HOA Community Association Management in Tennessee

It might be said that those Americans who can move to another state are doing so. US migration is going strong, but only to a few states.

And those states appear to be Florida, Texas, South Carolina, Georgia, North Carolina, and Tennessee.

The Volunteer state welcomed 77,000 new residents from July 2022 to July 2023, for a 1.1% growth rate which was 8th in the nation.  5100 associations operate across Tennessee housing 722,000 residents.

Tennessee cities such as Chattanooga, Nashville, Memphis, Knoxville, Clarksville, Hendersonville, Germantown, and Murfreesboro are drawing new residents. As you'll see here, there is a clear need for HOA management services. Tennessee offers mild weather and gorgeous landscapes set in the famous Smokie mountains. It's music and good and laid-back culture make it very attract to newcomers.

Local Governments May Not Provide Needed Services

Being one of the poorer states, TN has lower tax revenues, which means government services might be fewer and lower quality. For this reason, community associations are called upon to service the gap.

Taxes are considered high for the poor, however may not be for incoming residents. Corporate and business taxes are very low, thus making it a viable location for businesses looking for a lower cost of doing business including taxes.

Unfortunately, this state has a high crime rate, likely a product of poverty here. Safewise reports property crime is up 3% and that 60% of residents report being concerned about crime.

Migration to the US Southeast

As mentioned in other posts, surveys reveal people are moving to these southern states for several reasons:

• affordable and improved lifestyles and communities -- both the neighborhoods and homes they can buy are an improvement and life in the southeast in particular is very gentile compared to many places in the west, with beaches that are enjoyable and warmer waters.
• low cost of living -- those who move report a much lower cost of living vs former high costs states and cities.
• improved climate and access to nature -- with temperate climates, residents can enjoy more outdoor activities year-round and suffer less snow and extreme temperatures than Northern or midwestern cities.
• more space to live -- homes in the southeast are larger with larger residential property allowing young families to live more relaxed
• business and economy are doing well -- digital business and travel sectors are contributing to improved economies in Tennessee, South Carolina, Florida and North Carolina.
• laid back friendlier atmosphere -- the people in the southeast are more calm, easygoing, and friendly creating their reputation for "southern charm."

With the influx of people to Tennessee, home building has grown and new developments have to be managed. Developers at some point wish to create a Homeowners association to allow property owners to manage the community.  And this would mean many services and amenities they've created from community centers to trash collection to bylaw enforcement. 

In this sense, it's no different in Tennessee than in South Carolina, North Carolina, or Florida.  The HOA becomes a business that needs professional management. While some are launched in an unserious fashion, financial risks mount. This is when boards begin to look for a professional-level association management company, or look into an HOA management software platform to bring all services together and conduct association business according to the laws.

Many developments decide to self-manage their HOA's which might work well. If residents with sufficient skills can operate buildings, parks, and community services well, it might be possible. Only when the services required are very technical would an outside association management company be needed.

Why Create an HOA in Tennessee?

The benefits of HOA management include:

• better management of the community assets and services, many of which are not provided by local governments
• improved security and safety
• discourages bad behavior of some residents and lowers property crime
• protects the value of homes in the neighborhood
• adds lifestyle value in building enjoyable amenities and managing them
• manages the funding created and foreseeing risk and future costs

A community is what people make of it, and given local governments don't have the funds, purpose or rights to offer many services, it's up to a community board and management team to deliver them.  A better lifestyle doesn't just happen. It's created by the homeowners association.

Tennessee Association Management Guidelines

Homeowners Associations (HOAs) in Tennessee are governed by several legal requirements, ensuring proper formation, registration, and operation according to state laws.  Those laws include the Tennessee Nonprofit Corporation Act. 

However, single-family HOAs are not subject to formal government regulations. The 2015 Bill SB405, or Tennessee Homeowners Association Act is in progress but is still being debated and reviewed.

HOA boards can decide to enforce their association rules and bylaws, fine any amount, charge dues, and perhaps put a lein on a property that hasn't paid its HOA dues. Homebuyers and homeowners need to review the HOA's CC&R's to understand their rights and obligations.

The CC&Rs of the HOA guide all decisions the board makes and how the management team resolves issues or takes action.

How to Launch an HOA in Tennessee?

Here are some steps in the creation process, which are generally the same regardless of which state you're in:

• decide on the purpose of your organization and give it a name
• review the state laws
• determine your funding and operational needs -- establish your budget
• get resident's feedback and gauge their willingness to join/cooperate
• communicate your HOA plan to all stakeholders
• build your plan for the HOA and community
• write your CC&Rs
• determine HOA or association fees
• form your corporation's legal entity and contact a lawyer
• create governing documents & elect your board members
• purchase HOA software and build a community portal
• acquire HOA insurance for property and liability

Additional info sources regarding HOAs in Tennessee

Tennessee State Government HOA Guidebook -- tn.gov/content/dam/tn/attorneygeneral/documents/nonprofits/nonprofitguidebook.pdf

IRS considerations for HOAs -- irs.gov/charities-and-nonprofits 

Registering an HOA in Chattanooga -- chattanooga.gov/equity-community-engagement/neighborhood-services/neighborhood-associations2/register-an-association

Manage your New Tennessee Carolina HOA Professionally

When building your new Tennessee Association, it is wise to review ManageCasa's association management platform first. 

Speak with our sales pros about a real, hands-on view of ManageCasa's essential services of accounting, online payments, communications, and daily management of HOA operations and maintenance.

Our HOA software is a foundation for your entire HOA/CAM success. It's more than just streamlining automation, HOA efficiency and compliance. It's a suite of services to optimize finances, communications, and support services. 

Switching to ManageCasa™ is easy. Begin with best HOA management platform and never worry about what's coming.