| 1 | 1 | | 25 LC 62 0085 |
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| 2 | 2 | | Senate Bill 315 |
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| 3 | 3 | | By: Senators Esteves of the 35th, James of the 28th, Kemp of the 38th, Mangham of the 55th |
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| 4 | 4 | | and Islam Parkes of the 7th |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | To amend Article 6 of Chapter 3 of Title 44 of the Official Code of Georgia Annotated, |
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| 8 | 8 | | 1 |
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| 9 | 9 | | relating to property owners' associations, so as to require property owners' associations to2 |
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| 10 | 10 | | provide disclosures and certain documents before a lot sale closes; to provide for forms; to3 |
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| 11 | 11 | | provide for definitions; to provide for penalties; to provide for a cause of action; to provide4 |
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| 12 | 12 | | for an effective date and applicability; to provide for related matters; to repeal conflicting5 |
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| 13 | 13 | | laws; and for other purposes.6 |
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| 14 | 14 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:7 |
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| 15 | 15 | | SECTION 1.8 |
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| 16 | 16 | | Article 6 of Chapter 3 of Title 44 of the Official Code of Georgia Annotated, relating to9 |
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| 17 | 17 | | property owners' associations, is amended by adding a new Code section to read as follows:10 |
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| 18 | 18 | | "44-3-231.1. |
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| 19 | 19 | | 11 |
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| 20 | 20 | | (a) As used in this Code section, the term:12 |
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| 21 | 21 | | (1) 'Lot' shall have the same meaning as set forth in Code Section 44-3-221.13 |
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| 22 | 22 | | (2) 'Lot owner' shall have the same meaning as set forth in Code Section 44-3-221.14 |
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| 23 | 23 | | (3) 'Property owners' association' or 'association' means a nongovernmental association15 |
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| 24 | 24 | | of participating members in a delineated area comprising a neighborhood or a group of16 |
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| 25 | 25 | | S. B. 315 |
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| 26 | 26 | | - 1 - 25 LC 62 0085 |
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| 27 | 27 | | homeowners and property owners, including, but not limited to, a homeowners'17 |
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| 28 | 28 | | association.18 |
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| 29 | 29 | | (b)(1) A prospective lot owner in a property owners' association shall be presented a19 |
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| 30 | 30 | | disclosure summary before executing the contract for sale. The disclosure summary shall20 |
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| 31 | 31 | | be substantially similar to the following form:21 |
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| 32 | 32 | | 'DISCLOSURE SUMMARY22 |
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| 33 | 33 | | FOR (NAME OF PROPERTY OWNERS' ASSOCIATION)23 |
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| 34 | 34 | | (1) As a purchaser of property in this association, you shall be obligated to be a24 |
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| 35 | 35 | | member of a property owners' association.25 |
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| 36 | 36 | | (2) There have been or shall be recorded restricted covenants governing the use26 |
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| 37 | 37 | | and occupancy of properties in this community.27 |
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| 38 | 38 | | (3) You shall be obligated to pay assessments to the association. Assessments28 |
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| 39 | 39 | | may be subject to periodic change. If applicable, the current amount is $____ per29 |
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| 40 | 40 | | ____. You shall also be obligated to pay any special assessments imposed by the30 |
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| 41 | 41 | | association. Such special assessments may be subject to change. If applicable,31 |
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| 42 | 42 | | the current amount is $___ per ___.32 |
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| 43 | 43 | | (4) You may be obligated to pay special assessments to the respective33 |
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| 44 | 44 | | municipality, county, or special district. All assessments are subject to periodic34 |
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| 45 | 45 | | change.35 |
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| 46 | 46 | | (5) Your failure to pay special assessments or assessments levied by a property36 |
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| 47 | 47 | | owners' association could result in a lien on your property.37 |
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| 48 | 48 | | (6) There may be an obligation or rent or land use fees for recreational or other38 |
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| 49 | 49 | | commonly used facilities as an obligation of membership in the property owners'39 |
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| 50 | 50 | | association. If applicable, the current amount is $___ per ___.40 |
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| 51 | 51 | | (7) The declarant may have the right to amend the restrictive covenants without41 |
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| 52 | 52 | | the approval of the association membership or the approval of the parcel owners.42 |
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| 53 | 53 | | S. B. 315 |
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| 54 | 54 | | - 2 - 25 LC 62 0085 |
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| 55 | 55 | | (8) The statements contained in this disclosure form are only summary in nature,43 |
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| 56 | 56 | | and, as a prospective lot owner, you should refer to the covenants and the44 |
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| 57 | 57 | | association governing documents before purchasing property.45 |
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| 58 | 58 | | (9) These documents are either matters of public record and can be obtained from46 |
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| 59 | 59 | | the record office in the county where the property is located, or are not recorded47 |
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| 60 | 60 | | and can be obtained from the declarant.'48 |
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| 61 | 61 | | (2) The disclosure shall be supplied by the declarant or by the lot owner if the sale is by49 |
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| 62 | 62 | | a lot owner that is not the declarant. Any contract or agreement for sale shall refer to and50 |
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| 63 | 63 | | incorporate the disclosure summary and shall include, in prominent language, a statement51 |
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| 64 | 64 | | that the potential buyer shall not execute the contract or agreement until he or she has52 |
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| 65 | 65 | | received and read the disclosure summary required by this Code section.53 |
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| 66 | 66 | | (c) Each contract entered into for the sale of a lot governed by covenants subject to54 |
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| 67 | 67 | | disclosure as required by this Code section shall contain in conspicuous type a clause that55 |
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| 68 | 68 | | states:56 |
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| 69 | 69 | | 'IF THE DISCLOSURE SUMMARY REQUIRED BY CODE SECTION 44-3-231.1 OF57 |
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| 70 | 70 | | THE OFFICIAL CODE OF GEORGIA ANNOTATED HAS NOT BEEN PROVIDED58 |
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| 71 | 71 | | TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT59 |
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| 72 | 72 | | FOR SALE, THIS CONTRACT IS VOIDABLE BY DELIVERING TO SELLER OR60 |
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| 73 | 73 | | SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S61 |
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| 74 | 74 | | INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE62 |
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| 75 | 75 | | DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS63 |
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| 76 | 76 | | FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO64 |
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| 77 | 77 | | EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT65 |
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| 78 | 78 | | CLOSING.'66 |
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| 79 | 79 | | (d) If a disclosure summary in a substantially similar form as set forth in subsection (b) of67 |
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| 80 | 80 | | this Code section is not provided to a prospective purchaser before the purchaser executes68 |
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| 81 | 81 | | a contract for the sale of property governed by covenants that are subject to disclosure69 |
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| 82 | 82 | | S. B. 315 |
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| 83 | 83 | | - 3 - 25 LC 62 0085 |
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| 84 | 84 | | pursuant to this Code section, the purchaser may void the contract by delivering to the70 |
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| 85 | 85 | | seller or the seller's agent or representative written notice cancelling the contract within 371 |
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| 86 | 86 | | days after receipt of the disclosure summary or prior to closing, whichever occurs first. 72 |
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| 87 | 87 | | This right may not be waived by the purchaser but terminates at closing.73 |
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| 88 | 88 | | (e) In addition to the disclosure summary provided in subsection (b) of this Code section,74 |
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| 89 | 89 | | a contract shall be voidable by the buyer until at least seven days after the seller has75 |
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| 90 | 90 | | furnished the prospective lot owner with the documents specified in this subsection. The76 |
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| 91 | 91 | | furnished copy of any such document which shall be executed in order to be effective shall77 |
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| 92 | 92 | | be a copy of such executed document. The documents required under this subsection to78 |
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| 93 | 93 | | be furnished to the prospective buyer are:79 |
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| 94 | 94 | | (1) A copy of the declaration and of each amendment thereto as of the time of purchase;80 |
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| 95 | 95 | | (2) A copy of the articles of incorporation and bylaws of the association and of each81 |
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| 96 | 96 | | amendment to either as of the time of purchase;82 |
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| 97 | 97 | | (3) A copy of any management, maintenance, or other contract for the management and83 |
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| 98 | 98 | | operation of the association or the facilities to be used by lot owners having a term in84 |
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| 99 | 99 | | excess of one year. Contracts renewable without the consent of the association shall be85 |
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| 100 | 100 | | deemed to have a term in excess of one year;86 |
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| 101 | 101 | | (4) The estimated or actual operating budget for the association for the current year87 |
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| 102 | 102 | | containing the matters set forth in subparagraph (A) of this paragraph and a schedule of88 |
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| 103 | 103 | | estimated or actual expenses pertaining to each lot for the current year containing the89 |
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| 104 | 104 | | matters set forth in subparagraph (B) of this paragraph:90 |
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| 105 | 105 | | (A) Expenses of the association for:91 |
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| 106 | 106 | | (i) Administration;92 |
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| 107 | 107 | | (ii) Management fees;93 |
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| 108 | 108 | | (iii) Maintenance;94 |
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| 109 | 109 | | (iv) Rent for recreational and other commonly used facilities;95 |
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| 110 | 110 | | (v) Taxes on property of the association;96 |
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| 111 | 111 | | S. B. 315 |
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| 112 | 112 | | - 4 - 25 LC 62 0085 |
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| 113 | 113 | | (vi) Insurance;97 |
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| 114 | 114 | | (vii) Security provisions;98 |
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| 115 | 115 | | (viii) Other expenses;99 |
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| 116 | 116 | | (ix) Operating capital;100 |
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| 117 | 117 | | (x) Reserve for deferred maintenance;101 |
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| 118 | 118 | | (xi) Reserve for depreciation; and102 |
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| 119 | 119 | | (xii) Other reserves; and103 |
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| 120 | 120 | | (B) Expenses required of the lot owner for:104 |
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| 121 | 121 | | (i) Assessments to cover association expenses; and105 |
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| 122 | 122 | | (ii) Rent, fees, or charges payable by the lot owner directly to the lessor or the lessor's106 |
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| 123 | 123 | | agent under any recreational lease or lease for the use of commonly used facilities,107 |
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| 124 | 124 | | which leases are and payment of is a mandatary condition of ownership and which108 |
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| 125 | 125 | | payment is not included in the assessments paid by the lot owner to the association;109 |
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| 126 | 126 | | (5) A copy of any lease of recreational or other facilities that shall be used only by the110 |
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| 127 | 127 | | lot owners;111 |
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| 128 | 128 | | (6) A copy of any lease of recreational or other facilities that shall be used by lot owners112 |
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| 129 | 129 | | in common with any other person; and113 |
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| 130 | 130 | | (7) A copy of a statement setting forth the extent of and conditions or limitations114 |
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| 131 | 131 | | applicable to the declarant's commitment to build and submit additional lots, additional115 |
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| 132 | 132 | | recreational or other facilities, or additional property.116 |
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| 133 | 133 | | (f) The items required by subsection (e) of this Code section shall be bound or stapled into117 |
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| 134 | 134 | | a single package and covered by an index sheet listing each item required by said118 |
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| 135 | 135 | | subsection and showing either that the same is attached or does not exist. A nonrefundable119 |
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| 136 | 136 | | deposit not in excess of $25.00 may be required of the recipient of the documents required120 |
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| 137 | 137 | | by this Code section, such deposit to be applied to the purchase price of the lot in the event121 |
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| 138 | 138 | | of purchase by the prospective lot owner. A dated, written acknowledgment of receipt of122 |
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| 139 | 139 | | all items required by subsection (e) of this Code section, executed by the prospective lot123 |
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| 140 | 140 | | S. B. 315 |
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| 141 | 141 | | - 5 - 25 LC 62 0085 |
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| 142 | 142 | | owner, shall be prima-facie evidence of the date of delivery of said items. The124 |
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| 143 | 143 | | requirements of subsection (e) of this Code section may not be waived.125 |
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| 144 | 144 | | (g) No contract executed prior to the expiration of seven days after the actual delivery to126 |
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| 145 | 145 | | the prospective lot owner of the items required to be furnished by subsection (e) of this127 |
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| 146 | 146 | | Code section shall be of any force or effect. This subsection may not be waived. The128 |
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| 147 | 147 | | contract shall contain within the text the following, in boldface type or capital letters no129 |
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| 148 | 148 | | smaller than the largest type in the text:130 |
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| 149 | 149 | | 'UNLESS ALL OF THE ITEMS REQUIRED UNDER CODE SECTION 44-3-231.1 OF131 |
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| 150 | 150 | | THE OFFICIAL CODE OF GEORGIA ANNOTATED TO BE DELIVERED TO132 |
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| 151 | 151 | | BUYER HAVE BEEN RECEIVED BY BUYER AT LEAST SEVEN DAYS PRIOR TO133 |
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| 152 | 152 | | BUYER'S EXECUTION OF THIS CONTRACT, THIS CONTRACT IS OF NO FORCE134 |
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| 153 | 153 | | OR EFFECT AND SHALL NOT BE BINDING ON ANY PARTY. THE ITEMS SO135 |
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| 154 | 154 | | REQUIRED ARE: (1) THE DECLARATION AND AMENDMENTS THERETO, (2)136 |
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| 155 | 155 | | THE ASSOCIATION'S ARTICLES AND INCORPORATION AND BYLAWS AND137 |
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| 156 | 156 | | AMENDMENTS THERETO, (3) ANY MANAGEMENT CONTRACT HAVING A138 |
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| 157 | 157 | | TERM IN EXCESS OF ONE YEAR, (4) THE ESTIMATED OR ACTUAL BUDGET139 |
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| 158 | 158 | | FOR THE ASSOCIATION, (5) ANY LEASE OF RECREATIONAL OR OTHER140 |
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| 159 | 159 | | FACILITIES THAT SHALL BE USED ONLY BY THE LOT OWNERS, (6) ANY141 |
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| 160 | 160 | | LEASE OF RECREATIONAL OR OTHER FACILITIES THAT MAY BE USED BY142 |
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| 161 | 161 | | THE LOT OWNER WITH OTHERS, AND (7) A STATEMENT SETTING FORTH143 |
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| 162 | 162 | | THE EXTENT OF THE SELLER'S COMMITMENT TO BUILD OR SUBMIT144 |
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| 163 | 163 | | ADDITIONAL LOTS, ADDITIONAL RECREATIONAL OR OTHER FACILITIES,145 |
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| 164 | 164 | | OR ADDITIONAL PROPERTY. A DATED, WRITTEN ACKNOWLEDGMENT OF146 |
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| 165 | 165 | | RECEIPT OF ALL SAID ITEMS SIGNED BY THE BUYER SHALL BE147 |
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| 166 | 166 | | PRIMA-FACIE EVIDENCE OF THE DATE OF DELIVERY OF SAID ITEMS.'148 |
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| 167 | 167 | | (h) The items required to be furnished or made available to a prospective lot owner under149 |
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| 168 | 168 | | this Code section shall constitute a part of each contract, and no change may be made in150 |
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| 169 | 169 | | S. B. 315 |
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| 170 | 170 | | - 6 - 25 LC 62 0085 |
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| 171 | 171 | | any such items which would materially affect the rights of the prospective lot owner or the151 |
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| 172 | 172 | | value of the lot without the approval of the prospective lot owner except to the extent that152 |
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| 173 | 173 | | such items by their own terms, by the express terms of such covered contract, or by the153 |
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| 174 | 174 | | provisions of this article may be changed without the consent of any lot owner or154 |
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| 175 | 175 | | prospective lot owner.155 |
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| 176 | 176 | | (i) In addition to the provisions required in this Code section, a contract shall include a156 |
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| 177 | 177 | | caveat in boldface type or capital letters no smaller than the largest type on the page shall157 |
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| 178 | 178 | | be placed upon the first page of the contract in the following words:158 |
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| 179 | 179 | | 'ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY159 |
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| 180 | 180 | | STATING THE REPRESENTATIONS OF THE SELLER. FOR CORRECT160 |
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| 181 | 181 | | REPRESENTATIONS, REFERENCE SHOULD BE MADE TO THIS CONTRACT161 |
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| 182 | 182 | | AND THE DOCUMENTS REQUIRED BY CODE SECTION 44-3-231.1 OF THE162 |
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| 183 | 183 | | OFFICIAL CODE OF GEORGIA ANNOTATED TO BE FURNISHED BY A SELLER163 |
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| 184 | 184 | | TO A BUYER.'164 |
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| 185 | 185 | | (j) If any lot is offered for sale prior to the completion of the construction or remodeling165 |
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| 186 | 186 | | of such lot or of improvements of common elements, the seller shall make available to each166 |
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| 187 | 187 | | prospective lot owner for his or her inspection at a place convenient to the site a copy of167 |
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| 188 | 188 | | the existing plans and specifications for the construction or remodeling of such lot and of168 |
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| 189 | 189 | | the improvements of common elements, whichever is not complete at the time of such169 |
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| 190 | 190 | | offering for sale.170 |
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| 191 | 191 | | (k) Any sales brochures describing the association and the lots for sale shall include a171 |
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| 192 | 192 | | description and location of the recreational facilities proposed to be provided by the seller172 |
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| 193 | 193 | | and other commonly used facilities together with a statement indicating:173 |
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| 194 | 194 | | (1) Which of the facilities shall be owned by the lot owners as part of the common174 |
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| 195 | 195 | | elements and which of the facilities shall be owned by others;175 |
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| 196 | 196 | | (2) Whether, with respect to each facility so shown, the seller is obligated to complete176 |
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| 197 | 197 | | the same; and177 |
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| 198 | 198 | | S. B. 315 |
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| 199 | 199 | | - 7 - 25 LC 62 0085 |
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| 200 | 200 | | (3) The limitations or conditions, if any, on the seller's obligation to complete the same.178 |
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| 201 | 201 | | A caveat in boldface type or capital letters no smaller than the largest type of text material179 |
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| 202 | 202 | | shall be conspicuously placed on the inside front cover of the sales brochure or on the180 |
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| 203 | 203 | | first page containing text material or shall be otherwise conspicuously displayed181 |
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| 204 | 204 | | containing the following words:182 |
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| 205 | 205 | | 'ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY183 |
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| 206 | 206 | | STATING REPRESENTATIONS OF THE SELLER. FOR CORRECT184 |
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| 207 | 207 | | REPRESENTATIONS, REFERENCE SHOULD BE MADE TO THIS BROCHURE185 |
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| 208 | 208 | | AND TO THE DOCUMENTS REQUIRED BY CODE SECTION 44-3-231.1 OF THE186 |
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| 209 | 209 | | OFFICIAL CODE OF GEORGIA ANNOTATED TO BE FURNISHED BY THE187 |
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| 210 | 210 | | SELLER TO A BUYER.'188 |
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| 211 | 211 | | (l) Any person who, in reasonable reliance upon any false or misleading material statement189 |
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| 212 | 212 | | or information published by or under authority from the seller in advertising and190 |
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| 213 | 213 | | promotional materials, including, but not limited to, the items required to be furnished by191 |
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| 214 | 214 | | this Code section, brochures, and newspaper advertising, or who, without having been192 |
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| 215 | 215 | | furnished with all of the information required to be furnished by this Code section, pays193 |
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| 216 | 216 | | anything of value toward the purchase of a lot located to this state shall be entitled to bring194 |
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| 217 | 217 | | an action against the seller for damages under this Code section at any time prior to the195 |
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| 218 | 218 | | expiration of one year of the date upon which the last of the events described in196 |
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| 219 | 219 | | paragraphs (1) through (5) of this subsection shall occur:197 |
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| 220 | 220 | | (1) The closing of the transaction;198 |
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| 221 | 221 | | (2) The first issuance by the applicable governmental authority of a certificate of199 |
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| 222 | 222 | | occupancy or other evidence of sufficient completion of construction of the lot to allow200 |
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| 223 | 223 | | lawful occupancy of the lot. In counties or municipalities in which certificates of201 |
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| 224 | 224 | | occupancy or other evidence of completion sufficient to allow lawful occupancy are not202 |
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| 225 | 225 | | customarily issued, for the purposes of this Code section, evidence of lawful occupancy203 |
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| 226 | 226 | | S. B. 315 |
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| 227 | 227 | | - 8 - 25 LC 62 0085 |
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| 228 | 228 | | shall be deemed to have been given or issued upon the date that such lawful occupancy204 |
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| 229 | 229 | | of the lot may first be allowed under prevailing applicable laws, ordinances, or statutes;205 |
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| 230 | 230 | | (3) The completion of the common elements and any recreational facilities, whether or206 |
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| 231 | 231 | | not the same are common elements, which the seller is obligated to complete or to207 |
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| 232 | 232 | | provide under the terms of the written contract for the sale of the lot;208 |
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| 233 | 233 | | (4) As to claims relating to the common elements and other portions of the association209 |
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| 234 | 234 | | which are the responsibility of the association to maintain, the date upon which the210 |
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| 235 | 235 | | declarant's right to control the association terminates; and211 |
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| 236 | 236 | | (5) In the event there is no written contract for the sale of the lot, then the completion of212 |
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| 237 | 237 | | common elements and such recreational facilities, whether or not the same are common213 |
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| 238 | 238 | | elements, which the seller would be obligated to complete under any rule of law214 |
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| 239 | 239 | | applicable to the seller's obligation.215 |
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| 240 | 240 | | (m) Under no circumstances shall a cause of action created or recognized under this Code216 |
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| 241 | 241 | | section survive for a period of more than five years after the closing of the transaction. 217 |
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| 242 | 242 | | Any person who has a right of action for damages as provided in this Code section shall218 |
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| 243 | 243 | | have the additional right to rescind any contract for the purchase of a lot at any time prior219 |
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| 244 | 244 | | to the closing of the transaction. In any action for relief under this Code section, the220 |
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| 245 | 245 | | prevailing party shall be entitled to recover reasonable attorney's fees.221 |
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| 246 | 246 | | (n) Willful violation of any of the requirements of this Code section by the declarant, the222 |
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| 247 | 247 | | seller, any sales agent or broker, or any other person shall result in a fine of $1,000.00."223 |
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| 248 | 248 | | SECTION 2.224 |
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| 249 | 249 | | This Act shall become effective on July 1, 2025, and shall apply to all lot sales made on or225 |
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| 250 | 250 | | after such date.226 |
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| 251 | 251 | | SECTION 3.227 |
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| 252 | 252 | | All laws and parts of laws in conflict with this Act are repealed.228 |
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| 253 | 253 | | S. B. 315 |
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| 254 | 254 | | - 9 - |
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