3) If the procedure is invoked by a lot owner, the association shall participate in the procedure; and

(4) A lot owner shall not be charged a fee to participate.

(e) The lien for unpaid assessments or other charges as provided for in Code Section 44-3-225 shall not be created unless the association offers the lot owner participation in alternative dispute resolution in accordance with this Code section, and, if so requested by the lot owner, the association participates in such alternative dispute resolution."

SECTION 4.

Code Section 44-14-15 of the Official Code of Georgia Annotated, relating to fee for a future conveyance and limited circumstances relative to property, is amended by revising paragraph

(3) of subsection (c) as follows:

"(3) A property owners' association formed for the purposes of exercising the powers of an association of property owners that has not been formed pursuant to or which has not adopted the provisions of Article 6 of Chapter 3 of this title, the 'Georgia Property Owners' Association Act,' provided that such association shall comply with subsection

(d) of Code Section 44-3-232 44-3-236;"

SECTION 5.

This Act shall not apply to contracts entered into prior to July 1, 2025, before the expiration or first renewal of such contract.

SECTION 6.

All laws and parts of laws in conflict with this Act are repealed.