Georgia lawmakers propose HOA reforms to limit fees and prevent foreclosure abuses

The Georgia State Legislature convened on March 3, 2025, to discuss significant reforms regarding homeowners associations (HOAs) and their practices. The primary focus of the meeting was a bill aimed at providing homeowners with greater protections and clearer guidelines in their dealings with HOAs.

The bill, presented by Representative Lewis Ward, seeks to establish alternative dispute resolution processes for homeowners before any liens can be placed on their properties. This initiative aims to alleviate concerns that HOAs are adversarial entities and to foster a more cooperative relationship between homeowners and their associations. A key provision of the bill is the introduction of a cap on fees charged by HOAs for closing letters, which are often required during property sales. Currently, these fees can reach as high as $400 or $500, but the proposed legislation would limit them to $250, with an additional $50 for expedited requests.

During the discussions, several representatives expressed their support for the bill, highlighting the need for transparency and fairness in HOA practices. Concerns were raised about the extraordinary powers that HOAs hold in Georgia, particularly regarding their ability to foreclose on properties for unpaid fines. This practice, which is relatively uncommon in other states, has led to calls for reform to protect homeowners from potential abuses.

The committee also reviewed feedback from homeowners and real estate professionals, which underscored the challenges faced by property owners when dealing with HOAs. Many complaints centered around the high costs associated with obtaining necessary documentation for property sales, which the bill aims to address.

As the meeting progressed, representatives discussed the importance of ensuring that the bill strikes a balance between the rights of homeowners and the operational needs of HOAs. Some members suggested further amendments to simplify the requirements for HOAs, while others emphasized the necessity of maintaining a structured process for dispute resolution.

The meeting concluded with a motion to advance the bill, reflecting a consensus among committee members on the need for reform. The proposed legislation is seen as a crucial step toward enhancing homeowner protections and ensuring that HOAs operate within reasonable financial constraints. Further discussions and potential amendments are expected as the bill moves forward in the legislative process.