Can a Tennessee HOA or Condo Foreclose Over Dues?

Whether a Tennessee community association can foreclose for unpaid dues depends on whether you live in a condominium or a non-condo HOA. Condos run on the 2008 Act's unique lien framework; non-condo HOAs rely entirely on the recorded covenants. For your specific situation, a licensed Tennessee attorney is the right resource. This is general information, not legal advice.

Can a Tennessee condo association put a lien on my unit?

Yes. Under Tenn. Code Ann. § 66-27-415 (the 2008 Condominium Act), a condo association has a lien on a unit for assessments levied against it and fines imposed against its owner, from the time each becomes due. It may be foreclosed by judicial action or, if the declaration so provides, like a deed of trust with power of sale.

For condominiums under the Tennessee Condominium Act of 2008, Section 66-27-415 gives the association a statutory lien "on a unit for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due." Two features stand out:

• The lien reaches fines as well as assessments
• The lien "may be foreclosed by judicial action" — or, if the declaration so provides, "in like manner as a deed of trust with power of sale" (§ 66-27-415(a)(2))

The Tennessee 1%-of-mortgage cap

In a foreclosure under title 35, chapter 5, the association is entitled to priority in the sale proceeds for the common-expense assessments that would have become due, without acceleration, during the six months immediately preceding the lien-enforcement action — but capped at one percent (1%) of the maximum principal indebtedness of the first mortgage or deed of trust.

So Tennessee imposes a double cap:

1. Six months of common-expense assessments
2. And 1% of the first mortgage's maximum principal indebtedness

Whichever is lower applies. On a $400,000 mortgage, the association's priority is capped at $4,000 even if six months of assessments would otherwise exceed that.

The priority also depends on a notice step. Where the owner or the first-mortgage holder has given the association the holder's name and address in writing, and the association "has failed, within thirty (30) days of the date that six (6) months of assessments for common expenses due from the unit became delinquent, to give written notice of the delinquency" to that holder, the lien "shall not have the priority provided for in subdivision (b)(2)(A)" over that mortgage (§ 66-27-415(d)(2)). A foreclosure by the association itself "shall not extinguish the lien" of a prior mortgage or deed of trust (§ 66-27-415(b)(2)(A)).

Six-year limitations period

Section 66-27-415(e) sets the time limit for enforcing the lien: "A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six (6) years after the date the lien for the assessment becomes effective."

It is a real outer limit: a lien that is not enforced in time is extinguished by the statute.

Can a non-condo HOA foreclose on my home in Tennessee?

It depends almost entirely on the recorded CC&Rs. Tennessee has no Condominium Act equivalent for non-condo HOAs, and without CC&R authority no Tennessee statute supplies a lien. The Tennessee Nonprofit Corporation Act (Tenn. Code Ann. Title 48) governs the entity but does not create a statutory lien.

For non-condo HOAs in Tennessee, there is no Condominium Act equivalent. Whether and how the association can record a lien and foreclose depends almost entirely on the recorded CC&Rs:

• Whether the CC&Rs authorize the association to lien the home for unpaid assessments
• What procedure the CC&Rs set for recording and enforcing the lien
• Without CC&R authority, no Tennessee statute supplies a lien for a non-condo HOA

Whether a particular declaration grants lien rights, and on what terms, depends on the documents. The Tennessee Nonprofit Corporation Act (T.C.A. Title 48) governs the entity but does not create a statutory lien.

Can a Tennessee HOA foreclose over a nonessential-amenity assessment?

No, not for that charge. Tenn. Code Ann. § 66-27-706, effective July 1, 2024 (2024 Pub. Ch. 691), reaches general (non-condo) homeowners' associations. It bars an HOA from taking a foreclosure action against the property or member over an unpaid special assessment for a nonessential amenity, such as a pool, tennis court, or club house.

One of the few statutory protections that reaches general (non-condo) homeowners' associations is T.C.A. § 66-27-706, added by 2024 Tenn. Acts, ch. 691, effective July 1, 2024 — it sits in Part 7, the "Homeowners' Association" part of Title 66, Chapter 27. It addresses special assessments for a "nonessential amenity" — defined as an amenity "not essential to the daily regular operation of the community, including a pool, tennis court, or club house" (§ 66-27-701(7)). The statute provides that an association seeking such a special assessment must "[p]ass the assessment by at least a two-thirds (⅔) majority vote of the total members" and "[p]rovide members with financing or a payment plan over a defined period of time."

Most important for foreclosure: the statute states that "[i]f a member of the homeowners' association fails to pay a special assessment for a nonessential amenity, then the homeowners' association shall not take a foreclosure action against the property or the member for failure to pay the special assessment."

What people generally do

In a Tennessee assessment-debt situation, a few points commonly matter:

• Whether the community is a condominium or non-condo HOA — the framework is fundamentally different.
• For condos, a written payoff and the association's records show what is owed.
• For condos, the 1% cap against the first mortgage's maximum principal indebtedness — the priority slice may be much smaller than six months of assessments.
• For condos, whether any unpaid amount is more than six years old — § 66-27-415 extinguishes liens not timely enforced.
• For non-condo HOAs, the CC&Rs are where the association's authority to lien for what it is claiming is defined.
• Disputed fines and undisputed assessments are treated separately — though in condos the lien reaches both.
• Early on, while options remain open, a licensed Tennessee attorney is the right resource.

Sources

• Tennessee Code Annotated — official public access (§§ 66-27-201, 66-27-415; §§ 66-27-701, 66-27-706; § 48-51-101)
• 2024 Pub. Ch. 691 (SB 2150) — nonessential-amenity special assessments, enacted text