HOAs and Senate Bill 1588
Recently passed Senate Bill 1588 relates to the powers and duties of certain property owners’ associations, ensuring homeowners enhanced protections against homeowner’s associations (HOAs). Seeking to mitigate the imbalance of power between property owners and HOAs, the bill requires HOAs to file management certificates with their county and the Texas Real Estate Commission (TREC) in an effort to create more transparent procedures. Failure to file would invalidate the HOA’s lien authority. In addition, the bill also allows more protection for property owners in the instance of fee disputes which require written notice before HOAs may report the information to credit services and agencies.
The bill covers the following areas designed to create transparency and a more balanced relationship between homeowners and the HOAs:
Website & Certification
The bill requires the TREC to establish and make available a system for electronic filing of new certificates and amended management certificates by HOAs by December 1, 2021. The requirement for an association to electronically file a certificate takes effect December 1, 2021, and management certificates and meeting information must be posted on the HOA’s website.
Fees
The bill also prohibits an association or its collection agent from reporting delinquent fines, fees, or assessments that are the subject of a pending dispute between an owner and the association to a credit reporting service. The bill authorizes an HOA to report delinquent payment history assessments, fines, and fees of property owners to a credit reporting service only if a property owner has been given the opportunity to enter into a payment plan and at least 30 business days before reporting to a service.
Architectural Review Authority
An architectural review board is the governing authority for review and approval of improvements within a subdivision. The bill establishes that a decision by the authority denying an application or request by a homeowner for the construction of improvements may be appealed to the board of the association. Property owners retain due process protections including the ability to present evidence and the opportunity to appeal architectural standards.
The bill goes into effect September 1, 2021. Cassie McGarvey is double Board Certified in commercial and residential real estate law in the state of Texas. Contact Cassie with your Texas real estate questions today at cmcgarvey@mcgarveypllc.com.
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