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The 87th Texas Legislative Session has brought a myriad of changes for property owners’ associations (“POAs”) across Texas. As a result, POAs will have to begin making preparations for the laws to take effect. The following update will provide a list of recommendations for POAs on the actions they should take to be prepared for the new laws.
SB 1588 – Relating to the powers and duties of property owners’ associations
Section 1 – Collection of Assessments – Amends Section 202.006 of the Texas Property Code by adding Subsection (c). POA may not collect a regular assessment (as defined by Section 209.002 of the Texas Property Code) if dedicatory instrument authorizing collection of assessment is not filed in the property records.
Action Item: Applies to Single-Family and Condominium Associations. Ensure the association has a collections policy and all dedicatory instruments are filed in the real property records.
Section 2 – Religious Displays – Amends Section 202.018(a) of the Texas Property Code. POA may not adopt or enforce a provision in a dedicatory instrument that would prohibit owner from displaying or affixing on the owner’s “property” or “dwelling” (current law limits to entryway of home) one or more religious items. POA may regulate:
- item that threatens public health or safety;
- violates a law (other than prohibition of display of religious free speech);
- contains graphics or language patently offensive to passerby (for reasons other than religious content) and
- is installed on common area or association property, violates building lines, easements, or setbacks, or attached to a traffic control device, lamp, fire hydrant or utility pole.
Action Item: Applies to Single-Family and Condominium Associations. Adopt or amend Religious Display Policy.
Section 3 – Swimming Pool Enclosures – Adds Section 202.022 to the Texas Property Code to prohibit a POA from adopting or enforcing a provision in a governing document that prohibits or restricts an owner from installing a swimming pool enclosure that conforms to applicable state or local safety requirements. A POA may enforce a provision in a dedicatory instrument related to the appearance of the enclosure, including regulation of colors, provided such regulation does not prohibit a black swimming pool enclosure that consists of transparent mesh set in metal frames.
Action Item: Applies to Single-Family and Condominium Associations. Cease enforcing existing provision prohibiting enclosure. Adopt Swimming Pool Enclosure Policy related to appearance of enclosure. Cannot prohibit black enclosure consisting of transparent mesh set in metal frames.
Section 4 – Security Measures – Adds Section 202.023 to the Texas Property Code to prohibit a POA from adopting or enforcing a restrictive covenant that prevents an owner from building or installing security measures (including security cameras, motion detectors and perimeter fencing). A POA is not prohibited from banning the installation of a security camera in a place other than an owner’s private property or regulating the type of fencing that an owner may install. This provision would not apply to a condominium or master mixed use POA.
Action Item: Applies to Single-Family Associations. Adopt Security Measures Policy to address architectural application process and requirements.
Section 6 Resale Certificates – This provision amends Section 207.003(c) of the Texas Property Code to cap resale certificate fees at $375.00 and updated resale certificate fees at $75.00. The deadline to deliver a resale certificate after the second request was delivered by an owner under Section 207.004(b) would be changed from seven days to five days. An owner would be permitted to seek a judgment against the POA for not more than $5,000 for failure to deliver such information in a timely manner (currently, amount is $500).
Action Item: Applies to Single-Family Associations. Modify policy to reflect change from 7-day delivery upon second request of owner to 5 day delivery upon second request of owner and update fees to comply with $375 and $75 caps, if fees are over that number.
Section 8 – Online Subdivision Information – This provision amends Section 207.006 of the Texas Property Code. POAs must make current versions of dedicatory instruments available on an internet website maintained by POA or management company and available to POA members. This will apply to POAs of at least 60 lots or a POA that has contracted with a management company.
Action Item: Applies to Single-Family Associations. If the POA does not already have a website, create a website to provide the current versions of the dedicatory instruments.
Section 9 – Management Company Definition – This provision amends the definition of “Management Company” under Section 209.002 of the Texas Property Code.
Action Item: Applies to Single-Family Associations. No Action necessary.
Section 10 – TREC Filings – This provision amends Section 209.004 of the Texas Property Code. It requires management certificates to include declaration amendments, the phone number and email address for the managing agent or representative, website information and amount and description of transfer fees. Not later than the 7th day after the date POA files a certificate, POA must electronically file the certificate with the Texas Real Estate Commission (“TREC”). Owners will not be liable for attorney’s fees incurred by the POA relating to the collection of assessments or interest if fees accrue during the period a management certificate is not recorded with county clerk or filed with TREC.
Action Item: Applies to Single-Family Associations. Modify management certificates to include declaration amendments, the phone number and email address for the managing agent or representative, website information and amount and description of transfer fees. Develop procedure to ensure certificates are filed with TREC electronically no later than 7 days after POA files certificate.
Section 11 – ACC Members -This provision adds Section 209.00505 of the Texas Property Code and prohibits a person from serving on an architectural review committee (“ACC”) if the person is: 1) a current board member; 2) a current board member’s spouse; or 3) a person residing in a current board member’s household. An owner is permitted to appeal a decision by the ACC to the board. Notice of denial must be provided to the owner meeting the requirements therein and the board must hold the hearing within 30 days after the date the board receives the owner’s request for a hearing. A notice must be sent to the owner providing the date, time and place of the hearing not later than 10 days before the date of the hearing (only one hearing is required). During the hearing, the board (or designated representative) and the owner are provided an opportunity to discuss, verify facts and resolve the denial by the ACC. Both the board and owner are permitted to postpone for a period of not more than 10 days. Audio recording is permitted by both parties.
Action Item: Applies to Single-Family Associations consisting of more than 40 lots and outside of Declarant/Developer control. Ensure a current board member, their spouse, or someone residing in a board member’s residence is not on the ACC committee.
Section 12 – Board Meetings – This provision amends Section 209.0051 of the Texas Property Code to provide a board meeting notice requirement of at least 144 hours before the start of a regular board meeting (current statute provides for 72 hours) and at least 72 hours before the start of a special board meeting. It also requires all budget changes be voted on in a properly noticed board meeting during the open session.
Action Item: Applies to Single-Family Associations. Update procedures to ensure notice is sent to owners 144 hours before board meeting and 72 hours before a special meeting. All budget items must now be voted on in an open board meeting.
Section 13 – Association Contracts – This provision amends Section 209.0052 of the Texas Property Code and applies to association contracts requiring contracts over $50,000 to comply with applicable Section 209.0052 requirements as well as requiring the adoption of a formal bid process policy.
Action Item: Applies to Single-Family Associations. For services over $50,000, the POA must now solicit bids or proposals using a bid process established by the POA. Consult with legal counsel on the types of services and terms of contracts this would include.
Section 14 – 209 Enforcement Action Notice – This provision amends Section 209.006(a) of the Texas Property Code. It requires POAs to send an enforcement action “209” notice to an owner prior to reporting a delinquency to a credit reporting service.
Action Item: Applies to Single-Family Associations. Send 209 notice to owner prior to reporting a delinquency to a credit reporting service.
Section 16 – 209 Assessment Delinquency Notice – This language requires a POA to give an owner 45 days (current law is 30 days) to cure a delinquency before further collection action is taken (including turning an account over to a collection agent).
Action Item: Applies to Single-Family Associations. Update procedures to ensure 209 notice gives owner 45 days to cure delinquency, not 30 days, before collection action is taken.
Section 17 – Credit Reporting Services – This section prevents associations from utilizing credit reporting services unless multiple requirements are followed.
Action Item: Applies to Single-Family Associations. If the association uses credit reporting, update Collections Policy and Chapter 209 Letters to only report fines, fees, or assessments to a credit reporting service if: a notice was provided to the owner 30 days prior to reporting and the owner was offered a payment plan.
Section 18 – 209 Hearings – This section amends Section 209.007 of the Texas Property Code related to 209 hearings requested by owners. Specifically, it provides that, not later than 10 days prior to the hearing, the POA must deliver a packet to the owner containing its evidence it will introduce at the hearing (photos, documents, communications, etc.). If the evidence is not provided, an owner is automatically entitled to a 15-day postponement. During the hearing, the board must present its case first, and then the owner is entitled to present his/her case.
Action Item: Applies to Single-Family Associations. Update 209 Hearing Policy to ensure owner receives packet of evidence the POA will be presenting 10 days prior to the hearing. Consult with the POA’s legal counsel on what evidence should be included.
Section 20 – Lease Information – This provision amends Section 209.016 of the Texas Property Code. POA may request the following information regarding a lease or rental applicant: 1) contact information, including the name, mailing address, phone number, and e-mail address of each person who will reside at a property in the subdivision under a lease; and 2) the commencement date and term of the lease.
Action Item: Applies to Single-Family Associations. Update Leasing Policy of association to ensure appropriate information is being collected.
Section 21 – JP Court Jurisdiction – This section adds Section 209.017 to the Texas Property Code to permit owners to bring an action for a violation of Chapter 209 of the Texas Property Code against a POA in the justice court of a precinct in which all or part of the subdivision is located.
Action Item: Applies to Single-Family Associations. Consult with counsel on how to prepare for violation hearings.
SB 581 – Relating to regulation by a property owners’ association of certain religious displays
This bill amends Section 202.018 of the Texas Property Code. The bill prevents POAs from enforcing or adopting a restriction that prohibits owners from displaying “on the owner’s or resident’s property or dwelling” one or more religious items (note that this expands the statute beyond the entry of the property). However, a POA could still enforce a restriction if the religious display threatens public safety, violates a law (other than a law prohibiting the display of religious speech), is offensive, is installed on property owned by the POA or in common with other members of the POA, or violates any applicable building line, right-of-way, setback or easement.
Action Item: Applies to Single-Family and Condominium Associations. Adopt or amend Religious Display Policy.
SB 30 – Relating to the removal of certain discriminatory restrictions and provisions from certain real property records
Adds Section 5.0261 to the Texas Property Code. Permits an owner of real property to request the removal of a discriminatory provision by completing and filing, with the district court clerk, a motion, verified by affidavit, that contains, at a minimum, the information provided in the suggested form under the bill.
Action Item: Applies to Single-Family Associations. For older communities, consult with counsel as to any discriminatory provisions in conveyance instruments for possible amendment.
HB 3571 – Relating to the regulation of security measures by a property owners’ association
This bill adds Section 202.023 to the Texas Property Code which would prohibit a POA from adopting or enforcing a restrictive covenant that prevents a property owner from building or installing a security measure, including a security camera, motion detector, or perimeter fence. The POA would be allowed to regulate the type of fencing that an owner may install and prohibit the installation of security cameras on property other than the owner’s private property.
Action Item: Applies to Single-Family Associations. Adopt Security Measures Policy to address architectural application process and requirements.
HB 1659 – Relating to the amendment of a residential subdivision’s declaration to affect certain types of property located in the subdivision
This bill amends Section 209.0041 of the Texas Property Code (requiring 67% vote for a Declaration Amendment) by adding subsection (d-1). The 67% vote requirement would not apply to an amendment that affects a portion of a subdivision zoned for or containing a commercial structure, industrial structure, apartment complex, or a condominium.
Action Item: Applies to Single-Family Associations. For master planned communities with commercial, condominium, industrial or apartment complexes as a sub-association, consult with counsel for new amendment requirements.
HB 1281 – Relating to the operation of a golf cart without a license plate in a master planned community.
This bill amends Section 551.403 of the Texas Transportation Code. It allows for golf carts, without a license plate, to be operated in a master planned community that is a residential subdivision under Section 209.022(9) of the Texas Property Code or has uniform deed restrictions.
Action Item: Applies to Single-Family and some Condominium Associations. As applicable, adopt or amend a Golf Cart Policy specifying where the golf cart can be driven and the speed at which they can be driven.
SB 318 – Relating to the records of certain condominium unit owners’ associations.
This bill essentially mirrors the language under Section 209.005 of the Texas Property Code making the open records procedures applicable to condominium associations. The bill requires a condominium association to make the books and records of the association, including financial records, open to and reasonably available for examination by a unit owner, and sets forth the procedure to request either the inspection or production of certain association records. This bill would also require a condominium association to adopt a records production and copying policy, as well as a document retention policy.
Action Item: Applies to Condominium Associations. Adopt required Open Records Production Policy and Records Retention Policy.
HB 1927 – Relating to provisions governing the carrying of a firearm by a person who is 21 years of age or older and not otherwise prohibited by state or federal law from possessing the firearm and to other provisions related to the carrying, possessing, transporting, or storing of a firearm or other weapon; creating criminal offenses.
This bill allows anyone over the age of 21 who can legally carry a firearm to carry a firearm without a handgun license. Private businesses, such as management companies, can still post restrictions following 30.06 and 30.07 of the Texas Penal Code on the possession of firearms.
Action Item: Applies to Single-Family and Condominium Associations. For those communities restricting gun carry, consult with counsel to ensure compliance with Texas Penal Code Sections 30.06 and 30.07.
SB 6 – Relating to liability for certain claims arising during a pandemic or disaster related to a pandemic.
This bill is another omnibus bill with many different parts. The area POAs should pay close attention to is the section adding Chapter 148 to the Civil Practice and Remedies Code. In Sec. 148.003 LIABILITY FOR CAUSING EXPOSURE TO PANDEMIC –Subsections (1)(a) and 1(b) focus on the liability for individuals and business when exposing a person to a pandemic disease. 1(a) states a person, which includes corporations pursuant to Section 311.005 of the Texas Government Code, is not liable for injury or death caused by exposing an individual to a pandemic disease during a pandemic emergency unless the claimant can establish that the person who exposed the individual knowingly failed to warn the individual or remediate a condition the person knew was likely to expose the individual to the disease. But the person would have to had control over the condition, know the individual would most likely not come into contact with the condition and had a reasonable opportunity and ability to remediate the condition or warn the individual of the condition before that individual came into contact with the condition.
Subsection (1)(b) continues the person is not liable unless the person knowingly failed to implement or comply with government standards, guidance, or protocols intended to lower the likelihood of exposure that were applicable to the person or the person’s business provided that:
- The person had reasonable opportunity and ability to implement protocols.
- The person refused to implement or comply with or acted with flagrant disregard to the protocols.
- The government protocols on the date the person failed to implement or comply with did not, on the date the individual was exposed to the disease, conflict with government protocols the person implemented or complied with.
Action Item: Applies to Single-Family and Condominium Associations. Adopt Pandemic Policy to ensure compliance with Section 148.003 of the Texas Civil Practice & Remedies Code.