Arkansas Lets Condo Boards Surcharge Landlords, Capped at Actual Cost

Arkansas never enacted a planned community or homeowners' association act, and nothing in Arkansas law tells a board how far it may go in restricting leases. A full search of every Arkansas act since 1987 turns up no leasing-cap statute, no grandfathering rule for owners who were already renting when a restriction passed, and no statutory supermajority for a rental amendment. If your declaration bans or limits leasing, or was amended to do so, the answer comes from the declaration's own amendment clause and from Arkansas covenant law in circuit court, not from a statute you can cite.

The one exception is the Horizontal Property Act, and it applies only to a condominium. A horizontal property regime exists only where a master deed has been recorded with the clerk and ex officio recorder of the county in which the property sits. A conventional subdivision with a property owners' association, however condominium-like the amenities, is not a horizontal property regime and gets nothing from this chapter. Check the county land records for a recorded master deed before relying on any of it.

Where the act does apply, Ark. Code § 18-13-116(a) sets the assessment rules. Co-owners are bound to contribute pro rata, in the percentages computed according to § 18-13-112, toward the expenses of administration and of maintenance and repair of the general common elements and, in the proper case, of the limited common elements, and toward any other expense lawfully agreed upon. The provision added by Act 434 of 1993, approved March 10, 1993, then gives the administrator, board of administration or other form of administration power to establish additional assessments to be collected from a co-owner who makes the apartment available for rent or lease, either directly or through an agent.

The cap is the part landlords should read closely. The additional assessment shall not exceed the amount reasonably calculated to cover expenses for additional security, wear and tear on buildings, additional trash pickup and other additional costs occasioned by the units being available for rent or lease. Three consequences follow. First, the surcharge has to be justified by cost, so a board that sets a rental fee to discourage investors rather than to recoup expense is outside the statute. Second, the listed categories are about the physical and security burden of tenancy, not about administrative preference, so a flat annual landlord fee with no cost analysis behind it is exposed. Third, the trigger is making the unit available for rent or lease, so an owner who lives in the unit or leaves it vacant is not a proper target for the surcharge at all.

Act 516 of 2025, approved April 10, 2025, rewrote much of the Horizontal Property Act and restyled § 18-13-116 without changing the rental surcharge or its cost cap in substance. It also added that a past due assessment or installment may bear interest at a lawful rate established by the association, and it imposed funding obligations on a declarant during the period of declarant control. Section 9 of that act, which is expressly not codified, limits all of it to a horizontal property regime organized on or after September 1, 2025. A regime organized before that date may elect to be subject to the 2025 act by amending its master deed and filing the appropriate reorganization documents on or after September 1, 2025. For practical purposes that means nearly every existing Arkansas condominium still runs on the 1993 language quoted below, and an owner arguing about a rental surcharge should first establish which version applies to the regime.

There is no Arkansas agency that reviews association leasing rules or rental surcharges, so a dispute goes to the circuit court in the county where the property lies. In a condominium, the usable argument is that a rental assessment exceeds the amount reasonably calculated to cover the listed additional costs, which puts the burden on the board to show its arithmetic: what extra security, extra wear and tear, extra trash pickup or other additional cost the tenancies actually created, and how the charge maps to it.

Ask the board in writing for the cost basis before paying under protest. Unpaid assessments are not a small exposure in a condominium. Section 18-13-116 as printed in Act 516 of 2025 provides that on the sale or conveyance of a unit all unpaid assessments for the owner's pro rata share are first paid out of the sales price or by the acquirer, in preference over any other assessment or charge except past due taxes on the unit and payments due under duly recorded mortgage instruments, and that the purchaser is jointly and severally liable with the seller for what the seller owed up to the conveyance.

Outside a condominium the analysis is ordinary covenant law: whether the declaration authorized the restriction or the amendment that created it, whether the amendment followed the declaration's own procedure, and whether the association is enforcing it consistently. Arkansas gives no fee-shifting for these disputes, so the cost of the fight is whatever the declaration provides.