SB 361: Property Owners' Associations; authorization of liens and use of assessments; provide

Under current Georgia law, a property owners' association can foreclose a lien for unpaid assessments once it has sent notice by certified mail and waited 30 days, as long as the lien is at least $2,000. This bill changes that process. It requires the association to first get written authorization to proceed from the Secretary of State's office before the 30-day notice period can start, and it raises the minimum lien amount needed to foreclose from $2,000 to $4,000. It also bars associations from using any part of members' assessments to pay for the cost of foreclosing on a lien. The bill also adds a new registration system. Anyone forming a property owners' association would have to file registration details, including bylaws, officer names, and a list of lots, with the Secretary of State when filing incorporation papers, and update that filing every year. By January 1, 2026, the Secretary of State must set up rules for administrative hearings to resolve disputes between associations and owners, and the Department of Banking and Finance must create rules for how associations escrow member funds.

• Requires associations to obtain written authorization from the Secretary of State's office before starting the 30-day foreclosure notice period on a lien.
• Raises the minimum unpaid assessment lien amount required before an association can foreclose, from $2,000 to $4,000.
• Bans associations from spending any portion of members' assessments on the cost of foreclosing against a lien.
• Creates a new requirement that associations register with the Secretary of State when incorporating and file updated registration information every year by December 31.
• Directs the Secretary of State to create administrative hearing rules by January 1, 2026 for disputes between associations and lot owners, with a filing fee reimbursed to the winning party.
• Directs the Department of Banking and Finance to create rules by January 1, 2026 for how associations must escrow member funds.

Property owners' associations across Georgia and the declarants who form them, lot owners who are members of these associations and may face liens or foreclosure for unpaid assessments, the Secretary of State's office, and the Department of Banking and Finance.

Lot owners facing foreclosure over unpaid dues would get an added procedural step and a higher dollar threshold before an association could foreclose, and could request a state hearing to dispute charges. Associations would face new registration paperwork, annual filings, and restrictions on using dues to cover foreclosure costs.

• Section 1 amends O.C.G.A. § 44-3-232(c) to require written authorization from the Secretary of State before the foreclosure notice period begins.
• Section 1 raises the minimum lien amount needed for foreclosure from $2,000 to $4,000 and bars using assessment funds to pay foreclosure costs.
• Section 2 creates new Code Section 44-3-236(a) requiring associations to file registration information, including bylaws, officers, and lot lists, when incorporating.
• Section 2 requires annual updated registration filings by December 31 each year under subsection (b).
• Section 2 requires the Secretary of State to establish administrative hearing rules for owner-association disputes by January 1, 2026, with a reimbursable filing fee for the prevailing party.
• Section 2 requires the Department of Banking and Finance to establish rules for escrow of association funds by January 1, 2026.
• Section 3 repeals conflicting laws.

1. 2025-03-27Senate Read and Referred (Senado)
2. 2025-03-25Senate Hopper (Senado)

• Matt Brass (R, SD-006)Patrocinador principal
• Donzella James (D, SD-028)

• property owners' associations
• homeowner liens
• foreclosure rules
• HOA regulation
• Secretary of State registration