(a) On or after January 1, 2016, a homeowners’ association created pursuant to a declaration shall be organized as a nonprofit corporation pursuant to Chapter 3 of Title 10A, and shall be governed in all respects as a nonprofit corporation.
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Terms Used In Alabama Code 35-20-5

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • following: means next after. See Alabama Code 1-1-1
  • Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
(b)

(1) A homeowners’ association, its members, and directors shall be subject to all of the obligations, duties, and responsibilities of and shall have all of the rights and benefits provided in Chapter 3 of Title 10A.
(2) In addition or supplemental to any other filing required in Chapter 3 of Title 10A, a homeowners’ association shall file the following documents with the Secretary of State:

a. Bylaws or other governing documents of the association.
b. The original covenants, conditions, or restrictions adopted by the association.
(3) The Secretary of State shall implement and maintain an electronic database, organized by association name, accessible by the public through the Secretary of State’s website which provides the capability to search and retrieve the documents listed in subdivision (2). Any documents filed with the Secretary of State shall be filed in accordance with Division 4 of Article 3 of Chapter 4, provided such documents filed with the Secretary of State pursuant to this chapter shall not be deemed to provide notice pursuant to Chapter 4.
(4) The Secretary of State may adopt rules necessary for the implementation of this section, including reasonable fees for the filing of documents.
(c) The organizational documents of a homeowners’ association shall provide for all of the following:

(1) Methods of efficient communications with the members of the association unless a different method is required by Chapter 3 of Title 10A.
(2) Rules and regulations for the conduct of any meetings of the association.
(3) The compilation, organization, and maintenance of full and complete financial records of the association available to any member at a reasonable time and place upon the payment of reasonable associated costs.
(4) Reasonable rules and regulations for the use, maintenance, repair, replacement, or modification of any common areas, if any, including penalties for violations.
(5) Power to grant easements, leases, licenses, and concessions through or over the common areas, if any.
(6) Statements regarding the payment of dues and assessments to be provided to any person having an interest, upon the payment of reasonable associated costs.
(7) Preparation and submission of the annual budgets of the association to the members.
(8) Any other act a nonprofit corporation is required to do under law.
(d) In addition to the requirements set forth in subsection (c), the organizational documents of a homeowners’ association may provide for the following:

(1) Indemnification and insurance for the association, its officers, and directors.
(2) Fidelity bonds for any person or entity having custody or control of any funds of the association.
(3) Periodic audits of the financial records of the association.
(4) Power to acquire real and personal property for the benefit of the association and its members.
(5) Power to hire and discharge managing agents and other employees, agents, and independent contractors.
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