What Laws TN HOAs must comply with

Started by TimB4 • 12 replies • 316 views

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TimB4 (Tennessee)
Posts: 21,059

Posted:

One of the misunderstandings at our recent annual meeting is that some of our members do not think there are any TN laws that apply to HOAs (because TN does not have a specific HOA law). This prompted me to write up a brief article for a newsletter we will start in December. I thought it would be good to share it and obtain some feedback.

Note: descriptions are simple and short in the hope the article might be read.

[NAME] Homeowners Association was incorporated in 2005. A Corporate Charter was issued by the State of Tennessee on February 7, 2005. This document is available online at the TN Secretary of State Website: https://sos.tn.gov/businesses The document is also available at the [NAME] County Registers Office, Book xxxx page xxxx or simply ask the board and a copy can be emailed to you.

As an incorporated homeowners association in the State of TN, the Board must comply with Corporate laws under the Tennessee Nonprofit Corporation Act. This is in addition to several other Federal and Tennessee laws and regulations.

Some of the laws our Association must comply with:

Federal Laws & Regulations

The Federal Fair Housing Act (FHA) 42 U.S.C. §3604
Addresses Discrimination and reasonable accommodation

Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. § 1692 et seq.
Addresses unfair practices in collecting a debt

Freedom to Display the American Flag Act of 2005
HOA may not restrict the display of the American Flag

The Corporate Transparency Act (CTA)
Requires all Directors to provide information to the US Treasury

FCC Over The Air Reception Devices (OTARD) Ruling 47 CFR § 1.4000
Address members right to have a satellite dish and placement to receive a signal

Soldiers and Sailors Civil Relief Act 50 U.S.C. §§ 3901 through 4043.
Prevents the HOA from bringing legal action if a service member is stationed outside of the US

The United States Bankruptcy Code 11 U.S.C. §362
Association responsibilities if a member declares bankruptcy

Tennessee Laws and Regulations:

The Tennessee Nonprofit Corporation Act Title 48 Chapters 51 to 68
Addresses the corporation structure and operation requirements

Tennessee Freedom of Speech Act Title 2 Chapter 7 Part 143
Association may not prohibit the display of political signs

Tennessee Display of Flag Title 66 Chapter 27 Part 6
Association may not prohibit the display the US Flag, TN flags or branch of armed forces flag

Tennessee Display of Signs Title 66 Chapter 27 Part 603
Association may not prohibit signs concerning health and safety

Tennessee Provision of Voting Record Upon Request Title 66 Chapter 27 Part 702
Association must provide voting records upon request

Tennessee Vested right to Lease Title 66 Chapter 27 Part 703
Association may not prohibit long-term rentals

Tennessee Transfer Covenant Fees Title 66 Chapter 37 Part 104
Association my not charge a fee when a home is sold

MichaelS56 (Minnesota)
Posts: 858

Posted:

Please review possible city ordinances.

SheliaH (Indiana)
Posts: 6,964

Posted:

I don't think you have to list all that, unless you might make this part of a series where you might do a brief summary of the laws covering issues that people ask about all the time. For example, if people ask about certain accommodations because of a disability, that could prompt a discussion of the Americans with disabilities act.

You've often spoken of the hierarchy of HOA documents vs. state/local and federal law - that could be a great place to begin. You might also use a recent situation to demonstrate where federal or state law influenced the board to do something or not. Then bring the conversation back to your documents, showing these scenarios are why the board wanted to update the documents- ensure compliance with state and federal law, while giving the community the flexibility to create and update community rules that work best for your community.

This way you sneak in information on how the proposed updates would have done this, and 5hen you can revisit that issue sometime next year and make another effort to get homeowner approval. The naysayers will still be there, but throwing facts at people is a lot harder to combat if all you know how to do is bleat "but that's the way we've always done it!"

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By MichaelS56 on 11/21/2024 4:33 AM
Please review possible city ordinances.

Always a good idea.

Fortunately, we are in the County and not the city.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SheliaH on 11/21/2024 9:18 AM
I don't think you have to list all that, unless you might make this part of a series where you might do a brief summary of the laws covering issues that people ask about all the time. For example, if people ask about certain accommodations because of a disability, that could prompt a discussion of the Americans with disabilities act.

We had one individual at our annual meeting cited something from the internet and insisted that there were zero TN laws that applied to our HOA, only federal laws. Some others were shaking their heads in agreement.

I agree that subtle is a better way to get info across but I'm hoping for a shock an awe type of moment to try and get those members to comprehend that the Board has to comply with many laws, not just our governing documents.

I am planning to do a series of articles on the governing documents and what they do in the future.

KerryL1 (California)
Posts: 14,550

Posted:

You're always fastidious, Tim, but I think that the list will not shock or awe anyone and, to be frank, will be skimmed and tossed. If in better heath I'd try to help but can't right now. I still think my two cents based on many years as a director and as a newsletter editor is worth contributing.

But I think reducing it to' as Shelia suggests fewer and ones the are more likely to at least be interesting to owners might work. I also really like her idea of an example of a recent matter that involved higher level laws.*

A Corporate Charter was issued to XXX HOA by the State of Tennessee on February 7, 2005. This document is available online at the TN Secretary of State Website: https://sos.tn.gov/businesses. It's also available at the [NAME] County Registers Office, Book xxxx page xxxx. Or ask the Board and a copy will be emailed to you.

As an incorporated homeowners association in the State of TN, the Board must comply with Corporate laws under the Tennessee Nonprofit Corporation Act. This is in addition to several other Federal and Tennessee laws and regulations.

Just SOME of the laws our Association must comply with:

Federal Laws & Regulations

The Corporate Transparency Act (CTA)
Requires all Directors to provide information to the US Treasury- I would delete this one too as distracting and not of immediate interest to any ownrs.

FCC Over The Air Reception Devices (OTARD) Ruling 47 CFR § 1.4000
Address members right to have a satellite dish and placement to receive a signal

Soldiers and Sailors Civil Relief Act 50 U.S.C. §§ 3901 through 4043.
Prevents the HOA from bringing legal action if a service member is stationed outside of the US

Tennessee Laws and Regulations:

Tennessee Freedom of Speech Act Title 2 Chapter 7 Part 143
Association may not prohibit the display of political signs

Tennessee Display of Flag Title 66 Chapter 27 Part 6
Association may not prohibit the display the OFFICIAL US Flag, TN flags or branch of armed forces flag

The Tennessee Nonprofit Corporation Act Title 48 Chapters 51 to 68
Addresses the HOA's required structure and functions.

Let's take a closer look at this one. Much of what is in our Bylaws is required by this Act. You can see, for example, the various types of Board and Members meetings; how elections must be held; what officers there must be..........

*The reason I capitalized "official" before US flag is that an owner here started flying a US flag tha was correct in all ways EXCEPT it had a Giant bright yellow Christian cross embossed on it. The PM sent him a curtesy letter to replace it with an occ final US fla g, which was descried in the courtesy letter. He took his sweet time about it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Kerry,

Thank you. Food for thought.
I also had to look up the word fastidious (interesting word).

TimB4 (Tennessee)
Posts: 21,059

Posted:

Based on Shelia's and Kerry's advice, I shortened the article.

I thank everyone for their assistance.

Tim

KerryL1 (California)
Posts: 14,550

Posted:

The way I used "fastidious," Tim, was a little off-base, but I kept it anyway.

RegisD (Delaware)
Posts: 3

Posted:

Beyond your good words, I wonder if you have the original "charter" or legal documents establishing the Association under the laws of the State of TN. If you are a legal construct recognized by the power of the State, I would think such a document would offer sentences about rights, obligations, etc.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Regis,

We do have those documents. They were poorly written by individuals who didn't know what they didn't know and what they didn't know was very important.

As an example: Are charter simply states that there will be members. Members are not defined. Membership is not defined.

It also specifies that if the Association is dissolved, that funds will go to the then owners of phase 1 and phase 2. However, we have 5 phases. It lists the Directors at the time. All of this fit on the one page application.

ElleN (Idaho)
Posts: 1,333

Posted:

About six months have passed.

I think the list is excellent. I think it should be printed at least once a year in the newsletter.

I like the qualifier that this is only 'some' of the statutes that might apply. As TimB4 knows, other statutes might apply depending on circumstances.

I do not think the membership can be reminded often enough what volunteer directors face and why they often consult the HOA attorney. Same for letting the membership know that the HOA is a legal entity with legal obligations going far beyond the spontaneously made-up rules Spanky's "Our Gang" club might have.

RegisD (Delaware)
Posts: 3

Posted:

I have confronted similar issues for my Alumni Association and other groups where a crisp expression to convey (unless they are holding pitch forks and lit torches) is....."we are not a social club"..... The very fact that you even have a lawyer should similarly shine a spotlight on the seriousness of efforts, decisions, and consequences galore. ((Loved Our Gang as a kid where they often had to learn the "gravity" of gravity, as an example, that would intrude upon their fun!))

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