The latest wave of legislation targeting homeowners associations takes effect Sunday, though it remains to be seen whether the new rules rein in the power of some groups.
Watchdog groups largely praise the new rules, some of which went into effect earlier this year.They include requirements for associations to obtain a court order before foreclosing, establish payment plans to prevent foreclosure when homeowners cannot pay dues and send additional notices before turning over an account to an attorney or collection agent.Other laws restrict associations from banning solar panels, ensure voting rights for all members and require open records and open meetings.How the 4.8 million Texans who live under the rules of associations will be affected may not be known until all the laws take effect."Was it effective? Yes. Was it perfect? Oh, no," said Beanie Adolph of Houston, a spokeswoman for Texans for HOA Reform. "They still have loads of loopholes. But I think it has jolted HOAs, and I am most grateful to the Legislature for finally recognizing a need to change."Associations and the companies that manage them say they have been scrambling to prepare for the new rules, holding seminars and briefing association boards about the effects. More consultation with lawyers is likely."There are a lot of 'what ifs' that are open to interpretation," said Judi Phares, chairwoman of the Texas Community Association Advocates, which represents management companies and homeowners associations. "The way they are interpreted in many cases is going to differ from attorney to attorney."Dale Dickerson, president of the Candleridge West Homeowners Association in south Fort Worth, said he is wary of the new laws, believing that they will drive up costs and make it harder for associations to operate. For example, it will be more costly to resolve cases where homeowners refuse to pay Candleridge West's $200 annual dues, he said."You start with someone owing $200 annual dues, and by the end of the year it reaches $1,000 with all of the attorneys involved," Dickerson said.And while watchdog groups praise the laws requiring associations to provide 72-hour notice of board meetings and open meetings to homeowners, those well-intended laws are somewhat impractical for many groups, said Rusty Fuller, president of the North Fort Worth Alliance, which includes 21 homeowners associations in far north Fort Worth.In the Vineyards at Heritage, where he is a board member, meetings will be held outside the neighborhood since there is no onsite meeting facility."Most homeowners organizations are not as well-organized as cities and counties are," Fuller said. "Most of us show up and say, 'What is going on?' and the management company tells us what we need to act on. Now if it isn't posted on the agenda, we may have to wait a whole month to deal with something. It's a pain in the neck."Spurred to actionAs for the criticism that new requirements will increase costs, state Rep. Burt Solomons, R-Carrollton, who sponsored comprehensive House legislation on homeowners associations that didn't pass, said legislators heard enough criticisms about association abuses that they had to do something."It was determined that it was far too easy to foreclosure a person's home for nonpayment of a few hundred dollars of unpaid dues or assessments," Solomons said.While he said the changes may increase the cost of a foreclosure slightly, "I believe HOAs' board members and property management companies testified over and over again that they didn't like to foreclose and didn't want to foreclose but needed the ability to foreclosure in rare cases."Some associations seem less alarmed about the new laws.Bob Putnam, president of the Remington Park association in Colleyville, said a committee is still reviewing the laws but expects to accommodate them without too much difficulty.At the Remuda Ranch Estates in Parker County, the new laws will do little to change the way the association operates. It drew national attention this year for obtaining a $7,200 court judgment against Clara Russell, who posted a political sign on a tree in front of her home supporting Glenn Beck's 9/12 Project. Russell said she intends to appeal to district court.Remuda Ranch doesn't have dues or levy fines, board President Tommy Stewart said. The only option is to take those who don't follow the rules to court, as it did in the sign case.The requirements will help curb associations' power to take homes for small fines or levies, Stewart said."I'm sure there are HOAs in Texas who have way overstepped their bounds," he said.The new laws do not deal with the contentious issues of signs.Religious displaysThe laws do address some other longstanding conflicts, including religious displays, solar panels and rain barrels. While many of these look like victories for homeowners, one longtime critic of associations says the devil is in the details.Austin attorney Bill Davis, who has been involved with lawsuits involving his own association in Dripping Springs and other litigation related to the association industry, said the new laws may be a good first step but sometimes give the illusion of righting a wrong while not actually doing so."The religious-display statute purports to create a right for an HOA board (or its agents) to enter onto your property to remove a 'religious display' if the display is greater than 25 square inches (1/4 of a sheet of letter-sized paper) or located somewhere besides the doorway of the owner's home," Davis said. "In other words, the board members and management company are protected against a trespass cause of action for trespassing on a homeowner's property to remove such a display. Incredible."Davis said that the language in the rainwater harvesting bill permits rain barrels in back yards with private fences but that some associations prohibit fences. He also said there's no recourse for violations of the open-meeting or open-records requirements unless a homeowner takes the association to court."I think generally this was a good year for the consumers, but there are still things to be fixed," Davis said. "I'm hopeful the Legislature will continue to make changes. The industry held the upper hand for the last decade."Bill Hanna, 817-390-7698Twitter: @fwhannaHighlights of new laws
HB1228: Creates an expedited foreclosure process where the Texas Supreme Court established rules for expedited foreclosure proceedings for an association to use in foreclosing an assessment lien. The recipient of the notice has 60 days to fix the delinquency before an association can start a judicial foreclosure or post a notice to auction the property. It became law Jan. 1.
SB101: Adds foreclosure protections for active military personnel. It became law Sept. 1.
HB2761: Prevents associations from foreclosing on an owner for fines associated with records requests alone. It becomes law Sunday.
HB1821: Says a restrictive covenant has no effect until it is filed with the appropriate county. Also requires that if an association has a website, it must include copies of all governing documents. It becomes law Sunday.
HB362: Prohibits a restrictive covenant against installing a solar energy device, but there are health and safety rules as well other stipulations about where it can be placed. It became law June 17.
SB472: Says an association's restrictive covenant can be amended only by a vote of 67 percent of the total votes allocated to property owners, but it can be a lower percentage if the association's declaration specifies that. Any vote by an association member must be conducted in writing and signed. Any rule preventing an owner from running for a position on the board is also void. It became law June 17.
HB2761: Expands access to an association's books and records. If an association cannot produce required records within 10 days of receiving a request, it must give the requestor a date within 15 business days by which the information will be available. It becomes law Sunday.
HB1821: Mandates that associations provide owners with written notice of their right to receive resale certificates. A buyer must pay fees for a resale certificate to the association unless the buyer and seller agree otherwise. It becomes law Sunday.
HB2779: Homeowners have an absolute right to fly U.S. Texas or military flags absent adoption of association rules related to flag displays. It became law Sept. 1.
HB1278: Associations must permit owners to display religious items on the front door or doorframe unless the display contains obviously offensive language or images or is larger than 25 cumulative square inches.
HB3391: Associations must allow owners to install and use rain barrels if they meet architectural requirements such as color, size and type of shielding.
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