Alabama has specific laws that support condo associations and homeowner associations. The Alabama Homeowners' Association Act (AL Code Title 35 Chapter 20) applies to all non-condo property associations that record a declaration from the beginning of 2016 and forward as well as those existing associations that opt in to take advantage of the clarity of the code. The Alabama Condominium Act (AL Code Title 35 Chapters 8 and 8A) has been in effect in some form since 1964. The characteristics and date of formation of an association in Alabama determine whether it falls under Chapter 8, 8A, or 20, regardless of whether it is called a property-, townhouse-, condominium-, or home-owners’ association.
Association documents may be called covenants, restrictions, agreements, declarations, articles, bylaws, interpretations of bylaws, and/or rules. Some documents must be recorded in probate and some must be filed with the state. The initial document recorded in the probate court is referred to as a “declaration” and lays out the area of the association. This declaration runs with the land and is enforceable by and against successors and assigns, regardless of form.
Associations
Alabama associations are responsible for the administration, management, maintenance, and operational responsibilities of the common property and the community as a whole to maintain property values and safety. Along with these responsibilities, associations also have authority to tax dues and assessments, and make and enforce rules as laid out in the association documents and restricted by applicable Alabama laws.
Board of Directors and Officers
The directors are typically elected by the members, while officers are often appointed by the board. Directors’ responsibilities include making decisions on community matters and ensuring the association's compliance with the relevant laws.
As with boards of all organizations, board members should not be involved with day-to-day management or operational tasks. The executive is usually designated as being responsible for the oversight of operation of the association and she should have authority to make decisions and spend funds up to a set amount.
In Alabama, association boards are bound by regulations and laws. These include state-specific statutes and federal laws that necessitate strict adherence to ensure lawful operation and compliance.
Board members must ensure association documents do not contradict or overrule federal and state laws including the Alabama Nonprofit Corporation Law. On the federal level, some of the primary laws affecting associations are the Americans with Disabilities Act of 1990 (ADA) and the Fair Housing Act (FHA).
Members
Members of an association, typically owners within the association, have specific rights and responsibilities as outlined in the bylaws. For example, they have the right to vote on certain community issues and have a responsibility to pay maintenance and other fees. It's crucial for members to be informed of their rights and obligations to contribute to the effective and fair management of the association.
Owner/members do not have the right to attend all board meetings, but they do have a right to see the minutes of such meetings. Owners may sue their association for failing to meet their obligations.
Members of an association enjoy the right to use common areas such as gates, roads, pools, fitness centers, and gathering spaces which are maintained by the association. On the other hand, the obligation tied to this right is that members must adhere to rules and schedules set for their use to avoid conflicts and ensure fair access for everyone and pay dues and assessments. Members have the right to expect their community to be safe and well kept, but also have the obligation to contribute to its upkeep through dues and assessments.
Assessments and Dues
In Alabama, associations are subject to specific regulations governing financial matters, including the collection and use of assessments and dues, maintenance of budgets and financial records, and procedures related to liens and foreclosure.
Alabama associations and housing Laws require that assessments are consistent with the governing documents, typically outlined in the community's declarations or bylaws.
In cases of unpaid assessments, the association may initiate a collections process, which may involve late fees and interest on the outstanding balance.
An association in Alabama can place a lien on a property for unpaid assessments or fines. While some states restrict foreclosures to unpaid assessments, Alabama does not. Association liens are generally prior but not necessarily superior to all other liens except for real estate taxes and can lead to foreclosure if the debt remains unpaid.
Budgets and Financial Records
Associations in Alabama have the authority to collect assessments and dues from properties declared to be in the association. All funds collected by the association must be used to maintain common areas and provide services to the community.
Associations are required to maintain detailed financial records, which encompass all collections and the annual budget. Associations must make these records available to homeowners upon request, as transparency in financial dealings is a legal requirement under the Alabama Secretary of State ASSOCIATION FAQ.
An annual budget must be prepared and adopted by the association, which reflects all expected income and expenses. A periodic financial audit may be conducted to ensure the integrity of the financial records.
Rules and Rule Enforcement
The enforcement of community rules is a critical function of an association. The Board may pass resolutions outlining the procedures for enforcing rules and implementing fines for violations. Penalties can range from warnings to monetary fines or litigation. Clear rules and consistent enforcement are essential to maintaining community standards and adherence to the association's obligations.
In instances where there is a disagreement or dispute, a process for conflict resolution should be in place to address grievances. Members have the responsibility to follow the established appeal process if they believe there has been unfair application of rules or penalties. An appeals process might involve submitting a written grievance to the association’s Board, which will review and make a determination. If further resolution is needed, mediation or lawsuits may ensue.
Stanley & Associates, LLC Office@Stanley-Law.Com
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