82nd Session – Legislative Review
Lobbyist for HOA Reform Coalition of Texas testifies
HOA Bill Matrix as of end of 82nd Regular Session – shows how far each bill got (excluding consideration of governor)
New Texas HOA Laws – (bills that passed and not vetoed by governor, with earliest effective date)
Texas’ New HOA Laws– Several new HOA (homeowner association) laws have recently been enacted in Texas. Prior to the 2011 Texas legislative session, there were very few HOA good-governance laws in the state. There were numerous attempts in prior legislative sessions to pass laws mandating open meetings, open records, open voting, and other good-governance parameters for Texas HOA residents. Unfortunately, nearly all failed. However, Texas homeowners achieved victory on many aspects of HOA governance in the 2011 legislative session.
New Laws Impacting HOAs – Numerous laws were enacted by the 2011 Texas legislature that provided good-governance provisions for HOA homeowners. These include HB 2761, SB 472, HB 1228, and HB 362. The new Texas HOA legislation:
- Mandates open records.
- Mandates standards for (1) records retention and (2) records production.
- Allows homeowners to sue in local justice of the peace courts for remedies if the HOA does not produce records.
- Mandates that key governance documents must be (1) filed with the County and (2) posted on the HOA web site.
- Allows all owners to (1) vote in HOA elections and (2) run for the HOA board (unless convicted of a felony or crime of moral turpitude).
- Provides for an independent election recount mechanism.
- Establishes a priority of payments (i.e. assessments = first; fines/legal fees = last).
- Allows solar devices on private property, given certain provisions.
- Mandates various voting techniques, including proxy voting.
- Mandates that the HOA board must have at least one-third control by residents once the HOA is 75% built-out.
- Mandates that HOAs must allow rain harvesting devices, flag poles, and religious displays on front doors – all under certain conditions.
Impact on HOAs– However, some of the key impacts on HOAs will be:
- Boards will no longer be able to legally refuse to provide records to homeowners, as long as those requests meet the parameters of the new laws. There have been numerous instances in the past where staff merely refused to provide records.
- Homeowners will be able to use the local inexpensive justice of the peace courts to enforce document requests.
- Boards will no longer be able to legally keep homeowners from voting or running for the Board. Many HOAs require that members be “in good standing” a process that can be used to keep people from voting or running for the Board, whether or not the “issues” against them are legitimate.
- There will be more safeguards in Board election voting and tabulation.
Implementation – Some of these new HOA laws go into effect on September 1, 2011; others go into effect on January 1, 2012. Therefore, in order to implement these new laws , Boards should (1) revise the elections policy, (2) create a records copying policy, (3) create a records retention policy that at least matches the requirements of HB 2761, (4) revise the Design Guidelines to allow the solar devices as prescribed in HB 362, (5) ensure that all appropriate governance documents (including the latest version of each) is posted on the Web Site and filed with the County, (6) instruct staff to provide records to homeowners without the need for them to file lawsuits, (7) revise the Design Guidelines rules on flag poles to comply with HB 2779, which is effective immediately, and (8) implement many other details.
Fear of Openness – One of the HOA governance laws that the 2011 Texas legislature did not pass was a good open meetings bill. The open meetings bill that did pass was weak and primarily applies only to HOAs that are not under developer control. Under the new laws, there are a few open meetings laws for all HOAs, including those still under developer control. The lobbyists for the builders and professional HOA managers put up strong resistance regarding open meetings legislation. Interestingly, there have been very detailed open meetings laws in place for two HOAs in the Houston area for several years – with no major concerns.
Summary – Not all of the new HOA laws may be positive or may be applicable to all HOAs. However, many of the HOA governance laws provide long-needed legislative relief for homeowners. Expect the staff and certain Board members to complain about the “extra costs” to be incurred due to this legislation.