Over the last few months, we have discussed many of the changes the 87th Texas Legislative Session brought to the Property Owners Association (POA) world. One of the biggest changes is the new requirement for POAs to file their management certificates with the Texas Real Estate Commission (TREC). In the following update, we will provide the latest information on what we know about TREC’s filing process and management certificate requirements.
What We Know About Filings with TREC:
As of today, there has still been very little information released by TREC on how the process for filing management certificates will occur; however, TREC has posted an FAQ page on the filing requirements that does detail some information. Here is what we know so far:
- TREC is developing a site for POAs to upload management certificates that will be online by December 1, 2021.
- TREC is asking POAs to not send management certificates before the site goes live.
- POAs that record their management certificates in their county’s real property records before December 1, 2021 will have until June 1, 2022 to file their management certificates with TREC.
- Management certificates recorded in their county’s real property records after December 1, 2021 have only seven (7) days to file their management certificate with TREC.
- The POA will not be able to email or send their management certificate via regular mail to TREC. All management certificates must be filed using TREC’s website.
- TREC will not create a form or template for use by POAs.
What Should Be Included in a Management Certificate?
The Texas Property Code identifies the requirements for what needs to be included in management certificates. Per Section 209.004(a), management certificates need to include the following information:
(1) the name of the subdivision;
(2) the name of the association;
(3) the recording data for the subdivision;
(4) the recording data for the declaration and any amendments to the declaration;
(5) the name and mailing address of the association;
(6) the name, [and] mailing address, telephone number, and e-mail address of the person managing the association or the association’s designated representative; [and]
(7) the website address of any Internet website on which the association’s dedicatory instruments are available in accordance with Section 207.006 (only applies to POAs composed of at least 60 lots OR a POA that has contracted with a management company);
(8) the amount and description of a fee or fees charged by the association relating to a property transfer in the subdivision; and
(9) other information the association considers appropriate.
Since some of the requirements aren’t entirely clear, i.e., websites, fee requirements, frequency and necessity of re-recording, many POAs have turned to legal counsel for assistance.
While most of the information that needs to be included in the management certificate is straightforward and should not change, certain sections may have to be updated over time. For instance, if the association’s declaration is amended, the management certificate will need to be re-recorded in the county’s real property records and re-filed with TREC. The POA won’t be able to avoid that action. But, POAs can avoid the hassle of re-recording and re-filing the management certificate in the event of a manager reassignment if the association just identifies the management company name as the designated representative on the certificate and includes a generic email address that can be accessed by all employees of the management company. Of course, if the POA changes management companies, the POA will have to re-record a new management certificate that identifies the new management company in the county’s real property records and re-file with TREC as well.
If your POA has not begun the process of updating its management certificate, now is the time to do it. POAs should work with their legal counsel to ensure they are in compliance with the new state laws and are ready to file their certificates with TREC on December 1st.
As questions continue to persist, RMWBH will be hosting a webinar on Wednesday, November 17th at 11:30 a.m. to provide the latest updates on the management certificate process and answer any questions you may have before the TREC site goes live on December 1st.