Executive Summary - GA Senate Bill 406
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1. Separate GaSOS Registration; Limitations on Fines/Fees/Liens Foreclosure (effective 1/1/2027)
If any Georgia association (common law HOA, Condo, or POA) wants to collect “fines or fees”, record liens or initiate foreclosure, SB 406 requires a second registration for that HOA with the Georgia Secretary of State (“GaSOS”) to become a “registered owners association.” Such dual registration includes an extra $100 fee, and requires the HOA to provide last year’s financial statements and identify officers and directors by name and address. Registration allows heightened GaSOS review of finances and subpoena power; the GaSOS can limit fines or fees; and bar persons from serving on a Board. Registered HOAs must maintain their records for 10 years and designate where they are kept.
If your association doesn’t dual-register, they cannot collect any “fines or fees,” or place liens or foreclose, and will be limited to collecting assessments only (but they can apply payments in covenantal order, and accelerate assessments if the covenants allow it; see below).
2. GaSOS Complaint System Created (effective 1/1/2027)
Any homeowner in any common law HOA, Condo, or POA, registered or not, can now file a complaint with the GaSOS for any “action or inaction” within 180 days of the HOA’s alleged action/inaction. A “hearing officer” is assigned to investigate the complaint and may order a hearing, then issue a ruling. No time limit on GaSOS investigation is placed.
Filing a complaint imposes an automatic stay against the HOA from collecting or attempting to collect any fines or fees that are the subject of the complaint while the matter is pending.
Anyone dissatisfied with the Hearing Officer’s ruling can appeal it and the case goes up into the court system (usually Magistrate Court).
3. Order of Application of Payments (effective 1/1/2027)
Any “registered owners association” must apply homeowner payments received in this order, irrespective of what the covenants require:
Regular assessments/dues;
Special assessments;
Specific assessments;
Other “fees and fines”
A registered owners’ association also can’t refuse to accept payment from an owner in any amount for any assessment, or accelerate assessments, irrespective of what the covenants say.
4. Expanded Right to Inspect/Demand Records (effective 1/1/2027)
Any owner in any HOA (common law HOA, Condo, or POA, registered or not) has an expanded right to inspect and demand association records including “accounting records” defined as (1) the finalized balance sheet, (2) annual budget, (3) profit and loss statements, and (4) bank statements for the past three years. Owners can also request a copy of the association’s certificate of insurance (“COI”) for coverage that may apply to a potential or submitted claim.
5. Limits on POA Foreclosure Rights; Expanded Lien Period (effective 1/1/2027)
Foreclosures now are more difficult for POA communities (not applicable to Condos or common-law HOAs). The statutory limit is raised to the lesser of $4000 or 12 months of assessments (but at least $2000), and can only include regular assessments, not special assessments or any fines or fees. Homeowners now get 60 days’ notice of an intended foreclosure (double the present notice period). The lien in a POA community now expires after 6 years.
6. Limitations on POA Attorney’s Fees (effective 7/1/2026)
Before a POA can collect or be awarded attorney’s fees it must itemize its claimed attorneys’ fees to a homeowner by certified mail and give 30 days to pay. If in court, a judge must make a finding of reasonableness of the fees first, before an award is made to the POA. (Not applicable to Condos or common-law HOAs).