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SB2326 • 2026

Real Property

AN ACT to amend Tennessee Code Annotated, Title 66, relative to property owners' associations' responsibility to maintain fidelity bonds.

Labor
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Yarbro, Hemmer
Last action
2026-04-13
Official status
Signed by Governor.
Effective date
Not listed

Plain English Breakdown

The candidate explanation accurately reflects the official source material. The only change noted was in the effective date, which has been updated from July 1, 2026, to January 1, 2027.

HOAs Must Have Fidelity Bonds

This law requires homeowners' associations (HOAs) to get fidelity bonds that protect against theft or dishonesty by officers, directors, employees, and managing agents.

What This Bill Does

  • Requires HOAs collecting money for common expenses to have a fidelity bond.
  • The bond must cover losses from theft or dishonest acts committed by association members or their managers.
  • Sets the minimum coverage amount of the bond at $10,000.
  • Allows the board of directors or managing agent to get this insurance on behalf of the HOA.

Who It Names or Affects

  • Homeowners' associations (HOAs) that collect money for common expenses.
  • Residents who are part of an HOA and pay assessments.

Terms To Know

Fidelity bond
Insurance that protects against losses due to theft or dishonesty by employees, officers, directors, or managing agents.
Homeowners' association (HOA)
An organization made up of homeowners who manage and regulate a residential subdivision.

Limits and Unknowns

  • The effective date was changed from July 1, 2026, to January 1, 2027.
  • It is not clear how existing HOAs will transition to meet the new requirements by the effective date.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

Amendment 1-0 to HB2338

Plain English: The amendment changes when a new law about property owners' associations taking out fidelity bonds will start.

  • Changes the effective date of the bill from its original unspecified date to January 1, 2027.
  • The original text does not specify an initial effective date for the bill, so it's unclear what the previous plan was.
  • The amendment only specifies when the new law will start but doesn't provide details about the content of the fidelity bond requirement.
Amendment 1-0 to SB2326

Plain English: The amendment removes an existing section of Senate Bill No. 2326 and replaces it with a new effective date for the bill's provisions.

  • Removes SECTION 2 from SB2326.
  • The specific content of the removed SECTION 2 is not provided, so its exact nature cannot be explained.
  • The amendment does not specify what changes are being made to the bill's original text beyond setting a new effective date.

Bill History

  1. 2026-04-13 Tennessee General Assembly

    Signed by Governor.

  2. 2026-04-02 Tennessee General Assembly

    Transmitted to Governor for action.

  3. 2026-04-01 Tennessee General Assembly

    Signed by H. Speaker

  4. 2026-03-30 Tennessee General Assembly

    Signed by Senate Speaker

  5. 2026-03-26 Tennessee General Assembly

    Enrolled and ready for signatures

  6. 2026-03-26 Tennessee General Assembly

    Passed H., Ayes 91, Nays 0, PNV 0

  7. 2026-03-26 Tennessee General Assembly

    Am. withdrawn. (Amendment 1 - HA0744)

  8. 2026-03-26 Tennessee General Assembly

    Subst. for comp. HB.

  9. 2026-03-26 Tennessee General Assembly

    Rcvd. from S., held on H. desk.

  10. 2026-03-26 Tennessee General Assembly

    Sponsor(s) Added.

  11. 2026-03-26 Tennessee General Assembly

    Comp. SB subst.

  12. 2026-03-23 Tennessee General Assembly

    Engrossed; ready for transmission to House

  13. 2026-03-23 Tennessee General Assembly

    Passed Senate as amended, Ayes 30, Nays 0

  14. 2026-03-23 Tennessee General Assembly

    Senate adopted Amendment (Amendment 1 - SA0694)

  15. 2026-03-20 Tennessee General Assembly

    Placed on Senate Regular Calendar for 3/23/2026

  16. 2026-03-19 Tennessee General Assembly

    H. Placed on Regular Calendar for 3/26/2026

  17. 2026-03-18 Tennessee General Assembly

    Placed on cal. Calendar & Rules Committee for 3/19/2026

  18. 2026-03-11 Tennessee General Assembly

    Rec. for pass; ref to Calendar & Rules Committee

  19. 2026-03-10 Tennessee General Assembly

    Recommended for passage, refer to Senate Calendar Committee

  20. 2026-03-09 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/10/2026

  21. 2026-03-09 Tennessee General Assembly

    Rule #83(8) Suspended, to be heard in Senate Commerce & Labor Committee on 3/10/2026

  22. 2026-03-04 Tennessee General Assembly

    Placed on cal. State & Local Government Committee for 3/11/2026

  23. 2026-03-04 Tennessee General Assembly

    Rec. for pass by s/c ref. to State & Local Government Committee

  24. 2026-02-25 Tennessee General Assembly

    Placed on s/c cal Cities & Counties Subcommittee for 3/4/2026

  25. 2026-02-09 Tennessee General Assembly

    Sponsor(s) Added.

  26. 2026-02-05 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Commerce and Labor Committee

  27. 2026-02-05 Tennessee General Assembly

    Assigned to s/c Cities & Counties Subcommittee

  28. 2026-02-05 Tennessee General Assembly

    P2C, ref. to State & Local Government Committee

  29. 2026-02-04 Tennessee General Assembly

    Intro., P1C.

  30. 2026-02-02 Tennessee General Assembly

    Introduced, Passed on First Consideration

  31. 2026-02-02 Tennessee General Assembly

    Filed for introduction

  32. 2026-02-02 Tennessee General Assembly

    Filed for introduction

Official Summary Text

This bill requires a homeowners' association or a unit owners' association (together, a "HOA") collecting assessments for common expenses to obtain and maintain a blanket fidelity bond to insure the HOA against losses resulting from theft or dishonesty c
ommitted by the officers, directors, or persons employed by the HOA, or committed by any managing agent or employee of the managing agent. Such bond or insurance policy must generally provide coverage in an amount equal to the reserve balances of the ass
oc
iation plus 1/4 of the aggregate annual assessment income of such HOA. However, the minimum coverage amount must be $10,000. The board of directors or managing agent may obtain such bond or insurance on behalf of the HOA.

ON MARCH 23, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2326, AS AMENDED.

AMENDMENT #1 changes the effective date of the bill from July 1, 2026, to January 1, 2027.

Current Bill Text

Read the full stored bill text 
HOUSE BILL 2338
By Hemmer

SENATE BILL 2326
By Yarbro
SB2326
012636
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 66,
relative to property owners' associations'
responsibility to maintain fidelity bonds.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 66, Chapter 27, is amended by adding
the following as a new part:
66-27-901.
As used in this part:
(1) "Board of directors" means the body, regardless of name, designated
in the declaration to act on behalf of a homeowners' association;
(2) "Declaration" means an instrument, however denominated, that
creates a homeowners' association, and amendments to that instrument,
including restrictive covenants, bylaws, and similar instruments governing the
administration or operation of a homeowners' association; and
(3) "Homeowners' association" or "HOA":
(A) Means an incorporated or unincorporated association owned
by, or whose members consist primarily of, the owners of the residential
property covered by the declaration and through which the owners, or the
board of directors or similar governing body, manage or regulate the
residential subdivision; and
(B) Includes a unit owners' association organized under § 66-27-
401.
66-27-902.

- 2 - 012636

A homeowners' association collecting assessments for common expenses shall
obtain and maintain a blanket fidelity bond to insure the HOA against losses resulting
from theft or dishonesty committed by the officers, directors, or persons employed by the
HOA, or committed by any managing agent or employee of the managing agent. Such
bond or insurance policy must provide coverage in an amount equal to the reserve
balances of the association plus one-fourth (1/4) of the aggregate annual assessment
income of such HOA; provided, that the minimum coverage amount must be ten
thousand dollars ($10,000). The board of directors or managing agent may obtain such
bond or insurance on behalf of the HOA.
SECTION 2. This act takes effect July 1, 2026, the public welfare requiring it.