Arkansas HOA Assessment Limits

Section 1: Overview

Arkansas sets no statutory percentage cap on assessment increases. The limits that apply depend entirely on community type: condominiums draw their assessment rules from the Arkansas Horizontal Property Act, while planned-community HOAs rely almost exclusively on their recorded covenants. For condominiums, assessment authority flows from the Horizontal Property Act, Ark. Code § 18-13-101 et seq., which requires co-owners to contribute pro rata toward common expenses in the percentages fixed by the master deed.¹ For planned communities, the recorded declaration of covenants, conditions, and restrictions (CC&Rs) governs assessments. Arkansas has no dedicated planned-community statute, and the Arkansas Nonprofit Corporation Act of 1993, Ark. Code § 4-33-101 et seq., supplies only the corporate mechanics for how a board adopts a budget and how members meet and vote.² Special assessments follow the same split: for condominiums, the source is the Horizontal Property Act and the master deed; for planned communities, the source is the CC&Rs alone. On the national spectrum, Arkansas sits with the CC&R-primary states — distinct from statutory-cap states such as California and from the ratification-mechanism states in the UCIOA family. The sections that follow set out the framework, the operative procedures, and the recent legislative and judicial activity that property managers, boards, treasurers, and association counsel need to track.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

For condominiums, the authority to levy assessments is statutory. Ark. Code § 18-13-116(a)(1) binds co-owners of an apartment or unit to contribute pro rata, in the percentages computed under Ark. Code § 18-13-112, toward the expenses of administration and of maintenance and repair of the general common elements and, where applicable, the limited common elements, plus any other expense lawfully agreed upon.¹ Section 18-13-112 ties each owner's share to the percentage value assigned to the individual apartment in the master deed — a percentage that carries a permanent character and cannot be altered without the acquiescence of all co-owners.³ The master deed controls the allocation formula, and the statute supplies the default rule that allocation tracks declared percentage interest. Act 516 of 2025 loosened that default for newly organized regimes by permitting a master deed to allocate common expenses differently from the allocation of ownership interest.⁴

For planned communities, no equivalent statute exists. A planned-community board's power to assess comes from the recorded declaration, not from Arkansas law. The Nonprofit Corporation Act of 1993 governs the corporate act of adopting a budget, calling meetings, and casting member votes, but it does not grant or limit the substantive power to assess.² In both settings, the declaration — master deed for condominiums, CC&Rs for planned communities — is the controlling document for the allocation formula. A point often miscited in practice deserves correction: the Ark. Code § 18-12-401 range that some sources associate with property-owners' disclosure does not contain a planned-community resale disclosure regime. Section 18-12-401 concerns deeds between spouses, and Arkansas has no general statute compelling an association to furnish assessment information on transfer.⁵

2B. Limits on regular assessment increases

For condominiums, the Horizontal Property Act sets few procedural limits on adopting or increasing common-expense assessments and contains no UCIOA-style budget-ratification or owner-veto mechanism. The Act fixes how expenses are shared — by declared percentage interest — but does not impose a fixed percentage ceiling on year-over-year increases.¹ The one express numeric limit in the statute is narrow: under Ark. Code § 18-13-116(a)(2), an association may levy an additional assessment on a co-owner who makes a unit available for rent or lease, but that surcharge may not exceed the amount reasonably calculated to cover the added security, wear and tear, trash pickup, and other costs occasioned by the rental.⁶ That is a reasonableness limit on a specific surcharge — not a cap on regular assessments.

For planned communities, increase limits are entirely CC&R-defined. No Arkansas statute imposes a percentage cap, a ratification requirement, or a notice rule on a planned-community regular-assessment increase. The Nonprofit Corporation Act governs only the corporate act of the board adopting the budget and any member vote the bylaws require.² The practical takeaway for both community types is the same: the operative limit on a regular increase lives in the governing document, and the Arkansas Code supplies no percentage ceiling that a board or an owner can invoke.

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

For condominiums, the Horizontal Property Act does not separately define or cap special or emergency assessments. Its common-expense framework in Ark. Code § 18-13-116 treats assessments levied outside the ordinary course the same as ordinary common expenses — allocating them by declared percentage interest and offering no distinct approval threshold or emergency exception.¹ Act 516 of 2025 added that a past-due assessment or installment may bear interest at a lawful rate established by the association, but it did not create a special-assessment cap.⁴

For planned communities, special assessments, any caps, approval thresholds, and emergency exceptions are CC&R-defined. The operational consequence is direct: a planned-community board cannot point to an Arkansas statute to justify the size or frequency of a special assessment. Both the authority to levy it and any limit on it come from the recorded declaration, so the assessment's validity rises or falls on the language of that document and the board's compliance with its own procedures.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

For condominiums, the Horizontal Property Act requires contribution by declared percentage interest but prescribes no statutory budget-adoption, notice, or member-ratification step for a regular increase; those steps, if any, come from the master deed and bylaws (Ark. Code § 18-13-116; § 18-13-108 directs that bylaws govern administration).¹ For planned communities, the increase procedure is contractual — CC&R-defined — with corporate mechanics supplied by the Nonprofit Corporation Act; the statute sets no notice content or effective-date rule for the increase itself.²

B. Special assessment procedure

For condominiums, the Horizontal Property Act provides no distinct special-assessment vote threshold or notice requirement; a special common expense is allocated like any other common expense under Ark. Code § 18-13-116.¹ For planned communities, board action, any member-vote threshold, and notice are contractual (CC&R-defined); no Arkansas statute supplies a default.⁷

C. Caps, ceilings, and override mechanisms

For both community types, Arkansas supplies no statutory percentage cap on regular or special assessments. Where a cap exists, it is CC&R-defined for planned communities or master-deed-defined for condominiums.¹ The single statutory ceiling is the reasonableness limit on rental-unit surcharges in condominiums under Ark. Code § 18-13-116(a)(2); the Act otherwise contains no emergency-override mechanism.⁶

D. Notice, documentation, and disclosure tied to assessments

For condominiums, on the sale or conveyance of a unit, Ark. Code § 18-13-116(c) directs that unpaid assessments be paid first out of the sale price, in preference over other charges except past-due taxes and duly recorded mortgages, and § 18-13-116(d) makes the purchaser jointly and severally liable with the seller for amounts owing up to conveyance.⁸ For both community types, Arkansas imposes no general statutory resale-disclosure obligation requiring an association to furnish an assessment statement on transfer; disclosure practice is contractual and is typically handled through the real estate contract.⁵ Records access for condominiums is addressed by Ark. Code § 18-13-110, and for nonprofit-corporation HOAs by the records provisions of the Nonprofit Corporation Act, neither of which functions as an assessment cap.²

Section 4: Recent legislative and judicial activity

Recent Legislation

Arkansas is not rewriting its HOA code wholesale. Instead, the legislative focus has been surgical — centered on the Horizontal Property Act and the mechanics of condominium assessment allocation. The 2025 session produced one enacted measure and one failed attempt to extend regulation to planned-community POAs.

Recent Court Rulings

Arkansas courts are not rewriting HOA law from the bench. What they are doing is more practical: enforcing recorded declarations, holding associations to their own procedures, and drawing limits on disproportionate remedies. The cases below show how.

For background outside the three-year window: the Arkansas Supreme Court in First State Bank v. Metro District Condominiums Property Owners Association, Inc., 2014 Ark. 48 (Feb. 6, 2014), construed Ark. Code § 18-13-116 for the first time and held that a purchaser at a mortgage-foreclosure sale remains jointly and severally liable for unpaid condominium assessments under subsection (d), which contains no foreclosure exception.¹²

Active Legislative Debates

The principal active question is whether Arkansas will regulate planned-community POAs and impose audit or disclosure duties — an approach the 2025 HB1660 advanced before dying in committee. No pending proposal would create a percentage cap on assessment increases for any community type.¹⁰

Section 5: National positioning and related coverage

Arkansas sits in the CC&R-primary group of states on the assessment-limit spectrum. The first group, statutory-cap states led by California, bars a board under Cal. Civ. Code § 5605(b) from imposing a regular assessment more than 20 percent greater than the preceding fiscal year's assessment, or special assessments that in the aggregate exceed 5 percent of the budgeted gross expenses for that fiscal year, without the approval of a majority of a quorum of members.¹³ The second group, ratification-mechanism states in the UCIOA family — Alaska, Colorado, Minnesota, Nevada, and West Virginia under the 1982 act, and Connecticut, Delaware, Vermont, and Washington under the 2008 act — controls increases through an owner veto: after the board adopts a proposed budget it sends the budget to owners and sets a ratification meeting, and the budget is ratified unless owners holding a majority of votes reject it, whether or not a quorum is present.¹⁴ Arkansas belongs to the third group, alongside Alabama and Mississippi, where assessment limits are set almost entirely by the recorded declaration and the code supplies no percentage ceiling. For a multi-state operator moving from a percentage-cap or ratification state into Arkansas, the practical shift is that the limit on any increase must be read out of each community's CC&Rs or master deed rather than the statute. Legislative momentum toward statutory assessment limits for Arkansas planned communities remains low, with the 2025 effort to regulate POAs dying in committee.

Federal frameworks also bear on Arkansas assessment practice, including the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the bankruptcy treatment of assessments.

1. Ark. Code § 18-13-116, Liability for expenses and assessments (text reproduced in Act 516 of 2025 / SB323, Arkansas General Assembly) ↩
2. Arkansas Nonprofit Corporation Act of 1993, Ark. Code § 4-33-101 et seq. (Arkansas General Assembly, Arkansas Code) ↩
3. Ark. Code § 18-13-112, Ownership and valuation of separate units and common elements (text in Act 516 of 2025 / SB323) ↩
4. Act 516 of 2025 (SB323), Sections 7–9, Arkansas General Assembly ↩
5. Ark. Code § 18-12-401 (deed between spouses), Arkansas Code (no planned-community resale-disclosure statute) ↩
6. Ark. Code § 18-13-116(a)(2), rental-unit additional assessment (text in Act 516 of 2025 / SB323) ↩
7. Arkansas Nonprofit Corporation Act of 1993, Ark. Code § 4-33-101 et seq. (corporate mechanics only) ↩
8. Ark. Code § 18-13-116(c)–(d), priority on sale and purchaser liability (text in Act 516 of 2025 / SB323) ↩
9. SB323 Bill Information, Arkansas General Assembly (lead sponsor J. Bryant; final votes; enacted as Act 516, Apr. 10, 2025) ↩
10. HB1660 Bill Information, Arkansas General Assembly (lead sponsor S. Meeks; died in House Committee at sine die adjournment, May 5, 2025) ↩
11. Wood v. Alkhaseh (Dawn Hill Townhouse and Condominium POA), 2023 Ark. App. 179, No. CV-20-322 (Ark. Ct. App. Mar. 29, 2023) ↩
12. First State Bank v. Metro District Condominiums POA, Inc., 2014 Ark. 48 (Feb. 6, 2014) ↩
13. Cal. Civ. Code § 5605(b), California Legislative Information ↩
14. Uniform Common Interest Ownership Act, § 3-115 budget-ratification provision and enacting states (Uniform Law Commission) ↩