By Sipra Boyd and Teddy Holtz
A key component of operating a property owners association (POA) is the enforcement of deed restriction violations (DRV). Consistent DRV enforcement ensures everyone in the community complies with the rules set forth in the governing documents, but following the 87th Texas Legislative Session, there are changes as to how the enforcement of DRVs will be conducted. In this blog, we review the changes facing Architectural Control (or Review) Committees (ACC) and 209 hearings.
A major change for POAs relating to DRV enforcement as a result of the legislative session was a section included in Senate Bill 1588, which affected single-family associations consisting of more than 40 lots not subject to Declarant/Developer control, relating to who can serve on a POA’s ACC committee. Section 11 of SB 1588 added Section 209.00505 to the Texas Property Code. This statute prohibits a person from serving on the ACC committee 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. Prior to the new law, finding volunteers to serve on various committees and boards was already difficult for many communities and now it may prove near impossible for some communities. If the POA does not have the volunteers who qualify to serve on the ACC committee, and they contract with a management company for services, the association can choose to use the management company to serve as the ACC committee subject to the management company’s willingness to provide this service for the POA.
In addition to the restrictions on who can serve on an ACC committee, Section 11 of SB 1588 outlines new rules for owners appealing the decision of the ACC committee to the POA’s board. Section 11 outlines that a 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 the hearing for a period of not more than 10 days. Audio recording is permitted by both parties.
An additional section within SB 1588 brings another major change to DRV enforcement within POAs. Section 18 modifies the way 209 hearings are conducted where they are now comparable to a mini-trial. This section amends Section 209.007 of the Texas Property Code relating 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 the 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. This section only applies to single-family and townhome associations that are subject to Chapter 209 of the Property Code.
As a result of the new law, POAs should work with their legal counsel on updating their 209 hearing policy to ensure the owner receives the packet of evidence the POA will be presenting 10 days prior to the hearing. The POA should also consult with their legal counsel on what evidence should be included in the packet.
In light of these new laws, POAs may need to reevaluate their DRV processes. POAs should consult with their legal counsel to ensure their policies and ACC committees are in compliance with the new laws. Additionally, POAs are strongly encouraged to have legal counsel involved throughout all steps of the new 209 hearing process to ensure no steps are missed.
To learn more about the DRV violation process, join Sipra Boyd and Teddy Holtz for a webinar covering the above topics and more, on Wednesday, October 20 from 11:30 a.m. – 12:30 p.m.