Gov. Bill Lee signs bill protecting homeowners from HOA fraud

Hinzugefügt: 2026-05-12

[00:00:00]Your HOA dues could soon come with an extra layer of protection against the people actually handling your money.

[00:00:06]>> The governor just signed a bill requiring HOAs to maintain a blanket fidelity bond to insure them against theft and fraud by their own directors, officers, board, or management company.

[00:00:18]State Capitol News reporter Tori Gesner explains how the bill came about and the potential impact. From neighborhood pool maintenance to landscaping and special assessments, HOAs handle a lot of money.

[00:00:30]In Tennessee, around 765,000 people live in a community that has one.

[00:00:35]When that money is stolen or misused, homeowners have to pay the price.

[00:00:39]>> 99.9% of HOA managers are are doing good job. They're doing what they're paid to do. Unfortunately, we had a situation where it was a bad actor.

[00:00:48]There was a, you know, I would say a loophole in the law and so this unfortunately happened and these homeowners had to come out of money with a lot of out of pocket with a lot of extra money.

[00:00:59]>> Representative Caleb Hemmer says the allegations of theft and fraud by Gasser Property Management Inc. across Middle Tennessee were so bad the TBI started investigating. The lawmaker wanted to do something more to make sure homeowners and HOAs are protected in the future.

[00:01:14]>> We did a lot of talking with a number of these victims over the summer looking at other states and what some of their best practices were for fixing and and providing some safeguards in state law for homeowner associations so that this type of fraud couldn't happen again. [clears throat] >> His bill, which the governor just signed into law, will require HOAs to maintain a blanket fidelity bond, a type of insurance that protects the association if someone handling HOA money steals it or commits fraud.

[00:01:44]>> We felt like this was some common sense protections we could put in the law.

[00:01:47]>> Inspired by a Virginia law, the bond must cover the total reserves plus at least a quarter of annual assessment income. The legislation passed with bipartisan support and no pushback from HOAs.

[00:01:58]>> We heard from various stakeholders, uh home builders, HOA managers, uh the residents, uh homeowners associations to to really brought everybody to the table uh to understood what what could be done. Uh I know some sides want to do more, some sides do do less uh do less, but yeah, like everything in life, sometimes you have to compromise and we felt like this was a good first step.

[00:02:22]>> Community Association Institute, an international organization that provides resources for HOAs and their residents say blanket fidelity bonds may modestly increase HOA fees, but they create an extra safeguard for homeowners that's worth the price. Representative Hammer says you can also take other actions to protect yourself.

[00:02:40]>> of times this happens because people don't want to be involved in their HOAs and and um so being able to really track and audit and follow where the money is spent uh can help prevent you from being the victim of a fraud uh in the future.

[00:02:55]>> Reporting in Nashville, I'm Tori Gestner.

[00:02:58]That was Tori. We will ask the FBI for an update on the investigation into Gasser Property Management Incorporated.

[00:03:04]We also reached out to Gasser Property Management's listed owner, Emre Gasser, for a comment. We're waiting to hear back. The law will go into effect January 1st of 2027.