It is imperative for homeowners and board members to familiarize themselves with Alabama HOA laws. In doing so, homeowners can protect their rights and board members can prevent exposure to liability. In Alabama, there are a handful of laws that apply to homeowners associations and other planned developments.
What are the Alabama HOA Laws?
A homeowners association is an entity that manages, operates, and maintains communities or neighborhoods. It is usually established upon the creation of a development, first under the control of the developer before transferring ownership to the HOA. An HOA is headed by a group of volunteer homeowners, known as the board of directors, who are elected by their peers.
Just like any organization, there are state laws that apply to homeowners associations. Here are the different HOA laws in Alabama.
Alabama Condominium Act
The Alabama Condominium Act governs the creation, management, powers, and operations of condominium associations established before January 1, 1991. This law covers various topics, including unit ownership, common and limited elements, association duties, bylaws, and liens.
Alabama Uniform Condominium Act
The Alabama Uniform Condominium Act governs condominium associations established after January 1, 1991. This Act regulates the creation, management, powers, and operations of condominium associations. It is worth noting that some provisions under this Act also apply to condominiums established before January 1, 1991.
Alabama Homeowners Association Act
The Alabama Homeowners Association Act governs all homeowners associations created after January 1, 2016. Homeowners associations that existed prior to that date may also elect to be governed by this Act by recording it in their governing documents. This Act governs the creation, management, powers, and operations of homeowners associations in the state.
Alabama Nonprofit Corporation Law
The Alabama Nonprofit Corporation Law governs nonprofit corporations in the state. In Alabama, homeowners associations established after January 1, 2016, must establish themselves as nonprofit corporations. This Act applies to these organizations in terms of corporate structure and procedure.
On the other hand, condominium associations can either form as nonprofit or for-profit corporations.
Alabama Fair Housing Law
The Alabama Fair Housing Act is the state’s answer to the federal Fair Housing Ac (FHA). Like the FHA, Alabama’s Fair Housing laws offer protection against housing discrimination on the basis of religion, race, color, sex, familial status, or country of origin.
How to Terminate an HOA in Alabama
Homeowners associations may refer to Alabama HOA laws to understand dissolution requirements and procedures. The governing documents of an HOA will contain more details on the process of termination. Typically, at least two-thirds of the membership must approve the dissolution for it to push through.
If an HOA decides to dissolve, the board must prepare a declaration of intent and secure written consent from all voting members. The board must then submit this statement to the Alabama Secretary of State. Afterward, the association must pay off any outstanding debts and distribute its assets.
After meeting the financial obligations and handling assets, the HOA must file Articles of Dissolution with the Alabama Secretary of State. At that point, it is officially dissolved.
Is HOA Membership Mandatory in Alabama?
There are two types of membership among homeowners associations in Alabama: voluntary and mandatory. In voluntary HOAs, members have the luxury of a choice. They can choose to join the HOA or not. If they choose the latter, they don’t receive the same benefits and access as HOA members do. They also don’t have to pay dues.
In mandatory HOAs, membership is automatic and obligatory once a person buys a home in the HOA-managed community. They must adhere to the HOA’s rules, which includes paying dues, but they also gain access to amenities and services. In these communities, homeowners can only leave the HOA by selling their home.
In some cases, homeowners may be able to request that their property leave the association. This may not always be possible, depending on the governing documents, and the process and requirements can be quite tedious.
Can an HOA in Alabama Impose Fines?
Homeowners who violate their HOA’s rules may face certain penalties, including fines. Alabama HOA regulations dictate that homeowners must get an opportunity to be heard before the board can impose fines on them. Additionally, they must receive proper notice. The HOA’s governing documents should also contain details on how much fines should be and when an HOA can charge them.
It is important to note that some rules are considered unenforceable in Alabama. A good example of this is a complete ban on displaying the U.S. flag, which is protected under the Freedom to Display the American Flag Act of 2005. Similarly, HOAs can’t altogether prohibit homeowners from installing satellite dishes and antennas under the OTARD Rule.
Understanding HOA Foreclosure in Alabama
Can an HOA foreclose on a home in Alabama? Homeowners associations in this state do have the ability to foreclose on a home if the homeowner fails to pay their dues. When a homeowner becomes delinquent, it typically starts with a notice and a lien. After placing the lien on the property, the HOA can foreclose on the lien and sell the home to satisfy the owner’s debt.
According to Alabama HOA laws, homeowners associations must provide notice before attaching a lien to a property. With a lien, a homeowner can’t refinance their mortgage or sell their home without settling the outstanding debt first. After placing the lien, the HOA can then file a lawsuit to enforce the lien.
Alabama HOA Laws: Frequently Asked Questions
Can an HOA evict you in Alabama?
Homeowners associations can’t evict homeowners in Alabama. The process of selling a home to satisfy the owner’s debt to the HOA is called foreclosure, which requires notice and the placement of liens beforehand. That said, there are some cases wherein an HOA may have the ability to evict a tenant if the homeowner has rented out their home.
Can you refuse to join a homeowners association in Alabama?
It depends on whether the HOA is voluntary or mandatory. Voluntary HOAs allow homeowners the freedom to choose whether they want to become members of the association. Mandatory HOAs, on the other hand, require membership upon the purchase of a home in the community.
What happens if you don’t pay HOA fees in Alabama?
Homeowners stand to face a number of consequences when they fail to pay HOA fees. These include late charges or interest, loss of privileges, legal action, liens, and even foreclosure.
What are an HOA’s powers in Alabama?
According to Alabama HOA laws, homeowners associations have the right to manage and maintain common areas like clubhouses and swimming pools. They also have the authority to establish and enforce rules to uphold community standards.
Additionally, HOAs can collect dues or assessments to cover maintenance costs. They are also allowed to issue reasonable fines and late fees when homeowners violate the association’s bylaws.
Can homeowners find HOA governing documents in public records in Alabama?
Yes, homeowners can typically find their HOA’s governing documents in public records. HOAs file these documents with the Alabama Secretary of State and the local county recorder’s office. Homeowners can request a copy of these documents from these agencies. Moreover, they can ask to examine these documents by making a request to the HOA board or community manager.
Securing Legal Help
Confusion often comes from a misunderstanding or misinterpretation of Alabama HOA laws. Board members who don’t have a legal background would be better off hiring a lawyer or an HOA management company for help.
Cedar Management Group offers legal assistance to communities in Alabama and beyond. Call us today at (877) 252-3327 or request a proposal to learn more!