Tennessee • Special assessment notice
Special assessment from your Tennessee condo or HOA — and are your reserves a mirage?
Tennessee added a reserve-study requirement but left the funding optional — a gap that quietly sets up special assessments. And if you're in an HOA rather than a condo, the statute barely applies to you.
The short answer
Tennessee's 2024 law requires condos to have a reserve study but NOT to fund it — so a study can exist while reserves sit near zero. Any repair cost above insurance plus reserves automatically becomes a special assessment (§ 66-27-413), and HOAs have almost no statutory protections at all. CondoSignal reads your notice against the Condo Act. Free.Tennessee at a glance
Reserve study
Required (condos)
Since 2024 — but funding is NOT.
Storm shortfall
Auto special assessment
Above insurance + reserves (§ 413).
Super-lien
6 mo / 1% cap
Condos only (§ 66-27-415).
HOA protections
Almost none
Governed only by CC&Rs.
The study-without-funding trap
Tennessee's 2024 law (effective January 2024, first studies due January 1, 2025) requires condos with $10,000+ in components to obtain a reserve study and update it every five years. But it does not require funding — so a board can be fully compliant with a reserve account near zero. A reserve 'study' is not the same as funded reserves, and the budget disclosure (§ 66-27-503) will tell you which you have.
Storm damage becomes an assessment automatically
Under § 66-27-413, any repair cost that exceeds insurance proceeds plus reserves automatically becomes a common expense — a direct pipeline from a tornado or hailstorm to a special assessment. Combined with thin reserves, that makes Tennessee assessments both common and sudden. There's no statutory cap.
HOAs are on their own
If you're in a planned-community HOA rather than a condo, Tennessee has essentially no statute governing you — no reserve, disclosure, insurance, or open-meeting mandate. Your only rules are the recorded CC&Rs and nonprofit law. That makes reading the governing documents and the budget directly even more important.
Your rights in Tennessee
Tennessee condo owners get a resale information package disclosing the reserve amount (or 'none'), 24 months of minutes, insurance, and delinquency (§ 66-27-503); HOA owners have few statutory protections. None of this is legal advice — confirm against Title 66 and Tennessee counsel.
What to check
- Confirm whether you're in a condo or an (unregulated) HOA.
- Check the budget for the reserve amount — 'none' is legal here.
- Compare any reserve study to the actual reserve balance.
- Understand that storm shortfalls auto-convert to assessments (§ 413).
- For West Tennessee, note New Madrid earthquake exposure.
- Request 24 months of minutes (condos) for a forming assessment.
Sources
- T.C.A. § 66-27-413 — insurance; shortfall as common expense(High)
- T.C.A. § 66-27-503 — resale information package(High)
- FirstService Residential — new TN reserve-study law(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Tennessee-licensed professional.
FAQ
Frequently asked questions
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