Senate Bill 2326, also known as House Bill 2338, amends Tennessee Code Annotated, Title 66, to establish new requirements for homeowners' associations (HOAs) regarding the maintenance of fidelity bonds. The bill introduces definitions for key terms such as "board of directors," "declaration," and "homeowners' association," clarifying the roles and responsibilities within these organizations.

Under the new provisions, any HOA that collects assessments for common expenses is mandated to obtain and maintain a blanket fidelity bond. This bond is intended to protect the HOA against losses due to theft or dishonesty by its officers, directors, employees, or managing agents. The required coverage must equal the reserve balances of the association plus one-fourth of the annual assessment income, with a minimum coverage amount set at $10,000. The bill specifies that either the board of directors or the managing agent can secure this bond on behalf of the HOA. The act is set to take effect on July 1, 2026.