ATLANTA — Among the more popular bills to pass out of the Georgia General Assembly last week was a measure that would make it more difficult for homeowners’ associations to foreclose on members’ homes over disputes about money.
Sen. Matt Brass, R-Newnan, told fellow lawmakers during hearings on the bill that he had heard numerous anecdotes about associations that had abused their authority to levy fines, piling up bills that had led to liens on homes and then to foreclosure.
“You might have a rogue board member or a bad management company that wants a neighbor out or they want to try to get possession of that property,” he said at a hearing last month. “And they start fining and feeing people.”
Senate Bill 406 passed the Senate unanimously and it passed the state House by an overwhelming bipartisan margin. If Gov. Brian Kemp allows it to become law, it will put guardrails around the associations’ authority to fine residents and place liens against their properties.
It would require associations to register annually with the Georgia Secretary of State if they plan to collect fines and fees. It would limit the types of debt that associations could use to place a lien on a property. It would double the current $2,000 debt threshold for filing a lien provided owners are not in arrears for at least a year. It would require associations to upload certain records to the state and open their financial books to members. And it would establish a hearing process for disputes to be overseen by the Secretary of State.
Caroline Simmons has been in a long-running dispute with her Decatur-area condominium association over the cost of new water meters. She asserted that the meters were not needed and that the board had failed to follow protocol to contract for them. She then sued.
SB 406 would give her an alternative to the courts.
“It means I have someplace other than the court to go to be able to rectify everything that I believe that the board is doing in violation of not only our declaration but of Georgia law,” Simmons said in an interview this week.
She was among several homeowners who testified about aggressive association behavior at that hearing with Brass last month.
One man described a battle over the pavers he placed in the mud to give his pregnant wife safe passage through the yard. He said the association levied thousands of dollars in fines after ordering them removed.
Another man said he had spent $25,000 dealing with water runoff from a neighbor’s property. The association did not like the work he had done, which led to a costly legal fight. He called the associations “judge, jury and executioner.”
A real estate agent described how an owner was at risk of losing his home because he failed to respond to an association order to repaint his front door.
She said the man had been busy tending to his dying wife.
At a prior hearing in February, a representative for the associations argued that there was no need for SB 406. Julie Howard, a lawyer who said she was a volunteer for the Community Associations Institute, said there are over 11,300 associations for condominiums and homes in Georgia, representing over 2.5 million people — about a quarter of the state.
She said residents voluntarily chose to live under those associations and that Brass was hearing from a relatively small number with complaints. She said there were already processes to hold boards accountable, including board elections.
“We don’t think it’s good law to make law based on a few rogue actors,” Howard said.
But Brass said the existing processes had failed to protect the people who had come to him, and he described the protections in SB 406 as modest, with minimal burden on the associations. All they must do is spend $100 a year to register with the Secretary of State and upload some of their records, he said. He said the legislation scratches the surface of the problems but establishes a framework for additional regulation in the future.
Homeowners’ associations are effectively small cities, and require oversight, he said in an interview Thursday.
“I was trying to rein in the bad associations without punishing the good ones,” he said. “And I think that was as close as we could get it, for now anyway.”
This story is available through a news partnership with Capitol Beat, an initiative of the Georgia Press Educational Foundation.
