Tennessee Nonprofit Corporation Act: A guide for your HOA

What is the Tennessee Nonprofit Corporation Act?

The Tennessee Nonprofit Corporation Act is the state law that sets the corporate rules for nonprofit corporations, including many Tennessee HOAs. It generally provides default corporate governance rules for nonprofit associations. An association's declaration, bylaws, and other documents as well as other applicable Tennessee laws may modify or supplement these requirements.

Boards should consult qualified legal counsel regarding the specific requirements applicable to their community.
 

Requirements

HOAs organized under the Tennessee Nonprofit Corporation Act are generally required to:

• Operate under the direction of a board of directors, unless an exception applies (Tenn. Code § 48-58-101).
   
• Expect directors to act in good faith and make decisions they reasonably believe are in the association’s best interests (Tenn. Code § 48-58-301).
   
• Hold an annual member meeting at the time set by the bylaws (Tenn. Code § 48-57-101).
   
• Give members proper notice of annual and special meetings “in a fair and reasonable manner,” generally at least 10 days in advance (Tenn. Code § 48-57-105).
   
• Follow the quorum requirement in the charter or bylaws, or the statutory default when those documents do not set one (Tenn. Code § 48-57-203).
   
• Maintain required corporate and financial records (Tenn. Code § 48-66-101).
   
• File an annual report with the Tennessee Secretary of State by the required deadline (Tenn. Code § 48-66-203).

These are the corporate requirements under the Tennessee Nonprofit Corporation Act. An HOA’s governing documents and other state or federal laws may add additional responsibilities.
 

Meeting requirements for Tennessee nonprofit HOAs

A nonprofit corporation with members must generally hold an annual membership meeting at the time provided in its bylaws. At that meeting, the president and chief financial officer are required to report on the corporation’s activities and financial condition (Tenn. Code § 48-57-101).
 

Special meetings

Unless the charter says otherwise, members holding at least 10% of the votes entitled to be cast on a proposed issue can generally request a special meeting by following the statutory process (Tenn. Code § 48-57-102).
 

Voting and quorum rules

If the association’s charter or bylaws do not set their own requirements, the Tennessee Nonprofit Corporation Act provides default rules for member voting and quorum:

• Members generally have one vote each unless the charter or bylaws say otherwise.
   
• The default quorum is 10% of the votes entitled to be cast. Once a quorum is present, an action generally passes when more votes are cast in favor than against, unless a higher threshold applies (Tenn. Code §§ 48-57-202 through 48-57-204).

Boards should start with the association’s charter and bylaws, since those documents may set different requirements.
 

Recordkeeping requirements

The Tennessee Nonprofit Corporation Act requires associations to keep permanent records of member and board meetings, along with actions taken outside a meeting. Associations must also maintain appropriate accounting records and an up-to-date membership record that reflects members and their voting rights (Tenn. Code § 48-66-101).
 

Record inspections for members

Members generally have the right to inspect and copy certain association records under Tenn. Code § 48-66-102. Inspection of records kept at the association’s principal office, such as its current charter and bylaws, recent member meeting records, and its most recent annual report, generally requires at least five business days’ written notice.

For other records, such as accounting records, certain additional meeting records, and the membership list, the request must also be made in good faith for a proper purpose. The member must describe the purpose and requested records with reasonable detail, and the records must be directly connected to that purpose.
 

Amending bylaws

Under the Tennessee Nonprofit Corporation Act, a board may generally amend or repeal bylaws unless that authority is reserved for members or has been limited by the Act or governing documents (Tenn. Code § 48-60-202).

Members also have the right to amend or repeal bylaws. Unless another requirement applies, approval generally requires two-thirds of the votes cast or a majority of the voting power, whichever is lower.
 

Annual reports

HOAs organized under the Tennessee Nonprofit Corporation Act generally need to file an annual report with the Tennessee Secretary of State. The report keeps the state’s corporate information current, including the association’s registered office and registered agent (Tenn. Code § 48-66-203).

The report is generally due by the first day of the fourth month after the association’s fiscal year ends, unless the Secretary of State sets a different filing date.
 

Compliance tips for board members

1. Know how your association is organized

   Start by confirming whether your HOA is incorporated under the Tennessee Nonprofit Corporation Act. That helps the board understand which corporate rules apply and where to look when questions come up. Keep the association’s charter and current bylaws easy to access so board members can check the corporate framework before making decisions that affect members or the association.
    

2. Build meeting requirements into your regular process

   Do not wait until meeting day to confirm how notice or voting should work. Review the applicable requirements with qualified legal counsel while preparing the agenda and meeting materials. A consistent process gives the board more time to address questions before the meeting starts and makes it easier for homeowners to understand how association business will be handled.
    

3. Keep corporate records organized

   Good recordkeeping supports both current and future boards. Maintain required records in a consistent location and have a clear process for updating them after meetings or other corporate actions. Organized records also make it easier to respond when members exercise their inspection rights under the Tennessee Nonprofit Corporation Act and help provide useful history when leadership changes.
    

4. Bring in the right support when needed

   Volunteer board members should not have to manage every corporate requirement alone. A professional property management company can help keep routine processes organized and support the board with meeting preparation or recordkeeping.

How FirstService Residential can help

As North America’s leading property management company, FirstService Residential helps Tennessee boards manage the day-to-day responsibilities that support good governance under the Tennessee Nonprofit Corporation Act.

Our local teams can help organize board administration, prepare meetings, maintain association records, support homeowner communication, track important deadlines, and keep established governance processes moving forward. When legal guidance is needed, we can also help boards coordinate with qualified association counsel.

Contact a member of our team today to learn more.

This information is provided for general informational purposes only and is not intended to constitute, and should not be relied upon as, legal, regulatory, financial, or operational advice, or as a representation or guarantee of any specific services, capabilities, or outcomes. Property management needs, regulatory requirements, market conditions, and available services vary by jurisdiction, property type, and community. FirstService Residential provides services through locally based affiliates and associates, and services and results may vary by community, region, contractual terms, and applicable law.