Georgia bill HB 512 enhances homeowner rights against associations' foreclosure actions

The Regulated Industries Regulatory Subcommittee of Georgia convened on February 27, 2025, to discuss House Bill 512, aimed at reforming the operations of homeowners associations (HOAs) across the state. The meeting highlighted the significant impact of HOAs on over two million Georgians living in association-governed communities.

The bill's primary objective is to enhance transparency and fairness in HOA operations, providing homeowners with greater protections. Key provisions include the requirement for associations to issue an annual letter of good standing to homeowners, limiting the cost of closing letters to $250, and mandating mediation before any liens can be placed on properties due to unpaid dues or fines.

During the presentation, the bill's sponsor detailed the specific sections of the legislation. Section 1 outlines the annual letter of good standing, which must be sent within 45 days after the fiscal year ends. Subsequent sections clarify the process for obtaining closing letters, including a 10-day response time for associations and a cap on the total fees that can be charged for these documents.

A significant aspect of the bill is the introduction of a mediation process. Homeowners must be offered mediation before any liens can be placed on their properties, ensuring that disputes can be resolved amicably without immediate legal repercussions. This provision aims to prevent situations where homeowners face foreclosure due to minor infractions or unpaid fines.

Committee members expressed concerns regarding the feasibility of implementing these changes, particularly the administrative burden on associations. Some members noted that Georgia is among the few states allowing HOAs to foreclose on properties, raising questions about the fairness of such practices. The discussion included anecdotes of homeowners facing severe penalties for minor violations, underscoring the need for reform.

Public testimony was also heard, with a homeowner sharing personal experiences of excessive fines and lack of communication from their HOA. This testimony reinforced the bill's intent to foster a more cooperative environment between homeowners and associations.

In conclusion, the subcommittee's discussions on HB 512 reflect a growing recognition of the need for regulatory reform in the management of homeowners associations in Georgia. The proposed changes aim to balance the interests of property owners with the operational needs of associations, promoting a fairer and more transparent community governance structure. The bill will continue to be reviewed as it progresses through the legislative process.