Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.
Alabama's homeowners' association statute — the Alabama Homeowners' Association Act, Ala. Code §§ 35-20-1 through 35-20-14 (2015) — is comparatively lean. Enacted in 2015 as Act No. 2015-292 and effective January 1, 2016, it is the first statewide framework governing HOAs in Alabama, but it leaves significant gaps that practitioners must fill from the governing documents, common-interest community governance principles, and general Alabama contract and corporate law. Special assessments sit squarely in that interstitial space: the Act addresses penalties and regular assessments indirectly, but it does not contain a dedicated "special assessment" provision with the procedural specificity found in Florida's Ch. 718 or Ch. 720. That gap creates both planning risks for boards and legal leverage for owners challenging irregular levies.
Doctrinal Framing
In Alabama, as in most jurisdictions, a homeowners' association's power to impose assessments — including special assessments — derives from the recorded declaration of covenants, conditions, and restrictions, the association's bylaws, and applicable statute. The threshold question in any assessment challenge is whether the levy was within the scope of authority granted by those sources. An assessment levied without authority in the declaration or bylaws is ultra vires and unenforceable as a lien under Ala. Code § 35-20-12.
The governing-documents-first principle is codified in Ala. Code § 35-20-11(a): the board of directors may exercise its enumerated powers only "to the extent authorized by the declaration and governing documents." This limiting clause applies to every power the Act grants to boards, including the power to assess penalties under § 35-20-11(a)(2).
What the Alabama HOA Act Provides
Powers of the Board: § 35-20-11
Section 35-20-11 is the primary board-powers provision. Relevant to assessments, it authorizes the board — "to the extent authorized by the declaration and governing documents" — to:
- Suspend a member's right to use facilities or services for nonpayment of assessments;
- Assess "reasonable penalties" against a member for any violation of the declaration or rules, provided the member is "afforded the opportunity to be heard and represented by counsel before the board of directors."
Section 35-20-11(c) provides that any penalty assessed under this section "shall be considered an assessment for purposes of Section 35-20-12." This cross-reference is significant: it means penalty assessments are subject to the same lien procedure and priority rules as regular assessments.
Lien Procedure: § 35-20-12
Section 35-20-12 governs the creation, perfection, and enforcement of assessment liens. The key mechanics are:
- Lien creation: A lien arises on every lot "for unpaid assessments levied against that lot arising on and from the date the assessment is due as fixed and determined by the board of directors at an annual meeting after giving notice as provided in Chapter 3 of Title 10A." The reference to Title 10A is the Alabama Business and Nonprofit Entities Code; notice must follow that statutory framework.
- Written notice to the owner: Written notice of the assessment and lien "shall be given to the owner of any lot on which the assessment and lien is claimed by personal delivery or first class United States mail, postage prepaid."
- Pre-recording notice: At least 30 days prior to recording a statement of lien, the association must give written notice by certified mail to the owner that the statement will be recorded in the office of the judge of probate.
- Recording: The association has 12 months from the date the assessment becomes due to record a verified statement of lien in the probate court of the county where the lot is located. The statement must contain: a description of the lot, the name of the association, the name of the owner, the amount of unpaid assessments with dates, and any other interests and costs claimed.
- Priority: The lien has priority over all subsequent liens and encumbrances except state and county ad valorem taxes, municipal improvement assessments, UCC fixture filings, mortgages, and deeds of trust securing indebtedness. Mortgage lienholders are thus senior to the HOA in Alabama — a meaningful distinction from some states.
- Enforcement: The association may file a verified complaint in the county where the lot is located to enforce the lien. The court may then order a sale with publication notice "once a week for three successive weeks in a newspaper published in the county."
Special Assessments: Filling the Statutory Gap
The Alabama HOA Act does not contain a standalone special-assessment provision defining when special assessments may be levied, what membership approval is required, or how much notice must precede a special assessment levy. Those questions are governed almost entirely by the declaration and bylaws.
Declaration and Bylaw Authority
Most Alabama HOA declarations contain provisions authorizing the board to levy both regular annual assessments and special assessments for capital expenditures, extraordinary expenses, or emergency repairs. These provisions typically specify: (a) whether board action alone is sufficient or whether a membership vote is required; (b) any cap on special assessment amounts without member approval; and (c) notice and collection procedures.
Where the declaration is silent on a specific procedure for special assessments, courts applying common-interest community governance principles will look to whether the assessment was: (1) for a purpose within the scope of the association's chartered objects; (2) levied by the board at a properly convened meeting after adequate notice; and (3) applied uniformly to all lots in the same classification.
Common-Interest Community Governance Principles
Alabama courts have generally applied the Restatement (Third) of Property: Servitudes as persuasive authority on common-interest community governance questions where the statute is silent. The Restatement recognizes that HOA boards have implied authority to levy assessments necessary to carry out the association's charitable or nonprofit purposes under the governing documents, but imposes a reasonableness constraint: the assessment must be within the general powers authorized by the declaration and must not violate the rights of individual owners.
For special assessments specifically, the Restatement's position — adopted in comment to § 6.5 — is that a levy for a purpose that is clearly within the association's authorized functions (repair, maintenance, capital improvement of common areas) is presumptively valid, while a levy for a purpose beyond those functions (e.g., a political contribution, support for a lawsuit against the municipality) is not.
Owner Challenges: Ultra Vires
The most direct owner challenge to a special assessment is that it was ultra vires — beyond the scope of authority granted by the declaration and governing documents. Because Ala. Code § 35-20-11(a) conditions all board power on declaration authorization, the board cannot bootstrap authority from the Act alone. An assessment for a purpose not authorized in the declaration fails on its face.
What to look for in discovery: (a) the board resolution authorizing the assessment and its stated purpose; (b) the meeting minutes showing the vote; (c) the budget and reserve study (if any) showing the need for the assessment; (d) prior practice — has the association levied similar assessments before, and were those ratified by members? Prior ratified practice can create implied authority; prior protests can help establish that members did not acquiesce.
Owner Challenges: Procedural Defects
Even an assessment within the scope of the board's authority is challengeable if proper procedure was not followed:
- Notice of the board meeting at which the assessment was adopted: Ala. Code § 35-20-12 refers to assessments fixed "at an annual meeting after giving notice as provided in Chapter 3 of Title 10A." A board meeting without proper notice under the applicable nonprofit-entity notice requirements may be insufficient to create a valid lien.
- Failure to provide individual written notice: The 30-day certified-mail notice requirement before recording a lien statement is mandatory. An association that records a lien without providing this notice has a potentially defective lien.
- 12-month recording deadline: An association that fails to record its statement of lien within 12 months of the assessment due date loses lien priority on those amounts. The claim for money damages survives, but the in rem remedy against the real property does not.
- Failure to offer a hearing: Under § 35-20-11(a)(2), any penalty assessment must be preceded by an opportunity to be heard before the board, with the right to be represented by counsel. An assessment imposed without a hearing is procedurally defective.
Reasonableness Challenges
Beyond authority and procedure, Alabama common law permits an owner to challenge whether a particular assessment is "reasonable." Courts will generally not substitute their judgment for the board's on discretionary matters (the classic business judgment rule), but a special assessment that is grossly disproportionate to the stated purpose, based on fraudulent contractor bids, or designed to benefit the board members personally rather than the community is subject to substantive review. The business judgment rule does not protect bad faith.
Pre-2016 HOAs
For HOAs formed before January 1, 2016 — the Act's effective date — the statute generally does not apply unless the HOA has opted in or its governing documents incorporate state statutory requirements. The Secretary of State's website confirms that pre-2016 HOAs are not required to file documents with the state and are not regulated under Ch. 35-20 unless they voluntarily comply. For those associations, assessment disputes turn almost entirely on the declaration, bylaws, and general Alabama contract and property principles.
Practice Notes
Threshold step: Compare the assessment resolution against the exact language of the declaration and bylaws. If the declaration requires member approval above a certain dollar threshold or for capital improvements, and the board has not obtained that approval, the assessment is challengeable regardless of the lien status.
Lien timing: Calendar both the 30-day pre-recording certified-mail deadline and the 12-month recording deadline. An owner whose property is subject to a lien recorded without the required pre-notice should move promptly to challenge the lien's validity.
Hearing rights: For any penalty-type assessment, confirm that the owner received written notice of the charge, the opportunity to appear before the board, and the right to be represented by counsel. A penalty assessment levied without those protections is not a valid assessment under § 35-20-11 and therefore not a valid lien under § 35-20-12.
Quiet title: Where an association has foreclosed on an invalid lien, consider a quiet-title action along with a damages claim. An attorney's fees claim may be available if the governing documents or applicable nonprofit-entity law supports it.
Open Questions
The scarcity of reported Alabama appellate decisions on the Homeowners' Association Act — enacted only in 2015 — means that many of the doctrinal questions discussed here will be resolved by litigation in the coming years. The most significant unresolved questions are: (1) whether the Act's procedural requirements apply retroactively to assessments levied by pre-2016 HOAs that have not opted into the Act; (2) what the correct measure of damages is when an association forecloses on a defective lien; and (3) whether Alabama courts will apply the Restatement (Third) of Property as persuasive authority on common-interest community governance gaps.
Closing
Alabama's HOA special-assessment framework is notable primarily for what the Act does not say. The governing documents remain the primary source of authority and procedure, with the Act providing a lien-enforcement mechanism that requires strict compliance with notice, recording, and timing requirements. Owners challenging special assessments should begin with the declaration, audit the board's procedures against the Act, and look carefully at the certification and hearing rights the Act guarantees. Boards should build their procedural record before the assessment is levied — not after the challenge is filed.
Talk to Yates Anderson
If you are litigating a matter in this area — or weighing whether to — the working analysis above only goes so far. Request a case evaluation and a Yates Anderson attorney will respond within one business day.
Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.