Georgia Proposes New HOA Rules: What Property Owners Need to Know Before November Hearings

Association Records and Owner Requests

Proposed Rules 590-13-2-.02 and 590-13-2-.03 establish detailed procedures governing records maintained by owners’ associations and requests made by owners.

Associations would be required to maintain records required by their governing documents, the Act and the proposed rules. Records required to be created and maintained would generally be open for inspection by owners unless disclosure is restricted by law, regulation or court order.

The proposed rule identifies certain exemptions, including active procurement material before completion of the procurement process, documents that have not become final and secret ballot selections.

When only part of a record is protected, the association would generally be expected to separate or redact the protected information rather than withhold the entire record. Account numbers, personal contact information, personally identifiable information and privileged communications may be redacted.

A sufficiently detailed written request submitted to the association contact information contained in its Secretary of State registration would generally have to be acknowledged in writing within five business days.

Responsive records would generally have to be made available within ten days after acknowledgment of the written request.

If unusual circumstances prevent complete production within that period, the association would provide written notice explaining the reason for the extension, identify the affected records, produce records that can reasonably be provided sooner and provide a definite completion date.

Charges would be limited to actual, reasonable and documented costs. Electronic transmission would be provided without charge when no material staff time or media cost is required.

Before charges exceed $25, the association would provide an advance itemized estimate. Access to otherwise undisputed records could not be conditioned upon payment of a record charge that is itself disputed.

The proposed rule states that an association is not required under this process to respond to record requests from persons who do not reside within the owners’ development. It also restricts requests seeking information concerning specific assessments or collection actions involving people who do not reside in the requesting owner’s residence.

Meeting Notice and the Right to Attend

Proposed Rule 590-13-7-.01 provides detailed standards for notice and meetings under the Owners’ Bill of Rights.

Written notice of an annual, regular or special meeting would generally be provided no fewer than seven days and no more than sixty days before the meeting.

The notice would identify the place, date and time of the meeting and include a description of the matters for which the meeting was called.

When applicable, notice would also be posted in a common area accessible to residents and provided to owners in writing by hard copy or electronic means.

Meetings open to all members would be scheduled at a time and place reasonably calculated to permit owners to attend.

The proposed rule states that any owner may attend an open meeting and that a board may not bar an owner from attending because of a failure or delay in the payment of charges.

Good Faith Requirements for Association Boards

Proposed Rule 590-13-7-.02 establishes basic standards for conduct considered consistent with a board member’s duty to act in good faith and with the care of an ordinarily prudent person in a similar position.

When an owner is charged a specific assessment or another fine or fee, the proposed rule calls for written notice that includes a method for resolving and challenging the charge.

Governing documents would be expected to be enforced consistently. If an enforcement action is not consistent with the treatment of similarly situated owners, a documented basis for the different treatment would have to be maintained.

Board members would be expected to disclose conflicts involving association transactions to the other board members before execution of a contract or payment for goods or services, whichever occurs first.

Board members would be required to take reasonable steps to safeguard association records, documents and other assets.

Association records, documents and administrative credentials would be treated as association assets rather than the personal property of an individual board member, officer, manager, agent or vendor.

A digital asset or credential created, acquired, maintained, branded, promoted or used primarily for association business would remain an association asset regardless of who originally opened the account, whose personal email address or telephone number was used, who paid an initial charge or whose name appears as the original administrator.

Association assets would have to be timely transitioned to a newly elected board. Association funds could not be commingled with an individual’s private accounts. The proposed rule also identifies intentional deletion or diversion of an association asset as an act of bad faith.

Property Owner Complaints Against an Association

Proposed Rules 590-13-6-.01 through 590-13-6-.06 establish procedures for the administrative complaint and hearing system created by the Georgia Property Owners’ Bill of Rights Act.

Under Senate Bill 406, a person residing in an owners’ development who claims to have been damaged by an association’s action or failure to act may file a complaint with the Secretary of State. The complaint generally must be made within 180 days of the alleged action or inaction.

The enacted law establishes an automatic stay preventing collection or attempted collection of fines or fees that are the subject of, or related to, a qualifying complaint.

The proposed procedural rule states that the stay becomes effective once the complaint is documented in writing and filed with the Secretary of State.

Anonymous complaints would be accepted for informational and investigatory purposes, but the proposed rule states that no collection stay would apply to charges associated with an anonymous complaint.

If additional information is required, the Secretary of State would notify the complainant. Issuance of an incomplete complaint notice would remove the stay associated with the complaint, although the individual could resubmit the complaint after correcting the deficiency.

Once a complaint is complete, it would be assigned to a hearing officer. The complainant and association would be notified of the appointment and would have procedures for raising a potential conflict.

The hearing officer would review whether an association action or inaction was prohibited or required by the Act, the rules or the association’s governing documents.

The nonprevailing party in a hearing under the enacted statute is subject to a $100 administrative service fee.

Association Registration and Collection Authority

Association registration has a direct connection to collection and enforcement authority under the Georgia Property Owners’ Bill of Rights Act.

The enacted statute provides that an owners’ association generally must be registered before it or its agent may collect fines or fees from an owner, file or record liens, or initiate foreclosure proceedings against a lot.

Proposed Rule 590-13-3-.01 would establish an immediately effective temporary registration following submission of an initial application.

The temporary registration would generally remain effective for 30 days and could be extended at the discretion of the Division Director while the filing is reviewed.

The enacted statute establishes a $100 fee for an initial registration statement and a $100 fee for each annual renewal.

When an active registration becomes materially inaccurate or misleading, proposed Rule 590-13-3-.03 would require an amended registration to be filed within 30 days.

Proposed Rule 590-13-3-.04 would permit renewal filings beginning 90 days before the annual December 31 expiration date and would require an updated year end financial statement dated no more than one year before the renewal application.