Members Can Strip HOA of Foreclosure Powers

San Antonio HOA Lawyer Trey Wilson wrote:

DID YOU KNOW?

As part of the sweeping reform of HOAs enacted by the 82nd Texas Legislature (2011), power was conferred upon property owners /members in community associations to grant or remove authority for their homeowners associations to seek collection of assessment liens through foreclosure. 

Texas Property Code Section 209.0093, which was adopted in 2011, allows property owners -- by and through a vote of at least 67% of the total association votes -- to remove foreclosure power from the dedicatory instrument a/k/a the "CCRs," the "covenants" and/or the "Declaration."  This same percentage of voters (67%) can add foreclosure powers to the dedicatory instrument, even if it did not previously exist.  

In my opinion, Section 209.0093 represents a tremendous step toward self-determination by the members of an HOA, and is truly a form of grassroots democracy in action.

A question that naturally arises is "How do I get my HOA Board to conduct an election or take a vote to add or remove the power of foreclosure?"  Fortunately, the statute answers that question too!  It provides:

"Owners holding at least 10 percent of all voting interests in the property owners' association may petition the association and require a special meeting to be called for the purposes of taking a vote for the purposes of this section."

Property Owners who desire to strip its HOA of foreclosure powers should ensure that at least 10% of the members are in favor of conducting an election on this issue, and then request in writing that the HOA Board schedule a special meeting to let the membership decide whether the power should be adopted, removed or retained.

HOA Boards that refuse to conduct meetings when required by law, or the Association's By-laws subject themselves to potential liability.