Community associations have become popular because they are controlled living environments where owners often share in the use of common recreational amenities and are subject to covenants designed to promote harmony and protect property values. Two primary functions of the community associations are to maintain and operate these facilities and to enforce the protective covenants.
Community associations are governed by protective covenants which are recorded in the county deed records and are generally binding to all owners who purchase property within the community after the covenants are recorded. Owners of property subject to protective covenants may give up certain rights to maintain an attractive community and to protect property values in the community. For example, covenants often regulate the changes which may be made to the exterior of a home or yard, the type of vehicles and pets which are permitted in the community, and whether businesses may be operated from a home. Covenants may also create a duty to pay assessments or dues to a homeowner association.
While there are a number of names used to classify communities, including homeowner associations, fee simple townhomes, planned unit developments, condominiums and housing cooperatives, residential community associations with mandatory membership can be classified as either homeowner associations or condominiums.
* Homeowner Associations
Homeowner association (“HOA”) is a broad term used to refer to mandatory membership planned communities. Typically organized as corporations, they serve essentially governmental functions. After the developer turns over control of the association to the homeowners, they elect their own board of directors. The HOA has the assessment power to raise money for the maintenance of recreational facilities and the operation of the community. The HOA also has enforcement rights of the protective covenants which exist through the power to levy monetary fines or to seek court intervention to ensure compliance. In an HOA, the recreational areas and amenities and other common property for the use and enjoyment of all the lot owners are referred to as the common area. A homeowner association generally holods legal title to the common area.
* Condominiums
A condominium is a form or property ownership in which people own their individual units in fee simple, together with an undivided ownership interest in certain common property referred to as common elements. The condominium form of ownership can exist in all types of housing. A condominium is different from an HOA in that a unit is defined in terms of a cube of air space with both vertical and horizontal boundaries, often being the walls, floors and ceilings of a particular space. This enables the identification and description of a space located above another space, such as stacked units, where the boundaries of the units cannot be defined by references on the land. The common elements in a typical residential condominium include building exteriors, grounds and recreational facilities. A limited common element is a portion of the common elements reserved for the use of the owners of one or more, but less than all, of the units. Limited common elements often consist of such things as balconies, patios, entrance stoops, or parking spaces.
In Georgia, a condominium can only be created pursuant to state statute. When a person buys a condominium unit, he or she automatically becomes a mandatory member of a condominium association consisting of all the unit owners, and is bound by certain legal documents, including a declaration of condominium and the bylaws of the condominium association. Condominium associations have the power to collect regular and special assessments, to adopt and enforce rules regarding the use of the unit and common elements, to establish and collect fines for the violation of covenants, to institute legal action to enforce the covenants, and to approve changes or alterations to the exterior of the units.
In new condominiums, the Georgia Condominium Act requires the developer to provide purchasers a disclosure package, which includes copies of the governing legal documents, a proposed operating budget for the condominium, and a statement regarding management, operation and future development of the condominium. The Condominium Act also gives the first purchaser of the condominium unit seven days to rescind any contract to buy a unit after this disclosure package is provided.
When purchasing a property that is subject to covenants, you are strongly encouraged to request and review the legal documents for the community to determine the type of community in which you are buying and to become familiar with the community regulations on your use of the property.