In 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.
In 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).
Unless 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.
The vast majority of community associations routinely use proxies in some way at their annual membership meetings. Given that, it’s not surprising that many of the questions I receive from community association Board members and property managers during annual meeting season involve proxies. In order to assist those of our Board member and property manager readers who are in the midst of annual meeting preparation, this blog post will address some of the most common misconceptions and questions concerning proxies and their use.
One of the most important things to understand about proxies is that they do not serve the same purpose as ballots. While ballots are voting instruments used to cast a vote, a proxy is a form of power of attorney by which a person who will not be present at a corporation’s meeting (the “proxy-giver”) assigns his or her right to vote at the meeting to another person who will be present at the meeting (the “proxy-holder”). At the annual meeting, the proxy-holder exchanges any proxies he/she holds for a ballot- one ballot per proxy. Unless the proxy document contains language telling the proxy-holder how to cast a vote on behalf of the proxy-giver on a particular matter(s), the proxy-holder has the right to vote on behalf of the proxy-giver in his or her discretion on all matters that may arise at the annual meeting. If the proxy document instructs the proxy-holder to vote in a particular way, then the proxy-holder must cast the vote he/she holds on behalf of the proxy-giver as instructed by the proxy-giver.
The general rule in community association collections is that any payment on a delinquent account is a good thing, even if the payment is for less than the full amount owed. However, depositing a payment of less than the full amount owed can be dangerous if the owner includes language on the check or other negotiable instrument, or accompanying letter, indicating that the owner intends the payment to be payment in full. The danger stems from the legal principle of accord and satisfaction.
Under the doctrine of accord and satisfaction, if a genuine dispute exists between a debtor and a creditor over the amount due, and the debtor pays the creditor less than the amount actually due upon the condition, either express or implied, that the payment is in full satisfaction of the creditor’s claim, and the creditor accepts and retains the money, then the law deems that the debtor has paid the creditor in full. Thus, the creditor cannot seek additional payment from the debtor.
A community association can change its name, so long as it complies with all requirements of Georgia law, and, if applicable, its governing documents. If your association is interested in changing its name, you’ll want to consult with your association attorney to discuss any individual requirements imposed by your association’s documents. However, the general process of changing a community association’s name is as follows:
1. Determine Authority. The process starts with determining whether an owner vote is required. Unless the association’s governing documents require a membership vote, the board of directors may change the corporate name without member action.
Are associations required to provide electric vehicle charging stations?
No. There is no law in Georgia which requires condominium associations to provide public electric vehicle charging stations. However, associations may wish to provide common charging stations as an amenity.
Must associations allow owners to install electric vehicle charging stations?
No. Georgia law does not currently require condominium associations to permit the installation of private electric vehicle charging stations. However, the law may soon change. With the increase in electric vehicle ownership, the law is evolving as states address the new technology. For example, California recently enacted a law which makes any language in governing documents that effectively prohibits or restricts the installation or use of electric vehicle charging stations void and unenforceable. However, California associations can still impose reasonable restrictions that do not significantly increase the cost or performance of the charging stations.
It is safe to say that Spring has finally sprung here in Atlanta. While Atlantans are enjoying the many benefits of Spring, including warm temperatures, festivals and a bevy of blooms, I’m sure that we can all agree that Spring does have a few downsides. Pollen is one of them. And, for many community associations, the beginning of “violation season” is another. What I am referring to when I say “violation season” is the unfortunate fact that as temperatures rise and vegetation comes back to life, the gardening and lawn maintenance efforts of some owners will not keep pace with the growth of their yards’ plant life. The governing documents of most community associations require that owners maintain their property in a neat and attractive manner, and overgrown lawns, weeds and unkempt landscaping beds will constitute a violation of this requirement. Luckily, most owners eventually catch up and cure the violation, either on their own initiation or with a friendly reminder.
Over the holidays, my husband and I took our first, much-anticipated trip to Paris, France. Rather than stay in a hotel, we decided to rent a “flat” through a website called “Airbnb” so that we could fully experience the Parisian lifestyle. For those of you that don’t know, Airbnb is a website that connects “hosts”, or property owners in various cities throughout the world, to travelers looking for lodging in those cities. Using Airbnb as a conduit, the travelers then rent a home, or even individual rooms in a home, directly from the property’s owner. The rental period can range from anywhere from a day to months.
While my husband and I greatly enjoyed our little Parisian flat, I couldn’t help wondering what the other property owners we passed in the building lobby thought about our host’s Airbnb visitors. Certainly, if I lived in that lovely Parisian building, I might be wary of having a constant stream of various strangers from all over the world staying right next door to me.