SB344 Alabama 2024 Session

Summary

Primary Sponsor

Jay HoveySenator

Republican

Session

Regular Session 2024

Title

Homeowners' associations; lot owner representation on board of directors, further provided

Summary

SB344 would require all Alabama HOAs to follow stricter rules, limit developer control of the board, and boost lot-owner representation as more lots are conveyed.

What This Bill Does

If passed, SB344 would require every Alabama homeowners' association to follow the act's rules. It would limit the developer's control of the board to five years after the first lot is conveyed. It would require increasing lot-owner representation on the board as more lots are sold: after 50+ lots, at least one director and at least 25% of the board must be elected by non-developer owners; after 100+ lots, at least 60% of the board must be elected by non-developer owners, with elections due within 90 days of those conveyances. It also requires HOAs to operate as nonprofit corporations, file governing documents with the Secretary of State, maintain financial records and budgets, and provide a public online database and governance guidelines.

Who It Affects

• Homeowners' associations in Alabama and their members, especially lot owners who gain more representation on boards.
• Developers/declarants who initially control boards and must transition control as lots are conveyed.

Key Provisions

• Applies to all homeowners' associations (including those formed prior to 2016) if they elect to be governed by this act, expanding applicability beyond current exemptions.
• Declarant control period limited to five years after the declarant's first conveyance of a lot.
• If 50 or more lots are conveyed, not later than 90 days after conveyance, at least one board member and at least 25% of the board must be elected by lot owners other than the declarant.
• If 100 or more lots are conveyed, not later than 90 days after conveyance, at least 60% of the board must be elected by lot owners other than the declarant.
• HOAs must be organized as nonprofit corporations under Title 10A, Chapter 3, and follow related organizational requirements.
• Governing documents must be filed with the Secretary of State, including bylaws and the original covenants, conditions, or restrictions; an online public database of these documents will be maintained.
• Organizational documents may include provisions for communications, meeting rules, full financial record-keeping, budgeting, common-area rules, and other required corporate actions.
• May include additional provisions such as indemnification, insurance, fidelity bonds, periodic audits, and powers to hire staff or manage property.
• Effective date: October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Property & Estates