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The Community Counsel - Our Blog for Your Association

tax-sale_pic_6-26-17Under Georgia law, the purchaser of a property at tax sale owns the property subject to the right of the prior owner or lien-holder of the property to redeem it by paying the past-due taxes plus statutorily required interest and other charges. If the property is redeemed, ownership of the property reverts back to the owner of the property prior to the tax sale. The right to redeem lasts for at least 12 months, and can last for even longer depending upon how long it takes the tax sale purchaser to take the necessary statutory steps to terminate the right of redemption (the “Redemption Period”).   Given that a tax sale purchaser owns property subject to the chance that the property might be redeemed and ownership restored in the prior owner, we often receive questions from clients as to whether the tax sale purchaser of the property is the real property owner for purposes of liability for community association assessments.

leg-update_pic_6-26-17Condominium developers often develop new condominium projects in phases, adding one portion, or “phase”, of property into the condominium at a time as such phases are constructed until eventually the entire property the developer intends to submit is added into the condominium.   While this process ordinarily occurs continuously until full completion, when the developer is foreclosed upon or otherwise ceases business mid-construction, as frequently occurred during the recent economic downturn, unit owners within a partially built-out condominium project can be left to suffer for the developer’s failure to finish. For example, these owners may pay higher assessments than expected because the total number of units originally intended to share in the common expenses were not built, and/or may be left staring out at the vacant, often unkempt pieces of property that were once intended to be condominium units or recreational area.

budget_smallAs a community association attorney, I attend numerous annual meetings each year for my community association clients. One of the most common mistakes that I see Boards of Directors make at these meetings is incorrectly assuming that the association’s annual budget requires membership approval and holding a vote to “approve” the budget.

In fact, for the vast majority of associations, the Board of Directors holds sole authority to approve the budget, so there is no need to hold a membership vote to approve the budget. Neither the Georgia Condominium Act nor the Georgia Property Owners Association Act requires that a community association hold a membership vote to approve the annual budget or annual assessment. 

electionIt’s summertime and it’s not only the temperature that is heating up.  Although the November election is months away, judging by the campaign signs blossoming on front yards throughout the Atlanta metropolitan area, political campaigns are already in full swing.  Given the number of signs already out there, your community association may justifiably be wondering if it has any control over campaign signs in the community.  For those community associations with Declarations of Covenants containing restrictions regulating signs, the answer is likely yes.  

It is a common misconception that the First Amendment right to free speech prevents a community association from prohibiting political signs within the community.  In fact, Georgia courts, as well as other courts throughout the country, have consistently upheld a community association’s right to prohibit signs, including political signs.  

Popcorn bowl, film strip and ticket. Cinema attributes. Detailed vector illustration.

Community associations are often on the look-out for easy and low-cost events that bring the community together for socializing and fun.  And, what could be easier than a community movie night?  What too many associations don’t realize, however, is that the seemingly harmless act of screening a movie in your community association clubhouse may subject the association to liability for copyright infringement.

To explain, under Title 17 of the United States Code, known as the “Federal Copyright Act,” all movies that you rent at Netflix or Redbox, or that you buy at a store, are copyrighted.  Neither the rental nor the purchase of a copy of a copyrighted work carries with it the right to publicly exhibit the work.  Thus, while no additional license is required to privately view a movie or other copyrighted work with a few friends and family, absent a few defined exceptions, the Federal Copyright Act requires a special public performance license for any public showing of a copyrighted movie.

Television news, newspapers and law firm websites are ablaze with the news that on September 8th, a Federal Judge for the Northern District of Georgia held the process for obtaining a garnishment carried out by Gwinnett County under the Georgia garnishment statute was unconstitutional because it violates the due process rights of debtors.  The news stories create the impression that a creditor will no longer be able to collect a debt after obtaining a judgment.

We have contacted lawyers, judges and state legislators.  All of them are uncertain as to exactly what the order means.  It is simply too soon to tell.  That will emerge as the dust settles. Until that happens, it is unclear if any creditor has the right to file a garnishment.  The prevailing opinion is a creditor/creditor’s attorney is at significant risk of violating the law.  Accordingly, WNCW will place on hold the filing of garnishments.

Over a year ago, I wrote a blog post about the potential problems that AirBnB and similar short-term leasing websites, such as VRBO and Homeaway, pose for community associations.  As explained in that post, Airbnb and its competitors are websites that connect property owners in various cities throughout the world who want to rent all or part of their homes on a short-term basis to travelers looking for temporary lodging in those cities.  Since my original post, the number of condominium units and homes available for lease through these websites has only increased.   For example, a quick search of AirBnB reveals more than 1,000 available listings in the Atlanta area.  

16503831-26409952-thumbnailIn community association legal terminology, a “special assessment” is an assessment imposed against all owners in addition to the regular annual association assessments.   There are a variety of reasons that a Board of Directors may want to levy a special assessment, but most commonly special assessments are used to pay for unexpected common area repair costs or to fund expected repairs that exceed available reserves.  Because a special assessment is an additional expense over and above what owners already pay through their regular assessments, most community association governing documents require that the Board obtain approval of at least a majority of owners prior to levying a special assessment over a certain amount per year.  In fact, for condominium associations with governing documents recorded after July 1, 1990, the current Georgia Condominium Act (the “Act”) requires that any special assessment greater than $200.00 per unit be approved by the majority of the unit owners. 

taxIn the last blog article, we examined whether community associations have to pay income taxes.  The natural corollary to that question is the question of whether community associations are required to pay property taxes.  The answer to that depends upon whether your community association is a homeowners association or a condominium association.  If a homeowners association, the answer is “yes.”  If a condominium, the answer is “no.”  

The difference between the two types of associations lies in the manner in which the common areas are owned.   In a condominium association, each of the individual owners owns a percentage of the common areas, or common elements, as tenants-in-common with the other owners.  Since the condominium association does not own the common elements, the condominium association should not be billed for taxes on them.  Rather, the value of the common elements is factored into the taxable value of the individual units, so that the individual unit owners each pay any taxes attributable to the common elements when they pay the tax bill on their individuals unit.  In fact, the Condominium Act specifically provides that there shall be no tax or assessment levied on the condominium as a whole, but only on the individual condominium units (O.C.G.A. § 44-3-96).  

hoaloanUnless you’ve been living under a rock during the month of January, you can’t have missed the barrage of T.V. and radio commercials telling you that it’s time to file your annual tax returns.   While most of us understand that there is no escaping filing personal tax returns, I frequently receive questions from community association clients about whether it is necessary that their community association file a federal tax return.  

Contrary to what many community association members may think, the fact that a community association is a non-profit organization does not mean that it is a tax-exempt organization, such as a 501(c)(3).  Rather, non-profit status is different from being exempt from income taxes.   Non-profit corporations can make a profit, although they differ from a for-profit corporation because the profits remain in the organization rather than being distributed to the members, as they would be in a for-profit corporation.