Until recently, homeowners’ associations in Alabama were unregulated by the state. The ‘Alabama Homeowners’ Association Act’ was passed and went into effect on January 1st, 2016. It outlines the general rules of setting up and managing an HOA along with the powers possessed by a community association. It applies to all new communities built after that date. Older communities predating the act may elect to follow the laws outlined in the act, but it is not mandatory.

 

Setting Up an HOA

All community associations in the state of Alabama must be managed as non-profit organizations. To start an HOA, you must first submit important association documents to the secretary of state.

These documents include:

  • Association Articles of Incorporation

  • Community Bylaws

  • Original Conditions and Restrictions Adopted by the Association.

When preparing any association documents, it is important to use as much detail as possible. Addressing topics such as methods of communication with HOA members, meeting guidelines, common area use, and maintenance regulations, and information regarding the payment of dues are mandatory.

The goal is to create a searchable electronic database of all state homeowners’ association information available to the public. Whether you have questions about your association bylaws, looking to move into a neighborhood with an existing HOA, or simply seeing what other homeowners’ associations are doing, this will allow open and honest communication not only between community members but also between different communities within the state.

 

Alabama HOA Board Rights

Before the creation of the Alabama Homeowners’ Association Act, HOAs were technically not a legal entity. Any association created by community members could not legally require membership or enforce bylaws. Once the act was put in place, it gave HOAs more authority.

Any HOA created after January 1st, 2016 can now legally suspend members from using community common facilities, assess penalties, and even impose liens on the property. Before any punishment is imposed, a written warning must be given in the form of a letter from the board of directors. The amount of notice necessary depends on the severity of the punishment.

The board of directors must submit financial documents to the state annually and follow all laws that apply to non-profit organizations. In addition to preparing documents, HOAs will be subject to periodical audits from the state government regarding financial and property management procedures.

 

The Alabama Homeowners Association Act

If you are setting up a new community HOA or just looking to refresh your knowledge, the full text of the Alabama Homeowners’ Association Act is available in full online. It thoroughly outlines the rules and regulations that HOAs created later than January 1st, 2016 must obey.

To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at help@csmhoa.com.