Articles

Sweet Home Growth: HOAs and Housing Trends in Alabama 2025

By Aimee, Winegar, CMCA, AMS, LSM, PCAM

The tide is rolling in Alabama in 2025. From 2024 to 2025, Alabama has been ranked as the 7th most popular state for domestic migration within the United States, adding 26,000 residents in 2024, or 0.5% of its population (source: US Census Bureau). This is down slightly from the nearly 0.6% growth Alabama experienced in 2023, but still higher than 43 other states (source: Reventure). In 2025, it appears that analysts and developers are anticipating significant additional growth, particularly in the usual Huntsville/Montgomery/Mobile areas, but also in smaller towns and cities, as well.

The Alabama Association of Realtors has reported that Alabama’s new home building permits increased 10% between 2023 and 2024, and as of April, 2025, almost 1500 building permits for new single-family homes had been issued in the state since the start of the year, with almost all of them under construction already. This is a decrease from 2024, but remains an indicator of Alabama’s ongoing attractiveness for new residents. The Alabama Association of Realtors notes that construction and sales have been affected by national economic uncertainty, relatively high interest rates, and concerns about purchase costs. Nevertheless, the Alabama market appears to be stronger than many other states.

Per real estate professional Amy Brown, growth is spreading beyond the bigger Alabama cities because of Alabama’s beautiful landscapes and southern Alabama’s proximity to some of the world’s most beautiful beaches along the gulf coast.

What does all this have to do with professionals in the community association management industry? Brown reports, “As far as I can see, most new developments all have HOAs. Builders and homeowners seem to appreciate HOAs.”

As new construction proceeds to meet the needs and goals of Alabama’s residents, Brown says, “more neighborhoods are including pools and playgrounds in their HOAs. I do think people really gravitate towards neighborhood with pools.” She believes that in Alabama, “attitudes towards HOAs are definitely getting better. I think people realize that the HOA is what keeps these neighborhoods looking great year after year.”  Developers/builders are recognizing that HOAs can provide significant benefits to homebuyers – even those who swear that they will never live in an HOA.

For those of us who work in the HOA management industry, it is important to focus on the benefits that community associations bring to their residents. Consistent (but not dictatorial or unreasonable) standards enforcement, financial stability, and high quality maintenance for landscaping and community assets are the traits of a strong, desirable community. As professionals, our goal should always be to help residents – new or old, native Alabaman or fresh out of a northern state – feel welcome and happy to be a resident of a community association.

Aimee Winegar has worked in the community management industry for almost 40 years, and is now serving as the President of the Midwest Division of HOALiving (hoaliving.com).

Associations and Fraud

by Mark Cantey CPA - HOA Financial Solutions LLC CPA’s for Associations

                                                                                                                  
Far too often we have read the story of an embezzlement or theft involving a homeowner association and we may think; “How could this have happened- Wasn’t anyone watching the store?”   In some cases, it may be true; no one was watching.  But fraud, by definition, involves deception and people intent on wrongdoing don’t always make it easy for us.   So how do we reduce the risk of a bad actor harming our community for their own financial gain?   Fully addressing the issue is far beyond this post and remember there is always a cost/benefit to every prescription, but the following are some thoughts and steps to consider.

The Fraud Triangle
Good auditors are familiar with the Fraud Triangle, but anyone in leadership and management should also be acquainted with this idea as well.  The Fraud Triangle essentially says that if the following three key components are present in a fraudster’s situation- Pressure, Rationalization and Opportunity, the environment can be ripe for a fraud to occur. What do these terms mean in our context?  Let’s look at the first one-Pressure.  The person that has pressure, strong incentives or unmet desires in their mind or life, may be looking to come out from underneath this weight- whether real or perceived.  From bills to pay, greed or addiction, the person has pressure or an incentive to get money- no matter what.

Of course, we all have pressure in our lives, but the fraudster is different in how they may rationalize it.   So, they will move to Rationalization as the next factor they consider. They may rationalize that they deserve the money since they believe they are being underpaid. The organization doesn’t need the money in their mind, they think they will pay it back, or they just don’t think they’ll get caught. These can be some of the many irrational rationalizations a fraudster may consider. 

The last aspect of The Fraud Triangle is Opportunity.  This final component to the Triangle is different from the other two aspects in that as pressure and rationalization are within the mind of the embezzler, (something out of our control), the concept of opportunity relates to the business environment we are all working within.  Yes, we should be aware of apparent warning flags we may see with folks, but the financial working environment and effective internal controls should be established to reduce opportunities for the thief.  In the Association world, what does that look like?   The basic principle is two- fold; we should have more than one set of eyes on a transaction and secondly, we work to bring financial activity into the light for all involved to see. The following is not an exhaustive list but these ideas can help promote an environment with checks and balances, including promoting the principles of segregation of duties, thus reducing the opportunity for someone to commit fraud:

1. Each month, the Board Treasurer should review the bank statements and bank reconciliations, noting the activity and transactions, including bank debits. This includes operating and all investment accounts.
   
   
2. All bills expended for the month should be reviewed, even after the fact, comparing the amount expended with an invoice.
   
   
3. The bills expended for the month should be ratified and entered into the minutes of the Board meeting as approved- even after the fact.
   
   
4. Vendors of the Association should be familiar to the Board.   All vendors serve at the pleasure of the Board and their vendor file and profile should be available to the Treasurer at a minimum, when requested. 
   
   
5. A review each month of homeowner assessment write offs and adjustments, noting any abnormalities normal assessments charged and payments received.
   
   
6. The Association should consider adopting a “No gift policy”.   This policy simply states that managers and board members are not to receive any gifts or services from vendors.
   
   
7. The Board should discuss and establish a “tone at the top” philosophy of doing business.    This is an attitude of encouraging solid ethics and acting above approach and blameless in all we do.  It is an environment where it is ok to ask questions and it is also good to provide transparency.  Most of us who have served on a Board or managed properties, are aware of “institutional mistrust” that many outside of governance have about our or any organization.   Our job in leadership is to serve well, without being defensive of our responsibilities and to provide transparent, truthful data and let the facts speak for our actions.   Easier said than done when accusations fly, so we counter with transparent truth and clear processes.  It helps protect us from falsehoods as we strive to do the right thing-and from those that are looking to take advantage of dark opportunities.

There is always more that can be done to protect your Association, but these ideas, can be a good starting point.  Consider talking to your manager, accountant and attorney to formulate your approach and document your processes.

Disclaimer. The material and opinions in this blog and our website are not intended to be used as guidance or direction for any entity and the use of this blog does not establish a professional relationship with the author or any other entity. Always consult your own professional advisors who are familiar with your specific situation. The author does not in any way guarantee or warrant the accuracy, completeness, or usefulness of this blog and will not be held responsible for the content of this or any blog. The information is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice or services. As such, it should not be used as a substitute for consultation.

Flag Display Controversies Continue

By Steven F. Casey, Esq. - Jones Walker LLP

A recent news story is a reminder that flag display controversies continue to be an issue for community associations to address.  An Alabama woman appeared on “Fox & Friends” recently to complain that her neighborhood homeowner association has demanded that she remove her U.S. flag display.  (Alabama homeowner defies HOA request to remove flag pole: 'Old Glory is still waving' | Fox News).

The homeowner claimed to have sought Association permission to install a stand-alone flagpole in her front yard, but after waiting 3 days for a response, proceeded to have the structure installed without permission.  A few weeks later, a letter from her community association instructed her to remove the flagpole.  She has resisted, saying that she and her family are patriotic and wish to honor her family’s military service by flying the nation’s flag and the U.S. Army flag in this way.

The restrictive covenants for this particular community state very clearly that “[no] flag poles, other than those mounted on the home and no longer than four (4) feet shall be erected on a Residence without the prior written consent of the ARC.”  That particular association seems, therefore, to have a reasonable basis for its position.

In addition to an association’s covenants, of course, there are statutory provisions that must be considered.  The Freedom to Display the American Flag Act, Pub.L. No. 109-243, 120 Stat. 572 (2006), restricts the ability of community associations to prohibit their members from flying the U.S. flag.  Under the Act, however, HOAs are permitted to place reasonable restrictions on the time, place, and manner of the display to protect a “substantial interest of the association.”  Whether an association’s restrictions on the flying of the U. S. flag are “reasonable” or not, and whether those restrictions serve a “substantial interest of the association,” of course, are matters of judgment.  If an association’s statement of policy is challenged in court, it is likely that a local, elected, circuit court judge will be the one to make that determination.

While there is no way to predict the outcome of such litigation with complete accuracy, judicial decisions from a few such cases give us some guidance.  Generally, the courts have viewed restrictions that moderate the size of U. S. flags displayed, as well as their placement on or near homes, have been upheld.  Such approved guidelines for the display of our nation’s flag most often seem to have uniformity of display within a neighborhood as the main goal.

Even if a policy is sound and complies with the law, an owner who believes that the restrictions in the HOA policy are unreasonable could still file suit and cause the Association to spend thousands of dollars litigating the issue.

Earlier this year, a bill providing similar restrictions on an HOA’s ability to prohibit the flying of the Alabama state flag, was introduced in the Alabama legislature.  I have not yet determined whether that legislation was ever passed.  The terms, however, were essentially the same as the federal legislation referenced herein.

Restrictions on the display of other flags (political, seasonal, sports-related, etc.) are easier to support and do not violate any widespread legal principles.  Although some homeowners have challenged such restrictions on free speech grounds, courts have generally held that since HOAs are not governmental entities, they are not subject to such arguments, as long as the display restrictions don’t favor specific political positions over another.

Some associations prohibit sports-related flags, while some allow them.  Some associations allow them with restrictions, such as game day display only, but those kinds of restrictions, while appearing to be reasonable and strike a good balance, often present enforcement challenges.  The same is true with seasonal flags.

In light of the potential controversy over this issue, it is wise to ensure that your association’s governing documents state your flag policy clearly and that you enforce them uniformly.  No matter how hard you try, however, you may attract unwanted media attention.  If that happens, seek legal assistance as needed, early in the process.