A condo association is more than a group of neighbors who share a roof. Under the Tennessee Condominium Act, Tennessee Code § 66-27-402 lists the powers an association holds, subject to its declaration. One of them is plain: the association may impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules.
Several other powers on the same list shape what a unit owner pays and what an HO-6 policy is meant to work alongside.
| Power under § 66-27-402 | Why an owner should care |
|---|---|
| Adopt budgets for revenues, expenditures, and reserves; collect assessments | Reserves and assessments fund repairs and deductibles the master policy does not pay |
| Sue, defend, or intervene in its own name for itself or two or more owners | Disputes over common elements can be handled by the association |
| Late charges; reasonable fines after notice and an opportunity to be heard | Fines follow a process; they are a rules matter, not an insurance claim |
| Reasonable charges for amendments, resale information, and unit transfers | Sellers and buyers may see these at closing |
| Indemnify officers and board members; carry D&O liability insurance | Protects volunteers who make decisions for the building |
Source: Tennessee Code §§ 66-27-402 and 66-27-418.
Budgets, reserves, and assessments
The association may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners. It may also make contracts, incur liabilities, and regulate the use, maintenance, repair, replacement, and modification of common elements. When a big repair or a master policy deductible lands on the association, the budget and reserves are where the money comes from first, and owners can be assessed for the rest. Read more: Tennessee condo law lets your association bill you for uninsured damage and put a lien on your unit if you do not pay.
Fines come after notice and a chance to be heard
Section 66-27-402 lets the association impose late charges on assessments. Fines for violating the declaration, bylaws, or rules are different: the statute allows reasonable fines after notice and an opportunity to be heard. If you receive a violation letter, check your bylaws for how that hearing is requested. Fines and late charges are association rules matters, so do not assume a homeowners or HO-6 policy treats them like a property loss.
Lawsuits in the association's name
The association may institute, defend, or intervene in litigation or administrative proceedings in its own name, on behalf of itself or two or more unit owners, on matters affecting the condominium. A dispute with a contractor over a common roof or siding is the kind of matter the association can carry. Who repairs which part of the building is a separate rule: Tennessee condo law makes the association repair the common elements and each owner repair their own unit unless the declaration says otherwise.
Fees at sale and transfer
The association may impose reasonable charges for preparing and recording amendments to the declaration or providing the information required by § 66-27-502, and for services rendered in connection with the transfer of a unit. If you are buying or selling, the resale certificate includes insurance information: Before buying a Tennessee condo, you can get the association's insurance types, limits, and deductibles in writing within 10 business days.
D&O insurance for the board
The statute allows the association to provide for indemnification of its officers and board members and to maintain directors' and officers' liability insurance. Board members are usually volunteer owners. Asking whether the association carries D&O coverage, and with what limits, is a fair question at an annual meeting. Related reading on association protections: Starting Jan. 1, 2027, Tennessee HOAs that collect assessments must carry a fidelity bond.
Insurance money held in trust
Under Tennessee Code § 66-27-418, the association can act as a trustee for insurance proceeds under § 66-27-413. A third person dealing with the association in that role is not bound to assure the proper application of trust assets paid or delivered to the association as trustee. That puts the focus on the association's own handling of claim money. How master policy proceeds must be used: After a Tennessee condo loss, the master policy claim is adjusted with the association, and the money must go to repairs first. What the master policy must cover: Tennessee’s condo law sets an 80% master-policy floor, and your HO-6 still has to fill the gaps. Gaps an HO-6 often fills: Tennessee condo law says your HO-6 has to cover the upgrades the master policy can skip.
This article is informational only. It summarizes Tennessee Code §§ 66-27-402 and 66-27-418 and is not legal advice. Your declaration, bylaws, and policies control, and this article does not promise coverage or eligibility.
Related reading from All Seasons
- Tennessee’s condo law sets an 80% master-policy floor, and your HO-6 still has to fill the gaps.
- After a Tennessee condo loss, the master policy claim is adjusted with the association, and the money must go to repairs first.
- Tennessee condo law lets your association bill you for uninsured damage and put a lien on your unit if you do not pay.
- Tennessee condo law makes the association repair the common elements and each owner repair their own unit unless the declaration says otherwise.
- Before buying a Tennessee condo, you can get the association's insurance types, limits, and deductibles in writing within 10 business days.
- Starting Jan. 1, 2027, Tennessee HOAs that collect assessments must carry a fidelity bond.
- Tennessee condo law says your HO-6 has to cover the upgrades the master policy can skip.
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
Can a Tennessee condo association fine me?
Tennessee Code 66-27-402 allows reasonable fines for violations of the declaration, bylaws, and rules after notice and an opportunity to be heard, subject to the declaration.
Can the association charge late fees on assessments?
Yes. The statute lets the association impose charges for late payment of assessments.
Who sets the condo budget and reserves?
The association may adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.
Can the association sue on behalf of owners?
The association may institute, defend, or intervene in litigation in its own name on behalf of itself or two or more unit owners on matters affecting the condominium.
Does a Tennessee condo association carry D&O insurance?
The statute allows the association to indemnify officers and board members and maintain directors' and officers' liability insurance. Ask your board whether it does.
Who holds insurance money after a master policy claim?
Tennessee Code 66-27-418 describes the association acting as trustee for insurance proceeds under 66-27-413.
Does my HO-6 pay association fines?
Fines and late charges are association rules matters. Your HO-6 policy wording controls, and you should not assume a fine is treated like a property loss.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
