Tennessee Enacts Law to Protect Homeowners from HOA Fraud
Tennessee has passed a new law, SB 2326, aimed at protecting homeowners from fraud within homeowners' associations (HOAs). Signed by Governor Bill Lee, the law mandates that HOAs maintain a blanket fidelity bond to insure against losses from theft or dishonesty by directors, employees, or management companies. The coverage must equal the reserve balances of the association plus one-fourth of the annual assessment income. This legislation, effective January 1, 2027, was prompted by multiple fraud incidents affecting various jurisdictions, including a case involving a member of Rep. Caleb Hemmer's staff. 
