A Georgia homeowner planted a flower bed where his homeowners’ association (HOA) wanted grass, and ended up harvesting an unexpected victory for Georgia homeowners. This case, concerning a seemingly trivial matter, actually represents a significant shift in Georgia law regarding the authority of HOAs to impose fines on homeowners.

The Facts

Mr. Abdullah bought a home in Winslow at Eagle’s Landing. His ownership of the property was governed by the HOA under a declaration of covenants and restrictions. At some point prior to August 1, 2016, the HOA sent Mr. Abdullah a letter regarding the lack of grass on a part of his property. Mr. Abdullah responded that grass would not grow in that area, and that he planted a flower bed there instead. The HOA never answered his responsive letter.

Early in August of 2016, the HOA began fining Mr. Abdullah $100 per week for the flower bed, as he had not sought or received approval prior to planting. Per the declaration of covenants and restrictions, the HOA asserted, the flower bed was an unauthorized home improvement.

Mr. Abdullah filed an action for a declaratory judgment. He was not seeking compensation from the HOA, but wanted a court order declaring the weekly $100 fines void as being contrary to the covenants.

The trial court ruled in favor of the HOA on summary judgment. Abdullah appealed, and the Georgia Court of Appeals reversed the decision in the homeowner’s favor.

The Ruling

The Court of Appeals recited the well-known rule in Georgia that the declaration of covenants is a contract. Where the terms of a contract are clear and unambiguous, a court looks to those words to determine the parties’ intent in entering into the contract.

In this case, the homeowner did not dispute that the flower bed constituted an improvement for which prior approval of the HOA was required, and that he had not sought or obtained that approval. The homeowner argued, however, that the language of the covenants did not support the HOA’s fining authority. The declaration stated that homeowners agreed to pay assessments including “reasonable fines as may be imposed in accordance with the terms of this Declaration.” However, the declaration further identified twenty-seven covenants, only two of which provided for any sort of penalty for violation. Neither of those penalties was a fine.

The Court of Appeals held that, because the declaration itself did not provide for the imposition of a fine for unauthorized improvements, the weekly $100 fines against Mr. Abdullah were not imposed “in accordance with the declaration.”

While the HOA had a ten-year practice of imposing weekly fines similar to the ones against Mr. Abdullah, the court noted, this longstanding practice did not constitute notice of the policy to Mr. Abdullah, nor did it mean (in light of the absence of language in the declaration) that those fines were proper.

The neighborhood in this case is governed by the Georgia Property Owners’ Association Act (POA). The POA states that “if and to the extent provided in the instrument, the association shall be empowered to impose and assess fines.” But because the instrument (the declaration) did not impose fines or give information as to the extent to which fines could be imposed, the court held that the HOA did not have the power to assess fines.

Further, the section of the POA also requires lot owners to comply with “any reasonable rules or regulations adopted by the association pursuant to the instrument which have been provided to the lot owners with the lawful provisions of the bylaws of the association.” In this case, there was no documentation that any rules, regulations, or bylaws were provided to the homeowners.

What This Case Means for Georgia Homeowners

This case, over a seemingly trivial matter, actually represents a significant shift in Georgia law regarding the authority of HOAs to impose fines. This case clearly establishes that the authority to impose fines must be present in a governing document, such as a declaration of covenants and restrictions. Furthermore, the governing document must authorize fines with respect to the specific duty or restriction at issue, such as unauthorized improvements. HOAs can no longer assume that they have authority to fine homeowners for violations based on general language in the covenants.

The case is also notable because it establishes that homeowners must be given notice of potential fine amounts in a specific manner; HOAs cannot simply rely on a longstanding practice as sufficient notice. Nor should HOAs create fine amounts on an ad hoc basis. If a community is covered by the Georgia POA, the power of an HOA to impose fines, and the extent to which they can be imposed, should be contained in the covenants in order to be enforceable. For common-law HOA communities, the fines must be established either in covenants or within duly adopted rules and regulations.

Historically, attorneys for HOAs have followed few, if any of these guidelines. The Abdullah case should put an end to these practices, and is a victory for Georgia homeowners. If you have more questions about this case, or an issue with your HOA, we invite you to contact our law office to schedule a consultation.