What Restrictions does Georgia Law Place on Association Powers?

Although the laws for Homeowners’ Associations and Condominium Associations are similar, it is key to understand which laws apply to your community by reading the Georgia HOA State Laws page in this website. For communities governed by the Property Owners’ Association Act, board members have the general authority to act for the association without a member vote regarding matters within the association’s inherent or express powers, as set forth in the governing documents or by statute. O.C.G.A. §44-3-231(b).  However, board and officer powers may also be constrained by the governing documents. O.C.G.A. §44-3-231(a) and (f).   Thus, an association’s declaration can deny powers to the board which it might otherwise have or allow powers not expressly granted by statute - as long as the powers are “reasonable.”  Id.

Georgia law affords substantial deference to an association’s declaration and articles of incorporation in interpreting association powers.  In general, a board’s exercise of its powers must be “procedurally fair and reasonable,” and its decisions must be made in “good faith … reasonable and not arbitrary and capricious.” Saunders v. Thorn Woode Partnership, L.P. 265 Ga. 703, 462 S.E.2d 135 (Ga., 1995).  A board can adopt supplementary rules and regulations in the association’s bylaws, but, again, the rules and regulations must be “reasonable” and cannot conflict with the governing documents or state or federal law. O.C.G.A. §44-3-223.  All association actions and governing documents must comply with any applicable federal laws, including the Fair Housing Act (FHA) and Americans With Disabilities Act (ADA).

Additionally, corporate boards of directors and officers have a statutory duty to act in good faith, in the best interests of the organization, and to exercise ordinary prudence in carrying out their powers.  O.C.G.A. §14–3–830(1)(A) and (B)

The chief statutory restriction on an association’s powers is the requirement that board-members be answerable to homeowners through elections at annual member meetings in accordance with voting procedures set forth in the association’s declaration.  The board must provide at least 21 days’ notice for regular member meetings and at least seven days’ notice for special meetings.  O.C.G.A. §44-3-230.