WeVote
Log In

Bill

Bill

HB 2338

Real Property - As enacted, requires a homeowners' association that collects assessments for common expenses to obtain and maintain a blanket fidelity bond to insure the homeowners' association against losses resulting from theft or dishonesty committed by the officers, directors, or persons employed by the homeowners' association, or committed by any managing agent or employees of the managing agent. - Amends TCA Title 66.

114th Regular Session (2025-2026) Introduced by Caleb Hemmer

Requires Tennessee HOAs collecting assessments to obtain fidelity bonds protecting members against theft or dishonesty by officers, directors, employees, and managing agents.

Comp. SB subst.
#realproperty
0
WeVote Research Nonpartisan
Bill Summary · HB 2338

Legislative bill overview

HB 2338 mandates that Tennessee homeowners' associations (HOAs) collecting member assessments must obtain and maintain a blanket fidelity bond. This insurance requirement protects HOA members against financial losses from theft or dishonest conduct by HOA officers, directors, employees, or hired managing agents.

Why is this important

HOAs control millions of dollars in collected assessments across Tennessee communities, yet currently lack uniform fiduciary protection requirements. Without mandatory bonding, homeowners have limited recourse when officers misappropriate funds or managing agents commit fraud—situations that occur periodically and can devastate community finances and member confidence in HOA governance.

Potential points of contention

  • Cost burden on HOAs: Fidelity bond premiums would become mandatory expenses, increasing assessment costs for all homeowners, particularly in smaller associations where per-unit costs are higher
  • One-size-fits-all approach: A blanket mandate may not account for associations of vastly different sizes, risk profiles, or existing internal controls that might already protect members
  • Coverage gaps: Fidelity bonds have exclusions and limits; the bill doesn't specify minimum coverage amounts, leaving uncertainty about adequate protection levels
  • Enforcement mechanism: The bill doesn't clarify who monitors compliance or what penalties exist for non-compliance, potentially creating enforcement challenges

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.