Alabama HOA Assessment Limits

Section 1: Overview — How assessment authority and limits work in Alabama

Alabama sets no statutory percentage cap on assessment increases for any community type. The operative limit on a regular or special assessment lives in the recorded governing documents — and for condominiums, the procedural rules of the 1991 Condominium Act apply as well.¹ For condominiums created after January 1, 1991, the Alabama Uniform Condominium Act of 1991, Ala. Code § 35-8A-101 et seq., governs assessment authority; for condominiums created before that date, the predecessor Alabama Condominium Ownership Act, Ala. Code § 35-8-1 et seq., still applies.^2,3 Planned-community associations draw their authority to levy assessments from the recorded declaration. The Alabama Homeowners' Association Act, Ala. Code § 35-20-1 et seq., and the nonprofit-corporation provisions of Title 10A add corporate mechanics, lien rights, and disclosure duties — but they impose no assessment cap.⁴ Special assessments draw their authority and limits from those same sources: the 1991 Act and the declaration for condominiums, and the declaration alone for planned communities.⁵ On the national map, Alabama belongs to the contract-primary group — distinct from statutory-cap states like California and from the budget-ratification states that have adopted the Uniform Common Interest Ownership Act (UCIOA), which Alabama has not adopted.⁶ The sections below trace the authority to levy, the limits on increases, special-assessment procedure, and recent legislative and judicial activity.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

For condominiums created after January 1, 1991, Ala. Code § 35-8A-302(a)(2) gives the unit owners' association express statutory power to adopt budgets and to impose and collect assessments for common expenses.⁷ Ala. Code § 35-8A-315 — the Alabama analog to Uniform Condominium Act § 3-115 — requires that after the first assessment, the association levy assessments at least annually based on an annually adopted budget, with costs allocated to all units as the declaration specifies under Ala. Code § 35-8A-207.⁸ Once an assessment becomes due, the association holds a lien on the unit. Recording the declaration provides record notice and perfects that lien under Ala. Code § 35-8A-316.⁹ For condominiums created before January 1, 1991, the Alabama Condominium Ownership Act governs. Ala. Code § 35-8-9 authorizes the association to assess, collect funds, and pay common expenses; Ala. Code § 35-8-17 provides the association lien.¹⁰ Notably, § 35-8A-316's lien provision also reaches pre-1991 condominiums for events occurring after January 1, 1991, under the carve-in list in Ala. Code § 35-8A-102.¹¹ For planned communities, the board's power to assess comes from the recorded declaration — not from any statutory grant. The Homeowners' Association Act presumes assessments exist and regulates their collection; it neither creates nor caps them.⁴ In both settings, the declaration controls the allocation formula.⁸

2B. Limits on regular assessment increases

The 1991 Condominium Act sets no fixed percentage cap on regular assessment increases.⁸ What it does set — and what separates Alabama from many other 1980 Uniform Condominium Act states — is an owner budget-ratification mechanism. Under Ala. Code § 35-8A-303(c), within 30 days after adopting a proposed budget, the board must deliver it to all unit owners and schedule a ratification meeting no fewer than 14 and no more than 30 days later. The budget is ratified unless a majority of all unit owners — or a larger percentage if the declaration requires — vote to reject it at that meeting. A quorum is not required; if owners do reject the budget, the prior ratified budget continues in effect.¹² The practical ceiling on a condominium increase is therefore procedural — notice plus the owners' opportunity to vote it down — rather than a numeric cap, supplemented by any limit the declaration itself imposes. For planned communities, increase limits come entirely from the recorded declaration. Alabama sets no statutory percentage cap, ratification step, or member-vote threshold for a planned-community regular increase; the Homeowners' Association Act and Title 10A address only the corporate act of budget adoption and the duty to submit annual budgets to members under Ala. Code § 35-20-5.¹³ Whatever cap, member-vote threshold, or notice rule applies comes straight from the declaration. For both community types, the governing documents carry the full weight of the ceiling — because the statute supplies no percentage limit.

2C. Special assessments, emergency assessments, and CC&Rs

For condominiums, special assessments fall within the common-expense framework. Ala. Code § 35-8A-316(a) expressly includes special assessments in the association's lien — the lien attaches from the day the assessment becomes due, and when an assessment is payable in installments, the full amount becomes a lien from the date the first installment is due.⁹ The 1991 Act sets no separate numeric cap or mandatory member-vote threshold for a condominium special assessment; size and frequency follow the declaration and bylaws, subject to the same annual-budget and ratification mechanics described above.⁸ For planned communities, special assessments, any caps, approval thresholds, and emergency exceptions all come from the recorded declaration alone.⁴ That makes the operational point clear: a planned-community board cannot look to Alabama statute to justify the size or frequency of a special assessment. Both the authority and the limit live in the CC&Rs. Emergency or contingency assessment power, where it exists, is a creature of the declaration in the planned-community setting.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

Condominiums: The board adopts an annual budget, delivers it to all unit owners within 30 days, and sets a ratification meeting. The budget — and the assessment it funds — takes effect unless a majority of all owners vote to reject it, per Ala. Code § 35-8A-303(c) and § 35-8A-315(a).¹² Planned communities: The process is CC&R-defined. The only statutory element is the corporate duty to prepare and submit annual budgets to members under Ala. Code § 35-20-5(c)(7), with effective dates and any member vote set by the declaration.¹³

B. Special assessment procedure

Condominiums: Special assessments are authorized within the common-expense and lien framework of Ala. Code § 35-8A-315 and § 35-8A-316. Board action, any member vote, and notice requirements all follow the declaration and bylaws — the Act sets no separate threshold.⁹ Planned communities: The process is CC&R-defined and contractual. No statute governs the amount through board-action, member-vote, or notice rules, though any penalty treated as an assessment is collectible under Ala. Code § 35-20-12.¹⁴

C. Caps, ceilings, and override mechanisms

Both community types: Alabama supplies no statutory percentage cap on regular or special assessments. Where a cap exists, it is CC&R-defined and contractual. For condominiums, the owner budget-ratification right in Ala. Code § 35-8A-303(c) serves as the statutory override mechanism — in place of a numeric cap.¹² Any emergency-handling authority, where provided, lives in the declaration.

D. Notice, documentation, and disclosure tied to assessments

Condominiums: Ala. Code § 35-8A-316(h) entitles any unit owner, mortgagee, purchaser, or lender to a written statement of assessments against a unit — past-due amounts, late charges, and interest included — for a fee not exceeding $25. If the association fails to furnish that statement within 10 business days, it releases its lien against the unit for the assessment amount as of that date, though it does not discharge the owner's underlying debt.¹⁵ Planned communities: Ala. Code § 35-20-13 requires the association, on request, to produce records showing the most recent assessments, any board-approved assessments not yet in effect, and the current operating budget.¹⁶ Past-due condominium assessments bear interest at the rate the association sets, not to exceed 18 percent per year, under Ala. Code § 35-8A-315(b).⁸

Section 4: Recent legislative and judicial activity

A. Recent bills

No bill enacted in the past 24 months touched the assessment or lien provisions of the Alabama Uniform Condominium Act, and no enacted measure created statutory assessment caps for planned communities. The most recent substantive amendment to those sections was Act 2018-403 — which falls outside the relevant window. That act revised Ala. Code § 35-8A-315 and § 35-8A-316, adding the $25 statement fee and the six-month lien-priority provision, as the history line shows: "(Acts 1990, No. 90-551, p. 858, § 3-116; Act 2018-403, § 1.)"¹⁵

B. Recent appellate rulings

Alabama's appellate courts have weighed in on two practical questions in this area: whether the governing documents define assessment authority, and whether procedural precision matters when a lien goes to foreclosure. On both questions, the answer is yes.

C. Active legislative debates

No pending Alabama legislation would impose statutory assessment caps or a ratification requirement on planned communities. Recent association-related bills — like SB 344, sponsored by Senator Hovey in the 2024 regular session — focused on declarant control periods and board composition under the Homeowners' Association Act, not assessment amounts or limits.¹⁹

Section 5: National positioning and related coverage

Alabama belongs to the contract-primary group of states — alongside Arkansas and Mississippi — where assessment limits flow from the recorded declaration, not from statute. That separates Alabama from statutory-cap states led by California, whose Cal. Civ. Code § 5605(b) bars the board from imposing a regular assessment more than 20 percent above the prior year's figure, and prohibits special assessments in the aggregate exceeding 5 percent of budgeted gross expenses without the approval of a majority of a quorum of members. It also separates Alabama from the budget-ratification states that have adopted UCIOA — Alaska, Colorado, Connecticut, Delaware, Minnesota, Nevada, Vermont, Washington, and West Virginia, as identified by the Uniform Law Commission and the Community Associations Institute.²⁰ Alabama has not adopted UCIOA, though its 1991 Condominium Act does borrow the 1980 Uniform Condominium Act's owner budget-ratification mechanism for condominiums.¹² For a multi-state operator moving from a percentage-cap or ratification state into Alabama, the key adjustment is this: outside the condominium budget-ratification step, no statutory ceiling exists to backstop the documents. The declaration's own cap and vote provisions carry the full weight. As of mid-2026, legislative momentum toward statutory assessment limits for Alabama planned communities remains absent.

1. Alabama Legislature, Code of Alabama § 35-8A-315, Assessments for common expenses — text contains no percentage cap on increases ↩
2. Alabama Legislature, Code of Alabama § 35-8A-101, Short title — Alabama Uniform Condominium Act of 1991 ↩
3. Alabama Legislature, Code of Alabama § 35-8A-102, Applicability (post-1991 condominiums); Code of Alabama § 35-8-1 et seq., Alabama Condominium Ownership Act (pre-1991 condominiums) ↩
4. Alabama Legislature, Code of Alabama § 35-20-1 et seq., Alabama Homeowners' Association Act; § 35-20-5, Organization as nonprofit corporation under Title 10A, Chapter 3 ↩
5. Alabama Legislature, Code of Alabama § 35-8A-316(a), Lien for assessments — lien expressly secures special assessments; planned-community assessments governed by declaration under § 35-20-1 et seq. ↩
6. Community Associations Institute, Uniform Common Interest Ownership Act — adoption summary ↩
7. Alabama Legislature, Code of Alabama § 35-8A-302(a)(2), Powers of unit owners' association — adopt budgets and impose and collect assessments for common expenses ↩
8. Alabama Legislature, Code of Alabama § 35-8A-315, Assessments for common expenses — assessments at least annually based on a budget adopted at least annually; allocation per § 35-8A-207; interest not exceeding 18 percent per year ↩
9. Alabama Legislature, Code of Alabama § 35-8A-316, Lien for assessments — lien from time assessment becomes due; recording of declaration constitutes record notice and perfection; lien secures special assessments ↩
10. Alabama Legislature, Code of Alabama § 35-8-9, Duties and responsibilities of association for administration and management — assess and collect funds; pay common expenses; § 35-8-17, Liens in favor of association ↩
11. Alabama Legislature, Code of Alabama § 35-8A-102, Applicability — listing § 35-8A-316 among sections applying to pre-1991 condominiums for events occurring after January 1, 1991 ↩
12. Alabama Legislature, Code of Alabama § 35-8A-303(c), Board members and officers — budget delivery within 30 days; ratification meeting 14–30 days after delivery; budget ratified unless rejected by a majority of all unit owners ↩
13. Alabama Legislature, Code of Alabama § 35-20-5(c)(7), Organizational documents — preparation and submission of annual budgets to members ↩
14. Alabama Legislature, Code of Alabama § 35-20-12, Liens for unpaid assessments — lien arising from date assessment due; penalties treated as assessments collectible thereunder ↩
15. Alabama Legislature, Code of Alabama § 35-8A-316(h), Statement of assessments on request — fee not exceeding $25; release of lien if statement not furnished within 10 business days; Act 2018-403, § 1 ↩
16. Alabama Legislature, Code of Alabama § 35-20-13, Records — most recent assessments, board-approved assessments not yet in effect, current operating budget ↩
17. Howard Ross v. West Wind Condominium Association, Nos. CL-2023-0829, CL-2024-0323, CL-2024-0339 (Ala. Civ. App. Feb. 7, 2025) (appeal from Madison Circuit Court CV-22-146; originally released Nov. 8, 2024) ↩
18. Howard Ross v. West Wind Condominium Association, No. CL-2025-0064 (Ala. Civ. App. Jul. 25, 2025) (appeal from Madison Circuit Court CV-24-143; reversed and remanded) ↩
19. Alabama Legislature, SB 344, 2024 Regular Session (by Senator Hovey) — amending Ala. Code §§ 35-20-3, 35-20-5, and 35-20-7, declarant control period and lot-owner board representation ↩
20. California Civil Code § 5605(b), Regular and special assessment increase limits; Community Associations Institute, UCIOA adopting states ↩