Recent state legislation has introduced changes that will affect both homeowners’ associations (HOAs) and condominium owner associations (COAs), both also referred to as property owners’ associations (POAs). Here is what you need to know from the 2024 Texas legislation that impact Homeowners Associations (HOAs) and Condominiums (COA’s):
Key Areas Affected:
- Enforcement of Fines: New requirements for how fines are levied and enforced.
- Assessment Liens: Changes in the process for filing assessment liens for nonpayment.
- Payment Acceptance: Mandates on accepting various forms of payment, including housing vouchers.
House Bill 614: Fine and Enforcement Policies (HOAs Only)
Overview: House Bill 614, filed by Representative Shaheen, updates Chapter 209 of the Texas Property Code regarding homeowners’ associations (HOAs) and their fine enforcement policies.
Key Requirements:
- Enforcement Policy: HOAs that have the authority to impose fines must establish and follow an enforcement policy.
- Communication: Associations must provide a copy of this policy to each property owner. This can be done by:
- Posting the policy on the HOA’s website.
- Sending a physical copy via hand delivery.
Contents of the Enforcement Policy:
- General categories of restrictive covenants.
- A schedule of fines for each category of violation.
- Information about hearings as described in Property Code Section 209.007.
House Bill 886: Assessment Lien Requirements (HOAs Only)
Overview: House Bill 886, also filed by Representative Shaheen, amends Chapter 209 of the Texas Property Code to introduce new requirements for HOAs regarding assessment liens.
Key Requirements:
Delinquency Notices: Before an HOA can file an assessment lien due to nonpayment, it must follow a specific process:
- First Notice: Send a delinquency notice to the property owner via:
First-class mail to the owner’s address.
Email, if the owner has provided an email address. - Waiting Period: After sending the first notice, the HOA must wait 30 days before sending a second notice.
- Second Notice: This must be sent via certified mail.
- Final Waiting Period: After the second notice is sent, there is a 90-day waiting period before the HOA can file the assessment lien.
These bills aim to enhance transparency and fairness in the enforcement of fines and assessment liens by HOAs.
House Bill 1193: Changes to Tenant Payment Protections (Both HOAs and COAs)
Overview: House Bill 1193 modifies Chapter 202 of the Texas Property Code to enhance
protection for tenants who rely on assistance to pay for housing. The intent of this legislation is
to ensure equal access to housing for all tenants, regardless of their payment methods.
Key Requirements:
Acceptance of Payments: Starting September 1, 2023, Texas property owners’ associations (POAs) must accept all forms of payment, including:
- Section 8 housing vouchers.
- Rental vouchers.
- Rental assistance or subsidies from non-governmental organizations.
This change aims to provide tenants with greater flexibility and security in their housing options. By complying with this new requirement, associations can support fair housing practices and help ensure that all tenants have equal access to housing opportunities.
House Bill 2024: Amendment to the Stature of Repose (HOAs and Townhomes under 3 stories)
HB 2024 introduces a significant amendment to the Statute of Repose, specifically targeting builders of single-family homes and townhomes with fewer than three stories. The legislation aims to encourage builders to provide written warranties for their residential construction projects, ultimately benefiting homeowners by reducing their risk and enhancing accountability within the construction industry.
Key Requirements
- Effective Date: Immediately upon passage.
- Applicability: This amendment applies to single-family homes and townhomes with a
- height of less than three stories.
- Incentive Structure:
- Builders that offer a written warranty for their construction projects will benefit from a reduced Statute of Repose period, decreasing it from 10 years to 6 years.
- If a written warranty is not provided, the Statute of Repose remains at 10 years.
- Legal Implications: This change allows homeowners to seek legal recourse for construction defects for a shorter period if a warranty is offered, fostering a more proactive approach to construction quality and homeowner protection.
By incentivizing the issuance of warranties, HB 2024 aims to improve the standards of residential construction and provide clearer options for homeowners regarding their legal rights.
General Impact
Both HOAs and condominium associations in Texas must adjust to these new regulations to ensure compliance. This includes reviewing and potentially updating governing documents, enhancing transparency in operations, and adopting new rules regarding rentals and disputes. Boards should communicate these changes to their members and consider legal consultation to navigate the updates effectively.
What to Explore More Results from the 88th Texas Legislature Special Session?
For additional information on the new legislation affecting property owners’ associations (POAs), visit the Texas State Law Library’s New Legislation page at: https://guides.sll.texas.gov/property-owners-associations.
Important Note: Before implementing any policy, changes or updating governing documents, it’s highly recommended that the board consults with legal counsel to ensure compliance and protect the association’s interests.
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