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LaskaS (Texas)
Posts: 1,025
Posted:
Hi, I was under the impression that texas hoa's can not suspend the voting rights of owners even if they are delinquent in their assessments.

I was double checking with our management company(basically the accounting company for us. but the owner does have full management contracts with about 100 associations)
The Management Company told me that that texas amendments affecting texas hoa in 2015 which specifically does not allow voting rights of delinquent members to suspended. does not in fact apply to condominiums. Our condominium is governed by texas 81. not 82.(texas uniform condominium act)
The owner of the Management Company told me specifically this issue came up often. The amendment that prevents hoa's from restricting an owners right to vote applies to single family homes and townhomes only.
He also said that our documents actually had a provision that did allow suspension of voting right for an owner who was delinquent on their dues to the HOA.

Ok.. My question is.. IF the above is true (we are double checking tomorrow).. if a delinquent owner is prohibited from voting. Wouldn't it follow that they can also not participate in the elections. I.E. They can't run for a board seat.

I know we all talked about this issue a couple weeks ago. but the information I had was different. I'm asking.. If the above info that I was told is in fact true.. I am hoping the same delinquent owners that can't vote, can't run for the board...

I'm not a lawyer, I know many of you are... hoping to get some expertise here. Again,, if the condo doesn't have a right to supsend a delinquent owners right to vote..it's a moot point. So please don't take your time to explain why condos can't suspend a members right to vote. We are finding this out directly from our hoa attorney. ( as you all and I have always said.. refer to your own documents)

I am looking for insight into whether a suspension of the members voting rights also includes running for a seat. .. another angle would be,, if the member has their voting rights suspended, they can't vote as a board member either, so it would defeat the purpose of being a board member. if that makes sense.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
It is what your documents say. Each HOA is separate entities. So what does your By-laws or CC&R's say?

Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posted:
As Melissa said, check your governing documents - they'll discuss voting rights.

It makes sense that condos would be handed differently from HOAs since condos have much more common area that would be affected if people were behind on assessments, such as the roof over your head.

For what it's worth, my (condo) Declaration also says that voting rights must be suspended for delinquent accounts. On the other hand, our bylaws say nothing about delinquent owners being unable to run for the board. Personally I would not vote for someone who I knew was behind on assessments - the problem is finding out who those folks are in states that keep such information confidential.
BarbaraT1 (Texas)
Posts: 821
Posted:
Your attorney is correct. The portions of the Texas property code that protect an owners right to vote and serve on the board regardless of delinquency status only applies to single family HOAs (which includes townhomes).

Condos are governed by the Texas Uniform Condominium Act, the full text of which you should be able to find online. I am not familiar with chapter and verse of TUCA because I stopped managing condos a long time ago - they are frankly, the worst.

BenA2 (Texas)
Posts: 1,273
Posted:
The confusion may come from Chapter 209, The Texas Residential Property Owners Protection Act, which says a POA/HOA cannot suspend someone from voting for being delinquent, however, that section does NOT apply to Condo Associations. I don't know of any similar law that applies to condos but I'm not very familiar with condo association laws in Texas.

I would not assume that just because you can suspend someone's voting rights that you can suspend their right to run for the board. They are two different things. Unless someone can point to a specific code that gives the answer, I would recommend speaking to an attorney.
BenA2 (Texas)
Posts: 1,273
Posted:
Quote:
Posted By BarbaraT1 on 03/02/2020 7:34 AM
Your attorney is correct. The portions of the Texas property code that protect an owners right to vote and serve on the board regardless of delinquency status only applies to single family HOAs (which includes townhomes).

You are correct except that townhomes also fall under condominiums.
BillH10 (Texas)
Posts: 1,217
Posted:
Laska

It would be helpful to readers, and probably yourself, if you would consistently and accurately use the terms "HOA" and "condominium association".

Your property, as I understand it, is located in a condominium association, not a homeowners association, even though the term "homeowners association" may be incorporated into the name of the association.

As you have found, a homeowners association, as defined in the bylaws of the association, is governed by Section 209 of the Texas Property Code. Do not assume the actions of the Legislature in 2011 in particular, and in 2013 and 2015 as regards homeowners associations automatically apply to condominium regimes--although, frankly, it would be nice if some of those changes applied to condominiums also.

A condominium association, as defined in its bylaws, is governed by Texas Property Code Chapter 81 (covers condominium regimes dated prior to January 1, 1994--with some caveats) or Texas Property Code Chapter 82, also known as the Texas Uniform Condominium Act or TUCA.

The distinctions are important, as you have discovered. However, beware: some portions of Chapter 82/TUCA retroactively apply to Chapter 81 Condominium Regimes, even if the Chapter 81 covered regime has not opted into a Chapter 82 Condominium Regime. Also important is a few portions of Section 209 of the Property Code also apply to condominium regimes as defined by the Legislature.

You may wish to obtain a copy of Cagle's "Texas Homeowners Association Law". It is most helpful.
AugustinD
Posts: 5,144
Posted:
Nice post, BillH10.

LaskaS, from Texas Property Code Chapter 82 applicable to your condominium? For one thing, was your condo's declaration recorded in 1994 or later? See the applicability section at https://statutes.capitol.texas.gov/Docs/PR/htm/PR.82.htm

If Chapter 82 applies to LaskaS's condominium, then what is leaping out at me is the following:

Section 82.103
"(b) The board may not act on behalf of the association to amend the declaration except as permitted by this chapter, to terminate the condominium, to elect members of the board, or to determine the qualifications, powers and duties, or terms of office of board members. The board may fill a vacancy in its membership for the unexpired portion of a term."

The way I read this is: 'The board may not act on behalf of the association... to determine the qualifications, powers and duties, or terms of office of board members. ... ' Instead, the Bylaws determine the qualifications et cetera.

Quote:
Posted By LaskaS on 03/02/2020 2:00 AM
I am looking for insight into whether a suspension of the members voting rights also includes running for a seat. .. another angle would be,, if the member has their voting rights suspended, they can't vote as a board member either, so it would defeat the purpose of being a board member. if that makes sense.
LaskaS, as I read Chapter 82, I think it's clear enough that only the 'voting privileges of a member' may be suspended. I think the statute distinguishes between a member's voting privileges and a director's voting privileges. Or at least this is a fair interpretation of same.
AugustinD
Posts: 5,144
Posted:
In 2018 LaskaS posted, "our bylaws and declaration are pre 1994." From reading the applicability section for Chapter 82, it appears 82.103 (which I cited above) does not apply to LaskaS's condo.

Still, let me assume LaskaS's Bylaws are silent about whether a person can serve on the board when she or he is delinquent in paying the assessment. In the latter case, in Texas I do not think the board can lawfully disqualify someone who is delinquent from running for and serving on the board.

I think the Texas nonprofit corporation act tends to point this way, too: "Sec. 22.203. BOARD MEMBER ELIGIBILITY REQUIREMENTS. A director of a corporation is not required to be a resident of this state or a member of the corporation unless the certificate of formation or a bylaw of the corporation imposes that requirement. The certificate of formation or bylaws may prescribe other qualifications for directors."

This is not a slam dunk. Instead, it is the judgment I would make if I were on LaskaS's board.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By BarbaraT1 on 03/02/2020 7:34 AM
I am not familiar with chapter and verse of TUCA because I stopped managing condos a long time ago - they are frankly, the worst.
Why do you think condos are so terrible vis-a-vis non-condos?
CathyA3 (Ohio)
Posts: 6,299
Posted:
I'm also interested in Barbara's take on condos.

From the perspective of someone who has lived in condos, I see the following:

* Higher proportion of common elements vs. personal property plus higher density makes individual owners more at the mercy of neighbors' behavior (vis-à-vis delinquent assessments, nuisance behavior, disregard for the rules, etc.).

* Higher rate of turnover, with people moving in and out constantly. This leads to a constant stream of clueless newbies and people who are less invested in their homes since they will be leaving soon.

* Higher rate of investor-owned units, with all of the issues that come with it.

* A more complicated form of ownership compared with single family homes in an HOA, which is ironic since condos seem to attract first-time buyers.

BillH10 (Texas)
Posts: 1,217
Posted:
I'm interested in Barbara's comments as well as she spoke from the perspective of managing condominiums and not so much from the perspective of residing in one.

As I have indicated previously, we manage small condominium associations without significant common area amenities: we will not consider a client with a pool, we may consider one with a club/meeting room. We also will not consider a client with an elevator. We modified our business plan to this approach after managing Section 209 HOAs for some years.

So, Barbara, please share your thoughts.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By BillH10 on 03/02/2020 8:57 AM
we manage small condominium associations without significant common area amenities: we will not consider a client with a pool, we may consider one with a club/meeting room. We also will not consider a client with an elevator. We modified our business plan to this approach after managing Section 209 HOAs for some years.
I would likewise appreciate a bit of elaboration on why pools, meeting rooms and elevators are anathema to your management company.

CathyA3, your list impresses.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By AugustinD on 03/02/2020 8:19 AM
LaskaS, from Texas Property Code Chapter 82 applicable to your condominium?
Doh on me. LaskaS said in her first post that Ch. 81 applies. Some sections of Ch. 82 apply to Ch. 81 condos, but apparently not for the topic under discussion here.
BillH10 (Texas)
Posts: 1,217
Posted:
Augustin

First, please understand we have developed a market niche for managing condominiums, partially by accident.

We have found the gentrification taking place slightly north of downtown Dallas is resulting in the removal of hundreds of 1930s/40s single family homes on fairly deep lots; those homes are being replaced by simple condominium buildings with 6-15 units (if two lots are consolidated). Typically the units have two living floors above a garage, some have a bedroom on the ground level adjacent to the garage.

As such, no elevators are required. To maximize profit for the developer, there is no room for pools. These are new buildings, with few to no maintenance issues. With few exceptions each unit has its own two vehicle enclosed garage. Parking issues are minimal. Most of the owners are new to condominium living and have no idea what they have gotten themselves into.

These are generally young professionals, they have no desire to roll up their sleeves and become involved in property management issues. We have an extensive corporate background, speak their language, and take care of business for them.

We have lived and served on boards in HOAs with pools, we have lived in residential properties with pools. We have one now. We are familiar with the overall maintenance regime and costs, and do not wish to manage the constant pool service, maintenance, repairs, and related issues. After receiving incessant calls as a board president regarding trespassers, who did what to whom, who left their lunch on a table, furniture in the pool, and the complaints about incessant Marco Polo, we scratched properties with pools off our list.

Elevators are complex, their presence suggests a condominium association larger than we wish to manage. We prefer to stay below 25 units. Also, we have zero experience managing a property with an elevator.

BarbaraT1 (Texas)
Posts: 821
Posted:
Quote:
Posted By CathyA3 on 03/02/2020 8:51 AM
I'm also interested in Barbara's take on condos.

From the perspective of someone who has lived in condos, I see the following:

* Higher proportion of common elements vs. personal property plus higher density makes individual owners more at the mercy of neighbors' behavior (vis-à-vis delinquent assessments, nuisance behavior, disregard for the rules, etc.).

* Higher rate of turnover, with people moving in and out constantly. This leads to a constant stream of clueless newbies and people who are less invested in their homes since they will be leaving soon.

* Higher rate of investor-owned units, with all of the issues that come with it.

* A more complicated form of ownership compared with single family homes in an HOA, which is ironic since condos seem to attract first-time buyers.


Pretty much this, yes.

I had a lo-o-o-ong answer written out and the board ate it, so I'll do the shorter version which is everything above AND:

In my experience, condos are chronically underfunded, and as a result, chronically poorly maintained. Board members never like raising dues or levying special assessments but condo boards seem especially loathe to do this. Especially when you get an investor on the board who owns multiple units.

And the deferred maintenance in condos has much higher stakes! Staircases, balconies, fire suppression sprinklers, foundations!

Monthly dues means an ongoing collection cycle. You get one owner caught up one month and a new owner is late the next month.

And frankly, condos are very vulnerable to corruption. The most common method of embezzling from an HOA is through maintenance. There are three main schemes: using HOA funds to repair an owner's unit, having the vendor pad an invoice and give a kickback to the board/manager or just plain creating fake companies that do imaginary work on the property. These are all much easier to do with a condo than with a single family HOA because condos have so much more maintenance, a wider variety of maintenance, and the line between owner's property and HOA property is finer. A typical SFH community with no amentieis is going to have five bills a month - anything unusual will be instantly spotted. Condos have an ever changing list of maintenance needs, you can slip just about anything in there.

And in Texas,condo owners have few protections, since condos are not subject to 209. Condo boards don't have to give notice of their meetings and they can use non-judicial foreclosure to collect delinquencies.

In every HOA there are owners who do not understand that the association's only source of income is assessments, that the smaller the community the larger the assessment because MATH. And there are always owners who want to pay nothing but have the property kept pristine by... I guess magic? And who want the freedom to do whatever they want because America! but their neighbors can't make any noise after 6pm. That happens everywhere. But somehow it happens times ten in a condo.

AugustinD
Posts: 5,144
Posted:
Wow. Nice supplement to CathyA3's post.
MarkW18
Posts: 1,290
Posted:
Couldn't agree with Barbara more.
KerryL1 (California)
Posts: 14,550
Posted:
Jeez, I had to wade through the condo-yak--a topic for its own thread??-- to see if any related to Laska's question.

There is no relationship between owners being unable to vote because they're behind of dues and someone running to be a director or being a director who's behind on their dues. It does not necessarily "follow." It may seem like "common sense," and I wouldn't want such a person on my board either, but we must look to our governing documents and, in this, case probably bylaws.

It's not unusual to get Owners rights to vote and directors rights--as directors-- to vote mixed up.

Unless they specify disqualifications to seek or continue board service, such a person can try to become or continue to be a director. So, Laska, what do yours say?

Your know, Laska? With the large issues facing your HOA, you do seem to focus on small matters. I confess to having the same tendencies. I seem to notice or "see" everything. These little things can distract me. I'm, in other words, "hyper-observant." It takes a lot of self-discipline to see & assess the big forest and ignore most little trees.

LaskaS (Texas)
Posts: 1,025
Posted:
wow. thank you all for your input.
Augustin , how in the world did you find my very first post. I can't even find it. LOL

Yes we are governed by 81 not 82. as we are pre 1994.

I will for sure use condo association from now on.

I know that our documents say somewhere that a member must be in good standing(account paid up) in order to be eligible to vote.

It doesn't really make sense that someone would be prevented from voting, but it's ok to serve on the board. Where they would be voting on things that affect the condo association. KWIM

However, as I've learned, it all depends on what the documents say. What I've also learned is that an many bylaws and declarations aren't as specific as they could be.

I was hoping to find a way to argue my point. That if a owner is prevented from voting in the annual elections. It seems to follow that could be also interpreted as can not participate in the annual elections. If I'm hoping to can a way to argue that convincingly. If our documents are silent to the specific issue of running for a board, and there is no state law that specifically covers condominiums pre 1994on this specific detail. But our documents do require a member to be in good standing to vote in the annual elections.

The potential board member in question would not get enough votes. however. There were 5 seats up for election and 5 people submitted their bios. So unless I can find some kind of precedent for what i'm saying. I guess he gets to be on the board. I'm just hoping I can find something.

I am continually amazed at how our coa documents are silent on many issues. This fact allows for more than one legitimate interpretation to be argued. I'm not going to argue something that I can't win. But If i can find precedent or a convincing argument that running for the board in the annual election , like voting in the annual election, can be considered participating.

I haven't been able to find anything in texas law or the cases i've searched.. There are plenty in other states. But there are none that I can find where a court interprets a condo's documents that are silent on the running for the board issue., to mean that running is considered the same thing as voting..i.e. the restriction is supposed to limit a delinquent owners participation in the annual meeting after all.
LaskaS (Texas)
Posts: 1,025
Posted:
What I'm trying to argue is..that while texas does not prohibit serving on the board if an owner is delinquent. I.e. an owner who is delinquent can continue to serve on a board through their term.

What I do want to try and argue is that

since in our condo's only bio's submitted by a certain date are eligible to be placed on the ballot. Submitting a bio is participating in the election, just like voting.

Does this make sense.. or do i need to give it up..lol
KerryL1 (California)
Posts: 14,550
Posted:
I'm not going to repeat my above Laska, but despite what's logical or sensible, your docs prevail. They are silent on that "qualification, because there IS no such qualification. If it's NOT stated, it is meant to be silent.

The Bylaws will not say: It is all right to run if you are a woman, if you are late in your dues, if you disagree with the current board, blah, blah, blah.

Give it up.
KerryL1 (California)
Posts: 14,550
Posted:
I'm not going to repeat my above Laska, but despite what's logical or sensible, your docs prevail. They are silent on that "qualification, because there IS no such qualification. If it's NOT stated, it is meant to be silent.

The Bylaws will not say: It is all right to run if you are a woman, if you are late in your dues, if you disagree with the current board, blah, blah, blah.

Give it up.
LaskaS (Texas)
Posts: 1,025
Posted:
ok kerry, thanks for the explanation. I was afraid i was reaching.

Kerry, It might seem like this is a small issue. However. the reason I am asking is because the owner in question was a board members when all the money was paid out without work having actually been done. While he wasn't one of the boar members that was perpetuating the fraud, I still believe that he failed the hoa and owners and his responsibilities by not insisting that the bylaws be followed with regarding to hiring contractors. getting bids.. transparency . etc. .. In addition, he does absolutely nothing to help the current board uncover exactly where all the money went, how it happened etc.

I really am thinking big picture. I want the board to have internal controls in place so that after I leave the board, there will be clear procedures put in place for all boards to follow. . I don't see how a member who was front and center in the last board where no one stopped the money from being paid out. No one verified that a certain percentage of the work had been completed BEFORE the president falsified board approval and paid out the money. Noone confronted her when it was revealed that they didn't have any meetings. they hadn't kept any minutes. They were acting outside their legal authority..

anway,, thank you for your explanation regarding being able to serve on the board is not the same as the restriction from voting for the board.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
That is not what bylaws do.
LaskaS (Texas)
Posts: 1,025
Posted:
george21, I do often interchange bylaws with declaration when i'm typing. I do know the difference. Thanks for reminding me
SheliaH (Indiana)
Posts: 6,964
Posted:
Dang it, Barbara and Cathy sound like they live in my community and I'm not in Texas! We're a townhouse community.

This is why I feel sorry for Texas homeowners regarding this delinquency business. As my community's former treasurer, nothing irked me more than people who didn't pay their fair share and then the association had to spend limited resources chasing the money! Meanwhile, everyone else had to see their assessments go up - not because of inflation (although that was a part of it), but because we still had to care for the entire community, so the payers wound up subsidizing those who didn't.

If you're a homeowner in a HOA community and want to have some say in how things are run, you must (1) pay your assessments in full and on time and (2) take the time to read board meeting minutes, your documents and the annual budget and (3) attend a few meetings once in awhile (at least the annual) so you can hear what's going on and speak your piece. Don't want to pay assessments? Go live somewhere else where they aren't required. Indiana is backwards in several ways, but thank goodness we don't have a statute like this one.

As for investor owners, well, that's another conversation that no one has time for....

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JanetB2 (Colorado)
Posts: 4,219
Posted:
There are potentially two major areas in most states where owners should not and in most cases cannot be denied voting rights. 1) Voting on documents which will be attached to everyone’s property such as CCR revisions and 2) Running of the HOA BOD of Directors.

I would contend NO you cannot prevent anyone from running for a BOD position. Mainly per: https://codes.findlaw.com/tx/property-code/prop-sect-209-00591.html

(a) Except as provided by this section, a provision in a dedicatory instrument that restricts a property owner's right to run for a position on the board of the property owners' association is void.

The exception in TX appears to be if an individual has been convicted of certain Felony / Crimes:

(b) If a board is presented with written, documented evidence from a database or other record maintained by a governmental law enforcement authority that a board member was convicted of a felony or crime involving moral turpitude not more than 20 years before the date the board is presented with the evidence, the board member is immediately ineligible to serve on the board of the property owners' association, automatically considered removed from the board, and prohibited from future service on the board.

LaskaS (Texas)
Posts: 1,025
Posted:
janet, that doesn't apply to condominiums in texas. I believe condominiums are allowed to have specifications and requirements our governing documents.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Single family homes are also allowed to have specifications in their governing documents also. If that same provision is not in condominiums yet you can bet will be in near future. Keep in mind the reason most states do not allow for example to not allow deliquent owners to be excluded from voting on CCR changes because in most states it is against the law to attach documents to anyone’s property titles without their knowledge and can violate other areas of law such as Real Estate Fraud. Yep laws which are outside the HOA or Condiminum Laws. Some states such as mine while has a different condominium section for additional statutes, that section is also governed by certain sections which pertain to single family homes and all HOA’s generally.

To get a definite answer you need to hire an attorney who knows your HOA/Condominum Laws and your other Real Estate Statutes.

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