![]() ![]() ![]() This ruling appears to apply only to homeowner associations that have not submitted to the Georgia Condominium Act (GCA) or the POA. What about condominiums and communities submitted to the Georgia Property Owners’ Association Act (POA)?įor these communities, the case may have less impact. It not only will reduce revenue to many communities, but it will eliminate or soften an effective collection tool for many communities. This ruling certainly will impact many homeowner associations. However, this will no longer be permitted going forward, as the Court has explicitly stated that interest at the “maximum legal rate per annum” only allows for 7% interest.Īs to late fees, the Court articulated specific requirements that must be met for late fee provisions to be enforceable in court, including that the provision state a specific late charge reasonably related to damages to the association caused by the delinquency. Most associations have interpreted the maximum legal rate to be 18%, based on statutory law and previous court decisions holding the higher rate to be appropriate for any payment of money for the furnishing of goods and services. Traditionally, many homeowner association declarations state that the association can recover interest at the “maximum legal rate per annum,” without stating a specific rate. Compounding the hit to community associations, the Court also ruled that late fee covenants that allow a board of directors to decide the amount of the fee, rather than state a specific late fee amount, constitute an impermissible penalty and therefore are invalid.įor many homeowner associations, this means no late charges and reduced interest. This is much lower than typically charged by most associations. Mountainbrook of Bartow County, that unless the declaration of a homeowner association states a specific interest rate to be charged on delinquent assessments the association can only charge interest at the rate of 7%. The Court recently held, in Northside Bank v. Recently, the Georgia Court of Appeals rendered a decision that will negatively impact many homeowners associations that have not yet adopted the Georgia Property Owners Association Act. ![]()
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