UNINCORPORATED HOA IN TENNESSEE

I own one lot in an 8 lot subdivision in Blount County Tennessee. The original developer declared bankruptcy over 12 years ago. Only two homes have been built at the present time. There were covenants and restrictions filed for this property back in 2006 at the county registrars office and I have no issue at all with the restrictions.
My neighbors have all voted in favor of forming board of directors and assessing each property owner $ 100.00/month to build a road through the subdivision. This Homeowners Association is unincorporated and has not filed any paperwork with the Tennessee Secretary of States office. Our "HOA" cannot obtain an insurance policy or even apply for a tax identification number to open an bank account but insists that it will place a lien on my property if I refuse to pay the dues. I received correspondence from the HOA attorney stating that an unincorporated HOA is perfectly legal and not unusual in a smaller subdivision.
Does anybody have any experience dealing with an unincorporated HOA in Tennessee. How can an organization that doesn't legally exist have this much power?

"Not incorporated" does not equal "does not exist".

As the attorney said, it's perfectly legal to have an unincorporated HOA, although it can make certain things more difficult. What you should look for is the governing documents for your community. These are public information and should be recorded with your county's recorder. (I'm assuming you were given a copies when you bought your home. If not, your county may have them on line.) It sure sounds to me like you do live in an HOA - otherwise you and your neighbors would not be looking at paying for new roads yourselves.

In your governing documents, you will find language that describes your HOA. It is this language that spells out the HOA's legal authority to enforce restrictions and place liens on properties whose owners do not abide by the governing documents.

The governing documents form part of the contract you signed when you closed on your home. I strongly recommend reading everything so that you understand what you've bought and what your rights and responsibilities are.

You should first look to see if the HOA is dormant, disbanded or dissolved.