Georgia Code vs Declarations

My question is can the Declarant, during their period of control, make amendments to the Declarations without Class A member consent? These are townhomes in GA and the Declarant is still in control of the HOA.

I am reading through both the The Georgia Property Owners’ Association Act(OCGA 44-3-220 through OCGA 44-3-235) and our Declarations regarding Amendments, and the Declarations seem to conflict with the POA which says in part:

OCGA 44-3-226.
(a) Except to the extent expressly permitted or required by other provisions of this article, the instrument shall be amended only by the agreement of lot owners of lots to which two-thirds of the votes in the association pertain or such larger majority as the instrument may specify; provided, however, that, during any such time as there shall exist an unexpired option to add any additional property to the property owners´ association or during any such time as the declarant has the right to control the association under the instrument, the agreement shall be that of the declarant and the lot owners of lots to which two-thirds of the votes in the association pertain, exclusive of any vote or votes appurtenant to any lot or lots then owned by the declarant, or a larger majority as the instrument may specify. Notwithstanding any other provisions of this subsection, during such time as the declarant shall own at least one lot primarily for the purpose of sale of such lot, no amendment shall be made to the instrument without the written agreement of the declarant if such amendment would impose a greater restriction on the use or development by the declarant of the lot or lots owned by the declarant.

The Declarations however state:

8.02 Amendments by Declarant. During any period in which Declarant retains the right to appoint and
remove any directors and officers of the Association, Declarant may amend this Declaration by an instrument in writing,
filed and recorded in the Deed Records of the Superior Court of Gwinnett County, Georgia, without the approval of any
Member or mortgagee; provided, however, that (i) in the event that such amendment materially alters or changes any
Owner's right to the use and enjoyment of such Owner's Lot or of the Common Property as set forth in this Declaration or if
such amendment adversely affects the title to any Lot, such amendment shall be valid on1y upon the written consent thereto
by a majority in number of the then existing Members affected thereby, or (ii) in the event that such amendment would
materially and adversely affect the security title and interest of any mortgagee, such amendment shall be valid only upon the
written consent thereto of all such mortgagees so affected. Any amendment made pursuant to this Section shall be certified
by Declarant as having been duly approved by Declarant, and such Members and mortgagees, if required, and shall be
effective only upon recordation or at such later date as shall be specified in the amendment itself. Each Owner, by
acceptance of a deed or other conveyance to a Lot, agrees to be bound by such amendments as are permitted by this Section
and further agrees that, if requested to do so by Declarant, such Owner will consent to the amendment of this Declaration or
any other instruments relating to the Development (i) if such amendment is necessary to bring any provision hereof or
thereof into compliance with the provisions of any applicable governmental statute, rule or regulation or any judicial
determination which shall be in conflict therewith, (ii) if such amendment is necessary to enable any reputable title
insurance company to issue title insurance coverage with respect to any Lots subject to this Declaration, (iii) if such
amendment is required by an institutional or governmental lender, purchaser or guarantor of mortgage loans, including, for
example,the Federal National Mortgage Association, or FederalHome LoanMortgage Corporation, to enablesuch lender
or purchaserto makeor purchasemortgageloanson any Lot subjectto this Declaration, (iv) if such amendment is necessary
to enable any government agency or reputable private insurance company to insure mortgage loans on the Lots subject to
this Declaration, or (v) if such amendmentis necessary to correct a scrivener's error in the drafting of this Declaration.

This section (above) of the Declarations seems ambiguous - is seems to say the Declarant can make amendments without Member approval, yet that Owners (members?) must consent only if the amendments are necessary to one of more of the five conditions at the end of the paragraph.

And the GA POA seems to say that all amendments require two-thirds of owner votes even during Declarant control.

Our Declarant has passed some amendments that don't seem to meet any of those 5 conditions of necessity and also did not have any member/owner participation in passing them and I'm not sure they can legally do that.

Does anyone here have any experience with this or do I need to talk to an attorney. I have searched this forum and the WEB extensively and found nothing.

Thanks for any insight.

Thanks - I cannot tell you how many times I re-read that thing trying to decifer it. I reforemated it, broke it down, etc - but I came to the same conclusion you did.

I'll try to find a friendly attorney to run it by as well for clarification.

The quoted statute is a poorly worded document that I, too, had to copy and dissect to try to understand it. I could certainly have missed something.

As I see it, there are three elements to this thread: the statute, the declaration, and what the declarant is doing. Taking them one at a time:

The Statute

The first clause provides that a declaration may be amended by consent of owners who have 2/3 of the votes or by a higher percentage if stated in the declaration.

The next clause provides an exception for those associations under declarant control. In those cases, amendments require the consent of the declarant plus consent of owners who have 2/3 of the votes or by a higher percentage if stated in the declaration.

The final clause prohibits the owners from amending the declaration in a way that would restrict the declarant's ability to sell his remaining lots. This would seem to apply only in those situations where the declarant has turned control of the association over to the owners but still has property to sell.

The Declaration

The Declarant states that as long as he controls the association that he may amend the declaration without consent of any owners or mortgagees with only two exceptions:
1. If the amendment alters or effects the owners' interest in their properties he needs only a majority of owners to consent to the amendment; or
2. If the amendment will adversely effect a mortgagee's interest that he needs the consent of a majority of the mortgagees.

This followed by some language about certifying and recording amendments.

Finally, there is a lengthy clause that says the owners will agree to amend the declaration upon the request of the declarant in to correct five specific areas:
1. To make the declaration conform to laws or court orders;
2. If required by title companies to insure titles
3. To conform to the requirements of Government lenders such as FNMA
4. If needed to obtain government insured mortgages
5. To correct typographical errors.

Declarant's Actions

There is a clear conflict between the statute and the declaration. The statute requires owner consent while the declaration allows the declarant to act unilaterally. On the face of it, the declaration is in violation of the law. There is additional conflict in that the statute requires 2/3 owner approval while the declaration sets the percentage to a simple majority.

BTW, the part of the declaration about making changes to conform to the real world appears to be legal. It does not state that the declarant can make these changes on his own; rather, it requires the owners to consent to make those changes when they are needed.

Carole, I missed the part in of this thread where the section of statute you cited would apply.

Larry, now that you mention it, I'm not sure where I was going with the statute, either. I think it was tied to the 5 conditions, but don't quote me on it. I'm too tired to think much more.

Then again, I'm wondering if the OP is looking at the correct statute, anyway. He said they are town homes and they may come under the Georgia Condo Act and not the POA. Not that it makes much difference. I just did a quick peek (real quick) at the GCA on amendments - § 44-3-93. Amendment of condominium instruments and it basically reads the same, although without the 5 conditions for corrections that are present in the POA. (I can't give you a specific link - the GA Code is a special LexisNexis thing and you have to drill down yourself.) The full drill is:
TITLE 44. PROPERTY
CHAPTER 3. REGULATION OF SPECIALIZED LAND TRANSACTIONS
ARTICLE 3. CONDOMINIUMS

O.C.G.A. § 44-3-93 (2012)

http://www.lexisnexis.com/hottopics/gacode/

Stephen,

Is your association subject to the Georgia POAA? This is not automatic but must be explicit in your governing documents.

Many developers choose not to submit their declaration to the POAA expressly so that they are not bound by its provisions.

Stephen,

You are right. You have the requisite statement that makes your association subject to the POAA.

That establishes a hierarchy of documents:

1. Laws of the United States
2. Federal Regulations
3. Laws of the State of Georgia
4. Any applicable city or county code
5. Declaration of Restrictive Covenants
6. Articles of Incorporation
7. Bylaws
8. Rules, Regulations, and Guidelines Established by the Board

Since state laws are higher in the list than the CC&Rs, they govern regardless of what the CC&Rs say.

So the provision in the POAA controls where it says:

during any such time as the declarant has the right to control the association under the instrument, the agreement shall be that of the declarant and the lot owners of lots to which two-thirds of the votes in the association pertain, exclusive of any vote or votes appurtenant to any lot or lots then owned by the declarant, or a larger majority as the instrument may specify.

So the declarant plus 2/3 of the lots not owned by the developer must both agree to any amendment.