The 2023 Texas legislature special session passed several new laws for homeowners association (HOAs), condominium owner associations (COAs) and property manager needs to be away of. If you're a member of your board, it's only natural to be curious about the potential impact of these changes on your association and to consider the appropriate steps your board should take in response. We will go over 3 of the new laws being passed; House Bill 614 (Fines and Enforcement Policy), House Bill 886 (Assessment Lien Filling); House Bill 1193 ( Anti-Discrimination based on Section 8 Status). Before updating any HOA or COA's bylaws of policy it is always best practice to consult appropriate legal council.
House Bill 614 (Fines and Enforcement Policy)
(Date to go into Effect January 1, 2024)
Overview: Returning from previous legislative sessions, House Bill 614, known as "Fines and Enforcement Policy," ushers in a transformative era for Texas Homeowners' Associations (HOAs). Effective January 1, 2024, this legislation mandates all Texas HOAs to institute comprehensive enforcement policies, specifically outlining types of restrictions and a structured schedule of fines for each infraction.
Legislative Objective: At its core, this legislative initiative seeks to instill heightened clarity within the realm of Texas HOA policies, establishing a robust framework that ensures communities remain compliant and consistent in the enforcement of rules.
Prescribed Requirements: The statutory text outlines the precise requirements for HOAs. A property owners' association board must adopt an enforcement policy, inclusive of general categories of restrictive covenants for which fines may be assessed, a detailed schedule of fines corresponding to each violation category, and essential information regarding hearings.
Association Compliance: In light of this legislation, boards are tasked with collaborating with legal counsel to recalibrate their enforcement policies. The adjusted policy should provide clarity on restrictions, fines categorized by violation type, and procedural information pertaining to hearings. Notably, the policy retains flexibility, allowing the board to exercise discretion in adjusting fines on a case-by-case basis, accommodating unique circumstances.
Implementation Timeline: Given the effective date of January 1, 2024, associations have a window of time to adapt. Any fines levied before this date will adhere to existing policies, irrespective of whether the association has introduced a new policy. However, fines due after the effective date will be subject to the association's freshly implemented policy, as dictated by Texas state law.
Association Guidance: To navigate these transformative changes, associations are strongly advised to consult with management companies and legal counsel promptly. A comprehensive review of current fines and enforcement policies, coupled with necessary adjustments, will ensure alignment with the evolving legal landscape.
House Bill 886 (Assessment Lien Filing)
(Date to go into Effect September 1, 2023 Single-family only)
Overview: House Bill 886, colloquially referred to as Assessment Lien Filing, introduces a meticulous framework defining an "assessment lien." This legal instrument signifies the nonpayment of assessments or charges owed to a Property Owners' Association (POA) and is filed in the official public records of a county, significantly impacting real property title. Central to this legislation is the mandate that a POA must issue three separate monthly notices of delinquency before filing an assessment lien.
Impact: This legislative amendment, enshrined in Section 209.0094 of the Texas Property Code, emerges from a comprehensive effort to regulate the process of filing liens for assessment debts, particularly within single-family residential property owners' associations. The core legislative intent is to afford homeowners an equitable opportunity to address outstanding dues, fostering transparency and mitigating the unexpected imposition of liens.
Procedural Details: In practical terms, HB 886 intricately outlines the steps a POA must follow. Before filing a lien or notice of lien against homeowners, the association is obligated to dispatch three monthly written notices. The first notice is sent via first-class mail or email, the second via certified mail (return receipt requested) after a minimum 30-day interval, and the third, constituting the notice of the assessment lien, is dispatched no sooner than 90 days after the second notice. Each notice must comprehensively delineate the amount owed, elucidate the homeowner's rights, and allow for a minimum 30-day payment window devoid of additional charges.
Association Guidance: Given the nuanced procedural adjustments, it is imperative for associations to collaborate closely with legal counsel to formulate and implement an amended Collection Policy aligned with the intricacies introduced by HB 886.
House Bill 1193 (Anti-Discrimination Based on Section 8 Status)
(Date to go into Effect September 1, 2023)
Overview: House Bill 1193, effective September 1, 2023, emerges as a pivotal legislative measure aimed at eradicating any form of discrimination within Texas property associations based on a tenant's chosen payment method. This legislative adjustment underscores a commitment to fostering equal housing opportunities, particularly for tenants reliant on assistance for their housing payments.
Legislative Purpose: Situated within Chapter 202 of the Texas Property Code, the essence of HB 1193 lies in bolstering protections for tenants relying on various forms of assistance to meet their housing obligations. By prohibiting property owners' associations from including or enforcing provisions in dedicatory instruments that restrict renting based on payment methods, the legislation aims to cultivate a more inclusive and accessible housing landscape.
Requirements and Implications: Commencing on September 1, 2023, property owners' associations in Texas are mandated to accept all forms of payment, inclusive of Section 8 housing vouchers. This expansive definition encompasses rental vouchers, rental assistance, or subsidies from non-governmental organizations. The overarching goal is to dismantle any barriers to housing, ensuring equal access regardless of the chosen method of payment.
Association Action: While many property owners' associations may already align with these principles, it is incumbent upon boards and managers to conduct a thorough review of their dedicatory instruments, ensuring alignment with the legislation's intent and proactively rectifying any lingering restrictions against specific payment methods.
If you have questions on any of the above mentioned new laws we here at PMI would love to talk to you and help in anyway we can. So please give us a call or schedule a consult. Once again before updating any HOA or COA's bylaws of policy it is always best practice to consult appropriate legal council. For any additional information on the 88th Texas Legislative session please check out https://guides.sll.texas.gov/property-owners-associations.
