Pending Texas POA-HOA legislation for 2021

I heard about one of these on a local NPR show this morning, and while searching for it, I found this attorney blog that goes over Texas POA-HOA legislation. Since there are many Texas posters, I wanted to share the latest update: https://www.rmwbh.com/may-legislative-update-the-finish-line-approaches/

Some important bills making their ways through committee and might go the floor for a vote:

1) Ban POA/HOAs from restricting displays of religious symbols - could limit size and other aspects though;
2) Allow a single owner to request County Clerk to remove any discriminatory language in CCRs;
3) Prohibit Board members or their spouses from serving on Architecture Committees;
4) A owner's protest of a restriction violation would be conducted as a "mini-trial" within a POA/HOA meeting;
5) Allow a single owner to bring suit in a Justice of Peace court to remove a Board member for violating Chapter 209 of the Texas Property Code and/or for violating provisions of the Association's CCR;
6) Prohibit a POA/HOA from preventing an owner from putting up perimeter fencing for security reasons (this might lower property values with ugly fencing some paranoid people might install in my opinion.)

These bills have no recent updates but are still possible. I am listing them because they would cause large effects:

7) Texas Attorney General would set up a consumer's affairs department to cover POA/HOA complaints;
8) POA/HOAs would be required to adopt fine schedules for deed restriction violations.

Roger

Thanks for posting what you did.

If you are a board member, association member, or involved in managing property owner associations in Texas I recommend you join the nearest chapter of CAI--Community Association Institute. Doing so will provide you access to a great deal of information; you will also receive email on subjects such as you described when the Legislature is in session.

The lobbying arm, Texas Community Association Advocates, has been monitoring these bills, and others, since they were introduced. In the last month, TCAA has sent almost daily updates and requests to CAI members asking members contact their legislators to oppose the bills.

You did not cite some of the more onerous provisions of the bills which will increase expenses and overhead for Associations, especially smaller associations.

I support these two aspects of proposed legislation:

7) Texas Attorney General would set up a consumer's affairs department to cover POA/HOA complaints;
8) POA/HOAs would be required to adopt fine schedules for deed restriction violations. (I thought we had to do this as a result of the changes in the Property Code mandated by the Legislature in the 2011 session. Our client at the time spent about $3,000 developing required policies and processes including attorney review and filing documents with the County Clerk.)

One person’s comments

1 – this could get awkward because the Nazi symbol most of you are familiar with is also a religious symbol in the Hindu religion (check this link - https://www.hinduamerican.org/blog/10-things-you-need-to-know-about-the-swastika/) Just as the Nazis co-opted it, I can see people coming up with all sorts of symbols and say it’s part of their religion.

2 – this may be faster than getting the community to agree to remove discriminatory language (especially when you know there are people who really want to keep it)

3 – While I agree there could be a conflict of interest when board members and spouses serve on the same committees, I don’t think this requires a state law

4 – See my response to #3. On one hand, it might be fascinating to watch a HOA board and homeowner duke it out over a shed, fence, parking, etc. On the other, I can see this becoming really disruptive and getting in the way of regular association business that needs to be addressed.

5 – See my response to #3 (again) – yes, it takes a lot of work to rally together one’s neighbors and call for a special meeting to toss a board member, but ultimately I think that’s appropriate so everyone understands what’s being done and why. I see too many pissing matches ensuing between the Chief POAs (you know what I mean!) and board members who have the gall to actually do what the documents require them to do.

6 – Another concurrence with 3

(Doesn’t the Texas State Legislature have other things to worry about than this??? How about fixing the electrical grid so it doesn’t fail like it did earlier this year – in the middle of winter?)

7 – Our state AG handles some HOA complaints, but it’s limited in the type of action it can take and I know it takes a considerable shitshow for them to get involved. There’s nothing inherently wrong with the idea, but if they don’t establish what is and isn’t a matter for this consumer affairs department, they will get deluged with all types of complaints that probably shouldn’t be there.

8 – I really don’t have a problem with this one, although I would say fines should be limited to the actual expenses the HOA had to incur to resolve the problem and there may need to be a cap on how much could be charged. Any fines schedule should also include an appeals process and perhaps a provision for dispute resolution.

As for the bills Barbara mentioned:

SB 1588 - require HOAs to have a website with governing documents posted on it, cap resale certificate fees, and require HOAs to file management certificates and documents on file with the Texas Real Estate Commission.

You’re probably right about the money grab issue. I can’t comment on resale certificates because I don’t think they’re required in my state. As for the website, does this really have to be a state law? What if you have a teeny tiny HOA (under 15 homes)? Websites are nice in that you can put up information at once and update as needed, but someone needs to maintain it, and not every community will have someone willing to do that unless you pay them. If money’s already tight, that could be a problem.

Barbara also did a great job in summarizing what might happen with a consumer affairs office. I like your suggestion on providing resources to educate homeowners on HOAs, especially for first-time homebuyers. For that matter, how about requiring realtors to take a class or two on HOAs so they know what the hell they’re talking about instead of downplaying or ignoring them altogether?

Barbara

To add to your description of the Resale Certificate process, the MC is responsible for answering questions from the seller, buyer, both agents, the title company, lenders, inspectors, and anyone else involved in the sale. There is no way members of the Board are at all equipped to manage the process or respond to questions. We also complete documents regarding the Association for the lender if asked.

Our fee provides all the necessary documents to the title company and others and up to five hours of answering questions, email, mileage to and time spent at meetings, etc. Most sales go smoothly, some do not. We have spent 8.5 hours on a pending sale for an owner in one of our client associations, we bill at $90.00 per hour for time over the initial five hours.

If a buyer's inspection results in requests for repairs, we must then convene the Board to consider the repairs so they can make a decision to accept or deny the request. If they accept the request, we sometimes go into bid gathering and securing the services of contractors mode.

I agree with your comments and analyses regarding the legislation. CAI/TCAA has been very direct regarding the underlying motivation of the real estate industry in driving these bills.

We do condos at the present time but have managed HOAs in the past; we would not walk away from the opportunity to manage a small HOA of up to 50 homes. Except the one in which we reside. From that, we would run far and fast.

I believe you are correct, all the information I can find indicates the bills would affect Property Code 209 associations only, not condos. (Sigh of relief!!)

Texas allows up to $200 a day fines. The risk to me, even if one might prevail in court, is that without a fine schedule you might get some power hungry Board that issues such outrageous fines. There was an HOA, in Houston, in the news the last few years that did that, $200/day, over landscaping, and a 3 months battle turned into an $18K fine and the homeowner lost home over it.

our condominium association was formed pre 94 so we are governed by texas condo law 81.. not 82.
One of the glaring differences. under 81. the condo board members have no fiduciary duty obligation .

With CAI pushing it's members to oppose the changes in legislation, Does anyone have any information about who condo and home owners can contact to give support to these legislative changes.

Texas case law undoubtedly states a Texas corporation's directors owe a fiduciary duty to the corporation.