HB241 Alabama 2015 Session

Summary

Primary Sponsor

Mac McCutcheon

Republican

Session

Regular Session 2015

Title

Homeowners' associations, formation as a nonprofit corporation, required, election of board of directors, notice requirements, adoption and enforcement of rules relating to common areas, liens, Alabama Homeowners' Association Act

Summary

HB241 creates a statewide framework for Alabama homeowners' associations, requiring many to organize as nonprofit corporations, file documents with the state, and manage rules, finances, and enforcement related to common areas and assessments.

What This Bill Does

If enacted, the bill would require homeowners' associations to organize as nonprofit corporations and file articles, bylaws, and covenants with the Secretary of State, which would maintain a public searchable database. It sets rules for board elections, requires the declarant to hand over specified information to the board, and requires notice of member meetings. It authorizes associations to adopt and enforce rules for common areas, imposes penalties and liens for unpaid assessments (including enforcement against tenants), and provides for attorney's fees in certain cases; it also requires disclosure of records to members and potential buyers and outlines dissolution procedures for the association.

Who It Affects

• Homeowners in developments with declarations: face new governance, rules for common areas, and the potential for penalties and liens if assessments are unpaid.
• Declarants/developers: must organize the HOA as a nonprofit, deliver records to the board during transition, and establish initial governance procedures.
• HOA boards/associations: must file with the Secretary of State, maintain records, publish budgets, and enforce rules and penalties (including liens) for violations.
• Tenants of member households: can be subject to enforcement of rules and penalties if violations occur.
• Potential homebuyers: can request and access association records to review finances, covenants, and other information before or during purchase.

Key Provisions

• HOAs must organize as nonprofit corporations and file articles of incorporation, bylaws, and original covenants with the Secretary of State; a public electronic database of association filings will be maintained.
• Organizational documents must include communications methods, meeting rules, financial record keeping, rules for use of common areas, easements, dues statements, and annual budgets (with potential for further provisions like indemnification and audits).
• Declarant must deliver specified records to the board within 90 days after board selection (books, assessments, contracts, insurance, member lists, warranties).
• HOAs may suspend member rights for nonpayment and impose penalties for violations; they may enforce penalties against tenants for violations as well.
• Associations have a lien on lots for unpaid assessments, with priority over most other liens; the lien can be foreclosed and enforcement may involve notice and foreclosure sale.
• Prevailing parties in enforcement actions can be awarded reasonable attorney's fees and costs by the court.
• Members and potential purchasers have right to access association records within 30 days of request; records include budgets, insurance, loans, covenants, and lists of common areas.
• Upon termination of a declaration, the board must dissolve and liquidate the association and remaining assets.
• The act becomes effective January 1, 2016; associations formed after that date must comply, and existing associations can elect to be governed by this act; exemptions apply to commercial developments and certain regulated entities.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Property, Real and Personal