How to Switch Your HOA’s Governing Models

We have had several conversations with our community manager and others suggesting we change from an HOA to a POA. What is the process? What are the benefits and disadvantages?

The Georgia Property Owners’ Association Act is a statute that homeowners associations can elect to be governed by in addition to their community- specific governing documents.

If the original declaration of an association was not made subject to the act, the community can elect to become subject to the statute by amending its declaration and conforming governing documents to it.

Recently, the desire to impose new leasing restrictions has driven many homeowners associations to adopt the act. Under Georgia law, communities that have not accepted the act are prohibited from imposing greater restrictions on the use or development of property such as leasing restrictions without the owner’s written approval. After an association submits to the act, all properties in the community will be bound by any new use restrictions approved by a two-thirds vote.

Additionally, the act provides an automatic statutory lien securing all past-due assessments and charges, including fines, which obviates the need to file a paper lien at the local courthouse.

It also ensures secured creditor status in the event an owner declares bankruptcy. The act also allows the foreclosure of liens over $2,000, subject to any superior liens like the first mortgage and ad valorem property taxes — a strong incentive for payment.

Furthermore, the act provides the statutory right to charge a late fee of $10 or 10% on past due assessments and interest at the rate of 10% per year if permitted by the declaration. The act also authorizes the recovery of collection costs including reasonable attorneys’ fees.

If permitted by the declaration, the act also authorizes the imposition of specific assessments, the assessment of fines, and the suspension of the right to use the common area for violations. The act also makes it clear that all owners and tenants must comply with the declaration and the rules and regulations.

Finally, the act provides that covenants run perpetually, avoiding potential expiration under the act.