Georgia Grandfathers Rentals When an HOA Adds a Leasing Ban

Georgia does not forbid HOA rental restrictions. A Georgia Court of Appeals decision, Pasha v. Battle Creek Homeowners Association, 350 Ga. App. 433 (2019), upheld a leasing restriction adopted by two-thirds of homeowners and held the owner had no unfettered right to lease afterwards. What O.C.G.A. Section 44-3-226 supplies instead is a vote threshold and a grandfathering rule, and the grandfathering rule is the part most owners never learn about until they need it.

Under subsection (a)(1), the instrument may be amended only by agreement of lot owners holding two-thirds of the votes in the association, or a larger majority if the instrument specifies one. While the declarant still holds an unexpired option to add property or retains the right to control the association, the amendment needs the declarant's agreement plus two-thirds of the votes excluding any lots the declarant owns. Subsection (b) works the other way, as a ceiling: no amendment may require the approval of owners holding more than 80 percent of the association vote together with mortgagees holding 80 percent of the voting interest of mortgaged lots, and an association predating July 1, 1994 that amends its documents to come under this article is deemed to have conformed to that limit.

The protection for existing rentals sits in subsection (a)(2)(B), and it applies notwithstanding any other provision of the subsection. No amendment may be made so as to prohibit or restrict a non-owner-occupied lot from continuing to be leased or rented for an initial term of six months or longer under the pre-amendment instrument. The shape of that sentence matters. It protects a lot that was already being rented, on leases with initial terms of six months or more, which means a lot used for short stays of under six months is outside the shelter entirely.

The grandfathering is attached to the owner rather than to the lot forever. Upon a conveyance for value, the lot must be made to conform to the instrument as amended, and the statute defines that trigger precisely: any transfer of the lot for consideration of 100 dollars or more, or any transfer of an interest in the entity that owns the lot for consideration of 100 dollars or more. The second half closes the entity workaround, so selling the LLC that holds the house counts just as a sale of the house would.

One further limit protects the declarant rather than owners. Under subsection (a)(2)(A), while the declarant still owns at least one lot primarily for sale, no amendment may be made without the declarant's written agreement if it would impose a greater restriction on the declarant's use or development of the lots it owns.

Amendments must be evidenced by the owners' execution, or by a sworn statement of the association's president, a vice president, or the secretary confirming the required agreement was lawfully obtained and all notices properly given. An amendment takes effect only when recorded, or later if it says so. A mortgagee that receives a written proposal by certified mail or statutory overnight delivery and does not respond within 30 days is deemed to have consented. Finally, subsection (f) gives adopted amendments a one year repose: if nobody sues within a year of recording, the amendment is presumed valid and the challenger carries the burden of proof.

An association that applies a newly adopted leasing ban to a lot already rented on a six month or longer term, before any conveyance for value has occurred, is enforcing the amendment beyond what Section 44-3-226(a)(2)(B) permits. There is no administrative regulator for this in Georgia; the dispute is resolved in court, and Section 44-3-223 supplies the cause of action for non-compliance with the instrument, available to the association or to one or more aggrieved lot owners individually or as a class. Timing is critical for an owner challenging how the amendment itself was adopted: under subsection (f), once more than one year has passed since the amendment was recorded, its adoption is presumed valid and the burden shifts to the owner contesting it.