- Posted on: Nov 18 2022
By: David Ludwig [11/19/22]
What is the POA?
The Georgia Property Owners’ Association Act—or POA—was adopted in 1994 to define the authority of homeowners associations (HOA) and strengthen their collection abilities. One of the benefits of submitting to the POA is that the HOA is no longer responsible for filing liens at the county courthouse when they are owed a debt for unpaid assessments. The POA reinforces the authority to collect on their attorney fees and any other costs associated with the collection of those debts as well. These costs include collecting late fees of either $10 or 10% of the amount due—whichever amount is greater—and includes an interest rate of 10% per annum on unpaid assessments.
Does the POA Apply to my HOA?
The POA is a voluntary law and does not automatically apply to all HOAs. The POA applies only to the communities that choose to opt in which can be comprised of several neighborhoods or even an entire town. A POA is not just confined to homes and is more expansive in nature—encompassing both HOAs and COAs, or condominium owners’ associations. The objective of a POA goes beyond maintaining property value and is instead geared more toward the long-term enhancement of larger developments. Without the POA, some covenant amendments were only enforceable against owners who personally consented to the amendment. By submitting to the POA, amendments can be universally enforced against every member of the community regardless of whether they vote for and approve of the change.
The POA also stipulates that the transfer of ownership on a home does not preclude the buyer from liability for paying unpaid assessments unless the declaration of covenants specifically states otherwise. In other words, if the statutory lien is not paid at closing, then the association will have the right to pursue the new owner who is now liable for the amounts owed prior to closing on the home. Foreclosures have been a way that delinquent homeowners have tried to avoid paying their assessments, but that changed in 2004 with an amendment to the POA which authorized judicial foreclosures of community association liens—meaning the association does not have to pay off the owner’s mortgage or lien before foreclosing on the home. Furthermore, the POA clarifies that tenants must comply with the association’s rules and most violations will be treated as an extension of a violation by the owner.
The process of opting into the POA takes place either when the developer first establishes the declaration of covenants for the community or when the member of an HOA makes an amendment to an existing declaration. Since most developers do not submit their communities to the POA the onus is placed on communities to amend their official legal documents which are generally prepared by an attorney. Therefore, most newly developed communities can expect that they are not part of the POA. If a community wants to change that with an amendment, owners would all get a draft of the proposal that has been prepared by the attorney.
For older communities, it is a little more complicated. Prior to the POA, Georgia law stipulated that covenants would expire after 20 years. While this was amended in 1994 to allow covenants to renew automatically, Georgia courts have largely upheld that covenants established before 1994 do not qualify for those benefits. However, the 20-year limitation on covenants does not apply to communities that submit them to the POA which helps avoid unnecessary and expensive community votes to renew its covenants. Under the POA its covenants will last in perpetuity.
Most homeowners do not oppose POAs but are more likely to be apathetic to change despite the benefits that it can offer. To verify whether your community has opted into the POA, you would need to review the bylaws or other governing documents (including amendments) of the association. An association’s declaration is also recorded in the county land records in which the association resides.
Dunlap Bennett & Ludwig provides clients with best-in-class legal assistance throughout the process of establishing a Board of Directors and expertly navigates the nuances involved in creating HOA rules that reduce our clients’ future liabilities. If you are interested in submitting to a POA and need help with preparing an amendment, reach out today by calling 800-747-9354 or by emailing email@example.com.