24 LC 48 1067
House Bill 1308
By: Representatives Holly of the 116
th
, Bell of the 75
th
, Hutchinson of the 106
th
, Glaize of the
67
th
, and Park of the 107
th
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 3 of Title 44 of the Official Code of Georgia Annotated, relating to
1
regulation of specialized land transactions, so as to provide for protections for homeowners,2
condominium owners, and property owners in community associations; to provide for a short3
title; to provide for definitions; to require declarants, developers, or other establishing entities4
to provide for budgets and reserve account funding for maintenance of community amenities;5
to require performance and maintenance bonds for community amenities; to implement6
requirements and procedures for turnover and transition from declarants, developers, or other7
establishing entities to property owners comprising the community association; to provide8
for civil causes of action for violations; to provide for civil penalties for violations and the9
recovery of litigation costs; to provide for related matters; to provide for an effective date and10
applicability; to repeal conflicting laws; and for other purposes.11
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:12
SECTION 1.13
Chapter 3 of Title 44 of the Official Code of Georgia Annotated, relating to regulation of14
specialized land transactions, is amended by adding a new article to read as follows:15
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"ARTICLE 816
44-3-260.17
This article shall be known and may be cited as the 'Community Association Transparency18
and Protection Act.'19
44-3-261.20
As used in this article, the term:21
(1) 'Amenities' mean retention and detention systems or common area facilities.22
(2) 'Common area facilities' means clubhouses; golf courses; swimming pools; tennis23
courts, basketball courts, and other recreational courts; sidewalks; cart paths; nature trails;24
street lighting; accent lighting; or any other facility that is intended to be communally25
shared by property owners as recorded in the plat last filed at the time of inception.26
(3) 'Community association' means a nongovernmental association of participating27
members in a delineated geographic area comprising a neighborhood, condominium,28
cooperative, or group of homeowners or property owners, including, but not limited to,29
a homeowners' association, condominium association, and property owners' association.30
(4) 'Condominium association' means an organization or corporation formed pursuant31
to the Georgia Condominium Act for the purpose of exercising the powers of an32
association of any condominium under such act.33
(5) 'Homeowners' association' means an organization or corporation of homeowners or34
declarants or developers of a particular subdivision, planned community, or condominium35
that makes and enforces rules for the properties within its jurisdiction and has an elected36
board of directors that enforces and oversees the organization's governing documents.37
(6) 'Inception' means the first property sale of said community to a member or future38
member of the community association who is not a declarant, developer, or other39
establishing entity.40
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(7) 'Members other than the declarant, developer, or other establishing entity' shall not41
include builders, contractors, or others who purchase a parcel for the purpose of42
constructing improvements thereon for resale.43
(8) 'Property owners' association' means a corporation formed pursuant to the Georgia44
Property Owners' Association Act for the purpose of exercising the powers of an45
association of property owners under such act.46
(9) 'Retention and detention systems' means any storm-water management system,47
method, or structure that is designed to provide storm-water storage or release for surface48
runoff as recorded in the plat last filed at the time of inception.49
(10) 'Turnover and transition' means the relinquishment of control by a declarant,50
developer, or other establishing entity of the amenities and community association51
voluntarily or by operation of law whereby the property owners comprising the property52
jurisdiction of the community association take control of such amenities and community53
association.54
44-3-262.55
(a) At the establishment of a community association by a declarant, developer, or other56
establishing entity, and prior to the turnover and transition, such declarant, developer, or57
other establishing entity shall establish a two-year operating and expense budget for any58
construction and ongoing maintenance or replacement of amenities. Such budget shall be59
verified by a real estate appraiser licensed pursuant to Chapter 39A of Title 40 and60
established using a good-faith method of estimation for all such construction and ongoing61
maintenance or replacement expenses and shall include a reserve fund account as provided62
for in subsection (b) of this Code section for such construction and ongoing maintenance63
or replacement of such amenities. Such budget shall be maintained as a record by such64
declarant, developer, or other establishing entity, and all such records shall be provided to65
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the unit or property owners upon creation of such community association and upon66
turnover and transition.67
(b) The reserve fund account provided for in subsection (a) of this Code section shall be68
fully funded by such declarant, developer, or other establishing entity, and shall include69
capital for all items that have a construction or ongoing maintenance or replacement70
expense that exceeds or will exceed $10,000.00 over the two-year period. All funds in the71
reserve account shall be maintained by the declarant, developer, or other establishing entity72
in a separate account to be held in trust upon inception and until turnover and transition.73
(c) The amount to be maintained in the reserve fund account by the declarant, developer,74
or other establishing entity shall be computed using a formula based upon estimated75
remaining useful life and estimated replacement cost or ongoing maintenance expense of76
each reserve item. The declarant, developer, or other establishing entity may adjust77
replacement reserve assessments annually to take into account any changes in estimates or78
extension of the useful life of an item caused by new construction or maintenance or79
replacement.80
(d) The establishment of the operating and expense budget, the maintenance of the reserve81
fund account, and any adjustments in such reserve fund account shall be managed by an82
independent certified public accountant who is licensed by this state who shall certify83
whether activities concerning such budget, fund, or adjustments are in conformance with84
the purposes of this Code section. The declarant, developer, or other establishing entity85
shall make such activities, records, and certifications open to public inspection.86
44-3-263.87
(a)(1) Prior to the conveyance of the first property that is or shall be subject to88
membership in a community association, a declarant, developer, or other establishing89
entity shall post a performance bond with the governing authority of the city or county90
with jurisdiction, with the community association as successor in interest to such bond,91
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for 125 percent of the cost of the construction and build-out of amenities. The amount92
affixed to the cost of the construction and build-out of amenities shall be verified by a93
real estate appraiser licensed under Chapter 39A of Title 43 where such verification shall94
be based on the plat which was last filed at the time of inception as well as other95
architectural and construction planning documents and economic forecasts.96
(2) Prior to the conveyance of the first property that is or shall be subject to membership97
in a community association, a declarant, developer, or other establishing entity shall post98
a maintenance bond with the governing authority of the city or county with jurisdiction,99
with the community association as successor in interest to such bond, for a maintenance100
term of at least 24 months beginning at inception.101
(b) The bonds required under subsection (a) of this Code section shall be issued by a102
person licensed to do such business in this state and who shall appear on the list of certified103
companies as issued by the United States Department of the Treasury.104
(c)(1) The construction and build-out of amenities shall be complete and fully105
operational, and turnover and transition shall occur, within two years after inception,106
otherwise the performance bond is forfeited.107
(2) In the case of forfeiture the governing authority of the city or county shall pay over108
funds from the bonds to the clerk of superior court of the county having jurisdiction, who109
shall segregate the funds pending proper petition for the clerk to pay over such funds to110
the community association as the successor in interest, and such funds shall then be used111
as provided for by the superior court for the purposes of this article.112
(3) If no proper petition as provided for in paragraph (2) of this subsection is made113
within two years after such funds have been paid over to the clerk of superior court, then114
such funds shall be paid into the general funds of the city or county with jurisdiction.115
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44-3-264.116
Not more than 90 days after turnover and transition, the declarant, developer, or other117
establishing entity shall deliver to the condominium association, at the declarant's,118
developer's, or other establishing entity's expense, all property, information, and reports of119
the unit owners and of the condominium association which is held or controlled by the120
declarant, developer, or other establishing entity, including, but not limited to:121
(1) The original or a photocopy of the recorded declaration of condominiums and all122
amendments thereto. If a photocopy is provided, it shall be certified by affidavit of the123
declarant, developer, or other establishing entity or by their officer or agent as being a124
complete copy of the actual recorded declaration;125
(2) A certified copy of the articles of incorporation of the condominium association or,126
if the condominium association was established prior to the Georgia Condominium Act127
and is not incorporated, copies of the documents creating the condominium association;128
(3) A copy of the bylaws and amendments thereto;129
(4) The minute books, including all minutes, and other books and records of the130
condominium association, if any;131
(5) Any house rules and regulations that have been promulgated;132
(6) Resignations of officers and members of the board of directors who are required to133
resign because the declarant, developer, or other establishing entity is required to134
relinquish control of the condominium association;135
(7) The financial records, including financial statements of the condominium association,136
and source documents from the incorporation of the condominium association through137
the date of turnover and transition. Such records shall be audited by an independent138
certified public accountant licensed by this state for the period from the incorporation of139
the condominium association or from the period covered by the last audit if an audit has140
been performed for each fiscal year since incorporation by an independent certified public141
accountant licensed by this state. All financial statements must be prepared in accordance142
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with generally accepted accounting principles and must be audited in accordance with143
generally accepted auditing standards. The accountant performing the audit shall144
examine, to the extent necessary, supporting documents and records, including the cash145
disbursements and related paid invoices to determine if expenditures were for146
condominium association purposes and the billings, cash receipts, and related records to147
determine that the declarant, developer, or other establishing entity was charged and paid148
the proper amounts of assessments. Audits required by this paragraph shall be paid for149
by the declarant, developer, or other establishing entity;150
(8) All condominium association funds or the control thereof;151
(9) All tangible personal property that is property of the condominium association, which152
is represented by the declarant, developer, or other establishing entity to be part of the153
common elements or which is ostensibly part of the common elements, and an inventory154
of that property;155
(10) A copy of the plans and specifications utilized in the construction or remodeling of156
improvements and the supplying of equipment to the condominium and in the157
construction and installation of all mechanical components serving the improvements and158
the site with a certificate in affidavit form of the declarant, developer, or other159
establishing entity, or their agent or an architect or engineer authorized to practice in this160
state, that such plans and specifications represent, to the best of his or her knowledge and161
belief, the actual plans and specifications utilized in the construction and improvement162
of the condominium association property and for the construction and installation of the163
mechanical components serving the improvements. If the condominium property has164
been declared a condominium more than three years after the completion of construction165
or remodeling of the improvements, the requirements of this paragraph shall not apply;166
(11) The names and addresses of all contractors, subcontractors, and suppliers utilized167
in the construction or remodeling of the improvements and in the landscaping of the168
condominium or condominium association property which the declarant, developer, or169
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other establishing entity had knowledge of at any time in the development of the170
condominium;171
(12) Insurance policies;172
(13) Copies of any certificates of occupancy that may have been issued for the173
condominium property;174
(14) Any other permits applicable to the condominium property which have been issued175
by governmental bodies and are in force or were issued within one year prior to the date176
the unit owners other than the declarant, developer, or other establishing entity took177
control of the condominium association;178
(15) All written warranties of the contractor, subcontractors, suppliers, and179
manufacturers, if any, that built the condominium property or condominium association180
properties that are still effective;181
(16) A roster of unit owners and their addresses and telephone numbers, if known, as182
shown on the declarant's records;183
(17) Leases of the common elements and other leases to which the condominium184
association is a party;185
(18) Employment contracts or service contracts in which the condominium association186
is one of the contracting parties or service contracts in which the condominium187
association or the unit owners have an obligation or responsibility, directly or indirectly,188
to pay some or all of the fee or charge of the person or persons performing the service;189
(19) All other contracts to which the condominium association is a party;190
(20) A turnover and transition inspection report included in the official records, under191
seal of an architect or engineer authorized to practice in this state, attesting to required192
maintenance, useful life, and replacement costs of common elements, including, but not193
limited to, the roof, structure, fireproofing and fire protection systems, elevators, heating194
and cooling systems, plumbing, electrical system, swimming pool or spa and equipment,195
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seawalls, pavement and parking areas, drainage systems, painting, and irrigation systems;196
and197
(21) A copy of the certificate of a surveyor and mapper recorded, or the recorded198
instrument, that transfers title to a unit in the condominium which is not accompanied by199
a recorded assignment of the declarant's, developer's, or other establishing entity's rights200
in favor of the grantee of such unit, whichever occurred first.201
44-3-265.202
(a) In addition to the requirements set forth in Code Section 44-3-227, homeowners'203
association or property owners' association members other than the declarant, developer,204
or other establishing entity are entitled to elect at least one member of the board of205
directors of the homeowners' association or property owners' association if 50 percent of206
the parcels in all phases of the community which will ultimately be operated by the207
homeowners' or property owners' association have been conveyed to the members.208
(b) Members of the homeowners' association or property owners' association other than209
the declarant, developer, or other establishing entity are entitled to elect at least a majority210
of the members of the board of directors of the homeowners' association or property211
owners' association when the earlier of the following events occurs:212
(1) Ninety days after 90 percent of the parcels in all phases of the community that will213
ultimately be operated by the homeowners' association or property owners' association214
have been conveyed to the members;215
(2) Such other percentage of the parcels has been conveyed to the members or such other216
date or event has occurred as is set forth in the governing documents in order to comply217
with the requirements of any governmentally chartered entity with regard to the mortgage218
financing of parcels;219
(3) Upon the declarant, developer, or other establishing entity abandoning or deserting220
its responsibility to maintain and complete the amenities or infrastructure as disclosed in221
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the governing documents. For purposes of this paragraph, there is a rebuttable222
presumption that the declarant, developer, or other establishing entity has abandoned and223
deserted the property if the declarant, developer, or other establishing entity has unpaid224
assessments for a period of more than two years;225
(4) Upon the declarant, developer, or other establishing entity filing a petition seeking226
protection under Chapter 7 of the United States Bankruptcy Code;227
(5) Upon the declarant, developer, or other establishing entity losing title to the property228
through a foreclosure action or the transfer of a deed in lieu of foreclosure, unless the229
successor owner has accepted an assignment of the declarant's, developer's, or other230
establishing entity's rights and responsibilities first arising after the date of such231
assignment; or232
(6) Upon a receiver for the declarant, developer, or other establishing entity being233
appointed by a superior court and not being discharged within 30 days after such234
appointment, unless the court determines within 30 days after such appointment that235
transfer of control would be detrimental to the association or its members.236
(c) The declarant, developer, or other establishing entity is entitled to elect at least one237
member of the board of directors of the homeowners' association or property owners'238
association as long as the declarant, developer, or other establishing entity holds for sale239
in the ordinary course of business at least 5 percent of the parcels in all phases of the240
community.241
(d) After the declarant, developer, or other establishing entity relinquishes control of the242
homeowners' association or property owners' association, the declarant, developer, or other243
establishing entity may exercise the right to vote on any matter in the same manner as any244
other member, except for purposes of reacquiring control of the homeowners' association245
or property owners' association or selecting the majority of the members of the board of246
directors.247
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(e) At such time that the members of the homeowners' association or property owners'248
association are entitled to elect at least a majority of the board of directors of the249
homeowners' association or property owners' association, the declarant, developer, or other250
establishing entity, at the declarant's, developer's, or other establishing entity's expense, and251
not later than 90 days thereafter, shall deliver the following documents to the board of252
directors of the association:253
(1) All deeds to common property owned by the homeowners' association or property254
owners' association;255
(2) The original of the association's declarations of covenants and restrictions;256
(3) A certified copy of the articles of incorporation of the association;257
(4) A copy of the bylaws;258
(5) The minute books, including all minutes;259
(6) The books and records of the association;260
(7) Policies, rules, and regulations, if any, which have been adopted;261
(8) Resignations of directors who are required to resign because the declarant is required262
to relinquish control of the association;263
(9) The financial records of the association from the date of incorporation through the264
date of turnover;265
(10) All association funds and control thereof;266
(11) All tangible property of the association;267
(12) A copy of all contracts which may be in force with the association as one of the268
parties;269
(13) A list of the names and addresses and telephone numbers of all contractors,270
subcontractors, or others in the current employ of the association;271
(14) Any and all insurance policies in effect;272
(15) Any permits issued to the association by governmental entities;273
(16) Any and all warranties in effect;274
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(17) A roster of current homeowners and property owners and their addresses and275
telephone numbers and section and lot numbers;276
(18) Employment and service contracts in effect;277
(19) All other contracts in effect to which the association is a party; and278
(20) The financial records, including, but not limited to, financial statements of the279
association and source documents from the incorporation of the association through the280
date of turnover and transition. The records shall be audited by an independent certified281
public accountant licensed by this state for the period from the incorporation of the282
association or from the period covered by the last audit, if an audit has been performed283
for each fiscal year since incorporation by an independent certified public accountant284
licensed by this state. All financial statements shall be prepared in accordance with285
generally accepted accounting principles and shall be audited in accordance with286
generally accepted auditing standards. The certified public accountant performing the287
audit shall examine to the extent necessary supporting documents and records, including288
the cash disbursements and related paid invoices to determine if expenditures were for289
association purposes and the billings, cash receipts, and related records of the association290
to determine that the declarant was charged and paid the proper amounts of assessments. 291
Audits required by this paragraph shall be paid for by the declarant, developer, or other292
establishing entity.293
44-3-266.294
(a) For a community proposed or represented to have amenities, the plat for the initial295
phase of the development shall identify an area encompassing 25 percent of the proposed296
buildable lots with installed and approved infrastructure sufficient to fully support the297
houses or residential units proposed for construction in such area. Such area shall be298
clearly delineated on the plat as 'not approved for construction or building permits.' Only299
after the governing jurisdiction in which the property is located has issued the applicable300
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certificate of occupancy for those areas or amenities requiring such a certificate and has301
otherwise approved those areas or amenities not requiring a certificate of occupancy, shall302
the final plat for said area be approved by the governing jurisdiction. For large multiphase303
projects, the governing jurisdiction shall have the discretion to shift the requirement to a304
later phase that upon completion achieves no more than 50 percent of the planned fully305
built out project.306
(b)(1) Where a community includes amenities for which the community association will307
assume maintenance and responsibility or where a community association shall be308
established to govern all community association maintenance of property outside of all309
dwelling units, the requirements in paragraphs (2) through (7) of this subsection, in310
addition to any other requirements established by this article or the community311
association's rules and regulations, shall be met.312
(2) A prerequisite to the transfer of the declarant's, developer's, or other establishing313
entity's responsibilities to the community association shall require that not more than 60314
days prior to the date of turnover and transition the community association shall request,315
and the governing jurisdiction with enforcement action of the property shall perform, an316
inspection of the amenities to be maintained by the community association. The317
inspection shall identify those areas that do not meet the governing jurisdiction standards.318
(3) Prior to the inspection, the declarant, developer, or other establishing entity shall319
have identified the amenities and shall prepare a form affidavit in the manner provided320
in this Code section, which shall be executed by the declarant, developer, or other321
establishing entity and design professionals certifying the sufficiency and workability of322
the facilities set forth in the affidavit. The declarant, developer, or other establishing323
entity shall provide a copy of the certification affidavit to the governing jurisdiction with324
enforcement action over the property after signature of its officers and that of the325
community association authorized representative or officer as is set forth in this Code326
section. The community association shall not delay execution of the certification327
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affidavit except for good cause shown or may be liable for civil penalties provided in this328
article.329
(4) The declarant, developer, or other establishing entity shall correct and bear the cost330
of any substandard conditions identified by the inspection by the governing jurisdiction331
or any other source prior to the transfer of the infrastructure, common areas, and332
amenities or control responsibilities from the declarant, developer, or other establishing333
entity to the community association. In lieu of making the corrections, the declarant,334
developer, or other establishing entity may provide a bond to the community association335
in an amount sufficient to correct the identified deficiencies.336
(5) At least 60 days prior to turnover and transition, the declarant, developer, or other337
establishing entity shall provide the executed certification affidavit to the governing338
jurisdiction with enforcement action over the property of the community association, with339
a copy to the community association, which affidavit shall attest and certify that the items340
to be turned over under this article are fully completed as designed or modified to provide341
equivalent functional performance, or have deficiencies remaining to be completed as342
specifically identified in the affidavit.343
(6) Failure of the declarant, developer, or other establishing entity to provide the required344
certification affidavit shall subject the declarant, developer, or other establishing entity345
to the civil penalties provided under this article. Said affidavit shall be maintained by the346
governing body as a public record and shall be subject to disclosure under Article 4 of347
Chapter 18 of Title 50, relating to open records.348
(7) The declarant, developer, or other establishing entity shall provide the certification349
affidavit to the local governing body with enforcement action over the property prior to350
the turnover and transition, which shall provide as follows:351
'This certification affidavit is for (name of community as reflected in the community352
plat last filed at the time of the first property sale of said community to a member or353
future member of the community association who was not a declarant, developer, or354
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other establishing entity). I certify that the below listed items as recorded in the plat355
last filed at the time of inception are fully completed as designed or modified to provide356
equivalent functional performance or have deficiencies remaining to be completed as357
specifically identified below.358
(a) With respect to common areas of the community for which the community359
association or other entity (other than individual residential property owners) is360
responsible to assume maintenance responsibility:361
(1) All recreational areas are complete and operational;362
(2) Swimming pools and facilities requiring Board of Health approval have been363
certified acceptable by the Health Department;364
(3) Swimming pools have a fence with a self-closing and positive latching gate. 365
The fence is constructed outside of the deck area and has an unclimbable space;366
(4) All storm-water management facilities, including, but not limited to, piping, as367
well as nonstructural system components, including, but not limited to, detention368
ponds, swales, and ditches are constructed and operating as intended with all369
construction sediment and debris removed, and no observable or known370
maintenance requirements existing; and371
(5) Sidewalks in the public and community association owned areas are complete372
and constructed in accordance with standards;373
(b) With respect to a clubhouse or common area buildings and structures:374
(1) All permanent street numbers are displayed;375
(2) All proposed disability parking and accessibility is complete;376
(3) All handrails and guardrails are installed properly;377
(4) All exit signs and emergency lights are installed and working properly;378
(5) All planned and required fire extinguishers are mounted;379
(6) All required fire alarms and sprinkler systems are installed per code and are380
functioning properly; and381
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(7) A written warranty has been provided;382
(c) With respect to common or private property subject to restrictions to avoid383
negative impact to the public or environment:384
(1) All areas with slopes of 40 percent or greater subject to the steep slope385
ordinance have been defined by a properly recorded easement;386
(2) All buffers, setbacks, and easements have been properly recorded and are387
clearly identifiable; and388
(3) All temporary erosion control measures have been removed;389
(d) With respect to other items:390
(1) All conditions of zoning have been complied with; and391
(2) All construction and other areas subject to erosion have been stabilized with392
appropriate vegetation or other acceptable measures; and393
(e) Deficiencies that currently exist and that will require action before use or394
maintenance at routine level may be achieved are as follows: (list and describe such395
deficiencies)'396
44-3-267.397
Prior to the declarant, developer, or other establishing entity relinquishing control of the398
community association pursuant to this article or other law, actions taken by members of399
the board of directors designated by the declarant, developer, or other establishing entity400
are considered actions taken by the declarant, developer, or other establishing entity and401
the declarant, developer, or other establishing entity is responsible to the community402
association and its members for all such actions.403
44-3-268.404
If, during the period prior to the time that the declarant, developer, or other establishing405
entity relinquishes control of the community association pursuant to this article or other406
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law, any provision of this article or any rule promulgated thereunder is violated by the407
community association, then the declarant, developer, or other establishing entity shall be408
responsible for such violation and subject to civil penalties as provided for in this article.409
44-3-269.410
Any community association shall have a cause of action in the superior court of the county411
of the community association. Civil penalties for violations of this article by a declarant,412
developer, or other establishing entity shall be not less than $500.00 and up to $5,000.00413
per violation at the discretion of the court, in addition to any other remedies available at414
law to the community association. A community association may recover the cost of415
litigation, including, but not limited to, court costs and reasonable attorney's fees, from a416
declarant, developer, or other establishing entity for the enforcement of this article."417
SECTION 2.418
This Act shall become effective on January 1, 2025, and shall apply to all property included419
on a plat first filed on or after such date.420
SECTION 3.421
All laws and parts of laws in conflict with this Act are repealed.422
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