Georgia HOA Foreclosures

If you live in a house, condo, or townhome that’s part of a common interest community in Georgia, you’re most likely responsible for paying dues and assessments to the homeowners’ association (HOA) or condominium owners’ association (COA). If you don’t pay up, in most cases, the HOA or COA can get a lien on your property that could lead to a foreclosure.

Read on to learn about the Georgia laws governing HOA and COA foreclosures.

Georgia HOA and COA Lien Laws

The Georgia Condominium Act (Ga. Code Ann. §§ 44-3-70 to 44-3-117) and the Georgia Property Owners’ Association Act (Ga. Code Ann. §§ 44-3-220 to 44-3-235) cover association liens in the state.

The two sets of laws are very similar.

How HOA and COA Liens Work

Most HOAs and COAs have the power to place a lien on your home if you become delinquent in paying the monthly dues or assessments (collectively referred to as “assessments”). Once you fall behind in the assessments, typically, the lien will automatically attach to the property.

In Georgia, the recording of the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or the Declaration of Condominium constitutes record notice of the existence of the lien, and no further recordation for any claim of lien is required. (Ga. Code Ann. § 44-3-109(a), 44-3-232(a)). (In some other states, though, the lien must be recorded in the county where the property is located.)

Lien Priority in Georgia

An HOA or COA lien for unpaid assessments has priority over other liens on a unit or lot subject to a few exceptions, like:

• property taxes
• a first mortgage or deed of trust recorded before the recording of the declaration, and
• a secondary purchase money mortgage, so long as neither the grantee nor any successor grantee on the mortgage is the seller of the lot. (Ga. Code Ann. § 44-3-109(a), 44-3-232(a)).

Charges the HOA or COA May Include in the Lien

Georgia law sets out the types of charges that the HOA or COA may include in the assessments lien. (Ga. Code Ann. § 44-3-109(b), 44-3-232(b)).

• Assessments. The HOA or COA can include amounts for unpaid assessments in the lien.
• Late charges. Late charges of the greater of $10 or 10% of the amount of each assessment or installment due may be included in the lien.
• Collection Costs. The association may also include court costs, reasonable attorneys’ fees actually incurred, the expenses of sale, and any expenses required for the protection and preservation of the unit or lot.
• Interest. The HOA or COA may charge interest on unpaid assessments from the time the assessment became due at a rate not to exceed 10% per year.
• Fines. The lien may include fines from the time they become due.
• Rental value. The lien can also include the fair rental value of the unit or lot from the time the action is initiated until the foreclosure sale or until the judgment is otherwise satisfied.

Requesting a Statement of Assessments Due

Upon request, the association must provide you with a statement setting forth the amount of assessments past due, plus late charges and interest. You must make the request in writing and deliver it to the registered office of the association. Be sure to tell the association where you want the statement sent. The association may charge a fee—not to exceed $10—for issuing the statement, if the declaration allows it. (Ga. Code Ann. § 44-3-109(d), 44-3-232(d)).

If the association doesn’t mail or otherwise furnish you with the statement within five business days after receiving your request, the lien is extinguished. (Ga. Code Ann. § 44-3-109(d), 44-3-232(d)).

HOA and COA Foreclosures in Georgia

If you default on the assessments, the HOA or COA can foreclose. A common misconception is that the association can’t foreclose if you’re current with your mortgage payments. But an association’s right to foreclose has nothing to do with whether you are current on your home loan.

In Georgia, an HOA or COA must judicially foreclose an assessments lien, and foreclosure isn’t permitted unless the amount of the lien is at least $2,000. (Ga. Code Ann. § 44-3-109(c), 44-3-232(c)). (Most loan foreclosures in Georgia, on the other hand, are nonjudicial.)

Notice Required in HOA and COA Foreclosures

At least 30 days before starting the foreclosure, the association must provide notice to the owner by certified mail or statutory overnight delivery, return receipt requested, at both at the address of the unit or lot and at any other address or addresses which the unit or lot owner may have designated to the association in writing. (Ga. Code Ann. § 44-3-109(c), 44-3-232(c)).

Statute of Limitations

The HOA or COA must initiate an action to enforce the lien within four years after the assessment becomes due—otherwise the lien will lapse and won’t be effective. (Ga. Code Ann. § 44-3-109(c), 44-3-232(c)).

Talk to a Lawyer

If you’re behind in assessments and facing an HOA or COA foreclosure, consider consulting with an attorney licensed in Georgia to discuss all legal options available in your particular circumstances.