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Subject: Dilemma in Georgia
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DonG9
(Georgia)

Posts:2


03/04/2020 1:45 AM  
Here in Georgia, I live in a community that has a covenants, recorded in 1986, and this covenants has no Home Owners Association written or implied in it. A group of homeowners, in my community, has now created an association.

This same group is moving to amend our original covenants and marry this new association as a Mandatory Association to our Covenants. And do this by using a section of the original Covenants that states, “This Declaration may be amended only by the affirmative vote of or written consent of 75 percent of the owners.

Even with the original covenants allowing an amendment requiring only 75 percent land owner's votes, can only75 percent of the land owners put in place a mandatory association in a community where there is no association now? Or should it require 100 percent?

Is amending and adding a Mandatory Association to a Covenants, by itself, considered imposing a greater restriction on the use or development of the land?

I can only find one law in Georgia’s Codes and that’s Georgia Code Title 44. Property § 44-5-60 (d) (4) “Notwithstanding any other provision of this Code section or of any covenants with respect to the land, no change in the covenants which imposes a greater restriction on the use or development of the land will be enforced unless agreed to in writing by the owner of the affected property at the time such change is made.”
This is all that I can find…are there other Georgia laws?


TimB4
(Virginia)

Posts:16700


03/04/2020 2:13 AM  
Posted By DonG9 on 03/04/2020 1:45 AM

Even with the original covenants allowing an amendment requiring only 75 percent land owner's votes, can only75 percent of the land owners put in place a mandatory association in a community where there is no association now? Or should it require 100 percent?




To amend, per your posting, only 75% would be required.



Posted By DonG9 on 03/04/2020 1:45 AM


Is amending and adding a Mandatory Association to a Covenants, by itself, considered imposing a greater restriction on the use or development of the land?




Possibly.



Bottom line is you will need to gather support to keep the Association from becoming mandatory.
Mention the cost - as this will likely be the main element to sway other members to your side.


Regarding the 75% vs. 100% to go from no Association to a mandatory Association, you will want to seek the advice of an attorney versed in contract law.
Perhaps a letter from that attorney specifying a need for 100% will help.

Might cost you $300 to $500.



CathyA3
(Ohio)

Posts:832


03/04/2020 5:14 AM  
Posted By DonG9 on 03/04/2020 1:45 AM
Here in Georgia, I live in a community that has a covenants, recorded in 1986, and this covenants has no Home Owners Association written or implied in it. A group of homeowners, in my community, has now created an association.

...snipping for brevity ...





Creating an association is a legal act, which must involve lawyers and the proper recording of documents with your county and with the state (eg. are you a corporation or not). It also must involve a vote of homeowners in your community, because no one agreed to be part of an HOA when they bought their homes.

What you have is a social group of homeowners, and at this time anything they do has no legal standing whatsoever.

Typically HOAs take care of maintaining common areas that are not owned by individuals. This can include landscaped areas, recreational amenities, and roads. If your community does not own these things and your streets are public, I question the need for an HOA.

The community needs to educate itself STAT because HOA membership carries a number of rights and responsibilities that many people are unaware of. HOA membership combines features of home ownership plus ownership of shares of stock or partial ownership of a business. It's this second part that people are unaware of and that trips them up.
GeorgeS21
(Florida)

Posts:2308


03/04/2020 6:04 AM  
First, Don, I support HOAs, especially if the deeds are already structured for covenants.

I’m not an attorney, and you should definitely work with one to find out the percentage requirement ... perhaps your local/state government has legal staff that might offer a free opinion.

If I were to bet? I think I would bet 100% agreement.
CathyA3
(Ohio)

Posts:832


03/04/2020 7:18 AM  
Posted By GeorgeS21 on 03/04/2020 6:04 AM
First, Don, I support HOAs, especially if the deeds are already structured for covenants.

I’m not an attorney, and you should definitely work with one to find out the percentage requirement ... perhaps your local/state government has legal staff that might offer a free opinion.

If I were to bet? I think I would bet 100% agreement.




I'm voting for 100% also unless they create a voluntary HOA. The existence of an HOA is a mandated disclosure in my state, and failure to disclose would be grounds for a buyer to terminate the purchase contract.
AugustinD


Posts:2915


03/04/2020 7:30 AM  
DonG9, similar issues have been raised recently by at least two other Georgia posters here in the last few months. They too had covenants but no HOA. The Georgia law, concerning creation of a HOA, that appears to be relevant is from the Georgia Property Owners Association Act, O.C.G.A. 44-3-220, et seq. (“POAA”). Specifically, see OCGA 44-3-222, 44-3-234, and 44-3-235. Google and these statute sections will come up. Or go to https://casetext.com/statute/code-of-georgia/title-44-property/chapter-3-regulation-of-specialized-land-transactions/article-6-property-owners-associations , but double check that the latter is the latest from the Georgia legislature.

Note that 44-3-234 states:
"The limitations provided in subsection (b) and paragraphs (1), (2), and (4) of subsection (d) of Code Section 44-5-60 shall not apply to any covenants contained in any instrument created pursuant to or submitted to this article."

Because the covenants are clear that they can be amended by a 75% affirmative vote; because you had notice of this reality when the covenants were recorded with the county; because OCGA 44-3-200 et seq. is public record; I think that your community can create a HOA and subject your property to the HOA. The HOA's actions must comply with the law. The biggest problem with HOAs is their amateurish boards typically do not understand what their legal obligations are under the law and can create a great deal of chaos. Also it is easy for boards to behave like tyrants, because they are frustrated with trying to understand the law and giving enormous hours to running the HOA.

Case law may exist on the point. Else maybe consider what I wrote above to be part of your prep for a meeting with a HOA or real estate attorney. But I am not optimistic.
AugustinD


Posts:2915


03/04/2020 7:39 AM  
DonG9, I would also take note of the relatively exacting requirements for creating a HOA. From OCGA 44-3-235: "any amendment must conform the instrument creating the property owners' association to this article." This means this is going to be one lengthy proposed amendment sent out to people in advance. It could be enough legal jargon to scare people from supporting the amendment.

If done correctly, the proposed amendment will excerpt much of OCGA 44-3-220 et seq. In addition the vote to amend must be done correctly. If even one blunder is made in providing notice of the vote; tallying the vote; using correct wording in the amendment, then the amendment is vulnerable to legal challenge. You can watch closely what the group does, and say nothing if they blunder. If there is a blunder, then report back here promptly for further suggestions, again in preparation for a meeting with an attorney.

How many owners are there in your community?
CathyA3
(Ohio)

Posts:832


03/04/2020 9:27 AM  
If I lived in Georgia and had time and money on my hands, I'd be looking for like-minded individuals to mount a challenge to the law that allows the creation of an HOA after the fact.

I feel strongly about the fundamental wrongness of forcing people into legal and financial relationships without their consent, particularly ones that are as complicated and un-straightforward as HOAs can be. There are people who avoid HOAs like the plague and who deliberately choose homes outside of them. You can't "caveat emptor" when what you're "empt-ing" can change its nature after you've "empt-ed" it. :-)

On the other hand, as I've observed before, there are probably too many big-money interests that profit from HOA's to make it a fair fight...
AugustinD


Posts:2915


03/04/2020 12:37 PM  
Here is the best Georgia case law I could find on this point: Marino et al. v. Clary Lakes Homeowners Association, 2013, https://law.justia.com/cases/georgia/court-of-appeals/2013/a13a0299.html, or see attachment.

From the court's decision:
"Construed together, OCGA §§ 44-3-222 and 44-3-235 (a) provide that when
an existing declaration is amended to include a provision affirmatively electing to be
governed by the POA Act, such an amendment to the existing declaration is to be
adopted in accordance with the voting requirements found in the existing declaration
itself. Thus, where, as here, the existing declaration (i.e., the Original Declaration)
allowed for the adoption of amendments by a majority vote of the members of the
property owners’ association, an amendment affirmatively submitting the association
to governance by the POA Act could be accomplished by majority vote."

"The election to submit to the POA was pursuant to a majority vote of the Association’s members in 2003, the same vote which also saw the adoption of the restrictive “Garage Use” provision."

The HOA was trying to enforce a new covenant, created by amendment, regarding parking in garages. Defendant Marino objected. The court ultimately agreed with Defendant Marino. The decision refers to how the HOA had been created and made subject to OCGA 44-3-220 et seq. via a lawful, majority vote. The latter does not seem to have been at issue. The HOA's manner of voting on the garage covenant was at issue.

The court decision is not directly on point. Still, it seems instructive: A mere majority of a HOA's membership was able to subject the entire HOA to the Geogia HOA statute.

Attachment: 13437429671.pdf

DonG9
(Georgia)

Posts:2


03/04/2020 3:49 PM  
Thanks everyone for your input, however, the Georgia Property Owners’ Association Act (the “POA Act” or the
“Act”), OCGA § 44-3-220 et seq.is an “opt-in” program for existing Mandatory Homeowners Associations. And the“opt-in” process requires only a majority vote. It also sets aside the Georgia code OCGA § 44-5-60 (d) (4).The "POA Act" in Georgia gives the HOA's powers beyond belief.

Georgia's “POA Act” OCGA § 44-3-220 thru 44-3-335 does not apply in our case because we do not have a Mandatory Home Owners Association (yet).We are still under the old code OCGA § 44-5-60.



AugustinD


Posts:2915


03/04/2020 6:03 PM  
DonG9, thank you for explaining the part about mandatory and correcting my error.

This Georgia law firm site indicates you cannot be forced to become a member of a HOA where a HOA was not previously mandatory:
https://www.luederlaw.com/creating-a-mandatory-homeowners-association-in-your-existing-neighborhood/
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