Tennessee Fines: Notice and a Hearing for Condos, Nothing for HOAs (T.C.A. § 66-27-402(a)(11))

The fining power sits in the list of association powers at § 66-27-402(a), which came from 2008 Public Chapter 766, the act that enacted the Tennessee Condominium Act of 2008 and took effect January 1, 2009. Subdivision (a)(11) does two things in one sentence. It lets the association impose charges for late payment of assessments, with no procedure attached, and it lets the association levy reasonable fines for violations of the declaration, bylaws and rules and regulations, but only after notice and an opportunity to be heard. Tennessee wrote no dollar ceiling, no per-day maximum, no aggregate limit and no schedule. "Reasonable" is the entire substantive constraint, and it is tested case by case in court rather than by any agency.

The procedure Tennessee did write is thin. The statute says notice and an opportunity to be heard, and stops. It does not say how many days of notice, who conducts the hearing, whether the board may hear its own charge, whether counsel or witnesses are allowed, whether a record must be kept, or whether an appeal exists. It also creates no cure period, so unlike states that require a written warning and a chance to fix the violation before any money is charged, a Tennessee condominium association may fine on the first offense as long as it gave notice and a hearing opportunity first. Most of the missing detail must come from the association's own bylaws, which § 66-27-406(a)(3) and (4) require to cover the powers and duties of the board and what the board may delegate.

The reach of the hearing right is broader than the rest of the condominium act. Section 66-27-202(a), as rewritten by 2009 Public Chapter 215, lists the sections that apply to condominiums created in Tennessee before January 1, 2009, and § 66-27-402(a)(11) is on that list along with § 66-27-415 and § 66-27-417. Those sections apply to events and circumstances occurring after January 1, 2009, but do not invalidate or supersede provisions already in the master deed, master lease, declaration, bylaws or plats that existed on that date. So an older Tennessee condominium is subject to the notice-and-hearing requirement for fines levied today, even though most of the 2008 act does not reach it.

Collection is where a Tennessee condominium fine becomes serious. Section 66-27-415(a)(1) gives the association a lien on the unit for fines imposed against the unit owner from the time the fine becomes due, foreclosable by judicial action, and the declaration may go further and allow foreclosure in the manner of a deed of trust with power of sale under §§ 35-5-101 et seq., provided the association first notifies the unit owner and every lienholder of record before the first publication of notice. Notice by United States mail is deemed received three days after deposit. Section 66-27-415(a)(2) removes any doubt that fines are collectible this way: unless the declaration provides otherwise, fees, charges, late charges, fines and interest charged under § 66-27-402(a)(10), (11) and (12) are enforceable as assessments. The lien is prior to almost everything except pre-declaration encumbrances, real estate taxes and a first mortgage recorded before delinquency, and even against that first mortgage the association has a six-month super-priority for budgeted common expense assessments, which it can lose if the mortgage holder gave the association written notice of its name and address and the association then failed, within thirty days after six months of assessments went delinquent, to notify the holder of the delinquency. A lien is extinguished unless proceedings to enforce it are begun within six years, and a judgment in a lien action must include costs and reasonable attorney's fees for the prevailing party, so a losing owner pays the association's lawyer and a winning owner recovers.

Outside the condominium act the picture is empty. Part 7 of Chapter 27, the homeowners' association part created by 2021 Public Chapter 151, addresses long-term rentals, vote records and business entity notices, and says nothing about fines. The only money limit Tennessee imposes on a subdivision homeowners' association is § 66-27-706, added by 2024 Public Chapter 691, which requires a two-thirds majority vote of the total membership and a financing or payment plan before the association may levy a special assessment for a nonessential amenity such as a pool, tennis court or clubhouse, and which forbids the association from foreclosing on a member who fails to pay that particular assessment. That protection covers special assessments, not fines.

For a condominium, a fine levied without notice and an opportunity to be heard is levied without statutory authority, and the defense is raised when the association sues to collect or forecloses its lien under § 66-27-415. Because a judgment in a lien action must include costs and reasonable attorney's fees for the prevailing party under § 66-27-415(g), contesting a fine is a two-sided bet. Before disputing, use § 66-27-415(h): a written request obliges the association to furnish a written statement of the unpaid assessments against your unit within seven days, and that statement is binding on the association, which pins down the amount actually claimed.

The association must also keep financial records under § 66-27-417 and make all financial and other records reasonably available for examination by any unit owner, which is how you obtain the fine ledger and the hearing minutes. There is no state agency to appeal to. Tennessee gave neither the attorney general nor the Department of Commerce and Insurance authority over association fines, unlike towing, where § 55-31-201 routes violations to the attorney general under the Tennessee Consumer Protection Act. For a subdivision homeowners' association, an unpaid fine is ordinary contract debt collectible in general sessions or circuit court, and any lien or foreclosure right has to come from the recorded declaration rather than from statute.