Disconnection of Electric Service by Texas HOA

Started by JaredC • 19 replies • 1029 views

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JaredC (Texas)
Posts: 264

Posted:

I sent this Email to the Texas PUC and their response was "we are unable to offer interpretation of substantive rules or state law". Sigh, thanks for nothing. So now I'm asking y'all. :-)

I live in a small HOA consisting of 24 townhomes. There is one master electric meter between Centerpoint Energy and all 24 units. Each of our 24 units is sub-metered but at the end of the day the HOA is responsible to pay the entire electric bill. My question is this: Does our HOA have the right to disconnect electric service to individual homeowners who are delinquent?

I have done my best to research this issue but I’m lost. TPC 92.008 talks about landlords but not HOA’s. PUC code 25.141(e)(4) refers us to 25.29(j). It would seem the term “Electric Utility” ,from 25.29(j), would apply in our situation per the definition provided by 25.5(41). In my opinion I interpret this to say “Yes, an HOA can disconnect electric service according to the law set forth via 25.29(j)” however that refers to an “apartment complex” for which there is no definition given by 25.5. In other law I see where an “Apartment complex” is similar to our situation of a townhome HOA but… wow…. It’s confusing.

So basically homeowners pay the HOA and the HOA pays the electric company.

SheliaH (Indiana)
Posts: 6,964

Posted:

We aren't attorneys either, so if you want to know, you'll have to talk to a private attorney (it's not a good idea to get legal advice off the internet). If you're on the board, this type of stuff should be reviewed with your association attorney.

That said, if the electricity is paid the way you describe, the HOA may have a right to cut you off for non-payment, but because we're talking about a necessary utility, it may not be that simple.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,550

Posted:

I agree with Sheila.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By SheliaH on 07/20/2018 10:13 AM
We aren't attorneys either, so if you want to know, you'll have to talk to a private attorney (it's not a good idea to get legal advice off the internet). If you're on the board, this type of stuff should be reviewed with your association attorney.

That said, if the electricity is paid the way you describe, the HOA may have a right to cut you off for non-payment, but because we're talking about a necessary utility, it may not be that simple.

Would the utility company shut off service and do they have the authority to do so. The answer is YES. Why can't the HOA?

GeorgeS21 (Florida)
Posts: 3,808

Posted:

I'll bet there is something in writing that describes this circumstance - since it is pretty darn likely to occur.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By RichardP13 on 07/20/2018 11:45 AM

Would the utility company shut off service and do they have the authority to do so. The answer is YES. Why can't the HOA?

There is a different contract directly with the electric company than an HOA, so I wouldn't use that as a guide. We cannot shut off the water to units that are delinquent. Our docs do not have any such provision. I want to say it wouldn't be legal, but I don't have a source for that. All we can do is fine and lien.

RichardP13 (California)
Posts: 3,868

Posted:

If it is in the CCRs, then it would be legal.

BillH10 (Texas)
Posts: 1,217

Posted:

Jennifer, I don't know where you are in Texas, we are in the Dallas Metroplex with now seven or eight days in excess of 100 degrees, our home weather station indicated 111 yesterday and today.

Given the temperatures the last few days which are forecast to continue, I would suggest, legal or not, this would not be a good time to turn off electricity because of a delinquent account. You know the publicity and criticism would be blistering.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By JaredC on 07/20/2018 8:35 AM
I sent this Email to the Texas PUC and their response was "we are unable to offer interpretation of substantive rules or state law". Sigh, thanks for nothing. So now I'm asking y'all. :-)

I live in a small HOA consisting of 24 townhomes. There is one master electric meter between Centerpoint Energy and all 24 units. Each of our 24 units is sub-metered but at the end of the day the HOA is responsible to pay the entire electric bill. My question is this: Does our HOA have the right to disconnect electric service to individual homeowners who are delinquent?

I have done my best to research this issue but I’m lost. TPC 92.008 talks about landlords but not HOA’s. PUC code 25.141(e)(4) refers us to 25.29(j). It would seem the term “Electric Utility” ,from 25.29(j), would apply in our situation per the definition provided by 25.5(41). In my opinion I interpret this to say “Yes, an HOA can disconnect electric service according to the law set forth via 25.29(j)” however that refers to an “apartment complex” for which there is no definition given by 25.5. In other law I see where an “Apartment complex” is similar to our situation of a townhome HOA but… wow…. It’s confusing.

So basically homeowners pay the HOA and the HOA pays the electric company.

Jared, legally individually owned townhomes are in no way similar to apartment complexes, to save you some time looking through laws that govern apartment complexes or anything related to renting vs home ownership in an association. Section 209 is what is going to govern your HOA.

I find nothing regarding shutting off any utilities. You will want to look at your Declaration and by-laws as Richard said. If it's not in there, the HOA can't do it. I would venture to say it would be atypical if your docs prescribed for such. The norm is late fees and interest leading to a lien, possible foreclosure, possible restriction on use of common elements, but not any utilities cut off.

Typically that is something that the HOA has to 'suck up' while awaiting payment.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Our HOA our CC&R's had we could shut off water to non-payers. However, we have since changed to separate water meters. As for electricity, it may be something along the lines of "health and welfare" situation. Which there may be laws against. The HOA if not written in their documents, should follow the lien/foreclosure process instead.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Our CCRs did and we pulled the water meters until paid. There are two restrictions, seniors and infants.

KerryL1 (California)
Posts: 14,550

Posted:

Jared, it looks like it's very, very rare that the ability to shut off water or other utilities is in the CC&Rs. Excepting homes with infants & seniors seems really vague: who's an "infant?" a "senior?" And what about invalids, etc. There are many classes of humans who'd suffer a lot if without electricity. And we know that some delinquencies are due to tragic circumstances.

I doubt any HOA would want to amend their CC&Rs to shut off these service--what about electricity for heat in the winter as I had in NC? Also had electric water heaters--so no hot water??? Yes, ol' duke Power had a near monopoly. One HOA in CA seems an anomaly and not anything we can learn from.

Now if the HOA pays for cable TV, that might be a different story. . .

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By KerryL1 on 07/20/2018 4:53 PM
Jared, it looks like it's very, very rare that the ability to shut off water or other utilities is in the CC&Rs. Excepting homes with infants & seniors seems really vague: who's an "infant?" a "senior?" And what about invalids, etc. There are many classes of humans who'd suffer a lot if without electricity. And we know that some delinquencies are due to tragic circumstances.

I doubt any HOA would want to amend their CC&Rs to shut off these service--what about electricity for heat in the winter as I had in NC? Also had electric water heaters--so no hot water??? Yes, ol' duke Power had a near monopoly. One HOA in CA seems an anomaly and not anything we can learn from.

Now if the HOA pays for cable TV, that might be a different story. . .

You would be very surprised how fast people pay when they have no water.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

From the California Public Utility Commission:

Utility must extend payment options to a residential customer if termination of service would: – Life threatening to a customer or property resident (certified by doctor, nurse, social worker) – Customer is willing to enter into payment arrangements

KerryL1 (California)
Posts: 14,550

Posted:

That's the 'utility," Richard, in CA. What about an HOA in CA or TX?

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By KerryL1 on 07/20/2018 6:05 PM
That's the 'utility," Richard, in CA. What about an HOA in CA or TX?

You said senior or infant was vague. I went to the PUC and got you an explanation.

I have never heard of of electricity sub metered and the HOA was responsible. Water yes. We had water shutoff in our CCRs and Cost Sharing Agreement as we were attached to another HOA and our water bills were $100K monthly. I am sure other HOA in California have some similar set-up, especially with a specific developer.

JenniferG11 (Texas)
Posts: 667

Posted:

Quote:

Posted By BillH10 on 07/20/2018 3:38 PM
Jennifer, I don't know where you are in Texas, we are in the Dallas Metroplex with now seven or eight days in excess of 100 degrees, our home weather station indicated 111 yesterday and today.

Given the temperatures the last few days which are forecast to continue, I would suggest, legal or not, this would not be a good time to turn off electricity because of a delinquent account. You know the publicity and criticism would be blistering.

I am in DFW and I agree. I can see the news stations now. 'North Texas Homeowner in a fight with the HOA for electricity'.

Since there are individual meters, it really is best if the electricity bills are separate. Then the association is not absorbing costs from delinquent homeowners. This way really favors a delinquent homeowner as they get free electricity too.

Conversely, IF the docs say it can be shut off, which I can find no mention of online for Texas, I would, as a homeowner delinquent due to financial issues, really want to be able to pay my electricity separate, and keep it on rather than risk going w/o while I catch up on the much larger debt of townhome assessments.

JenniferG11 (Texas)
Posts: 667

Posted:

Water is common to be shared bill in Condos in Texas. Again, I can find no mention of shutting that off either in Texas. All google searches come up blank for Texas, though other states pop up. Arizona allows no utility to be shut off. GA allows after a process, $750 or more behind, with a lien filed. Some other state, a guy let them turn off his water and still refused to pay. He has a protest issue, so he is having water delivered, LOL. What a pain, he must really feel angry with them.

MarkM19 (Texas)
Posts: 1,459

Posted:

Richard, I love the shutting off the water idea. I can't remember where I heard or read about an HOA that is in control of the water lowering the water pressure to a dribble. They still have water but forget about showers or other daily activities. The board has a fiduciary duty to do everything in there power to collect the dues and maintain the HOA.

I have also heard of a large association near Sacramento that has the primary contract with the Cable provider Comcast. They pull the plug on your TV and Internet service when you are behind on dues which hardly happens to them anymore.

JaredC (Texas)
Posts: 264

Posted:

Yeah, we're governed by 209 and our covenants were created almost 40 years ago. They do allow for shutoff of utilities however so much in our covenants is irrelevant due to changes in law. This utility thing is something that is much more of a gray area and every few years I recheck the laws and they seem to have changed back into our favor. I have a friend in another HOA where they decided to start shutting off water just last week but they quoted TPC 204 and 209 which seems like a bunch of BS to me since neither mentions anything about the subject. That leaves us only with PUC rules to go by.

Since no one (including myself) can give any definitive answers I think the best thing to do is to pay for an opinion from an HOA attorney. I was just someone in an HOA in Texas could give some better insight. No worries. Thanks!

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