Special assessment from your Tennessee condo or HOA — and are your reserves a mirage?

Tennessee at a glance

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.

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.