20 June 2011
New HOA Laws in Texas
Posted by Byron under: All Newsletters .
Victory for Sun City Residents – Several new HOA (homeowner association) laws have recently been enacted in Texas. Prior to the 2011 Texas legislative session, there were very few HOA good-governance laws in the state. There were numerous attempts in prior legislative sessions to pass laws mandating open meetings, open records, open voting, and other good-governance parameters for Texas HOA residents. Unfortunately, nearly all failed. However, Texas homeowners achieved victory on many aspects of HOA governance in the 2011 legislative session.
Central Control Versus Individual Rights – There are an estimated 5 million HOA homeowners in Texas, reflecting one out of every four new homes in the state. As citizens of America and of Texas, we have certain constitutional rights. However, as homeowners in HOAs, Texans have had very few rights regarding their community governance. In the 2011 Texas legislative session the overriding issue was between rights for residents versus greater central control by builders and HOA managers.
Opponents of HOA Legislation – The key opponents of Texas HOA legislation have been builders, professional HOA managers, and their lobbyists. One of the primary opponents of most HOA legislation has been TCAA (Texas Community Association Advocates). The TCAA board is almost totally comprised of lobbyists, lawyers, and others who sell services to HOA managers. One of the TCAA board members is Connie Heyer, wife of Sun City Texas Community Association (CA) attorney William Heyer. Supporting TCAA in 2011 were Sun City CA Board members Steve Fought, Fred Warman, Brent Baker, and (former member) Kim Moran. In the past two legislative sessions, Sun City Executive Director Jim Romine pushed for TCAA support, including using resident-funded resources to beg for contributions for their lobbying efforts.
New Laws Impacting HOAs – Numerous laws were enacted by the 2011 Texas legislature that provided good-governance parameters for HOA homeowners. These include HB 2761, SB 472, HB 1228, and HB 362. Descriptions of these newly enacted bills can be found on the “HOA legislation” page on this web site. The new Texas HOA legislation:
- Mandates open records.
- Mandates standards for (1) records retention and (2) records production.
- Allows homeowners to sue in local justice of the peace courts for remedies if the HOA does not produce records.
- Mandates that key governance documents must be (1) filed with the County and (2) posted on the HOA web site.
- Allows all owners to (1) vote in HOA elections and (2) run for the HOA board (unless convicted of a felony or crime of moral turpitude).
- Provides for an independent election recount mechanism.
- Establishes a priority of payments (i.e. assessments = first; fines/legal fees = last)
- Allows solar devices on private property, given certain parameters.
- Mandates various voting techniques, including proxy voting.
- Mandates that the HOA board must have at least one-third control by residents once the HOA is 75% built-out.
- Mandates that HOAs must allow rain harvesting devices, flag poles, and religious displays on front doors – all under certain conditions.
Impact on Sun City Texas – Many of the details of these (and other) bills still need to be analyzed. However, some of the key impacts on Sun City Texas will be:
- CA staff will no longer be able to legally refuse to provide records to homeowners, as long as those requests meet the parameters of the new laws. There have been numerous instances in the past where staff merely refused to provide records for fear of embarrassment.
- Sun City Texas homeowners will be able to use the local inexpensive justice of the peace courts to enforce document requests.
- CA staff will no longer be able to legally keep homeowners from voting or running for the CA Board. Sun City currently has a “MIGS” (member-in-good-standing) process that can be used to keep people from voting or running for the CA Board, whether or not the “issues” against them are legitimate.
- There will be more safeguards in CA Board election voting and tabulation.
Implementation – Some of these new HOA parameters go into effect on September 1, 2011; others go into effect on January 1, 2012. Therefore, in order to implement these new parameters in Sun City Texas, the CA Board should (1) revise the elections policy, (2) create a records copying policy, (3) create a records retention policy that at least matches the requirements of HB 2761, (4) revise the Design Guidelines to allow the solar devices as prescribed in HB 362, (5) ensure that all appropriate governance documents (including the latest version of each) is posted on the Web Portal and filed with the County, (6) instruct CA staff to provide records to homeowners without the need for them to file lawsuits, (7) revise the Design Guidelines rules on flag poles to comply with HB 2779, which is effective immediately, and (8) implement many other details.
Fear of Openness – One of the HOA governance parameters that the 2011 Texas legislature did not pass was a good open meetings bill. The open meetings bill that did pass was weak and primarily applies only to HOAs that are not under developer control. Under the new laws, there are a few open meetings parameters for all HOAs, including those still under developer control. The lobbyists for the builders and professional HOA managers put up strong resistance regarding open meetings legislation. Interestingly, there have been very detailed open meetings laws in place for HOAs in the Houston area for several years – with no major concerns.
Summary – Not all of the new HOA parameters may be positive or may be applicable to Sun City Texas. However, many of the HOA governance parameters provide long-needed legislative relief for Sun City homeowners. Expect the CA staff and certain Board members to complain about the “extra costs” to be incurred due to this legislation. Of course, they overlook the millions of dollars gained resulting from openness and resident involvement on past important financial issues at Sun City Texas such as (1) the $1.5 million reserve true-up, (2) the roll-back of the huge 2006 attempted golf rate increase, and (3) the every-year HOA dues increases that stopped escalating in 2007.
June 20, 2011