new "STR" rules

So my ROA (Austin, TX, ~600 SFH) has an Annual Meeting election on June 25th. Today we got word that there is a Special Meeting on June 23rd. The agenda is

Agenda
1.Call to Order
2.Confirmation of Quorum
3.Vote on Amendment of Rules and Regulations
a)Cameras
b)Fencing
c)One Dwelling (home) per Lot
d)Leasing Restrictions
4.Vote on Camera Bids
5.Adjournment

Note there is not owner comment time allocated.

The Leasing Restriction are probably the most "unusual" item:

LEASING RESTRICTIONS
I. Single Family Residential Use Only:
Residential lots may be used, including leased, only for single-family residential use.
Single-family use means use by a group of persons related by blood, marriage or adoption. For
example, rental of a home as a boarding house or other housing for multiple unrelated individuals
is not authorized².

1.1 DEFINITION OF LEASING. A Lot (Lot includes the Lot and all improvements on it) is deemed
“leased,” and its occupants deemed “tenants,” for purposes of this rule and other leasing-related
provisions in the Declaration and the other documents, except when: (i) the Lot is occupied by the
Lot owner and/or a person immediately related to the owner by blood, marriage or adoption³, (ii)
the Lot is vacant, or (iii) title to the Lot is held by a corporation, trust, partnership, or other
legal entity, with the primary purpose of providing occupancy to the current occupant. This
definition applies irrespective of whether there is a written agreement between the Lot owner and
the occupant(s) or whether any financial consideration has been provided for the right of
occupancy. The Association may in the sole discretion of the Board require proof of familial
relation between a Lot owner and occupant, in which case owners must provide such proof in a form
sufficient in the discretion of the Board.
In calculating occupancy, lots are counted uniformly regardless of size. A person is considered a
tenant for all purposes under these rules (including recommended background checks) if that person
stays overnight on the property more than 7 days in any month. Presence on the property at any time
between 11:00 pm and 6:00 am will be considered an overnight stay.

1.2 GENERAL LEASE CONDITIONS. The leasing of Lots is subject to the following general
conditions:

(1) Minimum lease term 30 days. No Lot may be rented for hotel or transient purposes or for an
initial lease term of less than 30 days. If a tenant fails to fulfill the lease term (moves out
early), the property may not be re-occupied by the owner or another tenant until the end of the
lease term without prior approval of the Board, and any replacement lease must be in compliance
with this rule. This is to prevent a situation for example where a Lot is leased “for 30 days” but
in reality is leased for the weekend and the tenant “leaves early” and a lease with another tenant
is then signed, or the owner moves back in. Rental rates must be reasonably consistent with market
rent. For example, a home may not be leased “for thirty days” but the rental amount consistent with
a weekend rental rate.
(2) Advertising. No Lot Owner may advertise the lease of any Lot for a term of less than the
minimum lease term. All advertisements for the lease of a Lot must clearly state that the minimum
lease term required by this rule (or any longer term the Owner wishes to apply). Daily or weekly
rates (or any rate less than monthly) may not be advertised. Fines will be assessed for any
violation of this rule, regardless of whether the advertised Lot is actually leased for a period
of less than the minimum lease term.
(3) No renting rooms. Except as provided in this subsection (3), no Lot may be subdivided for rent
purposes, and not less than an entire Lot may be leased. However, less than the entire Lot may be
leased (for example, a room in a home may be leased) in situations where an Owner lives in the
home along with the renter, and all lease terms otherwise satisfy all leasing restrictions of the
Association, including the 30-day minimum lease term.
(4) Written leases only; mandatory lease provisions. All leases must be in writing, must contain
the names of all tenants and occupants; must expressly provide that tenants are subject to the
declaration, bylaws, and rules of the Association; and must have as an exhibit the rules and
regulations of the Association;
(5) Must provide tenants with Association documents. An owner must provide his tenants with
copies of the governing documents and notify them of changes thereto; (6) Tenants subject to
Association documents. Each tenant is subject to and must comply with all provisions of the
governing documents, federal and State laws, and local ordinances. Owners are responsible for
their tenants and occupants and their guests’ violations;
(7) Owner must provide Association copy of all leases and lease renewals; tenant pet, vehicle,
and contact information. An owner must provide the Association within seven days of occupancy
by a tenant or renewal of a lease (with every new lease or lease renewal – a change of
roommates is a new lease):
(i) a complete and legible copy (electronic copy or hard copy) of the fully-executed
lease, and any lease renewal document(s), both of which must include the name of all
tenants and occupants. Dollar figures and any driver’s license or social security number
or other sensitive personal information may be redacted; and
(ii) current information regarding all pets (breed, age, name, weight) and vehicles (make,
model, color, license plate number) of the tenant(s), and current contact information
including full names, email addresses, and any additional mailing address for all
tenants.

1.3 SCREENING OF TENANTS AND OCCUPANTS. Prior to leasing to anyone or allowing
anyone except the Lot Owner, or an individual related to the Owner by marriage, blood
or adoption, to occupy a Lot, it is recommended that an Owner assess the criminal
background of potential occupants and without limitation obtain a report based upon
Texas Department of Public Safety criminal history and sex offender searches both for the
named tenants/occupants under the lease and all unnamed persons whom the Owner knows,
or comes to know, are occupying or will occupy the leased Lot. (Criminal reports may be
purchased from the DPS website at www.txdps.state.tx.us for a small fee).

1.4 EVICTION OF TENANTS. Every lease agreement on a Lot, whether written or oral, express or
implied, is subject to and is deemed to include the following provisions:
(1) Violation Constitutes Default. Failure by the tenant or occupants or invitees to comply
with the governing documents, federal or State law, or local ordinance is deemed to be a
default under the lease. When the Association notifies an owner of his tenant’s violation,
the owner must promptly obtain his tenant’s compliance or diligently exercise his rights as
landlord for tenant’s breach of lease, including eviction. If the owner fails to obtain the
tenant’s compliance after reasonable notice (at least 10 days notice) from the Association,
the Association has the right, but not the obligation, to pursue the remedies of a landlord
under the lease.
(2) Association as Attorney-in-Fact. Notwithstanding the absence of an express provision in
the lease agreement for enforcement of the governing documents by the Association, each owner
appoints the Association as his attorney-in-fact, with full authority to act in his place in
all respects, solely for the purpose of enforcing said documents against owner’s tenants,
including but not limited to the authority to institute forcible detainer proceedings against
the tenant on owner’s behalf, provided the Association gives the owner at least 10 days’
notice, by certified mail, of its intent to so enforce the governing documents.
(3) Association Not Liable for Damages. The owner of a leased Lot is liable to the
Association for any expenses incurred by the Association in connection with enforcement
of the governing documents against the owner’s tenant. The Association is not liable to
the owner for any damages, including lost rents, suffered by the owner in relation to
the Association’s enforcement of the documents against the owner’s tenant.

1.5 CHANGE OF TENANTS/OCCUPANTS; NO SUBLETTING OR ASSIGNMENT. Unless otherwise provided
in this rule 1.5, change of tenants or occupants during a lease term is a new lease for
the purposes of this rule, and must be permitted and documented as such, with all
documentation submitted to the Association in accordance with this rule. No lease may
be assigned; subleasing is prohibited. However, Owners may request Association consent
to substitute roommates, at least 14 days in advance of any substitution. The Board may
in its discretion consent to any substitution.

[continued in next]

There's a lot of overreach. It's just bad... I also wonder whether anyone knowledgeable about local condo law and Texas law has actually reviewed the proposal. Based on a quick look at the Texas Family Code, it appears that the definition of family being proposed doesn't conform with Texas law. But I am not a lawyer.

Where I live, a change like this would require a super-majority of the owners. It's introducing restrictions in the economic rights of the owners to their property by restricting the circumstances under which they can rent.

The attempt to define a family is idiotic and has no place in association documents. It's not their business.

Aside from the problem of defining a family, which is inappropriate all by itself, to me, the definition reads like reviewers kept pointing out omissions, but rather than realize the whole idea is bad, they just kept tacking on exceptions. Section I starts with "Residential lots may be used, including leased, only for single-family residential use. Single-family use means use by a group of persons related by blood, marriage or adoption. ", but 1.2(3) and 1.5 recognize roommates, which modifies the text in the header. There's also a reference to a "an" unrelated person such as a home health aide, or companion (3). A few unfortunate people are debilitated enough to need more than one aide. I have experience with that.

The part where the board gets to "require proof of familial relation" in a "form sufficient in the discretion of the Board" is just stunning. Are they going to pass judgment on the validity of my marriage or whatever evidence I have? Not all marriages are civilly or religiously documented, and not all documentation is still available. Will they pass judgment on my religious marriage documents, or whether they choose to recognize the government that documented my civil marriage? Then there are wars, floods, fires...

Defining a family in a way that includes all the variations in common use is actually really difficult. Some examples of family not covered by the proposed rules:

1. Foster children or adults. Some fosters are sometimes informal. There are several examples of informal fosters in my family and friends.
2. Best friends from childhood. Two of mine date back over half a century and I consider them my sisters.
3. Friend who has been burned out or is sick and needs to live in the spare room while they get back on their feet, get treated, etc.
4. If they're my 14th cousin, are they still my blood relative?
5. Throuples. But maybe that's a bit modern for your board.
6. A companion (defined in (3)) is not a partner. What if they're my long term partner but we don't marry?

A couple more things that particularly struck me - "if that person stays overnight on the property more than 7 days in any month. Presence on the property at any time between 11:00 pm and 6:00 am will be considered an overnight stay. " So a serious dating relationship where the person stays over every weekend now requires a lease? Or they stay until midnight before heading home? Or a friend from a long way off comes to stay for a couple weeks?

And the infinite fine in (4). Never, ever give a board discretion to jack up penalties any way it likes.

1. I agree the proposed HOA rule should include foster children and foster parents.
2. No. Granted the Texas Family Code does not exclude this possibility but does not expressly name it either.
3. The proposed HOA rule has wiggle room for this.
4. Texas Family Code appears to say yes.
5. Until the law on polygamy changes, no.
6. Texas law already speaks to common law marriages.

BillD16, to exactly which parts do you object?

The only change I would make is regarding foster children/parents.

I am aware that some states have significant precedent on the meaning of "family" for the purposes of phrases like "single family use."

I favor HOAs having lease restrictions, as long as the restrictions do not violate Fair Housing law or other statutes.

The list you're referring to is relevant to the proposed rules, not the Texas family code. A partnership is not a common-law marriage, which is a legally recognized union in which the couple presents as a married couple, among other requirements. A partnership does not have the same legal status. Here is a Texas lawyer's definition - https://www.williedasherlaw.net/blog/family-law/everything-need-know-domestic-partnerships-texas/

The point is that the association can try to but should not insert itself into the definition of a family. They come in all shapes and sizes. It's not really anyone's business. It should not take squinting or wiggle room to make space for people in perfectly normal relationships.

Re throuples, there is no requirement that they be married. A partnership is a commitment.

You are the one who dragged the Texas Family Code into this. From your first post:


I actually do not think the Texas Family Code is all that legally controlling for this situation.

Morality has no role here AFAIC. AFAIC all that matters is the law of covenants and other law.

I am not convinced that defining "family," in a reasonable way and for the purposes here, would violate the covenants, statute or court precedent.

Excellent; that's too fun. :)

I do not support using Texas Family Code for anything but crude guidance on what could be a "reasonable" definition of family.

I think the local municipal code might have better guidance on what "family" ought to mean, for the best chances if push came to shove and someone sued.

Regarding the definition of "family," here are the two questions I think one should ask:

Would a Texas court find the HOA's definition of family to be "reasonable"?

Does what a court might say even matter? If the HOA is hell bent on maintaining a certain standard, it can impose a (hopefully reasonable) standard, then see if someone sues. The instant someone sues, go to the HOA attorney and ask if the HOA should rescind this part of the rule.

Dastardly? Yes. But if I were an owner in a SFH HOA, I would want appropriate rental restrictions.

The entire response is in the context of the proposed changes. The point was that the proposal defines family more tightly than the Texas Family Code, but the state's definition is not mentioned again in the several intervening paragraphs, where the associations proposal is repeatedly mentioned as the context.

So the list to which you refer, 5 paragraphs later, is prefaced with

"Defining a family in a way that includes all the variations in common use is actually really difficult. Some examples of family not covered by the proposed rules: "

Do the covenants prohibit leases less than 30 days?

If the covenants have no such prohibition, then this part of the proposed rule, if approved by the board, will likely fail after a lengthy, costly court challenge. See TimB4's citation and many more citations on the net.

Then again, if the board hates STRs, go for it. See if someone lawyers up. I estimate the minimum cost for an owner's attorney to research the covenants and law and prepare a demand letter to be $5000.

Cry me a river for the landlord-owners who want STRs.

For the sake of preserving home values and being pre-emptive, even though the proposed rule prohibiting less than 30 day rentals violates the covenants, I would not battle to remove the 30-day prohibition. I do not find the rules stupid. But if you like the arguments above or find some other arguments, go ahead and give the board a hard time.

I agree an owner being willing to spend $5k to correct a wrong; validate an ego; or similar is not a black swan. I just keep in mind that the instant a landlord-owner has his/her attorney send that demand letter and the demand letter hits the desks of the directors, then if I were on this board I would vote to rescind the 30 day prohibition.

I figure you are consulting an attorney because this has become harassment; is demoralizing; and some of what these folks are saying may be so close to the threshold for Texas defamation per se (or may surpass this threshold) that spending the money is worth it.

In the States you saw them, were they backed up by the courts (legal cases) or simply rationalized that way by the Board and not challenged in a court of law?

A court case or two from Illinois and maybe some common law from Restatement (Third) of Property.

a Google summary of one case:
Where the Declaration is Silent (Board Rule Upheld):
In Board of Directors of 175 E. Delaware v. Hinojosa (1997), an Illinois appellate court upheld a condo board's rule restricting additional dogs. The court determined that because the condo’s founding declaration was silent on pet ownership, the board had the authority to implement rational and uniform pet limits to maintain building order.

Another case from Illinois said that a rule (a 30% rental cap) conflicted with the condo declaration and therefore was not valid. This is in line with your statement that restrictions should be in the CCRs, which I think is the consensus.

Other court cases (e.g. Iowa supreme court, Oberbillig), not necessarily about rules, have upheld the business judgment rule for board decisions and cited the Restatement (Third) of Property that the Association’s “power should be interpreted broadly.” and "If unable to act, the common property may fall into disrepair . . "

It would help a lot if the CCRs also gave the board additional hooks to establish the rule, such as a general power of the board to oversee safety, property values, general oversight, etc., and even some specifics on a particular issue. That is why I asked Bill what the covenants say.

That said, rules are risky, and there are always complicated specifics and case law. I'm thinking the courts in different states will give varying decisions on how far a rule can go when the CCRs are silent.

I do not think the Google (AI?) summary is accurate. One can read the appellate court decision here: https://law.justia.com/cases/illinois/court-of-appeals-first-appellate-district/1997/1952262.html . By my reading, the court decision relied heavily on what the Declaration and state statute say with regard to board-created rules. In my opinion this is a key excerpt from the actual court decision:

The 175 East Delaware Place declaration and bylaws do not make
any reference to pet ownership or dogs, in particular. As to the
Board's powers, the declaration provides:

"The Board, may adopt such reasonable rules and
regulations as it may deem advisable for the
maintenance, conservation and beautification of
the Property, and for the health, comfort,
safety and general welfare of the Owners and
occupants of the Property. Written notice of
such rules and regulations shall be given to
all Owners and Occupants and the entire
Property shall at all times be maintained
subject to such rules and regulations."

The declaration clearly gives the Board authority to promulgate
rules regarding use of and restrictions on the use of units.
Because the Board is authorized to promulgate reasonable rules for
the general welfare of the owners and the declaration is silent on
the issue of dog ownership, the instant rule does not conflict with
either the declaration or the bylaws.

The court decision also observed that the Illinois Condo statute says this:

The bylaws shall provide for at least the following:
.
.
.
[R]estrictions on and requirements respecting the
use and maintenance of the units and the use of the common
elements, not set forth in the declaration, as are designed to
prevent unreasonable interference with the use of their respective
units and of the common elements by the several unit owners."

Jeff nailed it. See https://nwaca.org/wp-content/uploads/2024/05/2019.97743.pdf . The latter is so close to the wording BillD16 quoted above, and comes from the same city, that I expect the source for both documents is the same.

BillD16, note the law firm named on the last page of the above PDF file. Look familiar?


Note how the rules assert that the authority for them comes from the HOA's Declaration at Article II, Section 1 (d). The Declaration is also online. Here is Article II, Section 1 (d):

Section 1. Owners' Easements of Enjoyment. Every Owner shall have a right and
easement of enjoyment in and to the Common Area which shall be appurtenant to and
shall pass with the title to every Lot, subject to the following provisions:

(d) the right of the Association to make such reasonable
rules and regulations regarding the use of the Common Area and
facilities located hereon by the Owners and other pserons
entitled to such use, including but not limited to restrictions of
the number of guests who may use the Common Area and the
parts of the Common Area such guests may use;

Oh my god. I could rattle off several people here at HOATalk who could skin this HOA attorney alive in oral arguments before a judge. Here's where a reasonably competent owner would start:

Owner:
Your Honor, Declaration Art II Sect 1 (d) authorizes the board to make rules for the common areas and only the common areas. The board-created leasing rules are for non-common area, individual lots. Would you please declare this rule to be null and void?

Judge:
That's very interesting. What do you say to this, Mr. HOA Attorney?

HOA Attorney:
My client thinks the phrase "facilities located hereon" allows the board to regulate the use of non-common area lots.

Judge:
Even though the section heading refers strictly to the use of the Common Area?

HOA Attorney:
I take that to be a Scrivener's error, Your Honor.

Owner:
I can cite case law that says interpretations of a SFH HOA's covenants are to be made with an eye to the free use of land.

Judge:
I bet you can. But that will not be necessary. Court time is expensive to the taxpayer. I grant the motion for summary judgment to the Owner. The Leasing rules are here by declared null and void. Oh and Mr. HOA Attorney, I have my eye on you. Madam Owner, don't let your head swell. The appeal lies ahead.

Thanks ElleN! I think it’s odd that a condo document should talk about Lots so often, but *shrug* what do I know?

One thing I noticed is at the top of the document (which went into effect in 2019), it says that these HP Leasing rules supplement rules from 2012, and replace rules from 2017. I’m not sure what happened in 2012, but 2018 is when the Texas Supreme Court handed downTarr vs Timberland. I happen to know that the attorney here gives their clients a yearly Legislative Update. Plus I’m guessing that there was a *lot* of document churn statewide in the wake of Tarr. I’ll bet $1USD that the previous version of these rules relied on the “residence can’t be a business” thinking that prevailed until Tarr tore it down.

It probably doesn't mean the board can do what it wants. But you might need an interpretation from an independent lawyer who knows the case law that might have further limited or interpreted clauses like that.

The attorney works for the association as a whole, and ethically they must do what's right for the association, but their direction comes from the board, and attorney-client privilege is with the board, not the association.

Maybe I missed something in prior comments - are you sure there's an actual living, breathing attorney and that they specialize in condo law?

My problem with this is that the lots owned by individual owners are not "Association Property."

The phrase "except as by law" is the important one to me.

I think Declaration phrasing like the above is misread all the time. E.g. within this thread JeffT2 seems inclined for arguing that often Declarations do allow boards to do whatever they want. Jeff et al. seem to be saying "If it's not in the Declaration, it is not prohibited." Not so. Or folks like Jeff argue that the "business judgment rule" gives boards wide latitude. The BJ rule gives boards wide latitude on subjects pertaining to spending money. The BJ rule does not give wide latitude on creating restrictions on the use of homes.

In my experience the courts say boards have to stay within the four corners of the Declaration. The courts want to see specific language that gives a Board the authority for xyz rule.

I like Jeff's posts. He adds substance to threads here. But I do not agree with him on the above points.

BillD16, you are doing exactly as I would be doing in scouring your HOA's Declaration (just like a court would) to see what authority there is for these rental restrictions. A rule requiring a minimum of 30 days is a significant restriction on the use of houses there. In my opinion such a rule violates the Declaration. When it comes to a board's authority to create certain rules, there's good reason, based in a long history of land use law, for TPC 209 not having language like Chapter 82. Single family homes with no shared walls are a different animal vis à vis condos and townhomes where close living can be a hard reality.

TPC 202 may also be a bit relevant here.

BillD16, what does the definitions section of the Declaration define "Association Property" to be?

In a similar declaration, I see in the definitions section that "Property" appears to mean all the lots within the boundaries of the HOA, regardless of whether they are owner owned.

If so then I think I will take back my objection. The Declaration section quoted above might be the legal authority the Board needs for the proposed STR rules.

I think it's sketchy as all hell. I've been trying hard for a week to get people to care, and to write the Board and complain. It does not seem to be happening. I believe the two Board members who are leaving the Board are pushing hard to get this done just so they can claim it as an accomplishment. It's like that scene from Robocop: "I had a guaranteed military sale with ED 209 - renovation program, spare parts for twenty-five years... Who cares if it worked or not?"

I agree that it should be a CCR change. The Board is claiming they took a survey and 64% of the neighborhood wants a minimum 1 month lease. Which is an out-and-out lie. And - if they had 64%, why not just put some effort into it get it put into the CCRs with a supermajority?

I'm on the ballot for the election - I wonder if the vote will be fair?

Bill

Quick response, I'm slammed. But yes, I'm sure it's a living, breathing attorney. Not so sure about their exact specialization, but I'll guess it's like that scene The Blues Brothers: they've got both kinds of law: condo and HOA.

Bill

ElleN posted:
Wrong. Numerous Texas appeals and supreme court decisions talk about the first Texas Condominium statute. It dates to 1963 and is known as article 1301(a) of Vernon’s Annotated Texas Statutes. The latter is the predecessor of Chapter 81 of the Texas Property Code.

It appears to me that associations that were created before about 1983 and wanted to be subject to the Texas Condominium statute in fact did have Declarations expressly stating the association was subject to the Condominium Act. If an association wanted to be subject to the Texas Condo Act back in say the 1970s, I think the statute ("the Act") might have required that the Declaration expressly state this.

At this point I think BillD16 is correct about the 1979 townhome community. The latter's Declaration says nothing about the Texas Condominium Act. I think the 1979 townhome community is in fact subject instead to TPC 209 (the Texas POA yada statute). This would explain why the 1979 townhome community's recorded 2019 amendment to the rules says nothing about the Condo Act.

Just a couple of quick references for the above:
https://www.caionline.org/getmedia/d3e19d1e-89fc-4c4a-a0b2-5fd8621c03f0/File-stamped-Amicus-Brief.pdf

https://cases.justia.com/texas/eighth-court-of-appeals/2023-08-21-00057-cv-0.pdf?ts=1686746502