Comité Judiciary de la Cámara de Representantes, 17 de marzo de 2026

Transcripción

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1. 0:16:11

   Family issue this morning.

2. 0:16:14

   Oh. Oh, thank you for-

3. 0:16:16

   Nothing bad, just had schedules

4. 0:16:19

   ... thank you for being here. Um, let me start us off with a word of prayer. Heavenly Father, we thank you for this day. We thank you for those that are here in attendance, pray that you bless them and their families, and that you be with us to give us guidance in the decisions that we make for this state. In Jesus' name, I pray. Amen.

5. 0:16:41

   Amen.

6. 0:16:41

   All right. Um, I got you with that microphone right there.

7. 0:16:46

   All right.

8. 0:16:47

   And you've got Senate Bill 406, and let me get the LC on it.

9. 0:16:55

   443527S, is that correct?

10. 0:16:58

    Yes, sir. That's the committee sub I submitted yesterday.

11. 0:17:01

    All right.

12. 0:17:02

    Okay.

13. 0:17:03

    Tell us about your bill.

14. 0:17:04

    All right. So the HOA, uh, bill, um, many of y'all may or may not have heard from people that have had issues. Uh, I've heard from many. Um, and so as I heard from them, uh, my constituents, I, I started doing a little investigation. Been working on this thing for about two years now. And, uh, Sen- uh, Senator James had been working on it for about three or four years, or, or about two, three years prior to that.

15. 0:17:34

    So, um, this is an issue that is a, uh, is a growing issue, but what I found in my investigation is there's, there's really no accountability, um, for, for associations. And, uh, I'll use that generic term 'cause that includes, uh, homeowners associations, that includes your condominium associations, and just the general property owners association. So without that accountability, uh, you know, our citizens are left with, uh, their only recourse right now is to go to court.

16. 0:18:10

    And, um, that's if you can afford a- an attorney, uh, you can't find one that'll take these cases, and it's very difficult to find that. So, so when I sought out to, to figure out how we're gonna tackle this complex issue, um, I wanted, number one, I wanted there be accountability. And so with accountability, uh, we wanted to make sure that, that the, all these associations were gonna register with the state.

17. 0:18:41

    And, um, it, it made the most sense for that registration to be with the Secretary of State's office, and, um, because they already handle nonprofits, and so we were able to use a lot of the code section from the nonprofit law, um, that would translate over into this. And so what we're gonna require, and you'll see this in s- in section, uh, in the first section there, I believe actually, it's gonna be section two, uh, on page two, starting on line 23.

18. 0:19:14

    That is your registration process, and the crux of it is we want them to, number one, register who the association is, the address of that association, the officers of that association, and then we also want them to v- um, file their, their, um, their financials every year and their bylaws. Okay? And these are, these are all documents that are already, should already be being kept. So we're not, we're not asking them to do something they're not already doing.

19. 0:19:47

    Um, and, uh, but we have had some transparency issues in some of these cases where people are requesting financials of their, their association, and they're not able to get those financials. Um, so this, if they're filing it with the state, it is now subject to Open Records Act, uh, open records requests, Freedom of Information Act, whatever. And so now constituents, if, if they cannot get it from their association, they can now go request it from the Secretary of State's office.

20. 0:20:18

    So that's, that's the accountability and transparency piece. That's very important. Um, the next thing I wanted to do is I, I didn't feel like, you know, court should be someone's first option. Um, and so we wanted to, to kind of figure out an administrative process. And so in the, in my original bill, um, the best idea we could come up with was, was to form a board. Uh, I'm not a big fan of creating new boards, um, but you know, at the time, that was the best thing we could come up with.

21. 0:20:53

    And so if s- if there was a complaint, um, someone felt like they were being wronged by their, their association, they would go to that board. Now, we had some, some back and forth and some issues on who should be on that board. Again, I'm not a fan of cr- re- creating new boards, but, but there were some issues. Um, and we had some floor amendments that I thought addressed some issues, but I could also... I can see both sides on this.

22. 0:21:24

    So, so we backed up a little bit, and that's what this sub is about. And so, um, so what we're gonna... What would happen is the Secretary of State's office, if you have a complaint, constituent has a complaint, they go file with the Secretary of State's office. The Secretary of State's office would appoint an arbitrator. That arbitrator will come in, this is an investigator, um, that would come in, and they would hear the facts of both sides, um, through written statements, through oral statements, whatever.

23. 0:21:56

    Um, they gather all the facts, and then they make a decision. Um, and in that decision, um, they will either rule for the association, or they would rule for, um, for the, for that homeowner And, um, and then if either party didn't like that, uh, like that decision, then they would have a, a, an appeal. And that appeal would go to magistrate court. Magistrate court, as y'all know, um, under $15,000 doesn't, uh, you don't have to have a lawyer.

24. 0:22:32

    So here we have, um, we have two, two steps where someone that's been wronged, they can have a shot without having to have a lawyer. So, um, and then the third and final, um, the third and final ruling they could get, appeal they would have, would be for superior court, just like they have now. Um, so instead of that superior court being their, their, their first line of defense, it's now their third line of defense with two, two lines of defense before that not requiring a lawyer.

25. 0:23:09

    And I think that's, uh, the important piece, and that was what we were seeking with that board. But I could see where, where a board could potentially, um, could, uh, potentially start swaying one way or another. I could see where a board could be, um, influenced, if you will, um, through time. And so we've taken that, we're tak- taking a step back from that moving forward with, uh, with magistrate court. And right now, you know, current law is $15,000 cap in magistrate court.

26. 0:23:44

    There's a couple bills out there, one getting traction taking that 15,000 to 25,000, uh, which would, uh, pretty much encompass, um, most of these cases, uh, if not all.

27. 0:24:00

    Right.

28. 0:24:01

    So, um, I did have a little concern on the wording and would love-

29. 0:24:08

    Where, where are you in the bill right now?

30. 0:24:09

    All right, so that's a good question. Just telling you all the thoughts. Um, all right, so the arbitrator, the process for complaint starts about, uh, starts at line 227. Um,

31. 0:24:26

    and then your appeal, your appeal starts at 247. And then on line 251 is where you get into magistrate court and then superior court. And,

32. 0:24:46

    and I'll, I'll go ahead and cover the rest of the bill, and then we can... That part right there is probably, is the biggest change and probably needs the biggest discussion.

33. 0:24:54

    Okay.

34. 0:24:54

    Um, line 278 is our property owner's bill of rights, and that essentially is pulling current law together and putting it all under one code section, uh, so that everyone's very clear. And then when you get into, um, section three, which is, starts on page 14, this is on the foreclosures. Under current law, if someone owes their, uh, their association $2,000, uh, that association can, can foreclose on that property.

35. 0:25:26

    Uh, to me, $2,000 is, um, is very low. I'm, I don't know when the last time that law was touched, um, but I would assume it's been a long time. And, um, the biggest thing we're doing, we're, we're taking it up to $4,000, but the most important part of this language is we're saying that fines and fees cannot go towards that number. And the reason I wanted that is because we're seeing some predatory type, uh, practices where, where associations, and you might have a rogue board member or a bad, uh, management company, uh, that wants a, a neighbor out, or they, they want, uh, to t- try to get possession of that property, and they start fining and feeing people.

36. 0:26:13

    Um, and that's how they're getting to that $2,000. So, um, when I dug in and, and, and really investigated to learn why we even have the foreclosure there, that is there to ensure people are paying their dues and they are paying their assessments. And I didn't, you know, there's no other, no other way, um, that I know of to where, to give the associations the ability to enforce that. Um, and if someone does not pay their dues or does not pay their assessments, they're really only hurting their neighbors.

37. 0:26:48

    Um, so I wanted to leave that mechanism in there to make sure they could, but I wanted to take, take out any potential, uh, predatory type, uh, practices out of the equation. And so that was, you know, on line 341, it says, "No portion of such amount shall include collection of fees or fines." Um, now, when we took it to $4,000, there was also, um, an amendment in, in Judy in, in the Senate, um, that if someone has gone 12, 12 months without paying their dues, then they're clearly not gonna pay their dues.

38. 0:27:29

    And so that should be, you know, they should have that mechanism to collect those dues. However, uh, so that language was added. But then on the Senate floor, um, it was brought to my attention that some dues might only be $100 for the year, might only be $300 for the year, and they usually get it at the beginning of the year, and that's their annual dues. They get all of it. And so if they were, say, 30, 30 days late on that, um, then, um, then the way the bill is written with that 12 months dues in the arrears, then, uh, then really someone could f- get foreclosed on for $100 or $300, whatever it is, and that was not the intent.

39. 0:28:14

    And so we, uh, we attempted to correct that on the floor. W- so we said 12 months of dues in arrears, but n- it has to be at least $2,000, taking it back to that original 2,000. Um, so if someone owed let's say their annual dues were 100 years or $100 and, and they were, um, not paying, refusing to pay, and it's still gonna take 20 years before it could, they could foreclose on that property. Um, I don't foresee that happening, but you j- you just never know.

40. 0:28:48

    So it's in there. It also was brought to my attention on the floor that the way it was worded, um, was a little off because it's, uh, the way it's worded now, it says the amount of the lien is the lesser of $4,000 or an amount equal to 12 months of dues and arrears, but not less than $2,000. So the way that's worded, and I believe the, my lawyer friends on the Senate floor were correct, the way that's worded, you could only foreclose if it was at least 2,000 and less than 4,000.

41. 0:29:22

    So, and I, I don't think we captured it correctly in the sub. So I think when, when we struck, if you look on line 340, when we struck at least $2,000, I, I don't think we should have struck at least. So I think if we put at least back in, it says at least the lesser of $4,000 or an amount equal to 12 months of dues and arrears, but not less than $2,000. I think that captures the intent of what I'm trying to do.

42. 0:29:55

    Um, and I'm more than happy to take questions on that part or any part.

43. 0:30:04

    So you're, you're saying the amendment should be to put back in at least 2,000.

44. 0:30:08

    At least. I think if we put back in at least, then the... It captures what we're trying to do of, all right, fourth, y- $4,000 is, is gonna be the minimum if you're not paying dues or, or assessments. Now, fines and fees is totally, that cannot count towards that.

45. 0:30:27

    Okay. So unless the amount of the lien is at least 2,000, the lesser of 4,000 is how it's gonna read. Does that... Or just the at least?

46. 0:30:38

    Yeah, if we just put back in at least, I think that captures what-

47. 0:30:42

    Yeah. Okay. That's, that's what I...

48. 0:30:43

    Does that make sense?

49. 0:30:44

    Yeah, it makes sense to me now.

50. 0:30:44

    Okay.

51. 0:30:45

    All right. Any questions by the committee?

52. 0:30:52

    Oh, got one. So, Ms. Evans, is that you?

53. 0:30:58

    Yes. Thank you, Mr. Chairman.

54. 0:30:59

    Sorry.

55. 0:30:59

    Senator. Sorry, I'm running in here on two wheels. Um-

56. 0:31:02

    So was I.

57. 0:31:05

    Um, uh, d- you, I think I understand. You want... There has to be at least $4,000, but even if it was, even if it was, um, $4,000, but not 12 months of dues, you still don't want this to kick in.

58. 0:31:23

    It's, it's $4,000 or 12 months total in dues, but that 12 months total in dues has to be at least $2,000.

59. 0:31:35

    Okay.

60. 0:31:36

    Does that make sense?

61. 0:31:37

    I think so. I'm a little bit worried about-

62. 0:31:39

    I mean, the wording, I'm, I'm all-

63. 0:31:41

    ... certain judges understand what we mean.

64. 0:31:43

    Yeah. If y'all got better ideas on how to word that to make it clearer, I'm all for it. It's-

65. 0:31:48

    But the 4,000 wouldn't include separate fines, like if you didn't cut your grass or-

66. 0:31:53

    Oh, no fine and no fee could count towards the $4,000 or the $2,000.

67. 0:31:58

    So that's only dues.

68. 0:32:00

    That's only dues and assessments.

69. 0:32:02

    Okay.

70. 0:32:02

    So if you've... An assessment would be if the, you know, the neighborhood sign needed painting or, you know, or the pool needed a new liner, whatever.

71. 0:32:12

    Oh, so like the dues, but then also if they say, "This year we need to add $50 to everybody because..." Of what you just said, like a sign or a pool or something like that.

72. 0:32:19

    Something, yeah, like a community, um, community space. I mean, I, I've, uh, I'll give you an extreme here, but I've heard over at, uh, Lake Spivey, uh, the dam is breaking and, um, and they're being assessed something in the neighborhood of, like, $25,000, uh, which, you know, for many, that's not gonna be, you know... And I, and I've... And full disclosure, I, I haven't, I've only, I've heard from a couple different homeowners on it.

73. 0:32:51

    I've done no investigation to, to verify it, but, you know, it seemed legit and it's, it's a real problem. And so, um, I think that's a, probably a separate issue we're gonna have to tackle, uh, once we get a framework down for these associations. Right now, there's not a, a... I just don't think there's enough accountability/transparency, um, around these associations. And so we need to get a framework for a law down, and then we need to come back and fill in a lot of the gaps.

74. 0:33:21

    And there's, there's a lot of issues this bill is not tackling. Um, but I thought it was important that we get something down that, um, that, that just really set it up and, and protected these people, um, giving them simple protections right now, and then we'll come back at a different time and-

75. 0:33:42

    Is there... What's the reasoning behind, um, keeping in a foreclosure right at all as opposed to there's a lien, and then once the, when the property's sold, then the HOA gets their money or something short of foreclosure, like even $4,000 or even $20,000? The idea of... And I know that's how it's been, but, uh, but it does- doesn't seem-

76. 0:34:02

    So what I found was there's... And, and I got a, and I, it... My light bulb for me went off when I got a call from a lady that was served as a officer on her association and, and she said, "Without the, the threat of the foreclosure, um, I've got s- several folks that would never pay their dues." And so, I, that is why that mechanism is there. I- is there a better way to do it? Um, uh-

77. 0:34:31

    I don't know. I bet you there is. I just haven't figured out what that is. Okay. So I just thought at the time, um, best thing I can do is let's take the number up, let's get... Uh, the most important part of that foreclosure that we're doing is getting the fines and fees out of that. Okay. Um, 'cause I, I think that gets that predatory practices out of, out of the equation, um, but still gives the associations the, the mechanism they need to, to, to call, you know, to get the dues, to collect the dues.

78. 0:35:09

    Okay. Um, but I, again, I'm, you know, I'm, there's no pride in authorship here. I'm, I'm all ears if we can come up with a better mechanism. Okay. But I haven't been able to do that. Understood. Thank you, Senator. Mm-hmm. Okay, who's got 13?

79. 0:35:26

    Chairman Kelley. Thank you, Mr. Chairman. Chairman Bryant, thank you for being with us this morning. Yes, sir. Thanks for having me. Appreciate all the hard work you and your committee have been doing over in the Senate, and I appreciate the, the work that you're doing on this legislation. I think trying to put some reasonable guardrails in place for these homeowners associations is something our constituents would appreciate, and I know that's the goal. I, I'll just piggyback a little bit. I, I do, uh, tend to agree with Representative Evans here as to whether we allow this foreclosure mechanism to occur.

80. 0:35:57

    Earlier, the House, uh, voted on legislation as it related to property taxes. Mm-hmm. And we had allowed local governments the ability to as- to assess in lieu of levying property taxes, and the position that at least some of us, when we voted to cut people's property taxes took, was to not allow them to be foreclosed on, but only allow those fees to be collected at the time of sale. And so generally, that's... I have a really a hard time taking someone's property as it relates to, uh, a back payment to a homeowners association or to the government.

81. 0:36:31

    So I, I would hope that we could maybe work on some language to get rid of that foreclosure mechanism. But for those people who have chosen to live in a homeowners association, I'm looking at line 304 where it says that they shall always have the right to install and use a satellite dish in compliance with, uh, the Federal Telecommunications Act from 1996, and I was just wondering, you know, um, where that language came from- It's- ... and how married you are to that. I could see how some people would not want that necessarily.

82. 0:37:04

    I believe that's already in, in law. Okay. And it's, um, again, uh, the, the bill of rights, we kind of pulled, um, we pulled from existing federal and state law, and, um, some of these things are, you know, we can take it out, but it's still gonna be the law. Yeah. So it's, it's more there to, you know... I, I- We can change the law. Again, I'm... y'all- I'm asking. Yeah ... it's your committee. You do what you- I'm just, I'm just thinking- ... need to do. I'm thinking now that, you know, it's, you know, we get our cable and our, our TV a lot different than we did in 1996, and if, uh- Yes ...

83. 0:37:41

    someone wanted to live in a subdivision without a big satellite on top of their roof- That's fair ... and have neighbors. So I was thinking, I was just thinking about if we, if we get into making some amendments, I would maybe want to strike that. So, uh- I wouldn't be opposed if that's... I, I agree things have changed since 1996, but it is a, that is a federal law, so taking it out isn't gonna change the law. Okay. So- Then we may not need it anyway, but thank you. Seems like with, uh, technology, we're always playing catch-up with that, so, um- I guess we could wait on the federal government to make that change.

84. 0:38:19

    I don't think the federal law, I don't think the federal law preempts homeowners associations. I think federal law defines what certain satellite dishes look like. Okay. And I think that's what it's saying, is that if you have a satellite dish that looks like or, you know, is in the compliance with this, this federal act. I don't think the federal law says you have to allow people to install satellite dishes on your property. That's not my understanding of the federal law. Okay. But I may be correct. Chairman Leverett, are you- I don't, I don't think there's any... I've, I haven't heard any complaints.

85. 0:38:51

    No one's called me mad that they can't put a satellite dish on their home, so I don't, I don't think we'd lose anything by taking that out. All right. Chairman Leverett. Thank you, Mr. Chairman. Um, so I, I want to make sure I sort of understand the overall scheme, and I apologize. I, I should have been listening, and I was probably trying to read. So it, it looks like you're, you're doing a few things here. One is you are requiring all the HOAs, whether they be condo or home or landowners, to register with the Secretary of State.

86. 0:39:24

    That's correct. So there's a registration process. Correct. And if they... It looks like if they, if they do not register, the penalty is they can't collect or assess fines, fees, or assessments. That's exactly right. So there's, you know, there... I'm assuming there's some associations out there where everybody just gets along and everybody's great neighbors. Everybody pays their dues. Everybody, if they need to assess, everybody does it, and it's just, you know, it's utopia.

87. 0:39:55

    Um, and if that's the case, then okay, you don't necessarily need, you don't need to register. You at least need to, we need to know you're there, and just send a, in a letter to the Secretary of State's office. You can do that. The only thing you're not gonna be able to do is, you know, if, if Jim Bob doesn't cut his grass and you're upset about it and it's in the bylaws, well, you're not gonna be able to fine him. Okay. I think you described a unicorn, Mr. Chairman. Yeah. I, I, it probably is a unicorn, but, um, you know, but who knows?

88. 0:40:28

    Maybe there's a three-home association out there where everybody loves each other.

89. 0:40:34

    I haven't heard of it, but- I haven't either. But- But it's, it's- But I wanted that opportunity there. Um, the other part too was if, you know, if someone forgets to register or someone, um, or, or doesn't know that we passed this law, there's, they're still gonna be able to... They'll still collect the, they'll still be able to collect their dues, the assessments. But then if someone had a complaint, you know, they tried to fine them and someone had a complaint, well, the secretary of state's, this arbitrator will look at it and say, "Well, hey, well, you didn't register, so you really didn't have the right to collect these, to, to issue a fine." Okay.

90. 0:41:14

    But you still... But I, I didn't think it'd be fair if we said because you didn't register, you couldn't collect the dues. That could be a problem. So that's kind of really the more likely scenario why that's there. Well, and that's a good point, 'cause I didn't catch that. So it, they, they could still assess dues or assessments, but fines, fees, they can't issue liens, and they can't initiate foreclosure- Correct ... unless they're registered. Correct. So it does say in 46 it's unlawful, um, it, but then it, it sort of contemplates that, that the, I guess the penalty for not doing that is you can't, the things we just listed, fine fees, issue liens, or initiate foreclosure.

91. 0:41:53

    Yeah, and I'll, I'll say the unlawful piece was there before we added that scenario. So, um, I, I do agree that probably could be a little misleading, and maybe that should come out. Again, that's, there's, y'all are far more educated in law than I am. So if you felt like that was, um, you know, contradictory, then I wouldn't be opposed to that- Okay ... that coming out. Mr. Chairman, I have just a few other, if, if, if that's all right.

92. 0:42:24

    Yes, sir. So just trying to make sure I understand the bill sort of overall. Mm-hmm. So then, so that 4317A2 is basically addressing the registration statement, what it has to look like, the fee you pay for it, and then there's a requirement of reasonable, you know, uh, inspection of records by the secretary of state. Correct. Um, record retention policies and that sort of thing. Correct. And then 4317A3 appears to just be sort of a, what I would imagine is somewhat standard administrative provisions for denying the, the registration or conducting hearings on the denial or if they take action against somebody, sort of just that kind of legal infrastructure for how that happens.

93. 0:43:07

    Exactly. And I think, again, I think a lot of that was pulled from our nonprofit law and how they, if a nonprofit files and it's, and it's denied for whatever reason, there's a process to appeal that process. And so that's kinda, that's that 43-17A-3 starting on line 99. That is, that covers all that. And then 17A4 kinda keeps going, just talking about getting a little more granular into hearing procedures, and the, the secretary has the right to, you know, subpoena documents.

94. 0:43:39

    I guess you can get subpoenas, and they can conduct hearings. And this, this to me is not so much on the complaint process yet. No, we're not into that yet. But this is about the registration. This is just on if your registration were denied. Okay. Um, and then

95. 0:43:57

    there is a arbitrator provision there, but again, I think, um, uh, starting like on lines 187 on page eight and nine, but that, I think, again, is about- That's all about the, the- Registration ... registration denial. Okay. And then the process for the hearing of complaints starts on line 226. Yeah, with section- And, and that's where you get into where the arbitrator is appointed. Um, you know, they'll hear testimony, they'll get written statements, make a, render a decision, and then, um, and then the, you got 15 days to comply with that decision, uh, or appeal.

96. 0:44:41

    And then you would appeal from the arbitrator's decision to the magistrate court if it's, if you're within the jurisdictional limits. If not, you go to superior court. Correct. Right, okay. And that jurisdictional limit's currently is 15,000. I believe Representative Monahan has a bill to take it to 25,000, which I fully support. Why do you feel that way? 'Cause I, I, I think that makes, I think taking it to 25,000 actually is gonna do a lot of good things for this- It would be the official purpose of the bill ...

97. 0:45:11

    this bill. Yes. I think it's the idea is you wanna try to keep it in a, a more sort of user-friendly environment where one does not have to incur the cost of retaining counsel. That is, that is the goal of... I wanted some sort of administrative process to where, you know, people that either couldn't afford a lawyer or couldn't hire a lawyer, um, to, to have a, a chance to go state their case. Okay. And then, um, uh, uh, uh, one question I had is that we have an arbitration act that kind of limits the, the grounds of appeal from the award of an arbitrator, and I don't s- uh, I, I'm just curious if you would think that would a- apply, or is that addressed in here and I've just missed it, as to whether that act applies to the decision, uh, the appeal from the arbitrator's decision?

98. 0:46:03

    Well, I guess it would, uh... I mean, that did not occur to me. Um, but I would say that, um, you know, when we get into the appeals, it's applying to this code section, not other code sections. Right. So I think that would supersede that, but- That would sort of be my, 'cause it's just a completely de novo review. And that's at least the, the intent is, you know, I want this appeal process to apply to this, this situation and this situation alone. Okay. And then you've got sort of a, of a, of a list of rights that the-

99. 0:46:36

    ... owners have in, in 17A-C

100. 0:46:38

     Yeah, I'm calling that the, the Bill of Rights, and that's, again, pulling from code section. If, uh, Representative Kelley wants to put that satellite dish on, um, by all means.

101. 0:46:48

     Y- you mention you believe it's in existing-

102. 0:46:50

     Not put it on. Not put it on

103. 0:46:52

     ... not put it on. So d- y- you... Do you have a recollection of where that may appear in Georgia law?

104. 0:46:59

     I, I don't.

105. 0:46:59

     Okay.

106. 0:47:00

     I'm sorry.

107. 0:47:00

     Okay. Um,

108. 0:47:04

     and then the fi- section three is the one where you're, you're sort of providing that, um,

109. 0:47:14

     the, sort of a limitation on when one can initiate a foreclosure action based on the amount.

110. 0:47:19

     Correct. We, we changed the amounts, and we've, um, changed really the structure. Again, the, to me, the, the most important part of the foreclosure process is taking out the fines and fees. I, I can't stress that enough. I think that is so important and will solve, um, a lot of issues. I, I think if you end up with a rogue board member that just truly hates their neighbor and wa- wants to target them, um, this takes away that ability.

111. 0:47:48

     And so currently in law, it looks like there is a limit, a monetary limit on the ability of a HOA, for example, to initiate a foreclosure action. The, the, the amount of the lien has to exceed a certain amount.

112. 0:48:02

     $2,000.

113. 0:48:03

     And you're providing it would be four, um-

114. 0:48:08

     Or 12 months dues, but that 12 months dues has to equal at least $2,000

115. 0:48:12

     ... thousand. And then you can include, to your point, you can include other add, like fines and fees and everything like that.

116. 0:48:17

     Cannot include that, correct.

117. 0:48:19

     Okay. And, and the foreclosure process, as I understand it, for a condo, for a condo or HOA lien is not like power of sale foreclosure that you, that lenders utilize. It's, it's like on a mechanics or materials lien where you have to file a lien and then within a year initiate suit. Is that, is that right?

118. 0:48:38

     I, I'm, I'll be honest, I'm not, um, I can't say I'm completely up to speed on, on foreclosure process. I, I mean, I do know that, uh, associations that initiate it is, it is rare that it's followed through. Um, I think probably the bigger issue is the threat of it and, um, and the predatory ability that, that we are giving them by allowing a, a- an association to fine or fee someone to make sure they're getting them to that $2,000 so that they can threaten.

119. 0:49:16

     Um, I think just taking that ability away, uh, again, I think it, it, it, it softens the blow, if you will. Um, or, or it just takes the, um, the harshness out of, of the threat of someone losing that home. You know, if you're not paying your dues, that's one thing. Um, and I'm not, you know, I'm not gon- You know, i- if you get a... I can understand someone getting two or three months behind. You know, you gotta keep the lights on.

120. 0:49:46

     You gotta pay your, you know, you gotta pay your mortgage, and there's just not enough for the HOA dues. Um, you get behind a few months, I, I can... There's reprieve for that. There's, there's, you know, that's okay, but if there's 12 months there, you're, then you're, you're clearly not paying your dues, or you're clearly not gonna pay your dues. And so, um, I do think there needs to be some sort of mechanism there, uh, to make sure people are paying their dues.

121. 0:50:14

     I, I would agree. I, I like-

122. 0:50:15

     Um-

123. 0:50:15

     ... the way you've sort of taken a sort of a, a m- middle ground position where you preserve that mechanism, which I think is essential. It's not all that easy, um, but you put some limitations on it to soften it. Because if, if we just said file a lien and get paid at sale, I mean, for someone like me, I ain't moving.

124. 0:50:33

     Right.

125. 0:50:33

     You're waiting until I die, and you're collecting it from my estate.

126. 0:50:37

     Right.

127. 0:50:37

     And I think that's unfair to the other people in the, in the d- development who are paying their dues. So I think there does need to be some mechanism, but I like, I like the way you're coming at this.

128. 0:50:46

     Right. And I mean, to Representative Evans' point, you know, is this, this may not be the best mechanism, um, but until we can come up with, with some sort of mechanism, you know, I, I thought we at least needed to make some changes around it, and I, I think we've, we've accomplished that.

129. 0:51:02

     And you've got-

130. 0:51:02

     So thank you

131. 0:51:03

     ... you've also got a stay here, which I think was... I- is that, is that, if you-

132. 0:51:07

     Yeah

133. 0:51:07

     ... file a complaint, there's a stay on appeal, and it would also stay any foreclosure as well?

134. 0:51:12

     Uh, correct.

135. 0:51:13

     Okay.

136. 0:51:13

     There's my unders- That was the intent.

137. 0:51:15

     Intent. I, I think that's what the law says.

138. 0:51:16

     So if, if foreclosure proceedings had started and, and, um, the homeowner's is appealing, then, then they can't come in and they can't continue with that foreclosure until, until the appeal pro- all the appeals are exhausted.

139. 0:51:32

     Thank you. Thank you, Mr. Chairman, for your patience with me.

140. 0:51:35

     Oh, yes, sir. No problem. Um, let's see. Representative Crawford.

141. 0:51:41

     Thank you, Mr. Chairman, and thank you, Senator. I... You touched on something in, uh, briefly with the last questions. I wanted to go back to line 226, and this is-

142. 0:51:51

     Sure

143. 0:51:51

     ... 17A5. Um, I've had a few of these in my practice where there have been suits against HOAs, and usually in the governing documents, there is language that requires mediation or arbitration as a prerequisite to l- uh, litigation.

144. 0:52:09

     Mm-hmm.

145. 0:52:09

     I'm, I'm wondering if you can kinda walk me through why we've changed that from those governing documents, and now there is a, um, a mandate with the Secretary of State and an arbitrator. I just wanna understand it.

146. 0:52:23

     Uh, because right now the, um, uh, it, it... That's not in all governing documents, number one. Um, so it is maybe in some.

147. 0:52:38

     No, no, no, I'm saying in the ones that I've done, so.

148. 0:52:40

     But also moving forward, you know, this- it, my understanding is a lot of these covenants, and bylaws, or whatever, you know, this law is not, we're not gonna be able to change those 'cause they're already there. One of ... The law's not retro. It's from the day, this day moving forward when this becomes law. So, um, so I'm, you know ... If that's the process, it hasn't, I guess it hasn't worked for many people.

149. 0:53:13

     Um, but I just don't know that that's the process for every association out there. So in, in those cases, maybe that, maybe that helped those people. And so I don't know that if they're already requiring it, I don't know how this changes that then, other than the arbitrators appointed by the Secretary of State would be the only, I guess the only difference.

150. 0:53:37

     Okay.

151. 0:53:38

     Is that ... I'm not sure if I answered your question or not, but, um, I mean, that's ... Uh, to be honest, that's, you're the first person that's, that has said that to me, that that's in some existing documents. But, um, so it sounds to me like it might be more the exception than the rule, but I don't, I don't know that for a fact. I'm, I haven't phoned through a bunch of different-

152. 0:54:02

     Uh, uh-

153. 0:54:02

     ... bylaws.

154. 0:54:03

     No, I've, I've had a few recently-

155. 0:54:05

     I gotcha

156. 0:54:05

     ... in which we have represented, or, um, HOAs or clients who are suing HOAs. And in each of those governing documents that I've worked on, there is a prerequisite for mediation and arbitration before a lawsuit is filed, and it's mandatory. So I was wondering what went into just your thought process in 17-85, but it sounds like you have seen some governing documents where that's not in there.

157. 0:54:32

     Uh, I would say I've heard from, from constituents where that was not in there.

158. 0:54:37

     Okay.

159. 0:54:38

     I can't, I can't honestly sit here and tell you I've read through their, their documents. Um-

160. 0:54:44

     I don't know that I would have unless I was-

161. 0:54:46

     Right

162. 0:54:46

     ... required to, so.

163. 0:54:47

     So but I do think, um, I, I do think that the fact that they do that is, is a good thing. Um, I think the, maybe the difference would be in some of these cases, um, I would assume if they're being forced to do ... Who pays for that would be my first question, and I would assume both parties have to somehow split that cost. And we're taking that cost off of some of these homeowners that may not be able to afford an arbitrator.

164. 0:55:20

     Um, and it would be picked up by the Secretary of State, which, um, all this would be paid for, this arbitrator, which I'm assuming the Secretary of State's gonna have to bring on an arbitrator, um, all this is gonna be paid for by these registration fees that are gonna be collected. We've, I've heard anywhere from 7,000 to 20,000 associations in our state. Um, the, the general consensus number is landing between 13,000 and 14,000.

165. 0:55:53

     So at $100, which I think is, is minimal and, and should be, any association should be able to cover 100 bucks, um, you add all that up and we should, a little over a million dollars should be able to have no problem hiring one or two arbitrators to hear these complaints. And so I guess taking that burden off of the, the homeowner, um, and the state coming in saying, "We're gonna ... You know, w- we've given y'all a chance for, for many years to, to total local control, but now that local control is out of control, and, um, and we're, we're gonna step in, and we're gonna start arbitrary, start mediating and, and figuring these things out so that ..." You know, really I want ...

166. 0:56:37

     It'd be nice if, if people would just get back to being each other's neighbor and, and not fighting all the time.

167. 0:56:47

     That's my half-

168. 0:56:49

     Finally

169. 0:56:50

     ... half full.

170. 0:56:51

     And fervently we pray.

171. 0:56:52

     Yeah. That's right.

172. 0:56:54

     All right. Representative Evans.

173. 0:56:58

     Thank you, Mr. Chairman. Um, senator, in trying to think about other ways we might protect homeowners against foreclosure, one of the things I was thinking about, and I wanted to see if you would be opposed to the idea, is a longer, perhaps a longer notice period with the homeowners association having to give notice of a right to cure within ... Like, say we extended the notice period, um, you know, got not, not less than 90 days after the notice that is sent with these instructions that this is how you can cure.

174. 0:57:31

     Um, I was wondering how you feel about something like that.

175. 0:57:36

     I mean, I don't, I can't say I'd be against it, but I don't ... It's hard. I n- I would need to kind of process it. But if that's, you know-

176. 0:57:43

     The concept of a plan

177. 0:57:44

     ... that's the will of the committee, then, you know ... Again, I'm ... If y'all got, if y'all got better ideas and that's the committee's will, then I'm, you know, I, I'm, I want this ... I'm trying to make things right for, for our homeowners out there.

178. 0:58:01

     Yeah.

179. 0:58:01

     And so if that makes it better-

180. 0:58:03

     Appreciate it

181. 0:58:03

     ... then that makes it better. I just, I do, I do believe we've gotta have some sort of mechanism to allow, um, to, to ... So people will pay their dues. 'Cause if one person not paying their dues is, is really impacting everyone else in that community, so it is a, a vital part of living in an, uh, in an association. So as long as, um, you know, we're, we're protecting that while still ... You know, the last thing I want is someone to lose their home over, you know, their dues.

182. 0:58:37

     Right.

183. 0:58:37

     But, um, you know, I'm, I'm open.

184. 0:58:42

     Gotcha. No, I appreciate that.

185. 0:58:42

     I'm not, I don't fully ... Uh, again, I'd probably need to talk with you offline to fully understand what you're-

186. 0:58:47

     Yeah

187. 0:58:47

     ... going at, but-

188. 0:58:48

     And I, and I'm gonna see if I can come up with some language-

189. 0:58:49

     Okay

190. 0:58:50

     ... to propose and then can say yes or no. Um, the, the last question I have is, um, just technical. I've been trying ... Uh, if you look on page, um, the last page on line 350, it references a code section And I don't know if my Westlaw is broken, but I cannot find a code section that's 4317A-5. It's in the bill, it's in this bill. Oh, it's new. That's why Westlaw doesn't know about it yet. Okay, okay. Then there's a chance that it might be that we want dash six instead of dash five.

191. 0:59:24

     Um, that's why I was trying to look it up to figure that out, but now that I know where it is, I'll, I'll go back to reading. Thank you. Okay. And, uh, Representative Evans, so I'm clear, were you looking at line 329 and thinking about changing from 30 days to 90? Is that what you're talking about? Yes, I was thinking that's where- Oh, okay. I got you ... I might put it into, um, with a, with some notice language that when you get this notice, and here's how you cure it kind of thing. Okay. Yeah. Oh, okay. I see what you're doing. Yeah, I, I mean, I'd be okay with that.

192. 0:59:56

     Okay. Thank you. Okay. All right. Let's see. I think, um,

193. 1:00:04

     Chairman K- uh, Kelley, I think, which one are you on now? I'm on 13. All right. Lucky 13. There you go. Thank you, Mr.- That's how I roll ... thank you, Mr. Chairman. I know we're having robust, uh, discussion here. Agree on some things, may not agree on some things, but I, I think me and you agree on something, uh, and that's that I've been disappointed in the way the Secretary of State's office has been run in recent years. And, uh, I hope we get a replacement pretty soon, uh, for that.

194. 1:00:36

     Um- Well, we are. And- We don't know who, but we know we are. Yeah. Well, I got my pick. Um, but that's where I'm struggling with us giving that office more power right here, and this is such a real estate transaction. I'm almost interested in putting this in the Real Estate Commission instead of the Secretary of State's office.

195. 1:01:00

     Uh, I mean, uh, I- to me, honestly, I wanted to put it at DCA in the beginning. Um, and then it just, the more we looked at it, the more it made sense 'cause they're, the Secretary of State's office is usually, um, that's where people are calling right now. Um- Is anybody answering? That's a good question. I can't comment on that. I don't know. Um, but, uh, they, the, in talking with the Secretary of State's office and those that, uh, run the nonprofit division, which, um, I've heard complaints from licensing division, um, from the elections division.

196. 1:01:48

     Those are the two biggest areas I have, uh, I hear from constituents on with that, uh, with that office. The one area I've never had a complaint on is in the nonprofit division. So, um, this would be under that, under that area. I just don't want us having to stand up a blue ribbon committee in a couple years working on homeowners associations under the Secretary of State's office. Well, I, I mean, look, I mean, essentially, we've been doing a blue ribbon committee on the Senate on this thing, trying to figure out what we're gonna do.

197. 1:02:21

     Um, you know, again, I, I think it made the most sense now to put it there, but in a year, maybe two years from now, it may, it may make sense to move it somewhere else, but we gotta put it somewhere, um, 'cause that accountability is not there right now. And so we've gotta put it somewhere. And I don't, I mean, I don't, I don't, to be honest with you, I don't care where we put it, as long as it has teeth in it and is protecting, um, uh, is protecting the very people these associations are supposed to be protecting, uh, then I'm, I'm, I'd be fine with it, but...

198. 1:02:58

     Thank you. I know it's gonna generate a lot of, lot of funds to then be used to administer this section, and that's just where I was wondering about it. Yeah, I mean, if we're talking in a, you know, $40 billion budget, we're talking, uh, 1 point, let's call it $5 million. It's not that much, and we're not, you know, there's no direction on that $100 fee. It goes to the general fund. Mm-hmm. So it's, you know, if we feel like we're, they're not doing what they're supposed to do by what this law, potential law says, um, then obviously we can do what we want with that money- Right ...

199. 1:03:37

     and put it somewhere else. Thank you.

200. 1:03:43

     Representative Hong. Thank you. Thank you, Chair. Thank you, Chairman. Um, on that note, I was just looking into, um, the transition, um, if this were to go into effect. And so I'm looking to see if this is signed into law, are we having a bunch of HOAs running to the Secretary of State's office, filing, and can they not collect until the date of filing? Or on line 66, it says, "Upon the Secretary of State's determination of a property owner's association compliance," that it's registered.

201. 1:04:22

     So are we gonna- Yeah, I- ... have to wait for the Secretary of State's office? To your point, I th- in my opinion, it's not in here, and it should've been. Um, I believe we should make it effective January 1 of 2027. I think that's something. That way it gives everyone time to, um, to get their documents ready, to get them uploaded into a portal. Uh, it gives, gives time for the Secretary of State to get word out that you're gonna need to do this if you want the ability to fine and fee.

202. 1:04:56

     Um, and it, it just, you know, does that, uh, does that help people that are being wronged right now? No

203. 1:05:05

     at the same time, we've gotta set up a system that works, and, um, and it's gotta work for everybody. So I do think it should have a January 1, 2027.

204. 1:05:16

     I agree. Thank you.

205. 1:05:17

     Mm-hmm.

206. 1:05:17

     We'll, we'll put that ...

207. 1:05:20

     Okay. Um, Representative Holcomb.

208. 1:05:23

     Thank you, Mr. Chairman. Uh, good morning, Chairman Brasse. I'll, I'll start with the easy ones. Um, the easy ones are lines 282 to 285. It talks about insurance and potential claim that might apply to, it looks like, the HOA's insurance policy. Can you give me an example of that?

209. 1:05:52

     282 through 5, page 12.

210. 1:05:58

     Upon written demand to the properties.

211. 1:06:03

     So, I mean, I guess an example would be someone wants to see the, the property owner's association's certificate of insurance. I mean, that's, you f- you file a letter and, and, and get it.

212. 1:06:17

     It's saying more than that. It's saying that that insurance could potentially apply to a potential claim or submitted claim. So can you give me an example of a submitted claim?

213. 1:06:26

     I cannot. I cannot. Again, I, um, we, we tried to pull this from, from existing law, so I d- I don't even know where that came from. So-

214. 1:06:35

     Okay

215. 1:06:35

     ... if you wanna take it out, take it out.

216. 1:06:38

     Lines 286 to 287, it talks about notice of meetings, and then it states that, that they have to comply with the governing documents and the laws of the state. Does that mean that we're making private entities comply with Public Open Records Act notices? Or what is the intent there?

217. 1:07:08

     I mean, I think it's exactly what it says. I mean, you got a ... You say a private entity. This is ... Associations are essentially a mini government, and where you're supposed to have representation on that government through your officer. And in government, we have meetings, and there's ... Uh, just like this meeting, it was, there's a, what, 24-hour notice that goes out. And so, um, if a, if an association is gonna have a meeting, there has to be ...

218. 1:07:44

     You have to notify your members that you're having that, essentially, a public meeting.

219. 1:07:50

     Okay.

220. 1:07:50

     Um, so that's ... Again, I mean, you're getting into the Bill of Rights, which my understanding is ... I mean, we pulled that from, from law. Like, if, if, if we wanted to strike the whole Bill of Rights, it's fine, 'cause it's already ... It's, it's out there.

221. 1:08:07

     Okay.

222. 1:08:07

     I'm just trying to put it under one, one section.

223. 1:08:10

     Understood. Um, next one i- is, uh, o- on line 194, it looks like that's just a typo, and a recommendations. Recommendations is plural, so I'll just note that out, that that probably needs to be fixed.

224. 1:08:25

     What part are you referring to?

225. 1:08:26

     194. Recommendations is plural, and it should probably be singular, or strike the A, one of the two.

226. 1:08:36

     Sure. I mean, I could see where there could be potential multiple recommendations, but ...

227. 1:08:43

     Would you rather it be strike the A and have recommendations?

228. 1:08:52

     Sorry, I was a marketing major, not English, so however you feel, Representative. Whatever's best for you.

229. 1:08:59

     Okay. And then my other questions are, th- they, they follow along what Chairman Leverett and, um, Representative Crawford were asking, which, uh, were mentioning, which is that typically an arbitration is, one, it's a matter of contract and consent.

230. 1:09:16

     Mm-hmm.

231. 1:09:17

     Um, it's two parties signing a document by which they're waiving their rights to be in court, and this seems to go in to a different direction. And one of my questions would be, what impact would that, would this have on contracts that explicitly have a mechanism of arbitration? Because the courts that interpret arbitration agreements, you will see in case law over and over and over again, is that arbitration is a matter of consent, whereas this is going to force individuals to arbitrate by a matter of statute, which is a pretty radical departure from the standard law.

232. 1:09:57

     With multiple, with multiple appeal lined up.

233. 1:10:02

     Okay, and that's the second thing that's very different that's typical. Because typically in an arbitration, there's finality and certainty-

234. 1:10:10

     Mm-hmm

235. 1:10:10

     ... of outcome.

236. 1:10:11

     Mm-hmm.

237. 1:10:11

     Whereas with this, there are appeals, and that's ... It's just a very different structure, and I think is inconsistent with what we have in the Admi- Administrative Procedures Act. And-

238. 1:10:23

     And that's fair, but I would say what we have isn't working.

239. 1:10:27

     Okay.

240. 1:10:27

     Not, not in this situation. So we're having to go a little bit outside the box here on how we structure this. And, um, you know, again, we've gone through different versions. We've gone through different ideas. At the end of the day, we're trying to protect communities by pr- protecting the members that live within that community. So, I mean, that's the, the overall goal of this. It's not ... I'm not trying to, uh, uh, you know ... I hate to change things for lawyers and how you're used to doing things, but again, what's on the books is not working.

241. 1:11:04

     So, um, I'm not changing anything outside of dealing with HOAs. So how you normally practice and how you, arbitrators normally, how all that works, it all stays the same outside of this code section.

242. 1:11:21

     I, I understand. Um, I think courts might wrestle with some of these interpretations. So a couple of final questions is, one, on the arbitrat- arbitrator appointment, which is on 229, to be candid with you, I practice before arbitrators, and some of them have no clue what they're doing. Like, they just don't. So, um, that's part, part-

243. 1:11:46

     Well, to your point and, uh, Representative Kelly's point, maybe two wrongs will make a right.

244. 1:11:53

     Well, I- I'm wondering if ...

245. 1:11:58

     There's no criteria for the Secretary of State in terms of who might appoint it, and I don't wanna get too far in the weeds, but we would wanna have somebody that has this basis of understanding and knowledge so the practitioners don't have to educate the arbitrator and get that person up to speed, particularly since this is asking for conclusions of law and other things.

246. 1:12:19

     Yeah. I, I think, uh, I don't think there's anybody out there currently that does this, that's, that's gonna be non-biased, if you will. Um, you know, the only people that are dealing with this right now are, are lawyers that work for management companies. And so, you know, to ... I, I would almost rather it be someone that is, has no clue what these, what the process is and that, and that does learn, that does ...

247. 1:12:51

     is able to come in with a, um, unbiased opinion and listen to both sides, listen to the facts, and then make a decision. Um, so-

248. 1:13:03

     The lack of bias I agree with you on, and that's sort of baseline arbitrator requirements. The lack of understanding of the law and the subject matter, that's a different question. Um, so my last questions are just on the appeal side. So going to lines 205 to 207, you can then go to the Secretary of State, and it says that the recommendations can be mo- approved, modified, or disapproved by the Secretary of State. What would be the basis for them making-

249. 1:13:33

     This is ... So you're, you're back in the code section that is on the appeal process if your registration is, if the association's registration is denied for whatever reason. So-

250. 1:13:44

     Understood.

251. 1:13:45

     So I just wanna make sure you, you understand that part.

252. 1:13:48

     Yes.

253. 1:13:48

     Um, okay, so w- restate your question, please.

254. 1:13:51

     The question is ... And this is where this construct is a little bit different from the norm with arbitration, because usually it's finality of the arbitrator's decision.

255. 1:14:01

     Mm-hmm.

256. 1:14:01

     Here, one could potentially go to the Secretary of State where the Secretary of State can approve, modify, or disapprove. So my question is, what would be the basis for the Secretary of State modifying, approving, or disapproving?

257. 1:14:17

     I guess we don't have that listed.

258. 1:14:20

     Okay.

259. 1:14:20

     And if you would like to list that, I would, um, I would be okay with that.

260. 1:14:27

     Talking about the standard review.

261. 1:14:29

     Yes.

262. 1:14:41

     The more we talk about this, the more changes I see coming.

263. 1:14:43

     Mm-hmm.

264. 1:14:44

     Um, all right. That's-

265. 1:14:45

     That's why I'm here.

266. 1:14:46

     Okay. I've got a few people who still want-

267. 1:14:49

     Thank you.

268. 1:14:49

     Uh, and are you done?

269. 1:14:50

     No.

270. 1:14:50

     Okay. All right. Um, who's got 12 over there?

271. 1:14:55

     That's me.

272. 1:14:55

     All right. Back to you.

273. 1:14:57

     Back what? And I-

274. 1:14:59

     Can pull that. Yeah

275. 1:14:59

     ... I, I believe Representative Evans may have been addressing this question with, or this issue with some of her questions. I apologize. I was kind of studying on the bill. We talked about the stay, and w- Representative Evans, were you noting that the re- the cross-reference to the stay section is actually not a stay?

276. 1:15:19

     Right. It should be six, I thought.

277. 1:15:20

     Six. So i- i- and my only issue there was that is ...

278. 1:15:29

     So in other words, if, if, if, if someone files a complaint, it doesn't stay the foreclosure until it gets to petition for review status. So you'd have to go through the arbitration and, um, then file a petition for review from the arbitrator's decision.

279. 1:15:49

     Okay.

280. 1:15:49

     Is that correct?

281. 1:15:52

     Oh, I don't, I'm not ... I don't know really how the section works, but I just noticed that we were referencing the wrong code section.

282. 1:15:57

     Okay. Okay. All right. Uh, and I guess that, that was just sort of a ... I was wondering the, the author's intent, was the intent that the stay would apply as soon as you file a complaint, or that it, it'd apply only upon appeal from the arbitrator's decision?

283. 1:16:13

     Oh.

284. 1:16:16

     So I guess the v-

285. 1:16:20

     I guess the intent is just to ... Uh, the intent is I, I don't want someone to be ... If, if they f- I guess at the time of the filing the complaint, I guess would be the-

286. 1:16:34

     Okay

287. 1:16:34

     ... make the most sense.

288. 1:16:37

     And i- to, to Representative Holcomb's-

289. 1:16:39

     I mean, as y'all know, I've ... we go to ledge counsel, we tell them our intent, and we tell them what we're trying to do in the law, and it doesn't always-

290. 1:16:51

     Stay in front

291. 1:16:51

     ... translate. And so we have smart lawyers like y'all to help me f- figure it all out.

292. 1:16:59

     To drive you absolutely crazy, I know. Um-

293. 1:17:01

     Not yet. We're getting there.

294. 1:17:03

     And, and I think it's-

295. 1:17:07

     Well, your stamina's impressive, man. I thought, I thought you'd been there about 20 minutes ago.

296. 1:17:11

     Nah. We're good. I got another hour.

297. 1:17:15

     Re- re- Representative, uh, Holcomb's comment, uh, effectively saying, "I think a lot of arbitrators can't find certain parts of their anatomy with both hands," um, they, uh- I, I think that's what he said. That's what I heard. I don't know.

298. 1:17:27

     That was the intent.

299. 1:17:29

     Um, the, the way I am, am perceiving you have it set up here is it is a de novo review, so the normal standards in the Arbitration Act I think wouldn't apply. You're, you're basically just providing them a route to try to get a, a disposition of a complaint that, that everybody can live with. And if they can't-

300. 1:17:48

     Mm-hmm

301. 1:17:48

     ... there is ... You can basically go back to more routine court. I mean, you- your petition review puts you in court, so.

302. 1:17:55

     Exactly. I mean, if you get, you know, y- you get fined $1,000 for not cutting your grass, and they, association had to send somebody out to cut it, and they said that's how much it cost, and there's a delta of $800 of what it really costs, do we really ... I mean, uh, can't we settle that at a much lower level than having to hire a lawyer? I mean, that's ... Well, the, the ... What I'm hoping is a lot of these issues get flushed at, out at that first level of defense, um, wrong or right.

303. 1:18:30

     Figure it out there, and then if you don't like it, then I wanted to have the appeals process without totally taking away, uh, what's there now. I just wanted what's there now to be your last level of defense, not your only.

304. 1:18:47

     Okay. Thank you. Thank you, Mr. Chairman.

305. 1:18:51

     Okay.

306. 1:18:52

     Okay. Um, the only ... I think you're the only non-lawyer on our committee.

307. 1:18:59

     Mm.

308. 1:19:00

     So I'm gonna call on-

309. 1:19:01

     Will you give me a hug?

310. 1:19:02

     Representative Momtahan.

311. 1:19:04

     Yes, Mr. Chairman, I will. If that's what you request. Uh, well, thank you. Uh, first comment to the chairman, uh, I'll say this. Uh, you know, we've fixed a lot of scriveners' errors this morning, and I'm afraid the code revision committee next year will have no work at all. So y'all leave some scriveners' errors for me, okay?

312. 1:19:24

     No more.

313. 1:19:26

     So I, I have a question. We had a, uh ... We talked about 252 earlier about, uh, where it says the, uh, "Does not exceed the amount provided in subsection, a magistrate or the county in which the court," you know. So I've got this wonderful bill right here, uh, that we passed out of the House. I wonder if that would be a friendly amendment to add. This, uh, sets the magistrate course to 25,000. I've just talked to our lawyer here. He finds it to be germane. Is that something you'd be willing to accept?

314. 1:19:58

     Well, I think it's up to the char- chairman if it's germane or not, but, um-

315. 1:20:02

     Well, that is true, too.

316. 1:20:03

     Yeah. I'll have to look at it.

317. 1:20:06

     Yeah. Well, like I s- I s- I support what you're trying to do there, so, uh, if you felt the need to do it in this bill, I would ... I'm okay with that as well.

318. 1:20:15

     Um, well, thank you for that. I ha- had another question for you, and that is now that we're contemplating these HOAs, is there a way maybe, or you can help us understand, we've got either a captive or captivated audience with us today, uh, I don't know, we're gonna find out soon, but, uh, is there a way to limit the size of these HOA or, and/or developments as part of this effort, you know?

319. 1:20:39

     Limit in what fashion?

320. 1:20:41

     The size, scope, number of units that are available in each one of these neighborhoods.

321. 1:20:46

     Uh, I mean, I'm sure there's a way. I don't ... This bill's not addressing that.

322. 1:20:51

     That may be the next bill we have.

323. 1:20:52

     Yeah. I mean, as I stated, I'm trying to lay down ... W- We gotta get the accountability and the transparency piece. Um, that has to get done. And, um, you know, when we get into things that are gonna be heavily debatable, that's, those are the types of issues I left off of here intentionally because w- we've gotta make that first step. You know, if we don't make the first step, you can't make the next 10.

324. 1:21:21

     Thank you, Chairman.

325. 1:21:23

     All right. That's all the questions.

326. 1:21:26

     Oh.

327. 1:21:26

     Hang on. Hang on. Vice Chair?

328. 1:21:28

     I'll wait. I'll wait.

329. 1:21:29

     Okay.

330. 1:21:30

     Come on, man. I'm hot. Or y'all are hot.

331. 1:21:37

     That's not even the same title, I'm sure, so.

332. 1:21:39

     Reference.

333. 1:21:40

     Okay. Um, everybody that signed up on here is, is, um, basically in support of the bill. There's a couple, though, Carl Rogers and Roy Cleveland, y'all still have an amendment to ... you wanna make?

334. 1:21:56

     We'd like to talk about one.

335. 1:21:58

     Come on up.

336. 1:22:03

     Celebrity among us, Mr. Chairman.

337. 1:22:07

     Where ... You want me to just-

338. 1:22:08

     Y- You can just have a seat right there if you want.

339. 1:22:11

     Yeah.

340. 1:22:11

     Can you sit right here? We'll talk to you about some other business. You're-

341. 1:22:17

     Right now I'm all ears.

342. 1:22:22

     Oh, God. This chair is so old. Okay.

343. 1:22:25

     Gentlemen, please introduce yourself and tell us what you're thinking on this-

344. 1:22:29

     Okay. I'm Carl Rogers. Uh, presently I live at 3705 Timberwalk Drive, Gainesville, Georgia 30506, which is across Lake Lanier. Roy, you want to introduce yourself?

345. 1:22:42

     Okay.

346. 1:22:42

     I'm Roy Cleveland. I live in the same, uh, uh, neighborhood as Carl. I'm the treasurer of, uh, our homeowners association. I naively, uh, accepted this position about 20-something years ago, not realizing the term was, uh, death as the final office. So, um ... Go ahead, Carl.

347. 1:23:02

     Yeah. I mean, what I'd like to do, if at all possible, our association is very small. Uh, six years ago n- next, next month, we would've lived in Timberwalk Subdivision. Um, Mitch Cleveland's lived there for 25 years, and the subdivision's been there 30 years. It's part of Lake Lanier, off, you know, a finger off Lake Lanier, off Wahoo Creek, and, uh, we've never had the issues that we're hearing today. And I think a lot of that is 'cause we only have 49 homeowners.

348. 1:23:35

     And you know, Carl Rogers gets the opportunity to call his neighbors and say, "Roy, cut your grass." And Roy normally says, "Okay, I'll do it." That's the way we handle things. I think when you get into these big, big developments, which we're seeing now, not only in Hall County, but Gwinnett County, there's a problem right now in Jackson County with a huge development off 53 Highway in Hoschton, Georgia. But, uh, I wanted to tell the author, and I read his bio, and I saw where you work for Lynn Westmoreland, so it made me feel better about the author of the bill.

349. 1:24:15

     But, uh, I think there's a way to address this issue. Serving 22 years here and, and actually passing a bill that formed a new organization to the Secretary of State's office, um, there are a lot of questions we still have. And my question is, do we wanna opt out? Do we wanna dissolve our association? Probably so, because of what we're gonna have to go through. You know, we're not big by any means, uh, and I think you've got a lot of that.

350. 1:24:49

     Uh, Mr. Cleveland and I were talking about this last night, and the reason I'm here today is 'cause it popped up on the website. I didn't get to substitute the bill, um, off the internet. And, uh, uh, it's gonna be a traumatic change, not only for us, but we're guessing 500 subdivisions surrounding Lake Lanier on the Forsyth County side, on the Hall County side, Dawson County side. And we probably have 1,000 HOAs just in Hall County, as a guess.

351. 1:25:21

     But you multiply that, and it may be 14, 15,000 like the author says, but I think there's gonna be more than that. My concern is when you do a bill like this, and I've done one, uh, it, it, it ends up being a bomb because people, the general public that live in these HOAs do not understand, they do not understand what's coming. It can be a silent bomb that will explode, then they react.

352. 1:25:53

     And, uh, and, and by the way, my senator voted for... Signed on to this bill, and he's a farmer. Uh, he doesn't live in an HOA. Uh, he lives on a farm. He grows peaches. He- But he can't tell me the life cycle of a peach, but he's a farmer. But a good guy. But you know, I hope to see him today. But I've got a lot more I can say, but I'm gonna let the expert... Mr. Cleveland here is a certified public accountant. He's been our treasurer for 25 years, and he's done an excellent job. And we keep everything above board.

353. 1:26:26

     Occasionally, we have an issue with an owner, even though they know the covenants and know the restricted covenants, and then we have to massage them to bring them around. But we don't threaten them. I don't threaten them. Mr. Cleveland doesn't threaten. Nobody on our board is a threat to any of our owners, the 49 owners we have right now. I'll let you...

354. 1:26:48

     Okay.

355. 1:26:51

     In many of the small HOAs like ours, we elected to be an HOA and not a POA. Uh, as I understand it, we're being pulled under the, the regulations or in the law that, uh, sort of treats us more like a POA than an HOA. Um, for the, it's for the lawyers to, to answer. I'm just a lowly accountant trying to live with what you write. But, um, I think there are a lot of good ideas that I've heard discussed here this morning. I think there's some worthy objectives in what you're trying to do.

356. 1:27:22

     But if I understood the one non-lawyer that was talking earlier, uh, you haven't decided fully who all this applies to. It looks like it applies to everybody who is an HOA at the moment. I do think you need to address that question before you pass a bill like this, 'cause it's better to figure out, uh, you know, if it applies to you or start calling your representative trying to figure out what it means for you. Uh, I will say that, uh, again, in many of the small HOAs, it's volunteers that do all the work.

357. 1:27:53

     And the more work there is to do, there are gonna be that many fewer people trying to do what's right and help the community be a, a good place to live. That's really all most of us are for after. You might also consider, uh, a law somewhere that says that anybody who's buying property in the State of Georgia, if there's covenants involved, should sign a statement that they have read them and they intend to comply with them before they buy the property. That way, they can't deny knowledge of what's in there when they move into a neighborhood and start complaining about what the covenants are.

358. 1:28:26

     I find too many people who come in seemingly have barely read what's there, and you sort of have to educate them, uh, as time goes on about what the covenants really say and that they've supposedly agreed to, after a look at the definition of a covenant. Um, that's probably the gist of my comments.

359. 1:28:47

     My suggestion, Mr. Chairman, and experience I've had over the years here, and of course I've been out 10 years, um, uh, I would recommend a study committee. The author may wanna do that eventually. Um, a study committee to address all over the State of Georgia and, and bring everybody in on the table. Um, I think it will help all of you all because you're gonna continue to get bombarded with people calling you after the fact if you pass a bill the way it's written right now or will be written.

360. 1:29:21

     Nothing against the author. Been there, done that, and have been, uh, have been scrutinized tremendously, um, by other bills. And, uh, also addressing another, uh- organization that's attached to the Secretary of State. And I will say the representative down here was right. Secretary of State does not have enough support people. They do not have enough dollars. In my last 12 years of serving here, I got a, I got a complaint every week about a Secretary of State licensing board about something.

361. 1:29:59

     Well, it seemed like it was every week. But it's a real concern, and it should be a concern for all you elected officials as well. And thank you for your time.

362. 1:30:08

     Yes, sir. I don't think those, uh, problems have changed. I, I still hear a lot of them.

363. 1:30:12

     I'm sure they haven't.

364. 1:30:13

     Yeah.

365. 1:30:14

     I'm sure they haven't.

366. 1:30:14

     Can I have one more quick comment?

367. 1:30:15

     Yes, sir.

368. 1:30:16

     If you're gonna have this arbitration procedure, I don't see why the people who are requesting the use of that service should not have to pay something, and it should be a tiered basis based on the size of the HOA-

369. 1:30:27

     Sure

370. 1:30:27

     ... so that the taxpayers don't have to fund all this. And, uh, I know the fees are, uh, directed toward that. Also, a closer definition of fines versus reimbursement for, uh, when a homeowner doesn't do what he's supposed to do and you have to go in and maybe clean up his landscaping, cut his grass, whatever, and then you bill him for the service. Uh, we've always billed, and we've done it very rarely, the actual cost, and we can prove we're only billing the actual cost of what's...

371. 1:30:57

     I don't think that should be included under the definition of fine if you're not going to allow someone to do anything but collect, uh, dues and not collect fines. I can understand these arbitrary fines that where they just make up a number to punish somebody because somebody doesn't like somebody or whatever. But, uh, I, I would submit that that ought to be considered whatever you do.

372. 1:31:20

     Okay. All right. We've got a couple of questions for y'all, so-

373. 1:31:23

     Okay

374. 1:31:23

     ... uh, Representative Holcomb.

375. 1:31:25

     Thank you, Mr. Chairman. Good morning, Mr. Rogers.

376. 1:31:27

     Good morning.

377. 1:31:27

     Good to see you.

378. 1:31:28

     Good to see you.

379. 1:31:28

     Um, do y'all have binding arbitration in your existing documents now-

380. 1:31:34

     Uh-

381. 1:31:35

     ... for disputes?

382. 1:31:37

     Um, I, I think we do, but, uh, bylaws are quite thick and I don't have a, uh, an instant recall of everything that's in them. But we've never used them, never used that.

383. 1:31:47

     I, I might need you to get into that microphone-

384. 1:31:49

     Sorry

385. 1:31:49

     ... 'cause we got people watching us-

386. 1:31:50

     Yeah, sure. Gotcha

387. 1:31:52

     ... from, from afar.

388. 1:31:52

     Uh, would you like me to repeat that?

389. 1:31:54

     If, if you don't mind.

390. 1:31:55

     I'm not absolutely certain. I think we probably have that provision in our bylaws, but we have never had to use, uh, an arbitration. We really never had a serious legal dispute with anybody. Um, as Carl says, we've mostly dealt with people either through a letter or a call or a personal meeting, discussion, and sort of resolve it as neighbors really should. But I know that's not always possible in the larger HOAs.

391. 1:32:23

     Right. Okay. Thank you.

392. 1:32:24

     Thank you.

393. 1:32:25

     Okay. All right. Vice Chair Reeves?

394. 1:32:29

     Representative Rogers, thanks for coming. Um, one of my HOAs in my district said try to, um, get something so that it doesn't interfere with the HOAs that are working well. There are some that, you know, need some restrictions, but most of them don't. You said your neighborhood has about less than 50?

395. 1:32:47

     Dude, um, 49.

396. 1:32:49

     Yeah, 49.

397. 1:32:49

     You know, from, from 23 years and going out with doing real estate stuff, once you get above, like, 75 or 80 units, that's when you get into amenities-

398. 1:32:57

     Sure. Mm-hmm

399. 1:32:58

     ... and larger money to take care of those amenities, and that, um, analogy about cutting the grass and arguing about how much that costs and all that. That's when you get into the bigger neighborhoods-

400. 1:33:08

     Right

401. 1:33:08

     ... uh, where they're holding more money and there are more disputes. What, what threshold were you thinking about? 75 or 80, 100? What, what's something that you had in mind?

402. 1:33:17

     We were thinking about 25. Uh, but, you know, 75 makes sense, 50 makes sense. But, uh-

403. 1:33:24

     1,000, uh-

404. 1:33:25

     No, no, no

405. 1:33:25

     ... for money or units?

406. 1:33:26

     Units.

407. 1:33:27

     Okay.

408. 1:33:27

     Units.

409. 1:33:28

     Well, if it's 25, y'all are in.

410. 1:33:29

     I was gonna say, I think you mean a higher number than that from what I-

411. 1:33:32

     Well, that's true. That's true. I beg your pardon. I misunderstood.

412. 1:33:37

     I was thinking about- ... like, 75 or 80 units or, um, $75,000, you know, per year, some threshold to where-

413. 1:33:46

     For total dues or something?

414. 1:33:47

     You don't... Right, right.

415. 1:33:48

     Okay. Yeah. Uh, I would say some- well, if you're talking dues, uh, I'd say 50 or up. And if you're talking-

416. 1:33:54

     Yeah

417. 1:33:54

     ... about units, I'd say 75 to 100.

418. 1:33:57

     Okay.

419. 1:33:57

     Our dues are minimum dues. We don't have the amenities, the swimming pools, the golf courses. Uh, we do have wide streets with sidewalks. Um, we don't have anything that it costs the homeowners anything. Our dues this year are $140 a year, so-

420. 1:34:17

     Okay.

421. 1:34:17

     The-

422. 1:34:18

     No, no swimming pool.

423. 1:34:19

     Well, and, and that's, that's a serious, uh, point to make, because if you get to a certain level and you've got volunteers, you don't have a management company, you don't have a lot of these disputes about you can't have the Georgia Bulldog on your-

424. 1:34:32

     Right

425. 1:34:33

     ... front porch and stuff like that, like some of the ones with management companies do. So, um, thanks for raising that issue of a threshold. And maybe have a provision in there that the secretary of state can initiate, uh, scrutiny if there's a problem with one lower-

426. 1:34:47

     That's another idea

427. 1:34:48

     ... but, but have a threshold of, uh, you know, both a dollar amount and a number of units. Um, and above that you're automatically in it. If it's below that, if there's some complaint. You know, I had one neighborhood where the, the president was, like, hiring himself to do the landscaping and wasn't giving transparency on the bank account and stuff like that. And I think Chairman Brass has brought a real issue, uh, here with, uh, having a mechanism other than filing a lawsuit to-

428. 1:35:16

     Right

429. 1:35:16

     ... have, uh, some scrutiny of, of other people's money.

430. 1:35:20

     Right.

431. 1:35:20

     So appreciate you all coming down.

432. 1:35:21

     Sure. Thank you. Um, I might add also, we do have insurance. We do have directors and officers liability coverage. We have, uh, employee dishonesty coverage in case there is an embezzlement to protect the property owners. We have done all that over the years. The big- one of the bigger challenges we have are getting people to serve. people today don't wanna serve. And you can understand why, 'cause it is an intense type of meeting, but we try to get along to get along.

433. 1:35:52

     And, and that's what we should do as neighbors. Um, Roy knows all the neighbors. I probably know a third of them and lived there nearly six years. And, uh, you know, it's, it's kinda sad, but we do have an annual meeting, but which we pay for, our association pays for, but we still don't get everybody to come. Um, it's just the way it is, and it's, it's hard to get people to volunteer to do it like I did, so.

434. 1:36:20

     Maybe you need to have it down in the Bahamas.

435. 1:36:22

     We could have it on the lake.

436. 1:36:26

     True.

437. 1:36:27

     Could have it up in Union County.

438. 1:36:28

     Yes, sir.

439. 1:36:29

     At Old Union.

440. 1:36:30

     Well, we'd welcome you up there.

441. 1:36:32

     Okay. Would you come?

442. 1:36:34

     I'd be happy to join you. Yes, sir.

443. 1:36:35

     Okay.

444. 1:36:37

     That's all we had.

445. 1:36:38

     I have a question for the author.

446. 1:36:40

     Sure.

447. 1:36:42

     Oh.

448. 1:36:42

     Uh, what number are you?

449. 1:36:43

     15.

450. 1:36:44

     15?

451. 1:36:45

     16.

452. 1:36:45

     16. Tap on it, see if it works.

453. 1:36:49

     Yes.

454. 1:36:49

     No.

455. 1:36:50

     Yes.

456. 1:36:51

     Does that work?

457. 1:36:52

     All right.

458. 1:36:52

     You got it?

459. 1:36:53

     Yeah, I got you now.

460. 1:36:54

     All right.

461. 1:36:55

     Uh, all right, my question is, the one and only time in my life I, I lived under, uh, HOA rules, uh, we sold the house a few years ago. We were there for 25 years. Uh, you're talking about getting notice. It's, uh, what's recorded in the deed records should give you notice of, uh, what the HOA, uh, recommendations or what they're, what's in them.

462. 1:37:22

     Yeah. I make sure I send an email to everybody who's supposed to be buying a property-

463. 1:37:26

     Right

464. 1:37:26

     ... of the covenants.

465. 1:37:27

     Okay.

466. 1:37:28

     But I f- find often the real estate agent or the closing attorney or whoever hasn't really fully informed people. I guess that's where-

467. 1:37:35

     But that doesn't excuse your-

468. 1:37:36

     Yeah

469. 1:37:37

     ... the purchaser from knowing what's on the-

470. 1:37:38

     Right

471. 1:37:38

     ... public record. So anyway, so for my HOA, the, um, uh, covenants were written very poorly. No teeth at all to do anything. And our, uh, dues, I think, were right around $100, $120. 125 houses possible in that subdivision. And the purpose of the money was to, uh, sit in the bank for a while and then repave the, the roads in there.

472. 1:38:16

     And that was really all that we had. We, we did have some mowing along there that we had to have done.

473. 1:38:22

     Mm-hmm.

474. 1:38:23

     Um, but what you got here replaces any system that's in a, a valid set of homeowners covenants of how to address these problems, right? This supersedes any- anything else that's out there.

475. 1:38:41

     It... No, it doesn't, it doesn't change covenants. I mean, there, you know, it changes a process of which, um, if, if there's a, if so- if there's an issue that cannot be worked out locally.

476. 1:38:56

     Mm-hmm.

477. 1:38:56

     Um, in, in the case of that neighborhood and what Mr. Rogers and Mr. Cleveland have described, the only extra step they're gonna need to do is file, upload everything that we've already heard them, that they do. Upload their financials, upload their, um, their bylaws or covenants, upload the names of the officers. All their, their only extra step is to upload that into a portal for the Secretary of State's office and pay $100.

478. 1:39:30

     And then they can go back to, to their neighborhood where everybody gets along, they work out everything locally. It, you don't have to go the arbitrator route. You only go the arbitrator route if that has to be initiated by someone. They could initiate it. If they had someone that just wouldn't cut their grass, you educated them, Mr. Cleveland, and, and they didn't cut their grass and, and they refused to and, and wouldn't pay their fines, you would have a mechanism without the association having to hire a lawyer and, and, and go to court.

479. 1:40:07

     This gives you a mechanism. Um, your only extra step, but in your... As y'all, as both Mr. Rogers and Mr. Cleveland stated, y'all are working everything out locally, and that's the way, that's the way HOAs should work. I mean, they're a, they're a model for the state. Um, however, there are, there are many other models that are not working, and people are being wronged, and this gives those people, gives them a mechanism, gives them a, a path forward without having to hire a lawyer, which they may or may not be able to do for whatever reason.

480. 1:40:45

     So we're not changing covenants. We're not... We are just simply giving a path forward for people if they cannot work it out locally. We're giving them a path forward to where they don't have to hire a lawyer and don't have to go to court.

481. 1:41:01

     Okay. So the intent is that this is a, kind of a last resort. Let, let's-

482. 1:41:06

     Yeah.

483. 1:41:06

     Let the covenants work.

484. 1:41:07

     I still want everything to work out locally. I mean, by all means, that's, that's the best way to do it, and that is, a- again, that is how HOAs, I, I believe that's why they were founded and, and why, and how they're supposed to work. The problem in, in many cases, and I don't, I don't think they're one of these cases, but in many cases, um, it's just, you get, you end up with, let's just call it a rogue board member or, you know... I mean, we're just ending with this huge division in some of these neighborhoods.

485. 1:41:41

     I don't think they're one of them. And so what I tried to do is set up a system that protects those people who are being wronged- with having as little punishment for those that are doing it right as possible. And so, so the ones that are doing it right, the only extra thing they have to do is do everything they're already doing, but pay $100 and put it into a, into a system, um, with the Secretary of State. That's it.

486. 1:42:11

     All right. So with the, the very poor HOA covenants that my subdivision had, if this goes into law, then I could take advantage of this and use it to... 'Cause we had people that didn't pay.

487. 1:42:25

     Mm-hmm.

488. 1:42:27

     Because they, they said, "We'll just take advantage of everybody else," and-

489. 1:42:30

     I, I think this would give them a path forward on that. I mean, in, in that case, they still have the foreclosure mechanism there. Um, again, I think if that were to happen, I mean, that's where you start to see a lot of the-

490. 1:42:44

     Yeah

491. 1:42:44

     ... the divide and a lot of the, the-

492. 1:42:47

     The, the-

493. 1:42:48

     ... the hatred, if you will.

494. 1:42:49

     Yeah. In, in our covenants, there was no foreclosure or anything like that. You didn't have that option.

495. 1:42:54

     Well, that was state law, so the, it's, it's... That's already been state law, and I don't know how long it's been state law.

496. 1:43:00

     Okay.

497. 1:43:00

     Maybe Mr. Rogers and, and Mr.... My old boss, maybe they did it. I don't know.

498. 1:43:08

     Okay. Thank you.

499. 1:43:09

     Sure.

500. 1:43:09

     That answered my question.

501. 1:43:11

     Okay.

502. 1:43:12

     All right. I think that's it. Thank you.

503. 1:43:13

     Thank you, Mr. Chairman.

504. 1:43:14

     Thank you.

505. 1:43:14

     Members of the committee.

506. 1:43:22

     Pick it up.

507. 1:43:38

     Make sure I have my quorum. All right, let's see. Um, I'm gonna start at the top of the list now and go to Brandon Greenberg.

508. 1:43:54

     Hi.

509. 1:43:55

     Good morning. I think it's still morning.

510. 1:43:58

     It is still morning, right?

511. 1:44:02

     So there's been a lot of good, healthy debate about this bill, and I really appreciate that, being able to see it and observe it. Um, I think there's things that obviously need to be worked out. Um, but the intent is what is really, really important here, and I appreciate the honest attempt to make sure that is heard. So Chairman Me- Members of the Committee, thank you for allowing me to speak today. My name is Brandon Greenberg, and I am here in support of Senate Bill 406, and I urge that it immediately passes. I'm not here as a political operative. I'm here as a homeowner, a husband, and expecting father. My wife is pregnant with our first child, and like many young families in Georgia, we bought into a neighborhood believing that an HOA existed to preserve the community, maintain shared property responsibly, and help neighbors live well together.

512. 1:44:44

     That is the promise. But in our experience, the reality has been very, very different. What should have been a season of joy, instead our family has spent months, four months exactly, dealing with silence, fines, threats, predatory threats, legal letters from an HOA over a simple attempt to make our home safer. Next to our driveway, there is an area of land that has been badly eroded because of improper drainage. This is not a new issue. It has been raised before. Neighbors knew about it. The HOA knew about it. People in the community had seen the problem persist for years prior to our, uh, ownership, and yet the area remained unsafe, muddy when it rained and hazardous when it froze.

513. 1:45:25

     My sw- my wife simply asked for a safe way to walk to and from our home without stepping into mud or slipping in freezing conditions during her pregnancy. So I did what any husband would do. I listened, because a hypothetical fight with your HOA is a whole heck of a lot better than a real one with your pregnant wife. I solved the problem in the smallest and most practical way I could. I installed pavers, stepping stones. Within days, we received a violation notice for an unapproved modification. That notice told us that we had a right to request a hearing, that if we did not act within 10 days, we would waive our rights, and we followed the instructions immediately.

514. 1:45:59

     We called, we emailed, we asked what process we needed to follow specifically. We were then instructed to submit an architectural request, which we did all of that. Under our governing documents, we believe two things mattered. First, that fines should not be enforced according to Section 3.21B, that if, if a hearing or appeal is invoked, fines cannot be levied. And secondly, according to 6.2, if an architectural request was submitted and not acted on within 30 days, the request would be deemed approved by omission. We followed the process and we were t- what, what we were told.

515. 1:46:29

     We submitted that, what, what was required. We heard nothing. We followed up repeatedly in November and December, and still nothing. So like any reasonable homeowner, we relied on the instructions given to us. I assumed the matter had been resolved according to the process that they themselves gave us. Then, out of the blue, on January 13, fines began suddenly to be imposed. I immediately requested a hearing, emailed, and called. We were told we had rights, but those rights never seemed to truly function in reality. We were delayed, redirected, and kept in the dark. I made more than 50 separate attempts by phone and email to communicate with the property management company as well as the HOA.

516. 1:47:05

     The HOA board itself s- chose not to speak with us. We were finally given a hearin- in hearing in February 11th, a month after, and all fines had already accrued and had been imposed and are on our balance ledger with weeks of silence. Today, we're facing thousands of dollars in fines, threats of legal fees, and threats of restoration charges, all which are estimated and not given to us in advance and will be assessed to our ledger when they choose to do so. The possibility of a lien has been threatened as well as foreclosure. That is why I'm here, because this is not really about pavers.

517. 1:47:39

     This is about power without accountability. It is about homeowners being told that they have rights on paper, but being denied those rights in practice. It is about boards and management companies operating in the dark, enforcing selectively, escalating quickl- quickly, and forcing families into legal and financial distress without any meaningful oversight review. My family's experience shows why SB 406 is necessary. When an HOA or its management company can ignore homeowners, delay hearings, impose fines anyways, and escalate to lawyers and liens all without meaningful outside oversight, the balance of power is broken.

518. 1:48:16

     SB 406 begins to restore that balance by requiring registration, creating a state-compliant review board, and establishing a clearer standard for homeowners' treatment and collection processes, which is incredibly important. It is designed to pres- to bring transparency, oversight, and due process, something that is an inalienable right as an American, to a space where many homeowners currently have none. The average homeowner has almost no practical remedy except to spend money they do not have to fight a system they never truly consented to.

519. 1:48:48

     My wife and I consider ourselves incredibly blessed. I am a graduate of the University of Alabama School of Law, and she is an accountant. Both of us have a formal education that inquire, that encourages inquiry and a focus on factual accuracy. I can only imagine the emotional strain and financial burden placed on families with far less privileges situ- a far, far less privileged situation or sub- who are subjected to similar unfairness. An HOA should be a fiduciary steward of the neighborhood. It should help preserve property and community.

520. 1:49:21

     It should not become a private enforcement machine that acts as the investigator, prosecutor, judge, and executioner. I believe in rules. I believe in property values. I believe in well-kept neighborhoods, but I also believe in fairness. I believe in transparency, and I believe no Georgian family should be pushed toward financial punishment or a lien because they tried to make a dangerous area safe for a pregnant wife after repeated inaction by the very people responsible for its maintenance. Being a good neighbor used to mean something.

521. 1:49:53

     It used to mean helping one another. It did not mean watching for technical violations, taking pictures of your neighbors, and using fines to strengthen a balance sheet. It did not mean refusing to speak to families while legal threats pile up. It did not mean punishing people for solving the very maintenance failures the associations has ignored. My family's story is one of thousands in this state, but this bill matters more because there are many more, and I assume it will not pass before I can actually get the care.

522. 1:50:25

     The bill is not about anti-HOA. It's about pro-accountability, it's about pro-transparency, and it's about pro-homer, pro- pro-homeowner, and it's pro-neighbor, which is most important. I respectfully ask that this committee advances SB 406 and Georgia homeowners a real bill of rights, not one that exists only on paper. Thank you.

523. 1:50:46

     Thank you. I have no questions.

524. 1:50:48

     No question.

525. 1:50:49

     Mm-hmm.

526. 1:50:49

     Okay. Thank you.

527. 1:50:53

     Betsy Bradfield.

528. 1:50:54

     We have to say no.

529. 1:50:56

     And, oh, we have a hard break at 11:00.

530. 1:51:00

     I'm gonna make it so quick.

531. 1:51:01

     So brevity is key.

532. 1:51:02

     You got it. Um, thank you, everyone. Thank you, Chairman and Committee. My name is Betsy Bradfield. I'm with the Georgia Association of Realtors, here represent- representing 49,000 realtors across this state of Georgia who are in full support of this bill. Um, there are good associations, like you heard from previously, and there are also bad associations, which you just heard from. Um, and unfortunately, not all associations are created equal, and so we believe that SB 406 is a really balanced piece of HOA legislation, like one that I haven't seen since I've worked for the realtors for the past five years.

533. 1:51:39

     Um, it preserves HOA governance and rule of law, while it also protects these homeowners who are being unfairly foreclosed upon. And as realtors, we are required to provide the, uh, whether or not a, a, a buyer at the closing table, if there is an HOA and the governing document, the buyer is not required to read them, but my people have done their due diligence. Um, and so it is a, it is a balance for us to walk because, uh, we live, realtors live and die by the contract, and, uh, you are signing into your HOA. But at what point do we say that it is unfair to take someone's largest investment they may ever make in their life for $2,000 and potentially fines for not cutting grass or painting paint?

534. 1:52:21

     I saw a story that, um, a man, foreclosure proceedings were brought upon him because he did not paint his front door in a timely manner, and he didn't paint his front door because his wife was in the hospital and she was passing away, and he was there to take care of her in her final days, and that is why he missed that, um, that deadline to paint his front door. Um, many of the complaints that were made in this, um, the Senate Rules Subcommittee that was set up by Chairman Brass are vast. Um, and but many of the complaints that were made, they're al- they're already current law what their HOAs are currently violating, and the HOA cannot be held accountable for violating current law because there's no teeth.

535. 1:52:58

     So there is no point, really, in making something that is illegal already more illegal, as you all know, but there is a point in adding an enforcement mechanism, which can be done through this appeals process, um, set up in the Secretary of State. And, uh, there's also precedent already for the Secretary of State because Georgia POAs have to file a formal declaration in the land records where the property's located, and then they have to file as nonprofit corporations with the Secretary of State. Um, this would also bring condo associations, POA associations, property owner associations, and homeowners associations all under the same.

536. 1:53:33

     Right now, they are not all required to follow the same laws, which is, uh, really fun for me to do my job. Um, but also to Representative Momtahan's point about what happens when some of these HOAs get too big, um, we've also found that in a lot of cases, local governments require HOAs to be created. They will require a developer to institute an HOA before they will permit that development. And so that is also what is happening, is there are some properties who, uh, and some developments who were never intended to have HOAs, and now they have to have an HOA in order to even get off the ground.

537. 1:54:08

     So we are fully in support of this bill and trust that you all will, you know, properly vet any amendments. I did not go to law school. There's not a, a jar for me to put money in here like there is in Senate, Judy. Um, but happy to answer any questions, um, that y'all may have, but thank you for hearing this bill.

538. 1:54:26

     I see no questions. Thank you.

539. 1:54:27

     Thank you.

540. 1:54:30

     Let's see. T- t- t- all right. Justin Mathis.

541. 1:54:44

     Um, good morning. My name is Justin Matias. I, actually, I caught you- Oh, Matias ... on the phone the other day. Yes. Um, and so thank you, honorable members of this committee, for the opportunity to testify here. Hopefully, you will vote yes to this bill and consider additional amendments to protect Georgians' property rights and due process rights. Um, my HOA experience is pretty similar to Mr. Greenberg. Um, just, um, my neighbor, she decided she didn't want the storm swell water to go through it anymore, built a dam basically that started eroding my property, um, going towards the foundation of my home.

542. 1:55:20

     I reached out to the HOA. They refused to meet with me. They told me to work with the City of Austell to develop a drainage system. I spent over $25,000 on it. Um, after that, that sort of spurred them to keep coming after me, the HOA, then with more arbitrary demands and fines that they start back charging me legal bills. Um, our neighborhood, it's called Heritage Place. It's in Austell. It was recently featured in a news story by Atlanta News First about these abuses, including trying to foreclose on somebody's home over some grass around their mailbox.

543. 1:55:55

     Um, basically, though, I just wanted to, to speak here about some other types of things that, um, happened. I'll try to keep it as brief as possible. But we haven't had elections. They fraudulently opted into a, uh, POA where they never had the votes. There's no financial transparency. They produce a budget document claiming that they take in $150,000 in income for a pretty modest neighborhood that costs $50,000 to run, and when you ask for the documents, you can't get them.

544. 1:56:26

     I tried to be on the board. They refused to hold an election and then immediately, um, went and racked up legal bills on me in retaliation. They've already run a lot of people out of their homes there who have sold at, uh, one lady that I talked to s- sold at half the value and then paid them $30,000 on the way out the door in really what's essentially a extortion racket. There's, uh, a few other people too who have gone through the same thing. About 80 homes out of 156 there, I think it is, uh, about that number of liens on them.

545. 1:56:59

     And under a POA, they can just foreclose pretty easily too. So they're trying to do that on a couple homes right now and continue to rack up fines on me. They prevent you as well from being able to pay the annual dues, so they lock you into this kind of, uh, catch-22 where you can't pay the dues and then you're gonna get in trouble because you didn't pay the dues. Um, I myself now have wanted to just flee this neighborhood. I tried to put the home on the market because they refused to allow me to do any property upgrades.

546. 1:57:29

     I have a split-level home. They won't let me build back stairs and a deck on the back of the home, so I can't get certain types of loans because it's a safety issue. Um, and never once have they addressed my neighbor who's the one who's damaged my property. Instead, I'm getting fined for not paying her money. So really what's happening with this board is that it's just personal retaliation against, uh, certain people. And these people aren't elected. They don't have the qualifications to run an organization that really has, uh, by my math, if you say each of these homes are 300 to 350 and there's 156 homes, it's, you know, over $50 million worth of assets, and they act like, um, you know, dictators about it.

547. 1:58:13

     So there may be good HOAs, but, you know, the same as, uh, somebody could say, "Well, my house isn't broken into. Why do we need laws about, uh, robberies?" Well, a lot of people are, though, going through that, and there needs to be equal protections for all Georgians on their property rights. Um, a lot of people too now if, uh, I don't even know what the benefit of HOAs are in a lot of places because now all of these stories and these reputations, they don't even wanna move into a HOA community. They, they purposely look away from it. So the law being meant to protect people, um, you know, this, this bill needs to pass.

548. 1:58:49

     Um, it's wiping out wealth and equity for a lot of Georgians, limiting property values. And for me as well, um, I did go to an attorney when, just like the gentleman Mr. Br- Greenberg spoke, um, they, they said, "Look, we can't... We're unlikely to collect any money from them. This is gonna be an endless process." I've already spent over fi- uh, about 15,000 on attorneys, and there's been no resolution to it at all. So that's why there needs to be some kind of, uh, arbitration board where you can, um, come to and get these kind of things settled because they're allowed to come and say, "Look, uh, yeah, you owe us, uh, 8,000.

549. 1:59:26

     Now you owe us 10,000." Um, and there are also these other types of demands. But there's no equal footing because then they're also charging me for their attorney bills and, but I'm not allowed to charge them for their, for my attorney bills that I incur. So, um, I think there needs to be that equal footing of you cannot, uh, hopefully an amendment that you can't back charge automatically residents that are bringing a complaint and a case to you and then saying, "Yeah, you owe us 10,000 for these just frivolous legal bills that we racked up," and then use that as a impetus to foreclose on you.

550. 2:00:03

     So, um, I had a lot of other things to discuss, but to keep it, um, brief, I mean, that was the main thing, is you got people acting like Judge Dredd as part of the HOA. They're unelected. They are the, um, you know, judge, jury, executioner. They make up rules that nobody even knows. In fact, too, when I moved in, we didn't get the covenants at all, and you couldn't find it because they established this POA, uh, while I was moving in and changed the name. So, um, anything you guys do is go- you know, this committee does is gonna be great to help us out.

551. 2:00:39

     So-

552. 2:00:39

     Thanks.

553. 2:00:40

     Yeah.

554. 2:00:40

     Appreciate what you told us.

555. 2:00:42

     Thank you. Thank you.

556. 2:00:43

     Yes, sir.

557. 2:00:45

     Yeah, can, can you all consider like a, some kind of amendment about not being able to back charge legal bills, like, unless it's court ordered or something like that?

558. 2:00:54

     Yeah.

559. 2:00:54

     Another colleague of mine too is interested in term limits, but so I'm just relaying that as well.

560. 2:01:00

     Oh, another bill.

561. 2:01:05

     All right, let's see. Um, Caroline Simmons.

562. 2:01:21

     Good morning.

563. 2:01:22

     Morning.

564. 2:01:26

     Where shall I start? Let's start with 405. 405 is the number of days it has been since I requested the financials from my community, and I don't have them. We don't know where our money is going. They won't tell us where our money is going. They won't give us insurance policies. They've-- I've gotten a letter from the attorneys telling me that I'm not entitled to what I'm asking for. There's a court case, Kalis versus Parkridge, that very well outlines that we are entitled to bank statements, registers, policies, contracts.

565. 2:02:01

     The attorneys don't care, and I know some of you are attorneys. I'm not talking about you. But they don't care. They're doing whatever they wanna do, these boards are. The homeowners association is all of the units. In my community, we are 228 condominium units. We have one board member who lives in the community and two who do not. They do not have to live by the rules that they set. So if there could be an amendment that you need to live in the community to be underneath what you have said, that would be perfect.

566. 2:02:39

     But I'm not against an HOA. I am against foreclosing on people because they can't pay. But in a lot of cases, there are people who can pay, and they choose not to pay because of the things that the board is doing, not necessarily because they don't want to pay. It's a choice for some folks. For some folks, it's not a choice. My board instituted a $1,610 special assessment without a vote, even though our declaration says anything over $200 has to be voted on.

567. 2:03:11

     So right now, I owe $1,860 for meters, water meters, water meters that we already had and had just finished paying for in August of 2025, and then they turned around and changed those water meters in May of 2020. I'm sorry. We finished paying for them in August of '24, and they changed them out in May of 2025. There was no reason to change them out. They were not broken. They just did it anyway. We don't have anywhere to go.

568. 2:03:42

     We filed a c- a lawsuit in court, but that took so long, some of my neighbors stopped paying, so therefore, I am on the hook for a bill to an attorney. But we still don't have resolution. The c- um, the board that Senator Brass has set up would have resolved a great many of the different disputes that we have in our community. However, with the bill, I do have some, uh, amendments that I would like to see made because I don't feel as though it is actually covering COAs, which is what I live in, a condominium association.

569. 2:04:16

     So 44-3-232C is included, but 44-3106... I'm sorry, 109C that covers COAs is not included to make condominiums a part of this, um, of this bill. There's also a gap where it talks about Article 6, which is for POAs, but it not- does not talk about Article 3, which is for COAs, and that's in different portions of the bill.

570. 2:04:46

     Um, one other thing is the floor has not been raised. The floor is still $2,000. If your lien has to be $2,000 and it says the lesser of $4,000 or 12 months, then the floor is $2,000 still. It would be better if the bill said the greater of $4,000 or 12 months of dues. That would make the floor $4,000. Um, the bill talks about dues. Nowhere in the law does it speak to dues, and most this, um, most declarations, it does not say dues.

571. 2:05:20

     It says assessments. There are three different types of assessments. There's an annual, a special, and a specific. Annual is what people pay on an annual basis, and some folks pay that on a month-to-month basis. Special is for anything that needs to be repaired that was not included in the regular budget. Specific are those things such as fines, legal fees, late fees, interest. The bill needs to, um, reflect the way that it is written because HOA attorneys will then in turn say, "Well, we don't have dues, so this does not apply to us." So that needs to be corrected as well.

572. 2:05:54

     Um, I have a question as to whether or not if a community opts out, do those homeowners still need to get, um, do these homeowners still have the opportunity to go to the board if their board has opted out and does not want to be included under this? Because we still have, um, fights over assessments. In my community, they can accelerate our dues, so they can get to that $3,000, $4,000 extremely fast if they don't like you, and they don't like me, and I don't care if they don't like me. I'm gonna keep fighting.

573. 2:06:25

     Our dues are $250 per month. At the end of the year, it's $3,000. So if I miss my January dues and they say, "Oh, you missed your dues. You're behind. We're gonna accelerate your dues," now we're at $3,000, and the way this is written, they can foreclose on my house for missing one month of dues because my association's declaration clearly states that dues can be accelerated. There needs to be something in the law that says that they cannot do that. Um, POAs, HOAs, and COAs are actually, um, CIAs, which is a common interest community, and we need to reference them that way so that they are all grouped together.

574. 2:07:05

     Also, we need to enumerate exactly what records people are entitled to, and we need to be very specific in stating that. I already talked about hopefully getting just people who live in the community to be on the board, and ballots. I got two more, ballots and voting. There needs to be a mechanism somewhere along the way that explains to all of these communities how they should actually be setting up their voting. Quorum is supposed to be advised at the start of the meeting, but our board did not do that at the last.

575. 2:07:41

     They said they would take quorum based on those who voted, and then when our board president saw that he was losing, he said, "Oh, well, we don't have to do that 'cause we didn't meet quorum, so I get to keep my position." We don't know what's going on because quorum was never in, um, invoked at the beginning of the meeting. And the boards need to be educated. They need to know what these laws are, what they can and cannot do. There are programs and so forth that they can go to, but they don't go because they know everything already. And then no matter how many times other people will tell them, they are still of a mind that they don't have to do it because you're not going to sue.

576. 2:08:19

     I put my board on notice that I will be suing them once again simply because they're not doing the right thing by the other 200, by the 228 units, that they have a fiduciary duty to defend. They have a duty of care and a duty of loyalty, and if they are not doing these things, the only way is for it to be ingrained in law and have it someplace where homeowners can go. Now, there are people who will say that it interferes with contract law. Well, we have other, um, places that we can go for different types of contracts where if it's a lease, you can go places.

577. 2:08:55

     There's laws for, on how you can do leases. We just don't let people run willy-nilly. I'm not a drunk driver, but I have to abide by DUI laws. I don't commit murder, but there's laws for murder. Same thing with this. HOAs are killing people because they can't afford to live in their homes. They're aggravated. They're selling. Our community was once valued at $123,000. Our board president bought his unit in October of 2023.

578. 2:09:25

     He is the highest purchase that has been in that community. We can't sell them now for $75,000 because of the things that are going on in our community, because of the things that our board is doing. So I would ask that you take a look at these amendments that I'm going to email to everyone, and you have a wonderful day. I have a question for you. Oh, okay. Oh, I thank you, uh, for your testimony. That was incredibly insightful. Thank you so much. No problem. That just right off the bat. I do my best. Um, very well researched, and, uh, I appreciate all that.

579. 2:09:59

     There was a lot of good that I heard there, and I wanted to know if you maybe had a handout or something- I did ... that we could- I have them right out in the hallway. I can bring them right in to you. Okay. Not a problem. Yeah, I'd like one of those, I think. Not a problem. Uh, some of that was very interesting. Thank you for your testimony, and, uh, good luck with that. That, uh, that's a big old mess. Thank you. But, uh, but thank you. Yeah, I want to see that- No problem ... when you get a chance. Thank you. That's it. Thank you. Thank you. All right, let's see. Um, Michael Shepherd.

580. 2:10:32

     That's an old question. That's right. Good morning, Mr. Chairman, members of the House Judiciary Committee- Morning ... and to the author, Senator Brass. I'm gonna try to make this the shortest one yet. So I will start. After looking at SB 406, giving recommended amendments, and seeing some of them actually get in, I'm very happy about that, but I, of all of the recommendations, I'm not gonna hit you with 1,000 improvements, but I'm gonna bring forth two

581. 2:11:04

     shortcomings, I'm gonna say, with the bill that I would definitely love to see addressed before it makes it out of the House, and hopefully it will. The first one is we're talking about HOAs, POAs, and condos, but what I noticed left out was, um, co-ops. Believe it or not, in Georgia, we actually do have co-ops, and from my understanding, they are either organized mainly as a nonprofit co-op, or I've learned recent, recently there are also for-profit co-ops. I recently interviewed, um, a duo who came from a co-op in Atlanta where they were refusing payments.

582. 2:11:40

     They had to go to court to get a judge to order the co-op to take their payment. So I would want to see co-ops added, um, as one of those communities that can go to a board. That's the first one. The second one was already addressed by, um, Justin Mattis. Condos, HOAs, POAs, they're actually refusing payment. Um, I reached out to Senator Brass about one issue on payment that he did plug that gap. One of the gaps he did plug was the payment ordering, because the way SB 406 is written right now, um, it, it, it addresses the fact that you cannot foreclose for fines, but there was a loophole that was plugged.

583. 2:12:21

     I just wanted to notate. Um, and that loophole was if, if my assessments are $200 a month and I pay $200 a month, the HOA, the association could take that $200 and apply it to a fine, leaving me looking like I'm not paying my assessments. So that was plugged 'cause there is now an order in which they need to apply your payment. However, I didn't see anything written that dictates they cannot refuse your payment, 'cause once again, I've talked to numerous people. I founded and I'm the executive director of the Watch Project.

584. 2:12:53

     I have dozens and dozens of people that reach out to me on a weekly basis with their issues, um, and that's one that came up continually. Um, so those are the two, um, the two, uh, uh, adjustments that I would like to see 'cause I think they're very, they're, they're glaring holes with that. Um, there's also talk that, you know, a-

585. 2:13:15

     Association boards are voluntary, which they are. But you cannot say that oversight is too much for a volunteer board when that volunteer board has the power to take your greatest asset, which is your home. They have the ability to levy you with tens of thousands of dollars in fines. I spoke to a man in Cherokee County during this work where he got a, a fine that was at least $3,000, and the fine reason was blank. He ended up filing a report with the, the Cherokee County, um, Sheriff Department.

586. 2:13:48

     Ultimately, he ended up taking them to court and, um, I believe they, they dropped the fine because of the extent that he pushed it. Um, myself, personally, I live in an HOA, and then I also own condos as well, and that's where I had to spend almost $40,000, um, f- taking them to court for refusing to have elections, refusing to have meetings. And it, since it's a condo, a lot of people don't understand the difference between a condo and a town home 'cause you can't always tell by looking at them. But a town home is, you know, connected homes where you take care of the outside, even if they're connected.

587. 2:14:23

     A condo, you take care of the inside. There are many condos that are refusing to make necessary repairs. We all seen what happened in, um, Florida with Surfside, and what happens when you have a condo that is negligent with their responsibility. It, it, it's very serious stuff in all communities, but specifically a condo. Um, and while on the issue of condos, I did wanna speak up, um, on the condo and co-op behalf when it comes to foreclosures. So myself personally, and the position of The Watch Project, is that we don't support the ability for an association, um, for a town home or single family to foreclose on your home.

588. 2:15:05

     But with a condo, if they don't have that ability to recover the funds, that, that's a death sentence to a, a condominium. And I'll give you a quick example. Um, they have very high insurance rates. Right now in Georgia law, they're statutorily required to maintain what's known as a master, um, insurance policy. That covers catastrophic loss in the event of some kind of catastrophe. If they don't have that, they're not in compliance with already existing Georgia law. Also, they have common area lights and, um, shared water.

589. 2:15:36

     So in theory, if the condominium does not collect from the homeowners, the water can be shut off, leaving local municipalities, whether it be the city or the county, to come in, condemn that community, making people who are already paying their HOAs, paying their assessment, paying their taxes, they could still lose their home in theory if the condo cannot recover for that. So that's a huge concern, um, that I think we should address as we talk about potentially taking, um, foreclosure off the table. Um, and let me see here.

590. 2:16:08

     Um, he's not here, but r- I just wanted to address what Representative Crawford mentioned about arbitration. Like Senator Brass said, they're, they're not taking away that ability, but the issue is, um, when I took the association to court, they refused to arbitrate. And then they tried to say, "Well, you can't take us to court because you didn't arbitrate." So you get things that happen like that. Um, and then, I d- I believe he stepped away, but Representative Holcomb mentioned the... I believe he's back. Divine timing. So Representative, um, Holcomb mentioned the insurance, um, issue.

591. 2:16:43

     I just wanted to provide clarification on that. So I believe that language by Senator Brass was written to address the issue specifically of condos, um, that an owner has the right to request those documents, including any certificate of insurance, for a claim. Because what's going on is you have condominium boards refusing to make exterior repairs and demanding that the homeowner, or in this case the condo owner, make those repairs when the condo is legally responsible for those exterior repairs.

592. 2:17:17

     And so, um, right now I s- also serves as the president of the board for, um, Peyton Place Condominiums, um, which has been documented in news for the past several years for the ongoing issues. And one of the issues that many owners, including myself, had was the exterior is literally falling apart and caving in. You could see this on Google Maps, like the roofs are literally caving in in some of the units. And the association says, "You know what? You pay for it," when they're supposed to pay for it. Um, and since I became the, um, the board president, we don't have the insurance anymore 'cause it got canceled, but if we did and a homeowner make a c- makes a claim, then it is my responsibility, the board's responsibility, to take in that claim and make sure that that homeowner's exterior portion of the home is dealt with.

593. 2:18:02

     Because they're trying to push it back on what's known as the HO6 policy, which is supposed to cover your interior. So I just wanted to address that, 'cause that was one question that you had. Um, and then closing out, I just wanna say to everyone on the board, please do the right thing. Make sure that the amendments we propose are strengthening our association laws. And looking at other states, Florida, Nevada, South Carolina, Georgia, with the passage of SB 406, is about to be a model for the nation, which I'm proud to say. I've lived in 12 states.

594. 2:18:35

     I've never been more proud to live in any other state than this. Um, this is gonna make me that much more prouder and put that official stamp on that. Um, so that's all the comments that I did have. Um, and just thank you all for your time.

595. 2:18:50

     Okay. Thank you. I see no questions.

596. 2:18:52

     All right.

597. 2:18:54

     All right. Uh, Najah Threadgill. I hope I said that right.

598. 2:18:58

     Yes.

599. 2:18:59

     Okay.

600. 2:19:03

     Good morning, Mr. Chairman and members of the House Judiciary Committee. My name is Nadra Threadgill. I am a retired senior who lives in a beautiful community in Smyrna, Georgia. I'm here today in support of SB406, and I'd like to share my personal experience as to why this bill is necessary. What began as a simple request to the association's property management about filing an insurance claim has escalated into an un- unnecessary legal dispute between myself and my homeowners association.

601. 2:19:33

     I own one of the 11 townhomes in a subdivision of 94 homes, 11 townhomes and 83 single-family houses. My unit suffered water damage during a storm, and I notified the property manager that I needed to file a claim under the master insurance policy covering our townhomes. Instead of assisting me, she told me that the HOA had no responsibility for my unit, and that I should file my personal insurance- file with my personal insurance company. Having previously served as the president of our HOA for several years, I knew that this was incorrect.

602. 2:20:06

     I had documentation from the insurance company and the former management company confirming that the master policy covered such claims. In fact, when I filed a claim in the past, I learned that the master policy was primary, and my personal condo policy was secondary. Despite explaining this, the property manager refused to assist me further, and stated that the board w- was prepared to escalate the matter to their attorney. I attempted for a week to contact the insurance company directly, but their phones were inoperable.

603. 2:20:40

     I eventually left a voicemail, but never received a call back. Neither did the property manager... Um, the property manager never followed up with me. Finally, through an email request, I was able to obtain updated documents, including a s- certificate of liability insurance and a coverage summary. When I reviewed these documents, I discovered that water damage coverage had become more restrictive, and the deductible had increased significantly. I then contacted my personal insurance, uh, personal insurance confirm- and confirmed that my condo policy would cover the damage.

604. 2:21:15

     Out of concern for my neighbors, I emailed nine of the 11 townhome owners, blind copied them, to share the information I had received and ensure that they were aware of the correct coverage requirements. I also provided supporting documents so they c- so that they could make an informed decision about their insurance policies. To my surprise, the HOA board responded by sending a community-wide email attacking me personally. Someone had clearly forwarded my email to the board. They falsely claimed that I had sent my message to the entire community, misrepresented insurance information, acted as an agent, an unauthorized agent to speak on behalf of the board, and even implied that I was jeopardizing the subdivision's insurance coverage.

605. 2:22:02

     95% of what was stated was untrue. But because of certain references in their email and the fact that I am a former HOA president well-known in the community, it was clear they were referring to me. The same, that same day, I received a cease and desist letter from the HOA's attorney. The letter accused me of harassing the board and demanding that I publicly apologize to the board and the community, retract my email, stop communicating with homeowners about insurance, accept calls from the property manager who I refused to speak to, cease all direct communication with the board, and pay the association's attorney fees, et cetera.

606. 2:22:44

     This left me in great distress. Feeling I had no other option, I was forced to hire my own attorney to, attorney to respond. Despite my attorney's efforts, the HOA refused to back down. Weeks later, I was billed by the HOA for their attorney's fees, further escalating the matter. This entire ordeal was ex- was extreme overreaction by the board, stemming from the property manager's poor handling of a simple inquiry. If she had simply called me to discuss the claim, the matter c- could have been resolved quickly.

607. 2:23:15

     Instead, the HOA chose intimidation and legal threats against a homeowner who was only asking questions and sharing factual information. Homeowners should not have to hire attorneys to defend themselves against rogue boards acting out of personal grudges or mismanagement, nor should HOA funds be used to f- finance intim- intimidating legal letters aimed at silencing residents. My experience illustrates exactly why SB406 is needed. Homeowners deserve fair and reasonable processes to resolve disputes without immediately being s- subjected to costly and intimidating legal action.

608. 2:23:51

     Administrative hearings, procedures must be established to protect homeowners, especially seniors and other vulnerable res- residents from abusive HOA practices. I strongly urge you to support and pass SB406. Thank you for your time and consideration.

609. 2:24:09

     Okay. Do I have a question for you? Hang on.

610. 2:24:10

     Oh, yes.

611. 2:24:11

     Uh, Vice Chairman.

612. 2:24:13

     Like I did on a previous bill, if something's serious enough to come to the State Capitol, um, who was that lawyer who wrote the letter, and who was the HOA?

613. 2:24:21

     Ooh, I don't have their n- names, but I could, I can give you that information. But-

614. 2:24:25

     What was the neighborhood again?

615. 2:24:27

     Sh- I never mentioned it, but Sherwood Park.

616. 2:24:29

     What, what area?

617. 2:24:30

     Smyrna, Georgia.

618. 2:24:31

     Okay. Well, and when you get the lawyer, let us know who it is.

619. 2:24:34

     Okay, I will.

620. 2:24:34

     Thanks.

621. 2:24:38

     Okay.

622. 2:24:44

     Will you, will you accept others?

623. 2:24:46

     Yes. Yes.

624. 2:24:48

     Okay. Um, to the author of the bill, uh-

625. 2:24:53

     Yes, sir

626. 2:24:53

     ... of course, with the testimony we've heard today, there's, uh, a, a real need for what you've got here.

627. 2:25:00

     Yes, sir.

628. 2:25:00

     Uh, but I don't think it's quite complete. And-

629. 2:25:03

     I agree

630. 2:25:04

     ... if you, uh, if you agree, then okay. Um, I, what I'd like to do is just make this hearing only today In the meantime, work on a sub with all the ideas that have been brought, uh, and see if we can't get it all organized, 'cause I'm afraid if we start taking one amendment after another, we're gonna screw this thing up. Yes, sir.

631. 2:25:24

     Yeah, I, I totally agree, Mr. Chairman. Um, I will say on some of them, you know, there's, there's a lot of back and forth on, on some of these issues that are being discussed, which is one of the reasons some of them, some of these things are intentionally left out-

632. 2:25:43

     Mm-hmm

633. 2:25:43

     ... because there is debate. And the, the underlying bill, to me, we've got to get something passed, and we've got to do it this year.

634. 2:25:53

     Right.

635. 2:25:53

     Um, you know, there has been study committees on this. I've held subcommittee hearings. I appointed a subcommittee out of rules, um, and have h- held those hearings over the last two years. Um, you know, we've, we've, we've waited long enough, and it's time to do something. So some, some of these suggestions are very good, and I'm, I'm, um... You know, the packet that she handed out, there are some very good suggestions. Some of these suggestions I, I do believe are gonna need to be in another bill, um, so that the, so that the crux of 406 gets done.

636. 2:26:31

     Okay.

637. 2:26:31

     Um, but, uh, but a lot of these are good suggestions and do fit well in this. I mean, COAs, our condominium associations, I thought they were captured. If, uh, if they are not, um, we need to make that clear. I totally agree with that. Um, and there are several other things in here that we, we do need to clean up, and I will work with, with all parties involved to try to get this. Again, we're- the overall intent is to protect the homeowner-

638. 2:27:00

     Mm-hmm

639. 2:27:00

     ... um, and get these communities back to being what they originally designed to do, and that's to protect and, and allow people to be neighbors again, so.

640. 2:27:12

     All right. Then, um, I'll leave it with you, Mr. Walker, and the committee if y'all can work out the details on this, and then we'll come back, uh, Thursday.

641. 2:27:24

     Sunday.

642. 2:27:25

     Yeah, probably Thursday.

643. 2:27:26

     Thursday. Okay.

644. 2:27:27

     Yeah.

645. 2:27:27

     I can get... If Mr. Walker can spend time with me today or tomorrow, we can work that out.

646. 2:27:33

     Okay.

647. 2:27:34

     Maybe today and tomorrow.

648. 2:27:35

     And, uh, uh- Yeah. I hope we have a, uh, um, a quorum after I leave, 'cause several of us have to go to rules. I'm gonna turn it over to the vice chair and let him take up Senate Bill 463.

649. 2:27:51

     I'm gonna leave this all with you.

650. 2:27:57

     I'll, uh, I'll get y'all – figure out the time.

651. 2:28:24

     What, what, where'd you see it?

652. 2:28:25

     Oh, I, I said I-

653. 2:28:26

     You're like, "Where'd you see it?"

654. 2:28:27

     I was like, "How did that happen?"

655. 2:28:30

     We know.

656. 2:28:31

     You know.

657. 2:28:34

     I don't know where to start.

658. 2:28:36

     Yeah, 'cause you'll lose it when you-

659. 2:28:38

     No problem.

660. 2:28:41

     Yeah.

661. 2:28:42

     All right. Let's go ahead and get started. Um, Senator Dolezal.

662. 2:28:48

     Morning.

663. 2:28:49

     Good morning.

664. 2:28:50

     Good after- good afternoon. You know, wherever.

665. 2:28:51

     Thank you for bringing this, uh, housing bill. Tell us about the bill.

666. 2:28:55

     Thank you, Mr. Vice Chairman. I'm so glad I voted for your bill in committee this morning. This would be awkward, um, if I didn't.

667. 2:29:00

     Hey, if you have a shorter hearing than that one, that'd be great. That was a long one.

668. 2:29:04

     All right. Well, we'll, we'll try to do that. I'm bringing to you, uh, Senate Bill 463 as it passed the Senate I believe 49 to 3, um, with strong bipartisan support. Um, I, I referenced to the Senate, this is an issue, ironically, probably one of the few that President Trump and Senator Ossoff both seemed, seemed to agree on and are both trying to take action on at the federal level. We're, we're looking to do that here at the state level as well. Um, in short, uh, this bill would ban large investors from accumulating single-family housing stock in Georgia.

669. 2:29:35

     Um, the issue is somewhat new. 15 years ago, there was not a single entity that owned over 100,000 residential units in America, and very, very quickly after that, really coming out of the Great Recession, we saw the, uh, the entrance of private equity into the American single-family home market. But what's the most interesting, uh, Mr. Chairman, is Atlanta, metro Atlanta, uh, leads the nation. And the- don't just think downtown Atlanta, think Gwinnett County, think Forsyth County, think all the way down to Newnan. Um, we have the most institutional-owned investor property, uh, in our capital city, and the concern I think that's shared across the aisle is that that is squeezing out families, uh, from being able to purchase these homes.

670. 2:30:18

     Even if you can compete with Blackstone, uh, in terms of pricing, um, you probably cannot compete with them if you're a young family in terms of appraisal contingencies, inspection contingen- contingencies, cash closings, and the ability to close, uh, very, very quickly. So I'll just walk you through what the bill does at a high level. Uh, we limit, uh, in, on line, starting on line 48, we limit institutional investors from accumulating o- over 500 single-family residences or by purchasing other businesses, um, to- that would get them over that 500 number.

671. 2:30:50

     A couple things are interesting to, uh, or that are important to point out here is that, one, we do not require divestment in this bill, and we do not prevent single famil- s- uh, single-family for-rent neighborhoods through the construction of new housing stock. So this, this is an attempt not to change the supply curve, but to change the demand curve, and so we do not do what they do at the federal level, actually, um, in the bill that they just, um, passed out of the Senate 89 to 10 last week. We do not do anything with single family, uh-

672. 2:31:21

     rentals, uh, single, I guess, yeah, single-family for-rent properties, um, that would be, bring new inventory to the market. Line 60 to 64 of the bill adds one additional, uh, consideration here, and that does not allow any foreign investors to turn any single, to purchase single-family rental housing and turn them into rentals. Um, and line 79, we get to really our first enforcement action, uh, which is a civil action that would a- allow statutory damages of $100,000 for each violation.

673. 2:31:54

     Go on to a couple of the other enforcement mechanisms that we have. Starting in section two of the bill, on line 150, you'll see three separate tax credits that we do not allow these institutional investors that would be over the 500 limit to participate in. Um, the first of which is listed there as the re- the re- uh, the rehab of historic structures. Uh, the second of which is, um, the depreciation of properties placed in service before 1987, and the LIHTC, the Low Income Housing Tax Credit, is actually the first one.

674. 2:32:27

     I got those mis- mixed up there. Uh, we, we really go after a number of these other tax provisions. Uh, we, on line 163, state that they cannot take credit against the insurance premium tax for the short-term, um, or, sorry, for the single-family housing that they own. Section 3.2 that starts on line 170 prevents them from taking depreciation of these homes on their corporate tax returns. Line 200 stops the depreciation on the personal tax returns.

675. 2:32:58

     Line 197 stops the mortgage interest deduction. And then one last kinda tax, uh, enforcement mechanism that we use is in section 3.4, uh, where we say that no expenses can be claimed for the usual cost of leasing out rental property. So with that, Mr. Chairman, I know that, um, there's been a, a couple house bills as well over the last few years, um, that different folks have brought. I know that, uh, Representative McCollum has worked on this. Representative Gullett has been working on this.

676. 2:33:29

     A- and I'm, I don't wanna leave out any members. Uh, but this is really an attempt to ensure that we preserve the American dream, um, and that we do not allow Wall Street to come into, to it, to Georgia, um, and really take the American dream away from the young families. So I'd be happy to answer any questions.

677. 2:33:45

     Thank you, Senator Dolezal. Representative Kelly.

678. 2:33:49

     I think it's-

679. 2:33:50

     Or Representative Momtahan.

680. 2:33:51

     You get us confused.

681. 2:33:52

     Yeah, I, that would be, that would be demeaning to me, Mr. Chairman. Um, thank you for that, Rep- Representative Kelly, for recognizing that. Uh, I wanted to, uh, ask you, and first of all, uh, Senator Dolezal, thank you for bringing this bill. Uh, this is a plague in Paulding County right now, where we've got, uh, not only, uh, these hedge funds, these institutional investor-owned housing projects. And let me kinda describe some, some, some, a, a statistic in my district that is shocking, I think, that over 90% of all single-family residential rental homes, so single-family residential rental homes, in my district are institutional investor-owned.

682. 2:34:36

     It's a shocking statistic. Uh, and it's a, it's a big problem. I think, uh, your bill is well needed. I wanna understand, I guess, uh, with your bill, first of all, I know we said 500. Um, I think it was, uh, President Trump's prerogative to set it at 100. Um, is, is, is the 500 something that, uh, you know, as y'all deliberate that on the Senate side, what... Kinda give me some background there.

683. 2:35:07

     Yeah, I actually brought, uh, wrote this piece of legislation before the president's executive order came out, um, at 100. The bill that just passed federal, um, Senate last week was 350. Um, I know that at the previous House versions were at 2,000. And frankly, I was trying to find something that I thought that 2,000 was too high, um, and wanted to get something that was lower, but also did not want to, to kinda ensnare the mom-and-pop rentals. Um, so if you, if you think about, you know, a family that might be in the rental business, um, they might have 150 single-family homes, and I, I think that that's probably fundamentally different from these large private equity groups oftentimes taking foreign investment money, um, able to use the carried interest loophole, uh, that exists in the, in the tax code, um, to compete against families.

684. 2:35:57

     And so that, you know, there's obviously nothing magic about any of these numbers. I know that there was some talk maybe among m- members of the committee to moving to 250. Um, I think that might cost you a couple votes on the Senate side, um, 'cause one of the members that voted against us on the Senate side communicated that he was doing this for, for one of those mom-and-pop type shops that was currently in between 250 and 500, but he felt that they would reach 500 within the next few years, and that was a concern. Um, I still think we could move it to 250, um, but that was really just trying to find that balance.

685. 2:36:29

     Maybe a, uh, maybe that senator is a soon-to-be institutional investor, and we'll just call him that. Um, let me, let me ask you another question. So I understand that the, the federal version of this bill requires divestment. Is that correct?

686. 2:36:44

     I believe that it requires divestment. It also, I know that for the sing- for the single-family for-rent neighborhoods, which may be part of what you're talking about, where you have somebody come in and build 300 new houses, it would allow them to still do that, but they would have to sell those housing units within seven years. Uh, our bill is silent on single-family for-rent new construction. Um, I do believe that divestment is required. We frankly are concerned about the, the constitutionality of a taking, um, if we were to require divestment. So we basically stop the accumulation of more units.

687. 2:37:17

     Um, we, there's n- there is no constitutional right to a tax credit or depreciation, so we have that in place there as well. Um, but the reason that we did not put divestment in this bill is we f- we're frankly worried about how it would hold up in courts.

688. 2:37:30

     Thank you. In Paulding County, and Paulding County is the county that I represent, uh, in and around the city of Dallas there, we have a financial issue. So I wanna move to that portion of the bill as we ask some questions. And this is about the, uh, this is going to 100% of assessed value. Is that correct?

689. 2:37:47

     Uh, we do not do that in this bill. There was a separate Senate bill that, that did that. Um, that may be an additional enforcement mechanism that the committee would, would, yeah, like to look at, that certainly, um, would be a probably, honestly, a heavier hammer than the, the depreciation pieces that we have in here.

690. 2:38:04

     So you have the depreciation piece. The issue that I have, I think, in Paulding County is when the, specifically the build-to-rent, uh, institutional investors are coming in, they're building homes. They're using every loophole that they can get their hands on to pay less taxes, while bringing greenfield developments into the county, which requires, you know, more schools, more buses, more roads, more infrastructure, and it's pretty harmful to the environment in, uh, our county and surrounding areas.

691. 2:38:35

     Uh, to that fact, we find that there is a four, five, or even up to s- depending on the price of the home, uh, a $6,000, uh, deficit that's built into the construction of every home. The further that these, uh, these owners, institutional owners won't pay the first tax until the next year because you pay those taxes in arrears. And so it ends up we have to educate children, uh, with little to no tax money at a deficit, causing, uh, legacy homeowners to have to pay the bill.

692. 2:39:13

     Why is that? Because these homes that are being built have a high propensity to house children, younger families, and so the cost of these homes, as far as services go in our community, they're higher. That being said, as we work through this bill, I would like to see something that addresses that. We've got to make sure that, um, that as we think about educating children in our communities, we're thinking about making sure that they have the appropriate amount of buses. Uh, we've got students that were unfortunately sitting in the aisle of the bus to get to school.

693. 2:39:49

     Uh, and that's what happens. I think there's a development right now, I'm not sure if it's build-to-rent or not, but it's 3,600 homes in one development. Um, it's hard to plan for, for those kinds of developments. Um, so I s- I, I like the direction we're going. As we move this conversation, I would just ask maybe that we take a look at some of those, um, maybe more Draconian measures to make sure that the kids in my district and in my county are getting the education they deserve, that homeowners can get, uh, home on time, uh, to go to that ballgame, you know, to, uh, make their kid's recital.

694. 2:40:27

     Uh, but I appreciate the direction and we'll c- continue to work on this as we move through.

695. 2:40:30

     I, I had one response to that, Mr. Chairman. Um, Chairman, you, your community, I think, is probably about where Forsyth County was 15 or 20 years ago. Rapidly growing, bursting at the seams. Um, and as you know, it's not just the cost to provide classroom instruction to those students. Oftentimes there's multi-hundred million dollar investments in new facilities. And I actually wrote a bill a couple years ago that fell a little short of the, the, the constitutional, um, amendment requirement in the House for impact fees for schools.

696. 2:40:57

     I remember.

697. 2:40:58

     And we can levy, in the state of Georgia, we can impact levy fees for, uh, uh, impact fees for libraries, parks and rec, 911 services, fire, and roads. What's the most expensive thing for Fal- for Paulding County when, when y'all are growing fast is to build a new high school for 100 million bucks. And so often that does fall on the existing residents, so I completely agree with you, and I think that's something that we probably need to address a- as well.

698. 2:41:19

     Thank you for your work. If you build a stadium, it might be more than that.

699. 2:41:23

     I heard those are about 80 million bucks in some areas.

700. 2:41:25

     Representative Silcox.

701. 2:41:27

     I think it's-

702. 2:41:28

     Representative, uh, Chairman Leverett.

703. 2:41:30

     Thank you. Thank you, Mr. Chairman. Thank you for bringing this bill. I wondered if you would be amenable to an amendment to carve out, uh, companies that acquire these businesses, rehab them, and then sell the fee interest rather than leasing them.

704. 2:41:45

     Yes. I've, I've spoken with some folks that do th- that exact thing. They're obviously, they're not stealing the American dream from a family. They're actually preparing a home, hopefully, that a family can live in, um, with, with newer, uh, accoutrements. And I think that those, those entities were, were amiss on our part to not have them carved out of this bill. Um, I don't think they're fundamentally changing the demand curve, um, in the same way that these other out-of-state investors or frankly, these in-state institutional funds are, are changing, so I do think we probably should make that refinement.

705. 2:42:13

     Thank, thank you. I, uh, it was suggested maybe we could do that on line 53, but I'm sure there probably would need to be some other tweaks here and there throughout the bill, but I appreciate your being receptive to such a change. I think that'd be good policy. Thank you.

706. 2:42:29

     Sounds like we got a reno or flip amendment coming on. All right. Any other questions for Senator Dolezal? Real quick, you mentioned, you said President Trump and, and Senator Ossoff are together on this one. I, I... We've got Senator Warren and Senator Scott, uh- ... together on it, and I think Senator Warnock, uh, got in the mix. And the, the 350, that's the Renewing Opportunity and American Dream Federal Act that passed the Senate. It's going to the House, and it has things other than what's in your bill but has some overlap.

707. 2:43:01

     And then that executive order, that was in January or s- late January after we convened, and it's, uh, the Road Act is 350 you said, and the executive order is 100.

708. 2:43:11

     That's right. Yes, sir.

709. 2:43:12

     And that's up on the internet. Both of those are up on the internet if anybody wants to start looking at those federal laws. All right. No questions for Senator Dolezal. We have 10 or more people signed up, so we want to get everybody heard, but in order to get everybody heard, I want to ask, uh, try to keep your remarks to five minutes or less And don't feel obligated to fill all five minutes. Um, uh, written submissions are welcome, uh, if you've got 'em by email or otherwise. Uh, let me start out, uh, with anybody who's got scheduling constraints.

710. 2:43:42

     Is it Mr. Hart? Uh, I- it's my understanding you're here from-

711. 2:43:46

     Yeah

712. 2:43:46

     ... Athens. Come on up.

713. 2:43:47

     Thank you.

714. 2:43:47

     And, uh, let me know if anybody else has scheduling constraints.

715. 2:43:52

     Thank you, Mr. Chair.

716. 2:43:52

     Thank you.

717. 2:43:52

     And thank you to the committee. Uh, my name's Chris Hart. I'm from Athens, Georgia. I represent Landmark Properties, I'm their in-house counsel. We're a Georgia business. We were founded in Georgia in 2004. We are the, one of the nation's largest student housing developers, and we also build build-to-rent communities. Uh, I think the, uh, bill on the table advances a worthy goal and worthy concern, uh, but we do have concerns with how the bill is drafted and structured. I think, uh, appropriately to point out, the federal legislation has different definitions for what a single family house is. So you have off the bat potentially competing, conflicting, uh, s- uh, interpretations.

718. 2:44:28

     Secondly, uh, we think there is no carve-out for build-to-rent or purpose-built communities. So one of our products is a neighborhood that is designed, curated, and built for students. And it is, looks like a neighborhood, right? Single-family homes, they're designed to be leased by the bed to those students. It actually furthers, we would argue, housing stock in university communities. It draws them out of your single family neighborhood. Instead of living with four of your friends in a house that's designed for a family, you live in one of our communities.

719. 2:45:01

     I'm not clear as we sit here today, is that a single family residence? I think we are more than happy to work with the committee, work with the bill sponsor on clarification, but the downside here is immense. We have a thousand doll- or a $100,000 per instance of fines. On a community like ours, that's, you know, 50, $100 million of exposure potentially. And there's no guidance. There's no rule making as in the federal bill. There's no opportunity for clarity. Myself, I'm a lawyer myself, I can't give a legal opinion.

720. 2:45:33

     We can't seek a legal opinion. And so that what's, that's gonna ... What is that going to do? It is going to chill investment, and investment is what we need to create additional housing stock. So, uh, lastly, and then wrapping up comments, but I think we're open to defining and clarifying 'cause we do think this is an important goal, and w- I don't think the bill sponsor's intending to target companies like ours. We're not the scattered site developer. We're not the, the person buying the house next to you.

721. 2:46:04

     But we do think there is a place in the market for purpose-built rental communities, and that that should be, you know, a complement, and that is a, a additional area of housing stock that can support this issue. Uh, the last thing I'll mention, um, and this is a, a, a clarification as well. I'm not sure if you're a large institutional investor that you can buy a home to create anything else. So there's an absolute prohibition. If I wanna build a hospital, let's say, in a area that is re-densifying, that is blighted, that the local community has decided is not appropriate for single family homes anymore, I'm not sure that I can do that under this bill without risk.

722. 2:46:43

     And so we would ask both, you know, clarifications in terms of definitions, we would ask for clarifications in terms of penalties and remedies, and guidance from the committee, guidance from regulators on how we can comply with these proposed restrictions.

723. 2:46:58

     Thank you, Mr. Hart. Uh, Representative Oliver, who sponsored Steve Henson to become a DOT board member a little while ago, had a good idea, which is if you've got a draft of an amendment or you have an idea for an amendment, and you're a, a lawyer, let's get it out now. Get that to Senator Dolazal, get it circulated. So, um-

724. 2:47:16

     Absolutely

725. 2:47:16

     ... spend, spend this time this morning while it's fresh in everybody's mind. If you've got any recommended changes, uh, now's the time. Um-

726. 2:47:24

     Yeah. Absolutely.

727. 2:47:24

     All right. Any questions for Mr. Hart? No questions for Mr. Hart. All right. Open Door. A, a representative from Open Door. And if anybody is not sure if you're signed up to speak, please get with, uh, Brock Perry or the committee, and we'll get you down 'cause we got a lot of speakers.

728. 2:47:43

     Okay.

729. 2:47:43

     Please introduce yourself.

730. 2:47:45

     Uh, thank you, uh, Chairman, members of the committee. Um, my name is Rishi Kotia. I serve as head of legal and corporate secretary at Open Door. Thank you for the opportunity to speak with you today. Um, I went to law school in this amazing city. I love the state, and so it's great to be here in front of you. Um, to be clear, I, I wanna say that Open Door supports this bill. Um, we're here today to kind of, to make sure that Open Door, which is not a corporate landlord, um, is, make sure that Open Door is not captured by the language in this bill.

731. 2:48:18

     Specifically, we'd like the committee to consider a carve-out for any entity that holds single family residences primarily for resale to customers in the ordinary course of its business. We have some proposed language. It's really, um, total of maybe 12, 15 words that would, uh, contain a carve-out that would, um, keep us from being captured by the language of the bill. Um, I'd like to take a moment to describe what Open Door is and what it's not.

732. 2:48:50

     So I, I understand that, uh, many people may not be familiar with what we do. Um, so what we do not do, we do not rent homes. We do not hold homes. We are not landlords. Um, corporate landlords buy homes and turn them into long-term rentals. We buy homes and turn them back into homes for American families. Corporate landlords remove homes from the market for good. Our entire business depends on putting them back on the market as quickly as possible. Simply put, we buy a home for a Georgia family, from a Georgia family.

733. 2:49:25

     We fix it up, and we sell it to another Georgia family. That's our entire business. So just to give you an example of some, what some of our customers are like, um, you, I think of my own parents who live in a home, uh- that they're ready to, to move out of. They don't wanna have to paint it, change the carpet. They don't want people in the house, uh, for showings. So we, we provide a simple solution for people like that. You- we, we give you an offer.

734. 2:49:56

     We buy the home. We, we do the light renovations, repairs. We put it back on the market. The faster we're able to do that, the more efficiently we're able to do that, the better it is for our business. Um, and so we s- we don't hold homes long term. Uh, you think of, uh, o- other, other examples of, um, you know, first line, uh, workers, people who have jobs that don't lend themselves to being at home during the day to let people in to see the house.

735. 2:50:26

     Um, folks that need to move quickly. Um, we provide a service to these types of home sellers. Um, we don't, we don't expect every home seller to use our service, but we do think there is a, um, a- it's a mean- it's a meaningful service, and there are people, uh, home sellers who can make good use of our product. And so just to reiterate, we're on the same side as the committee. We are in support of SB 463. We understand why this bill exists, and we support that goal.

736. 2:50:57

     Families are worried about large institutions buying homes and turning them into rentals, and about homes disappearing from the market for first-time buyers. This legislation is trying to prevent large institutions from buying homes and turning them into rentals. That is not our business, business. To ensure this bill achieves its intent without unintended consequences, we respectfully ask that it include a narrow exception for entities that purchase homes primarily for repair and resale to individual buyers in the ordinary course of business.

737. 2:51:30

     Um, I can stop there. I know that we're n- pe- the people behind me, but-

738. 2:51:36

     If you could spell your last name, please.

739. 2:51:37

     K-O T-I Y-A.

740. 2:51:39

     Okay. Thank you. Representative Oliver.

741. 2:51:42

     Oh, additionally, we'd like to see your draft. Does your draft of a carve-out have any time limit in it? I mean, are you allowed to keep your renovation going for five years, or does that, an issue that r- is relevant to you?

742. 2:51:59

     Yeah. We are, we are, um, it- that's not relevant to us. We'd be open to a, a car- a time limit. Um, we, you know, we ideally are, uh, buying and reselling our homes within 90 to 180 days. So I think a carve-out that we could, we could- we'd be open to would be, like, a year, two years. Um, we, we w- we're trying to keep our edits limited, but we're happy to... We actually have a couple places where we could add in carve-outs there.

743. 2:52:30

     I'd like to see your draft would be, uh, would be helpful.

744. 2:52:32

     Great. Okay. Thank you.

745. 2:52:34

     And you mentioned you went to law school here in Atlanta. Where, where-

746. 2:52:37

     Uh, I went to Emory.

747. 2:52:38

     All right.

748. 2:52:38

     Yeah.

749. 2:52:39

     Put that Emory education to work, uh- ... as, uh, Representative Oliver-

750. 2:52:42

     Do my best

751. 2:52:42

     ... requested. Put something on paper in. Uh, so you haven't given it to the sponsor, Senator Dolezal?

752. 2:52:47

     We have not yet. No.

753. 2:52:48

     All right.

754. 2:52:48

     Yeah.

755. 2:52:49

     Listen, if anybody's got any amendments, now's the time to get them to the sponsor, and let's get communication on this. Uh, and just to be clear, are you for or against the bill?

756. 2:52:58

     We're for it.

757. 2:52:59

     Okay.

758. 2:53:00

     Yeah.

759. 2:53:00

     Thank you.

760. 2:53:00

     Thank you.

761. 2:53:00

     All right. Um, any other questions? No other questions. Uh, let's see. Caroline Sim- Simmons with We The Homeowners.

762. 2:53:18

     Nice to see you again.

763. 2:53:24

     Good morning.

764. 2:53:25

     Good morning.

765. 2:53:26

     I am both a real estate agent and a mortgage broker, and I support this bill because there are too many people who cannot buy a home, who are out placing bids on homes, and the institutional investors are winning simply because they have cash and they can close quick. They've never walked into these homes. In some cases, the institutional investors are slumlords as well.

766. 2:53:57

     They don't pay their assessments, going back to another bill. They are not keeping up the homes. They are forcing their tenants to make repairs to homes, and it's gotta stop somewhere. So you guys have to be the stopgap for all of that. That's my short version of the long story. Have a great day.

767. 2:54:19

     Thank you. Any, any questions for Ms. Simmons? Thank you, Ms. Simmons. All right. Let's see. We've got, uh, Chris Denson from Georgia Public Policy Foundation.

768. 2:54:31

     Chris Denson, going once. Going twice. All right. If, if he gets back, uh, Chris, you're on the list. Um, Amy Huskins and Josh Kamen, and y'all are together. Um- We are. All right. Come on up. Come on up. Okay. Good. Let's go. Duane, Morris, and King and Spalding, if I remember right. All right.

769. 2:54:51

     Right.

770. 2:54:52

     So you know a thing or two-

771. 2:54:52

     Yeah

772. 2:54:52

     ... about commercial real estate. That's right. All right. Please introduce yourself and tell us, uh, your position on the bill. Josh, you go first.

773. 2:55:01

     You want me to go first? Okay. Um, hey, folks. Nice to see you again. Uh, my name is Josh Kamen. I'm here in an individual capacity, but I, um, am the managing partner of the Atlanta office of King & Spalding, and have been a r- a commercial real estate lawyer for over 30 years, a member of the American College of Real Estate Lawyers, and I represent a number of different kinds of real estate investors, clients, developers, sponsors, uh, across the board. Um, I'll just start out and say that, uh, I personally am against the bill, and so would note it that way.

774. 2:55:32

     I think from a policy standpoint to start with, um, this bill is not good housing policy. I think as you read articles and, and look through the details, you'll find that, uh, it will actually discourage- housing stock as opposed to increasing housing stock. And in fact, you'll have, um, unintended consequences that are much more damaging than, than what one might actually like to have. Um, all institutional owners, in fact, are not bad landlords. They actually have standards a lot of times, which are better for renters.

775. 2:56:03

     And we cannot forget the rental community, um, that is out there, that actually there is a need for folks to rent homes, to be in homes, to not necessarily own homes. And we don't wanna have a detrimental impact on those folks as well too. Um, but even if you get past this, uh, there's a federal bill in process, and that federal bill is still being worked out. And even if you get to the policy where you say that you do need to support some type of bill, um, this bill is not the bill to support for Georgia because it has some fundamental flaws that I think need to be addressed and corrected.

776. 2:56:34

     Um, what are a couple of them? Um, it does require divestiture, uh, in, in terms of the way that the bill is drafted, and that's a problem. The federal bill does not, but this one prevents ownership of homes above a certain number, which is 350 at this point in time. Uh, while there might not be specific divestiture procedures in there, it's hard for me not to see how a prohibition on ownership doesn't require one to divest if you own something past a period of time. Um, it has a, um... It requires build-to-rent homeowners to...

777. 2:57:05

     home builders to basically hold their build-to-rent homes long term. Um, for those of us who represent builders, we recognize that that's not a group that does long-term holding by gen- as a general nature. Um, they're looking to build and move. And so I think what you'll actually find is that will discourage in- uh, investing in new homes to build to rent as opposed to encourage because you'll have those folks come out of the market. Um, it has a foreign ownership restriction, which is different than the federal bill. The federal bill has no such foreign ownership restriction.

778. 2:57:35

     As you take a step back with how investment is done in real estate, um, there are many of our mom-and-pop organizations, life insurance companies and the like, that actually, uh, take passive investors, um, who are quite in, quite sophisticated, who invest in their companies or they manage their money for them to invest in things far beyond just single family homes for rent. Um, what you'll basically do is take typical dollars out of the marketplace. They're investing in a lot of different real estate components, and you'll take that out of the fa- uh, out of the single family home for rent, um, market, which I think will again discourage, um, investment in, in that marketplace.

779. 2:58:14

     Um, the terms, many of the defined terms have been noted by others, are very loose. Um, they're different than they are in the federal bill, where there's been... I know with some of my partners in DC working on this, there have been some desires to tighten them up and, and make them appropriate for the situation. And it has, um, unintended consequences when you start thinking about how loose those terms can be, including for things like, that have been mentioned before, foreign ownership, um, the definition of single family residence and the like. Uh, and it also doesn't have exceptions for known consequences, so these aren't even unintended consequences.

780. 2:58:47

     But you have, for instance, in the federal bill, an exception for real estate investment trusts who, if they sell their assets, uh, will pay 100% tax, which effectively makes this a forfeiture. And I think there's a recognition that, uh, forfeiture of property in the United States is, uh, without payment is not, uh, something that we like to do, so. Uh, and then on top of it, the fines and penalties are, are quite draconian, which again will discourage more stock from coming into play. Uh, so in sum, I, I do not believe personally that this is good policy to advance this bill.

781. 2:59:18

     Um, but if you choose that, that it is good policy and it's something that we need to advance, uh, I can see that, and I see that with the federal bill. But nonetheless, I think this bill is not the right bill for Georgia.

782. 2:59:29

     Thank you. Ms. Hoskins-

783. 2:59:30

     Yes

784. 2:59:30

     ... and then we'll have questions for both of you.

785. 2:59:33

     Sure. So, um, in addition to Josh, um, s- comments, I want to, um, clarify my comments as only being applicable to the extent that this current draft exclude, uh, does not exclude out build-to-rent communities. I know there was some discussion earlier. The definitions do not appear to exclude out build-to-rent communities, frankly. And I wanna highlight a couple of things. Before I do that, I do need to mention that I'm also, in addition to practicing law, to work, I've got to work every day, just like everybody else here.

786. 3:00:04

     I'm also a member of a national, uh, political action committee called Commercial Real Estate Finance Council. Uh, um, I've been asked to help them out on the federal bill, this federal bill that was voted on last Thursday, and they actually, they called me up a week and a half ago and said, "Can you get on a plane tomorrow and come up to Washington to discuss the federal bill?" Because it had not been voted on as of, as of the day I was there last Tuesday. It vo- was voted on Thursday night. And I'll tell you real quickly that, um, in the federal bill, and Josh is correct about this, there's no, um, prohibition about, uh, foreign ownership of the US entity that may be a build-to-rent community, LLC or whatever.

787. 3:00:47

     That's just not done on a federal level. And, um, I do wanna ask, uh, and we will pr- we will present, um, amendments, Josh and I will, working with Max Turner. Um, but I do wanna point out a couple of things that do need clarification to the extent that build-to-rent communities are supposed to be excluded from this version of the bill and are not. On line 44 through 46, um, it talks about a p- one parcel, a parcel of property, real property. Well, in a build-to-rent community, when you're getting your local zoning, whether it be at a city or a county level, some of the counties and cities require that you have individual little tax parcels for each individual detached little house.

788. 3:01:31

     And others, you have one tax parcel, and it's everything. The, uh, the corporate owner owns the roads, they're all internal streets, they're, you know, sidewalks, the lamppost, the swimming pool. It's one tax parcel. These are not statewide regulations. They're on a local level. So I can't tell which one this means. Um, because, uh, we would like to have build-to-rent communities excluded from this entire bill, and we can work on amendments if that was the intention of the drafters. So that's part one.

789. 3:02:01

     And then part two, I do want to highlight again the foreign investment, um, provisions of this, for example, on lines 60 through 64. Um, my understanding is, and like I said, I was in DC and, and New York last week. Um, many of the large build-to-rent community, um, US owners, US owners have, do have foreign investments, but they might be the sovereign fund of Norway. I'm not kidding. This is not Chinese money here. This is like London banks, you know, uh, companies and countries in which the United States is very friendly.

790. 3:02:38

     And we're very, um, alarmed that this is excluding all foreign investment of every single country in the world other than the United States. So that's number two. And then I'll, I'll end real quickly here. The last one is the very last line, line twen- 248 and 249. It has to do with the effective date. I- if in fact build-to-rent communities are supposed to be part of this bill, um, we need to push the effective date out, because to, to construct these very large communities where you have to build the sidewalks, you have to build the roads are many times private streets, et cetera.

791. 3:03:14

     If they're in, if they're under construction now, they will not be finished by January 1. And so, uh, they could be in a limbo situation in which they are... You understand what I'm saying? Uh, so we, I would, I would at least suggest push- pushing it out to July 1, 207... Um, you know, at least that or a year beyond that. And I'll stop right there for questions.

792. 3:03:36

     Thank you, Mr. King and Ms. Huskins. Any questions for these witnesses? Um, let me ask this. It sounds like y'all have analyzed and, you know, pretty much briefed this. Uh, you testified to a lot that may, uh, help to have it down on paper. So definitely, if you wouldn't mind emailing, uh-

793. 3:03:53

     Sure

794. 3:03:53

     ... Senator Dolezal and the committee, I think seeing it on paper would help us absorb, uh, what you're presenting. And then also, King and Spalding, are y'all still the biggest, uh, law firm headquartered in Georgia?

795. 3:04:06

     It, we're close.

796. 3:04:07

     All right.

797. 3:04:07

     Close.

798. 3:04:07

     Close, if not the biggest. So, um, thank you all for looking at this bill.

799. 3:04:11

     Thank you.

800. 3:04:11

     Appreciate your testimony.

801. 3:04:12

     Thank you.

802. 3:04:13

     All right, I think, uh, Chris Denson is now here. Chris Denson from Georgia Public Policy Foundation.

803. 3:04:27

     Yes, sir. I apologize for that, Mr. Chairman. I was standing outside the packed room and couldn't get here fast enough. So, um, good morning, committee. Uh, thank you for this opportunity. Um, as chairman noted, my name is Chris Denson. I'm with the Georgia Public Policy Foundation and, uh, our C4 Georgia Policy Impact. Um, however, I'm, I'm here today. We are, uh, neutral on this bill. We're not engaged. Um, but over the five-plus years that I have traveled around this state talking about housing affordability and the state and local regulations that drive the cost of housing, um, it goes without fail that every time a question about, um, big banks buying up homes always comes up.

804. 3:05:11

     And so, you know, we'd released a report, um, in the fall that looked at the prevalence of these, uh, investor-owned homes, uh, in Metro Atlanta. And I'll keep my remarks brief today. I know the hour's late. Uh, but this is an extremely tough issue to quantify. So there's not a lot of apples to apples out there when it comes to the, looking at this issue. Um, you know, that's the reason you see certain studies that will say Atlanta will have 2 to 4% of investor-owned homes or 28 to 30%. And that's because several of these, um, studies will look at, for example, um, you know, whether or not we're talking about a percentage of single family rental stock or just the percentage of single family homes overall.

805. 3:05:52

     Um, this is also problematic because there's not a consistent definition for institutional investors among government regulators and, and academia, uh, which means that sometimes you get into this situation where we're talking about holding companies that have 100 or more homes, or 500 or more homes, or 1,000 or more homes. And so again, that's why you see these percentages that will vary wildly, such as 2 to 4% or 28 to 30%. Um, now having given all those qualifiers, it is absolutely reasonable to conclude that Atlanta has the highest concentration of investor-owned homes of any metropolitan area in the country.

806. 3:06:28

     Um, but because of the ambiguity in defining these, these homes, um, with our research, we try to look at home ownership rates as the control variable. Um, so but, you know, the inverse of that is that you mean, it means you get the mom and pops that may own one or two rental homes, and then you get these corporate entities as well that may own, you know, thousands of homes. So they're essentially all, you know, bracketed in this area of, uh, investor-owned homes. Um, but I'll also note that in our research looking at data from the Census Bureau and the Federal Reserve, uh, the number of investor-owned homes in Metro Atlanta peaked from 2014 to 2017, uh, as the housing market re- recovered from the Great Recession and our subsequent decline of our home building and our banking industries.

807. 3:07:21

     And, you know, at that time, you still had the federal government giving, um, uh, you know, one company a 10-year, $1 billion loan, for example. Um, and since that 2017 period, we've actually seen home ownership rates increase for, uh, all 12 of the Metro Atlanta, uh, counties that we studied. And so within that data as well, looking at the Federal Reserve, we could see that, um, during this peak of investor-owned housing, um, that home prices for both the highest and the lowest priced homes did not necessarily correlate with reduced home ownership.

808. 3:07:58

     So, uh, it's pretty reasonable to conclude that, you know, when you have your peak of investor-owned homes, it actually didn't, uh, fluctuate. Um, it actually didn't have a, a direct measurable impact on prices. Um, and then lastly, I think one thing I'd just like to, you know, keep this brief. Um, I don't think I realized the impact of, uh, interest rates and home mortgages on the ability of homeownership, um, across the country until we started diving into this. And, you know, essentially 20 years ago, those that have what are considered super prime mortgages, which is 760 and above, constituted, um, um...

809. 3:08:39

     Sorry, I lost my notes here. Um, 25% of home mortgages. Uh, now that number is close to 70%, and that is a direct result of, uh, you know, the Dodd-Frank, uh, tightening of mortgage lending standards. And so the federal government, as a response to the Great Recession, has essentially locked out many people from the ability to purchase a home, uh, including those that are high income earners who have low credit. And so, um, with that, Mr. Chairman, I, I know we're getting late in my... I've packed a lot in there, but my remarks are near their end.

810. 3:09:12

     So are you saying that sometimes yesterday's solutions can be today's problems on that one?

811. 3:09:19

     Yes, sir. I mean, essentially, like I said, in 2017, Fannie Mae was still giving out billion-dollar loans to corporate investors to purchase housing stock. So yeah, the federal government was both lagging and, um, somewhat misguided in their approach, I'd say.

812. 3:09:35

     Thanks. Any questions for Mr. Denson? Appreciate your testimony.

813. 3:09:38

     Yes, sir.

814. 3:09:39

     Adam Lawless from South Fulton Police Department.

815. 3:09:45

     Yes, sir.

816. 3:09:50

     We did our best to get rid of squatters. Uh, appreciate y'all coming up on that a couple years ago.

817. 3:09:54

     All right. All right. Good morning-

818. 3:09:57

     Good morning

819. 3:09:57

     ... Chairman and members of the committee. Uh, my name is Sergeant Ireland with the, uh, South Fulton Police Department. I just wanted to speak with, uh, about my personal experience dealing with Progress Residential. Um, I'll try to keep it brief. Uh, so about a year ago, uh, my sister got into some legal trouble, and three of my nieces were placed into foster care without my knowledge. When I found out about it, I got the wheels rolling, started to speak to DFCS. At the time, I lived in a two-bedroom town home in Smyrna.

820. 3:10:28

     It was me, my fiance, and my one-year-old daughter. Uh, when DFCS came to do the home inspection, uh, they told me that the house wasn't big enough for me to take custody of my three nieces. Getting a house that fit the size requirements in that area just wasn't financially possible for me and my fiance at the time. Um, and we needed a, basically a overnight solution, 'cause I didn't want my nieces to stay in foster care. Uh, that's when the Progress Residential program for, um, police officers came about, and it was pretty much an overnight solution for us.

821. 3:11:03

     It allowed me to get a four-bedroom home within a period of two weeks, and we were able to get my nieces signed into our custody the day that I signed the lease on the home. And it has been a really great help allowing me to provide a stable house for my nieces. I mean, I have a 16-year-old niece, for the first time in her life, hasn't had to share a bedroom with one of her siblings. And I know without the help of Progress Residential to get us into that home, taking care of four kids would've just been a financial burden that I'm not sure I would've been able to take on.

822. 3:11:41

     So with their help, it has been a great, great help with my family and adding stability for my nieces and my daughter. Um, and also, uh, the effects that it has on the younger officers, 'cause there is other homes that are available for younger officers in our police department. I know my period of, my hardest financial period in my life was when I was in the academy and my first year of policing. I didn't have any kids, didn't have a girlfriend. I was just a single male.

823. 3:12:11

     But nobody gets into policing for the money that we make. So having the ability for officers now to have that stable housing at the rate that they are providing that for us is a great benefit for them starting their life and their career with the, having the financial stability and housing stability. Um, again, so just speaking, I would say, in opposition of the House Bill or the Senate Bill, that, uh, it makes a difference having that program available for officers in our community and being able to serve in the community that I live in.

824. 3:12:50

     Thank you, Sergeant. Any questions for the sergeant? Thank you for coming to the Capitol.

825. 3:12:54

     Appreciate it.

826. 3:12:56

     All right, let's see Betsy Bradfield with Georgia Realtors.

827. 3:13:03

     Thank you, Mr. Chairman and committee. Again, great to see you all. Um, my name is Betsy Bradfield. I am advocacy director for the Georgia Realtors, and I represent 49,000 realtors across, uh, the state. We represent mom-and-pop landlords, um, that live in your communities and their property managers. And our mom-and-pops structure their rental properties in LLCs to protect themselves from liability, which is exactly the way that a lot of these corporations structure their LLCs. Um, and we are just worried because we want to protect our mom-and-pop landlords from the unintended consequences of a rental ban.

828. 3:13:40

     No other group, in my opinion, has been down here longer representing homeowners and banging the drum that we're in a housing crisis since 2018. We are in a housing affordability and supply crisis. Much of it is to do with current interest rates, uh, which I wish you guys could pass a bill, but a lot of it is just the lack of competition. And first-time homebuyers cannot compete. The median sales price in the state of Georgia for 2025 was $360,000. That is not affordable for a first-time homebuyer. And our national association just did a study that found that the average age of a first-time homebuyer is now 40 years old.

829. 3:14:15

     We do not support arbitrary caps that create loopholes, but we do create, we do support leveling the playing field, and I think we can do that through a tax approach, which we have, um, discussed with Senator Dolezal. Um, and that would be adopting a structure where mom-and-pops who are less than 500 houses would be taxed at 40% of assessed value, and institutional investors would be taxed at 100% of assessed value, uh, which would require these private equity firms to readdress their stance in Georgia. So to be clear about our position, we are opposed to this particular bill for many of the ways that it's written and the bans, but we are not opposed to doing something to level the playing field to protect our mom-and-pop landlords and protect Georgians who are trying to find homes to live in and to purchase and to build generational wealth for their families.

830. 3:15:03

     Thank you.

831. 3:15:04

     Did you say you've gotten that language to Senator Dolezal?

832. 3:15:06

     Yes, we've talked about it-

833. 3:15:08

     Yeah

834. 3:15:08

     ... in committee. Yeah.

835. 3:15:08

     All right. We got, uh, more lawyers than realtors, so maybe when that changes, we can get more people- ... people into homes. But, uh-

836. 3:15:16

     That's right

837. 3:15:16

     ... thank you. Any questions for Ms. Bradfield?

838. 3:15:19

     Thanks y'all-

839. 3:15:20

     All right

840. 3:15:20

     ... for taking the time.

841. 3:15:21

     Thank you. All right. Uh, next witness, we've got, uh, Jason Parker from Two Rezzy Build.

842. 3:15:37

     Good morning, Vice Chair. Nice to see you again. Committee, thank you for your opportunity to speak. My name is Jason Parker, the president of Two Rezzy Build. We're a Georgia-based home builder, primarily operating in the bill for rent space. We're 14 employees and we build about 100 to 150 homes a year. Personally, we're opposed to this bill for a lot of reasons, and some of the same things you've already heard. Um, being a BTR builder, we identify communities, we design communities for a lifestyle to serve a certain need. Unfortunately, this bill as currently worded, it would exclude us as well, you know, from being able to do that, um, which is important.

843. 3:16:12

     Uh, in Georgia, obviously housing's important. Housing affordability is probably one of our biggest challenges I feel like we face right now. And frankly, by continuing to introduce, possibly interlate, introduce legislation that could hinder that, uh, would, would negatively affect affordability. We need more supply. Simple put, I always say is we have a supply problem. If I can build, if we could build more homes, it would absolutely reduce the average house price. We can get more, even more product on the ground.

844. 3:16:43

     And by eliminating opportunity even for us to serve a certain niche to the person who gets the next one, would hurt, you know, hurts everyone. So, um, yeah, so as a local home builder, definitely appro- opposed to this. Um, and yeah. So.

845. 3:16:59

     Thank you. We've got a question for Mr. Parker. Representative Oliver.

846. 3:17:03

     What's your average rent?

847. 3:17:07

     Depends on the community. So some we've had, we build from a kind of a higher lend level that's, like, low $2,200 to $1,800 a month. We're actually introducing more of a tenant product right now we're working through, 'cause we wanna try to s- truly service that 1,500 to $1,600 a month. Our biggest challenge is the land cost. The house, if it's here or here on the spec level, the dirt and development costs are the same.

848. 3:17:30

     Do you sell your homes on any particular schedule?

849. 3:17:34

     No. We build for ourselves.

850. 3:17:37

     Do you have a... Are you able to tell us what the average fair market value of the house you build is?

851. 3:17:45

     It's hard to compare apples to apples. I'd say some communities we're in line with a for sale, per se. We- we're... Honestly, I'm trying to move into for sale to do that as well, 'cause I wanna service all consumers.

852. 3:17:59

     Are they, are they less than 450,000?

853. 3:18:01

     Yes.

854. 3:18:02

     And what's the county that you target?

855. 3:18:05

     I'm in Hall, Gwinnett, and Henry right now.

856. 3:18:10

     Thank you.

857. 3:18:11

     Yep. Um, my goal is I would love to build a for sale house. I just gotta get to a point where I can, doesn't take me three to four years to get to that point, when we've got the systems, processes, everything. That's, we're gonna do that as well, 'cause we believe in serving all the consumers.

858. 3:18:27

     Thank you. Any more questions for Mr. Parker? All right. Thanks for your testimony.

859. 3:18:32

     Yep.

860. 3:18:32

     Matt Yarborough from Council for Quality Growth.

861. 3:18:41

     Thank, ooh. Uh, thank you, Mr. Vice Chair. Uh, morning, committee, or I guess it's afternoon. I think we've almost crossed lunch. Um, thank you for the opportunity to speak today. Uh, my name's Matt Yarborough. I serve as the VP of Policy and Government Affairs with the Council for Quality Growth. We are a Metro Atlanta trade association of about 325 companies in the growth and development space. Um, we are here, um, to speak a little bit to the bill. Um, we do similarly have concerns, uh, with the bill similar to, I think, a lot of our other folks in the broader real estate industry. Um, I do think philosophically we're on similar, uh, lines to what the chairman's, uh, attempting to kind of get at with the bill, which is a focus on homeownership, a focus on affordability, trying to address what is the demand side curve.

862. 3:19:25

     We tend to focus more on the supply side curve. Um, but we appreciate kind of the intent behind the legislation. Um, I don't wanna over-litigate what has already been mentioned. W- we, at a fundamental level, have, uh, kind of some basic private property issues with this bill. Um, if a, if an individual within our state wants to sell their property and is not experiencing anyone interested in buying that property, um, they should have the right to sell that property to, to an interested buyer. Um, that's just a, a baseline fundamental for us.

863. 3:19:56

     Um, the thing I wanna highlight is more, um, on the private right to action portion of this bill, um, specifically the potential litigation costs that are gonna ultimately need to start getting built into the land financing and transfer portion of a real estate transaction. Um, the anticipation of, um, a ... of a homeowner, uh, who's financing a land deal who may anticipate, uh, a neighbor bringing a private right to action against them, uh, for being an institutional investor or for being, uh, uh, uh, someone who breaks this threshold, is gonna start needing to require that potential litigation to be built into the, the core f- financing of that transaction.

864. 3:20:41

     Um, and we have concerns about that overarchingly. Um, we would like to see this get studied further. I know there was a, a bill by Representative Olaleye, uh, in the House to do a year-long study on this effort. Um, we think that's a, um, a more reasonable approach going forward, especially given some of the research we've seen out of, uh, organizations in this room that, that this curve is flattening and that, uh, the, the current purchasing of institutional investors, um, has slowed here in metro Atlanta. So, um, I appreciate the opportunity to share and, uh, appreciate the, the opportunity to speak.

865. 3:21:16

     Thank you. Uh, we have a question for Mr. Yarbrough. Representative Holcomb.

866. 3:21:20

     Thank you. Do you have an understanding as to why the curve is flattening? Is it because of threats of l- legislation or potential action or something else?

867. 3:21:30

     No, I, uh, my general sense from, from talking to a number of the companies is that, uh, the curve started to flatten about a year and a half ago, um, with the conversations I was having. I know when House Bill 555 was first introduced, I guess that was la- uh, at the beginning of last session, we had a number of initial conversations, and, um, the data we were shown showed it was flattening as early as, uh, late '23, early '24, which I think was prior to 555 coming online in 2025.

868. 3:21:58

     Do you know any of the reasons why?

869. 3:22:00

     Uh, not, not in that kind of nuance, but I do sense it was before the threat of legislative action.

870. 3:22:05

     Okay. Thank you.

871. 3:22:06

     Yep.

872. 3:22:08

     Any more questions for Mr. Yarbrough? All right, I'm glad you brought up Triple Cinco.

873. 3:22:12

     Thank you.

874. 3:22:13

     All right. Uh, we've got two more witnesses and then definitely Senator Dolson wants you to, uh, be able to close out. Um, we've got Steven Davis with Progress Residential.

875. 3:22:28

     Uh, good morning, everyone. Uh, my name's Steven Davis. I'm Vice President of Government Affairs for Progress Residential. Thank y'all for having me here today. On behalf of our 240 Georgia-based employees, including myself, thank you for the opportunity. We are executives, managers, maintenance technicians, leasing professionals, accountants, and frontline team members. We live here. We raise families, shop, pay taxes, and contribute every day to the communities we serve. I understand there are strong views about our industry, and when concerns are raised, they deserve to be heard. But good policy should be grounded in facts and data, not assumptions and misleading narratives.

876. 3:23:04

     This year marks my eighth year under the Gold Dome advocating for Georgia residents, and one thing I have learned from talking to folks across this state, Georgia's housing challenges did not begin with investors. It began with a decade-long shortage of home construction, and that is the reality that SB 463 fails to address. For s- SB 463 creates serious unintended consequences, mass evictions, higher rents, lower home values, and greater school turnover. It sends a message, it sends a message that Georgia's closed for business and that investment in our state is no longer welcome.

877. 3:23:37

     This is a slippery slope and raises an important question. What industry is gonna be targeted next? Our data tells a very clear story. Housing affordability challenges in Georgia are primarily driven by supply and demand imbalance. Georgia has experienced strong population growth, including myself when I moved down here, and the reality that new housing construction has not kept pace. In fact, we are building fewer homes today than we were in the early 2000s, and that means fewer homes available for growing population. Institutional investors represent only a small share of the housing ecosystem.

878. 3:24:11

     In Gwinnett County, it's 2.2% of single family homes, Henry County 5.6, and Paulding County 6.4. And most telling, when institutional home purchases declined in 2022, home prices did not fall. That's because the underlying home housing shortage remained. Our company's work in Georgia reflects that reality. Last year, across the entire state, we purchased 57 homes. We paid on average 89% of the list price after they sat on the market for over 100 days.

879. 3:24:43

     And when we acquire a home, we invest on average $30,000 into improving that home for the families who live there. And in 2025 alone, we paid nearly $60 million in property taxes, contracted with 100 Georgia vendors, spending $54 million with local businesses. We also partnered with nonprofits to expand home ownership opportunities, created a pilot program that helps police officers live in the single family homes in the communities they protect. And when families were displaced after an extended stay hotel was forced to close, we made the largest private donation to help rehouse those families.

880. 3:25:19

     Those are not the actions of a company harming communities. These are the actions of a company investing in them. Georgia has always prospered and prided itself when policy decisions were made deliberately and based on facts. SB 463 falls short of that mark and ignores the real problem, a shortage of new homes, which happens to be the same story that I've been telling for eight years to any elected official that would be listening to me. We must build more new homes, not discourage investment. For those reasons, I respectfully oppose SB 463 and ask that you do the tha- same.

881. 3:25:53

     Thank you for your time.

882. 3:25:55

     Thank you. Uh, any questions for Mr. Davis? All right, you mentioned and then the sergeant mentioned your program for law enforcement and other, um, first-time homebuyers and folks like that. Can you get that to the committee and, and the sponsor to take a look at that?

883. 3:26:09

     Yes, sir, can do.

884. 3:26:10

     Thank you.

885. 3:26:11

     Thank you.

886. 3:26:11

     No, no questions. All right. I appreciate your testimony. And the last witness I have signed up is, uh, former Attorney General Olens. Does anybody else wanna be heard who thought you were signed up or otherwise? All right. Wanna make sure everybody gets to weigh in on this important bill. Attorney General Olens.

887. 3:26:31

     Tha- thank you, Mr. Vice Chair.

888. 3:26:40

     Brock, if I could give you two documents.

889. 3:26:46

     One is from the law firm Hogan Lovells, and one is from the Georgia president of the National Home Rental Council. I'm Sam Olens. I represent the National Home Rental Council.

890. 3:27:01

     Thank you, Mr. Vice Chair. Thank you, committee, for, uh, allowing us to talk on this bill. Investor ownership peaked a decade ago. Many of you were old enough to remember PVC farms, and when the economy took a nosedive in '07 to '09, many subdivisions stopped in their tracks. And as was referenced earlier, I think, by Mr. Denson, the federal government, not wanting those PVC farms to stay there, um, offered companies the opportunity, with low interest loans, to build subdivisions.

891. 3:27:40

     At the time, those local governments were very, um, appreciative, but now they are not. But the peak literally was almost a decade ago. The peak was actually between 2014 and 2017. Owner occupancy in Metro Atlanta is actually rising, not falling. Now, clearly, it's, it, it's a heavy lift due to the high mortgage rates, due to the economy, but owner occupancy is about 2% higher now than it was, for instance, a decade ago.

892. 3:28:16

     So institutional homeownership has not lessened the number of single family homes at all. There are clearly impediments. As was stated earlier, Dodd-Frank adversely affected many families' ability to get a mortgage. And let's face it, when the mortgage rates were 7% and now 6%, it's tough for a lot of families, irrespective of their credit rating. Whether institutional investors are 3% or 4% of rentals, that tells you that the vast majority of rentals are mom and pops.

893. 3:28:52

     But they're sort of thrown in with, uh, the mom and pops. And nothing against mom and pops, that's great for them to be in the business. Removing institutional investors would not lessen rents. It would increase rents. It would not enhance choice. It would limit choice. It would not increase supply. It would reduce supply. Because once again, if we don't have enough folks post Dodd-Frank to get these mortgages, they're not buying the homes.

894. 3:29:25

     What it will do is create a situation of much uncertainty in the financial market. And as the s- sponsor of the bill referenced, the bill doesn't require divestiture. If you look in the bill itself, there are numerous sentences that, that talk about ownership, et cetera, that adversely would require a divestiture, that adversely would shock capital markets around this country. Institutional investors helped stabilize Georgia neighbors after the foreclosure crisis, and in the meantime, they have permitted numerous families, young couples, seniors, folks that just simply don't want the hassle of homeownership, to live in a nice neighborhood, to have a house, and to exist.

895. 3:30:11

     And per a recent Virginia Tech study, folks living in rental houses actually demonstrated increased student achievement. It gives people a greater opportunity to choose where they're going to live, and the rents in those houses are less than trying to acquire a property. As was stated earlier, this comes at an interesting time because the US Senate just passed last week, by 89 to 10, a proposal to greatly enhance Americans' ability to acquire homes and to be homeowners.

896. 3:30:45

     The Century Road to Housing Act is now in the House. Additionally, President Trump issued two executive orders March 13th, one removing regulatory barriers to affordable home construction and another promoting access to mortgage credit. That is what's needed to actually increase Americans' ability to get homes, not what this bill does, which is force divestiture. The bill has numerous constitutional infirmities.

897. 3:31:16

     Now, the letter that I gave you from, uh, Latham is a three-page exercise in the attacks that will occur if this bill passes. You can count the number of violations, both of federal and Georgia law. You can start with the Commerce Clause that favors local businesses differently than other businesses, where there are less restrictive alternatives. Related federal preemption, the power to regulate commerce, federal and state due process, the limits on owning.

898. 3:31:49

     There is no hearing involved in this bill, but there are really high statutory damages of $100,000 per violation. That is a gift to lawyers to sue. Federal and state equal protection, arbitrary ownership-based distinctions, federal and state takings, distressed prices. And we all know in House Judiciary about state uniform taxation. This bill clearly violates that provision, too. To highlight just one section that I'm hoping most lawyers have read, even though I know most lawyers have never read the Georgia Constitution, they didn't learn it in law school, but Article 1, Section 1, Paragraph 1 of the Georgia Constitution, in other words, the very beginning of the Georgia Constitution, states, and I quote, "No person shall be deprived of life, liberty, or property except by due process of law." End quote.

899. 3:32:43

     463 overtly violates the very beginning of the Georgia Constitution. In summary, Senate Bill 463 would reduce rental supply, not increase it. It would increase rents, not decrease them. It would harm the very families the legislation aims to protect. Military families, which we have so many of in our state, young couples, old people, would be harmed by the passage of 463. I just saw in the last couple days a recent Fortune magazine article, and Jay Parsons, an expert in the rental business, and I quote, "Institutional investors serve tenants who are typically locked out of the gates of home ownership for reasons that have nothing to do with corporations.

900. 3:33:27

     These are real people, real families, who live in these homes. And the assumption in the narrative is that they would be homeowners if not for the fact that the investors own these houses. The reality is ma- most of them can't, once again, based on the ability to get the mortgage and mortgage interest rates." I, I greatly appreciate, Chairman, I see you're here now. I greatly appreciate the time of this committee with all the speakers. We all want affordable housing. We all want more housing, but the real problem at the end of the day is an abject shortage of housing supply, and that's what's most needed in our state.

901. 3:34:05

     Thank you, Mr. Chairman and Vice Chairman and members of the committee.

902. 3:34:09

     All right. Thank you. I don't see any questions.

903. 3:34:12

     Thank you, sir.

904. 3:34:13

     Yes, sir. Austin Hackney.

905. 3:34:21

     Thank you, Mr. Chairman and members of the committee. My name's Austin Hackney, representing the Home Builders Association of Georgia, and appreciate the opportunity to address you today. Um, the association, uh, opposes Senate Bill 463, and I wanna make four brief points to try and explain why. Uh, the first of those is the financing mechanism that a lot of these, um, investment firms play in the real estate market now. Uh, following the Great Recession, uh, so many local community banks folded, and, uh, and they had been the, really, the financial backing for so many of our residential developments around the state.

906. 3:34:58

     So, uh, this financing mechanism is, is something that's kinda taken the place post-recession. Uh, second point is the 500-unit cap being a- an arbitrary number that isn't really related to the market or the business models of, of these entities. And, um, as we saw in a, in a Senate bill just a few weeks ago related to this topic, you know, that started out with a 2,000-unit trigger getting changed to 500 in committee. Our concern would be w- what happens when that, uh, number changes, uh, from any future legislature.

907. 3:35:32

     A- and thirdly, the, the right to action. That's one of the enforcement mechanisms in the bill, uh, to go from, uh, the wins of this legislature on tort reform last year to a new, uh, litigation process this year is, uh, concerning to, uh, our trade association. And finally, uh, most importantly to the home builders, uh, that I represent and, and just wanted to start by, uh, thanking the author of the bill for, uh, recognizing the supply that these businesses put into the market, uh, with the carve-out for the, the builders that create these rooftops.

908. 3:36:07

     Um, the concern, I think, for these companies that, that would be recognized in that carve-out, that would be allowed to build these communities and manage them as long as it makes sense for their business model is when that business model changes or the, uh, just the market changes, uh, if the, that company needs some kind of cash liquidity in the moment, the exit strategy for those assets doesn't exist anymore. After this bill passes, there's no secondary market to sell these assets to another wholesale buyer.

909. 3:36:38

     So that's a concern for the businesses that we represent. Uh, General Owens made some great points that, that I won't repeat about the housing, uh, market overall and the effect that this kind of divestment could have. But I appreciate the committee's time and happy to answer any questions.

910. 3:36:55

     I see no questions. Thank you.

911. 3:36:56

     Thank you so much.

912. 3:36:59

     Senator Dolza.

913. 3:37:09

     Thank you, Mr. Chairman, uh, members of the committee, and to those that testified on both sides of this. Certainly appreciate the, the good dialogue. Did wanna point out a couple of things really quickly. Um, on lines, on line 51 through 53, there's a very, at least our lawyers tell me it's clear carve-out, um, that says, "Provided, however, that a business enterprise may hold an interest in more than 500 single-family residences if such business enterprise constructed such single-family residences." So I'm not sure where the confusion's coming around that this bill does not, um, provide a carve-out for SFR.

914. 3:37:43

     And I will tell you, I think there's members of the House that, um, that do believe that this bill should capture single-family, um, for-rent neighborhoods that were constructed as such. And if that's the wisdom of the committee, would certainly adhere to you. I just, uh, would adhere to that. I just wanna clearly s- uh, point out that the bill, as it passed the Senate, did not do some of the things that some of the folks were testifying that it did. I agree with, um, General Owens that the bill that the House pa- sorry, that the US Senate passed last week, um, was a multi-pronged approach to lowering the price of housing.

915. 3:38:15

     And what did they include? They included the ban on institutional funds owning more than 350 homes. So in part, in their multi-prong attack, they view that as necess- as a vital piece of that. And then lastly, Mr. Chairman, I wanna give you some numbers from the, from GAO, the Government Accounting Office, from 2022 for other cities around America of the estimated share of single-family rental market held by investors with over 1,000 homes. And just to give some other comparables, Seattle, Washington, was 9%, Las Vegas, Nevada, 10%, Dallas, Texas, 7%, Houston, Texas, 7%, Birmingham, 10, Memphis, 11, Nashville, 11, Charlotte, looks like 13 or 18.

916. 3:39:02

     With Charlotte, between Charlotte and Raleigh, one of them is 13, one of them is 18. Orlando, 13, Tampa, 15, Miami, 5, Atlanta, 25. So we are the clear outlier, or, and s- or sorry, I should say in 2022 we were the clear outlier. And while this may have tailed off, uh, Mr. Chairman, last year, I don't know that that's a reason that we need to back off an approach to ensure that it doesn't flare up again in the future. So with that, I know the committee's given, given us a lot of your time. Certainly appreciate that, and if you have any questions, I'm happy to answer them. If not, happy to step aside.

917. 3:39:32

     Okay. Um, I don't see any questions, but at this time, uh, this will be hearing only. There's a couple other people that I promised could come in and testify, and so we'll give them that opportunity. I expect your bill to be back on on Thursday.

918. 3:39:48

     Okay.

919. 3:39:48

     And then, uh, I would suggest to the people that are opposed to the bill, uh, that spoke today, work with the author. Uh, otherwise, you may have a bill going up that doesn't represent what you want. So, um, I'll leave it at that.

920. 3:40:04

     Thank you, Chairman.

921. 3:40:04

     Okay. Thank you. And that's all the business we had today. We're adjourned.