Senator Royce West Files Multiple HOA Bills in the Texas Legislature

On February 18, 2009, Senator Royce West (D - Dallas) filed a flurry of bills that would impact the way HOAs transact business. The following is a brief summary of the Bills. I will post updates as the bills work their way through the 81st Regular Session of the Texas Legislature.

SB 234 by West
HOAs are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their association. Disputes between HOA boards and individual homeowners can generate considerable acrimony and expense. This bill attempts to restore balance to the relationship between homeowner's association (HOA) boards and individual homeowners.

As proposed, S.B. 234 requires a court to allow the prevailing party in an action on a breach of a restrictive covenant reasonable attorney's fees and cost and claims. S.B. 234 requires the seller of residential property that is subject to membership in a property owner's association to provide certain information and notice to a buyer, including a resale certificate. S.B. 236 sets forth certain requirements relating to the content of and fees for such resale certificates.

SB 235 by West

HOAs are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. Developers often retain control over most aspects of an HOA while construction and sale of houses within the development is still ongoing.

As proposed, S.B. 235 strikes a balance between the developer's interest in the ultimate completion of a development and the need to prevent discriminatory housing practices. The bill provides that a restrictive covenant providing a right of first refusal for the sale or lease of a residential unit or residential lot in favor of the HOA or its members is void.

SB 236 by West

HOAs are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, individual homeowners have become frustrated with what they perceive as unduly restrictive HOA board policies regarding the installation of solar energy devices.

S.B. 236 strikes a balance between the community's interest in maintaining consistent aesthetics, and the freedom of individual homeowners to make sensible investments in clean energy.

As proposed, S.B. 236 prohibits a property owners' association from imposing or enforcing a restriction against solar energy devices, except under certain listed circumstances. S.B. 236 provides that restrictions that violate the provisions of this Act are void.

SB 237 by West

HOAs are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their associations. Many homeowners lack confidence in the conduct of board elections. Additionally, some HOAs operate under extremely cumbersome provisions for the amendment of their declarations. S.B. 237 attempts to restore confidence in the HOA election process and to provide a uniform standard for amending a declaration.

As proposed, S.B. 237 provides that a declaration may be amended on a vote of 67 percent of the total votes allocated to owners of property in the subdivision, unless the declaration creating the subdivision specified a lower percentage. It also establishes that the right to vote in board elections cannot be limited and states the conditions under which a person is disqualified from serving on the board. The bill requires the use of a neutral third party to count election ballots under certain circumstances and sets forth the requirements for the conduct of elections. S.B. 237 sets forth certain property owners' associations to which certain provisions of this Act do not apply. S.B. 237 prohibits a person from serving on the board of an HOA if the person has been convicted of certain offenses and requires an HOA to obtain criminal history information on candidates for HOA boards. Finally, S.B. 237 provides for the use and content of an association's bylaws.

SB 238 by West

HOAs are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their associations. Often, they feel frustrated in attempts to challenge an HOA board decision due to a lack of information. S.B. 238 attempts to restore balance to the relationship between HOA boards and individual homeowners.

As proposed, S.B. 238 sets forth remedies available to a homeowner if an HOA board fails to comply with its statutory duty to make its books and records, including financial records, reasonably available to a homeowner.

SB 239 by West

(HOAs) are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their HOAs. Disputes between HOA boards and individual homeowners often begin with the imposition of relatively small fines by the board for violations of deed restrictions. The manner in which the board notifies the individual homeowner is at times the subject of some disagreement.

As proposed, S.B. 239 sets forth the required content and manner of delivery of a notice of enforcement action by a property owners' association . The bill also requires that the homeowner be given a date certain by which a violation must be cured.

SB 240 by West

(HOAs) are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their associations. Disputes between HOA boards and individual homeowners often begin with the imposition of relatively small fines by the board for violations of deed restrictions. The actions of some HOA boards can cause such fines to become insurmountable burdens for the homeowner. Additionally, because foreclosure is a remedy available to an HOA board for delinquent assessments, the order of application by the HOA board of payments received from a homeowner is a critical issue.

As proposed, S.B. 240 sets forth certain requirements and restrictions regarding a fine imposed by a property owners' association. The bill also requires a property owners' association to adopt reasonable guidelines for an alternative payment schedule, sets forth provisions relating to the priority of application of payments by a homeowner, and sets forth time limitations relating to collection actions against a homeowner. S.B. 240 repeals Section 202.004(c), Property Code, relating to an assessment of civil damages by a court for the violation of a restrictive covenant.

SB 241 by West

HOAs) are intended to maintain common areas in residential neighborhoods and to protect homeowners' investments in their property by enforcing certain aesthetic guidelines. In recent years, however, many homeowners have become dissatisfied with the operation of their associations. Disputes between HOA boards and individual homeowners often begin with the imposition of relatively small fines by the HOA board for violations of deed restrictions. Such fines, when combined with assessments and legal fees, can quickly become insurmountable for a homeowner, ultimately resulting in foreclosure. Currently, a homeowner is not guaranteed access to the courts in a proceeding for the foreclosure of an assessment lien.

As proposed, S.B. 241 requires a property owners' association to obtain a court judgment foreclosing an assessment lien and providing for issuance of an order of sale before the foreclosure of the lien, unless judicial foreclosure is waived in writing by the homeowner.