Restrictive covenants against property were historically not favored under the law. Statutes and court opinions throughout the United States instead favored that property owners should be able to use their property how the owners would like, as long as such use does not violate local, state, or federal law, and that covenants restricting the use of land should be limited. Following that general consensus throughout the country, Georgia law likewise generally provided at Code Section 44-5-60 that covenants restricting the use of land would be valid for a maximum of twenty years, and at the end of the twenty years, the restrictive covenants would automatically expire.
With the growth of residential subdivisions over the past couple of decades, however, covenants have steadily become recognized as protecting home values and have become more and more accepted. In Georgia, Code Section 44-5-60 has been amended over the years to keep up with this trend. The last significant amendment to Code Section 44-5-60 was passed in 1993 to state that restrictive covenants in subdivisions of fifteen or more lots shall be valid for an initial period of twenty years and shall then automatically renew for successive periods of twenty years each, unless a majority of at least fifty-one percent of the lot owners vote to terminate the restrictive covenants. This statutory automatic renewal became effective on July 1, 1993 and is the current law in Georgia. This article addresses various issues facing many community associations that are subject to covenants recorded prior to July 1, 1993.
1. Does the statutory automatic renewal provision in Code Section 44-5-60, which became effective on July 1, 1993, apply to all covenants? The answer is no. The Georgia appellate courts have concluded that the 1993 amendment to Code Section 44-50-60 does not apply retroactively to restrictive covenants recorded prior to July 1, 1993. Accordingly, restrictive covenants recorded before July 1, 1993 are not subject to automatic renewal under Code Section 44-5-60 and will expire after twenty years.
2. Are there any exceptions to that? The answer is yes. The Georgia courts have also concluded that if pre-July 1, 1993 covenants contain a renewal provision in the covenants themselves, “[t]hat provision is valid and enforceable under contract law.” For example, if pre-July 1, 1993 covenants provide that the covenants will be extended beyond their initial twenty year period upon the affirmative vote of two-thirds of the owners, or if the covenants provide for automatically renew beyond the initial twenty year duration, the courts have held that both of these renewal provisions are valid.
3. If there is not an automatic renewal provision already contained in pre-July 1, 1993 covenants, does Code Section 44-5-60 prohibit amending the covenants to add such a provision? The answer is yes. This issue was addressed by the Georgia Court of Appeals in 2000. In that case, the original restrictive covenants in a subdivision were recorded in 1975 and did not contain a renewal provision. In 1995, members of the subdivision’s homeowners association recorded an amendment to the covenants to extend them for an additional twenty years. The court determined that the amendment violated Code Section 44-5-60, as it existed prior to July 1, 1993, and as a result, the amendment was invalid. Code Section 44-5-60 thus prohibited an attempt to add a covenant renewal provision into pre-July 1, 1993 covenants.
4. But what if pre-July 1, 1993 covenants are submitted to the Georgia Property Owners’ Association Act (commonly referred to as the POA)? The POA was adopted in 1994 and provides many benefits to homeowners associations. One of the benefits of the POA is that it contains a provision that states Code Section 44-5-60 shall not apply to any covenants submitted to the POA. There are no appellate court decisions on this issue; but this provision is commonly interpreted to mean that if a community’s covenants were recorded prior to July 1, 1993, submitting the covenants now to the POA and adding a provision that the covenants shall be perpetual is a valid means of extending the covenants beyond their initial twenty years. Although the 2000 Georgia Court of Appeals case discussed immediately above provides that Code Section 44-5-60 prohibits pre-July 1, 1993 covenants from being amended to add a renewal provision to extend the covenants beyond their original twenty year duration, that case did not address the POA, which specifically excludes Code Section 44-5-60.
5. Are all covenants subject to Code Section 44-5-60? The answer is no. As discussed above, the POA provides that Code Section 44-5-60 shall not apply to covenants submitted to the POA. In addition, Code Section 44-5-60 itself provides that it applies only to restrictive covenants. In 2002, the Georgia Court of Appeals concluded that affirmative covenants are not subject to Code Section 44-5-60 and thus do not expire. Specifically at issue in that case was a pre-July 1, 1993 covenant requiring the payment of mandatory assessments. A property owner argued that he did not need to pay assessments because the pre-July 1, 1993 covenant requiring assessments had expired. The Georgia Court of Appeals concluded, however, that a covenant to pay assessments is an affirmative covenant, rather than a restrictive covenant, and since Code Section 44-5-60 only applies to restrictive covenants, the affirmative covenant requiring the payment of assessments does not expire. The issue of which other types of covenants are restrictive versus affirmative was not addressed in the case and is an open issue for the courts.
As you can see, there are many issues regarding the duration and expiration of restrictive covenants. If it turns out that your pre-July 1, 1993 restrictive covenants have expired, the result is that such covenants can no longer be enforced. Property owners who were once subjected to those covenants would now be able to do whatever they want with their property, as long as it does not violate local, state, or federal law. To again have restrictive covenants against the lots in the subdivision, you would need the signed consent of any lot owner who desires to have covenants against the owner’s property. If the owner does not again want covenants against the owner’s lot, you cannot force or require that. If you have any questions regarding these issues, consult with your community association’s attorney.
