Role and importance of homeowner associations in Georgia

Written by Nino Khukhua – Local Democracy Agency Georgia, Dinara Jalagonia- Charity Humanitarian Centre “Abkhazeti”, and Natia Aphkhazava –  Civil Society Institute

The Housing Initiative for Eastern Europe (IWO e.V.) implements with international partners the project “The way forward for reforms in the housing sector: empowering grass-root homeowners associations in Azerbaijan, Belarus, Georgia, Moldova and Ukraine ” (Project HOME). The three-year project aims, through the establishment of 11 Technical Advisory Centres (TACs) to improve housing management and to promote energy efficiency refurbishment of residential buildings in the partner countries.

In the 1920s cooperatives for consolidation of builders’ resources were created to develop home construction and operate and maintain existing dwellings in Georgia. After the country became independent in 1991, mass privatization gave residents their homes to own and manage privately. As a result, owners became responsible for building maintenance. The Georgian Law on Homeowner Associations adopted in 2007 provides for common property management. Within the project HOME, Technical Advisory Centres (TACs) have been established in three most populous cities of Georgia: Batumi, Kutaisi and Tbilisi. They provide technical and legal assistance through regular trainings and individual consultations. Successful solution of issues discussed by homeowner associations (HOAs) is directly linked to involvement of the HOA’s chairperson and members.

Features of an HOA in Georgia:

  • The tasks of HOAs are maintenance, exploitation, and development of common property.
  • A HOA is not a legal entity; it is a union of owners of residential and non-residential spaces, including commercial spaces in a multi-unit building or an individual property object that exists on two or more neighboring plots of land.
  • A HOA is not the result of free will of its members. The law establishes the HOA if there is more than one homeowner (individual or legal entity) in a multi-unit building.
  • HOA management is performed by a chairperson who is chosen by members of the HOA, and might be a member of the HOA or an invited manager.
  • Individual owners benefit financially if the HOA obtains income by transferring the right to use or sell common property of the HOA, including roofs, basements and plots of land.
  • Membership fees are set by the HOA to pay for maintenance and development of common property.
  • HOAs have the right to open a bank account and are responsible for any debt. Bank accounts ensure more transparency when collecting membership fees and incurring expenses.
  • Decision making requires consent of the two thirds of members in case of general issues and consent of all members if more substantial issues are reviewed.

Common Problems and Recommendations:

  • Non-payment of membership fees, regardless of income level, could be avoided if homeowners are made aware of their rights and responsibilities for common property, and with compulsory enforcement measure.
  • Non-attendance at general meetings.
  • High number of members required to vote causes adoption of many issues to be delayed when all members or two thirds are not present at the meetings of home owners. This situation contributes to the illegal practice of falsification of signatures. The number of members required to make decisions could be reduced to simple majority for routine decisions, and to two thirds for major decisions.
  • Criteria should be defined for selecting qualified HOA chairpersons.
  • Activities during the pre-election campaign and political campaigning performed by leaders create mistrust towards the chairperson. Priorities of chairpersons need to be de-politicization, transparency, effective communication, and problem-solving orientation.
  • HOAs’ chairpersons should receive training on technical issues, housing management, energy efficiency, environment without barriers, and modern innovations of building maintenance.
  • It is impossible for the majority of HOAs to cover repairs with their own funds. Registration of HOAs at a local municipality enables it to take part in various co-funded programs for renovation, replacement of the elevator, etc. The criteria for this type of support must be improved in order to fund residential buildings with the most urgent needs.
  • Create a unified web database of HOAs to ensure transparency of housing management projects and public involvement.
  • For further development of HOAs it is useful to share national and international experiences and engage in active dialogue with civic, educational, and non-governmental sectors.