How much are HOA fees in Texas? This is a question many homeowners ask, especially in the Lone Star State. After all, homeowners want to know that they’re paying a reasonable amount and getting their money’s worth.

 

Are HOA Fees in Texas Legal?

Yes, in general. Section 204.010 of the Texas Property Code states that the HOA board may collect regular dues unless the governing documents say otherwise. As such, board members and homeowners should check their CC&Rs, bylaws, and articles of incorporation to verify that their HOA has this authority.

 

What are HOA Fees?

Homeowners in an HOA generally have an obligation to pay dues or fees to the association. The HOA collects this fee regularly, typically in monthly, quarterly, or yearly installments. The HOA uses the collected fees from homeowners to pay for various expenses needed to maintain the community.

 

Average Texas HOA Fees

Homeowners association fees can vary greatly from one community to another. Several factors can influence this, including location, size, and the extent of its amenities. As such, what may be a reasonable amount to one HOA may be exorbitant in another.

What are typical HOA fees in Texas? In the Lone Star State, average monthly HOA fees can range from $150 to $400. However, some associations charge as low as $100 per year, while others charge over $1,000 monthly. Communities in wealthier areas typically have higher fees due to their extravagant amenities and higher cost of living.

As for the average HOA fees in Houston, owners can expect to pay somewhere between $200 to $400 per month. Again, this is not a set standard. Fees can still vary widely from association to association.

 

How to Calculate HOA Fees

The HOA board calculates the regular fees or dues that homeowners must pay. This process usually begins with the annual budget. Board members create the budget by anticipating the expenses for the year. From there, the board determines how much each homeowner must pay to meet the necessary costs.

It’s important to understand that the HOA board doesn’t compute this fee arbitrarily. The board must consider several factors to determine anticipated expenses and revenue. These include historical data (past budgets and financial statements) and economic changes such as inflation and the rising cost of goods and labor.

Additionally, the board must consider the HOA’s delinquency rate. If there are many delinquent homeowners who will likely remain delinquent, the board must collect more money to make up the difference.

 

What do HOA Fees Cover?

What do HOA Fees Cover?

Regular fees cover the expenses associated with the HOA’s maintenance, operations, and management. These include but are not limited to the following:

  • Maintenance and upkeep of common areas and amenities (including repairs, pest control, snow removal, etc.)
  • Utilities of common areas and amenities
  • Landscaping of common areas and amenities
  • Insurance for the HOA
  • Management fees
  • Certain municipal services, such as trash collection and wastewater management
  • Security precautions
  • Reserve fund contributions

 

Is There a Cap on HOA Fees in Texas?

Texas law doesn’t limit increases in HOA fees in terms of amount and frequency. However, owners should check their governing documents to see if any caps or restrictions are in place for their community. More often than not, an HOA’s governing documents will stipulate the maximum amount for increases without approval from the membership. Beyond that amount, homeowners must vote to approve it.

If the HOA board wishes to discuss or vote on an increase in HOA fees, the meeting must be open to all association members. This is in accordance with Section 209.0051 of the Texas Property Code.

 

Harris, Montgomery, and Galveston Counties

Section 204.002 contains additional requirements. If an HOA’s governing documents allow annual increases in fees without a vote, Section 204.010 permits the board to:

  • Assess the increase on a yearly basis; or
  • Accumulate and assess the increase after a number of years.

It’s worth noting that this section only applies if the governing documents don’t contain provisions that say otherwise.

 

What Happens if You Don’t Pay HOA Fees in Texas?

When you don’t pay your HOA fees, you may face a few possible consequences. These include late charges or interest, dealing with a collections agency, and liens and foreclosure.

 

1. Late Charges or Interest

According to Section 204.010(10) of the Texas Property Code, an HOA may charge a late fee or interest for any late payments of regular dues. However, if the governing documents say otherwise, then the HOA doesn’t have this authority. Late charges and interest are typically used to discourage owners from paying late fees.

 

2. Collections Agency

An HOA may send delinquent accounts to a collections agency. However, the HOA must provide advance notice in writing.

According to Section 209.0064 of the Texas Property Code, a debt collection fee may only be charged to a homeowner if:

  • The owner receives written notice via certified mail;
  • The notice lists all delinquent amounts as well as the total outstanding amount;
  • The owner receives information on any available payment plans or alternative options to avoid being sent to a collections agency; and,
  • The owner receives at least 45 days to pay their debt.

 

3. Liens and Foreclosure

Liens and Foreclosure

Left with no other option, an HOA may place a lien on an owner’s property for unpaid dues. A lien ensures that the HOA receives payment in the event of the property’s sale. Homeowners should also know that an HOA may force a sale through foreclosure to collect the outstanding debt.

Texas law doesn’t automatically give HOAs the authority to create a lien. The HOA’s governing documents must explicitly grant this power, including what forms of debts a lien may secure.

Furthermore, before an HOA can file a lien with the county’s official public records, it must first send two notices to the homeowner (Section 209.0094). The HOA must send the first notice via first-class mail or email. Then, at least 30 days after sending the first notice, the HOA must send the second notice via certified mail.

After that, the HOA must wait at least 90 days after sending the second notice before proceeding. This allows the owner to settle their debt/s with the association.

For foreclosures, an HOA may use the judicial process, which requires filing a lawsuit in a district or county court. Some HOAs may use the nonjudicial process only if their governing documents permit it.

 

Texas Law on HOA Payment Plans

Homeowners associations consisting of at least 15 lots must offer members a payment plan to pay their overdue fees. According to Section 209.0062, this payment plan must be for at least 3 months. However, not everyone can participate in a payment plan. This includes homeowners who have been on a payment plan in the last 12 months and those who have defaulted on a previous payment plan.

 

Do Unpaid HOA Fees Affect Your Credit Score in Texas?

HOA fees can appear on a credit report and affect credit score. Some HOAs go through the trouble of reporting the delinquency to a credit reporting agency, while others don’t.

If an HOA wishes to make such a report, there are certain requirements to follow. For one thing, the HOA can’t report any fees that are being disputed. The HOA also can’t charge any reporting fees to the homeowner (Section 209.0065).

Before making the report, an HOA must also give the homeowner a detailed notice of all the delinquent fees or charges at least 30 business days in advance and give the homeowner the choice to enter into a payment plan.

Furthermore, Section 209.006 of the Texas Property Code requires HOAs to send written notice to the owner via certified mail.

 

A Vital Purpose

Many people feel confused by HOA fees in Texas. These fees can vary widely depending on the community’s needs and priorities. However, when owners know where their fees are going and what purpose they serve, it’s easier to understand why they exist.

Graham Management offers exceptional HOA management services, including assistance with fee collection, to Houston communities. Call us today at (713) 334-8000, request a proposal, or contact us online to learn more.