Texas HOA Laws: Key Regulations Every BOD And Homeowner Should Know

Homeowners associations would be wise to familiarize themselves with Texas HOA laws. These laws tell you how HOAs should be run, what rules may not be permissibly enforced, and what rights homeowners have, among other things. Failure to follow these laws can result in potential liability.

 

Why You Should Know Texas HOA Laws

The governing documents of an HOA primarily govern its operation and management. However, beyond the governing documents, federal and state laws take precedence. If a rule in the CC&Rs, for instance, conflicts with the state laws, the rule is deemed void and unenforceable.

In Texas, several laws relate to the governance of homeowners associations and condominiums. It is important to understand these laws in order to adhere to them properly. Board members have a responsibility to run their association legally. Violating HOA laws can lead to liability, not just for the association itself but also potentially for the individual board members.

 

What are the HOA Laws in Texas?

A handful of laws within the Texas Property Code and the Texas Business Organizations Code apply to homeowners associations and condominiums. These are the Texas Condominium Act, the Texas Uniform Condominium Act, the Texas Property Code—Restrictive Covenants, the Texas Cooperative Association Act, the Texas Nonprofit Corporation Act, and the Texas Fair Housing Act.

Let’s dive into each one below.

 

Texas Condominium Act

Found under Title 7, Chapter 81 of the Texas Property Code, the Texas Condominium Act governs condominiums formed prior to January 1, 1994. However, it’s worth noting that Chapter 82 also applies to such condominium associations.

The Texas Condominium Act covers various topics, including—but not limited to—the creation and termination of condominium associations, condominium records, insurance, and voting.

Here is a breakdown of the subchapters:

• Subchapter A. Provisions Generally Applicable To Condominiums.
• Subchapter B. Creation, Alteration, And Termination Of Condominiums.
• Subchapter C. Condominium Management.

 

Texas Uniform Condominium Act

Found under Title 7, Chapter 82 of the Texas Property Code, the Texas Uniform Condominium Act governs condominiums formed after January 1, 1994. It applies to al types of condominiums, including residential, commercial, and industrial types.

The Texas Uniform Condominium Act covers a variety of topics, including but not limited to the creation and termination of condominium associations, the powers of the association, board members and officers, meetings, voting, quorums, upkeep, and assessments.

Here is a breakdown of the subchapters:

• Subchapter A. General Provisions.
• Subchapter B. Creation, Alteration, and Termination of Condominiums.
• Subchapter C. Condominium Management.
• Subchapter D. Protection of Purchasers.

 

Texas Property Code – Restrictive Covenants

Found under Title 11, Chapters 201 to 215 of the Texas Property Code, the Texas Property Code – Restrictive Covenants governs residential homeowners associations in the state. It covers a variety of topics, including but not limited to the creation and enforcement of restrictive covenants, the responsibilities of HOAs, disclosure of certain information to members, and protections for property owners.

Here is a breakdown of the subchapters:

• Chapter 201. Restrictive Covenants Applicable To Certain Subdivisions.
• Chapter 202. Construction And Enforcement Of Restrictive Covenants.
• Chapter 203. Enforcement Of Land Use Restrictions In Certain Counties.
• Chapter 204. Powers Of Property Owners’ Association Relating To Restrictive Covenants In Certain Subdivisions.
• Chapter 205. Restrictive Covenants Applicable To Revised Subdivisions In Certain Counties.
• Chapter 206. Extension Of Restrictions Imposing Regular Assessments In Certain Subdivisions.
• Chapter 207. Disclosure Of Information By Property Owners’ Associations.
• Chapter 208. Amendment And Termination Of Restrictive Covenants In Historic Neighborhoods.
• Chapter 209. Texas Residential Property Owners Protection Act.
• Chapter 210. Extension Or Modification Of Residential Restrictive Covenants By Petition In Certain Subdivisions.
• Chapter 211. Amendment And Enforcement Of Restrictions In Certain Subdivisions.
• Chapter 212. Extension Of Restrictions By Majority Vote In Certain Subdivisions.
• Chapter 214. Amendment Of Dedicatory Instruments Of Certain Mixed-Use Real Estate Developments.
• Chapter 215. Master Mixed-Use Property Owners’ Associations.

 

Texas Cooperative Association Act

Found under Title 6, Chapter 251 of the Texas Property Code, the Texas Cooperative Association Act governs cooperative associations in the state.

Here is a breakdown of the subchapters:

• Subchapter A. General Provisions.
• Subchapter B. Formation and Governing Documents.
• Subchapter C. Management.
• Subchapter D. Membership.
• Subchapter E. Shares.
• Subchapter F. Meetings and Voting.
• Subchapter G. Capital and Net Savings.
• Subchapter H. Reports and Records.
• Subchapter I. Winding Up and Termination.
• Subchapter J. Miscellaneous Provisions.

 

Texas Nonprofit Corporation Act

Found under Title 2, Chapter 22 of the Texas Business Organizations Code, the Texas Nonprofit Corporation Act governs nonprofit organizations in the state. In Texas, homeowners associations must be structured as nonprofits. Condominiums can either form as for-profit or nonprofit corporations.

Here is a breakdown of the subchapters:

• Subchapter A. General Provisions.
• Subchapter B. Purposes And Powers.
• Subchapter C. Formation And Governing Documents.
• Subchapter D. Members.
• Subchapter E. Management.
• Subchapter F. Fundamental Business Transactions.
• Subchapter G. Winding Up And Termination.
• Subchapter H. Records And Reports.
• Subchapter I. Church Benefits Boards.
• Subchapter J. Ratification Of Defective Corporate Acts; Proceedings.

 

Texas Fair Housing Act

Found under Title 15, Chapter 301 of the Texas Property Code, the Texas Fair Housing Act offers similar protections to the federal Fair Housing Act. This law protects against discrimination when it comes to housing opportunities at the state level. According to the Texas FHA, housing discrimination based on race, color, religion, sex, familial status, or national origin is prohibited.

Here is a breakdown of the subchapters:

• Subchapter A. Title, Purpose, And Definitions.
• Subchapter B. Discrimination Prohibited.
• Subchapter C. Exemptions.
• Subchapter D. Administrative Provisions.
• Subchapter E. Administrative Enforcement.
• Subchapter F. Administrative Hearings.
• Subchapter G. Enforcement By Attorney General.
• Subchapter H. Enforcement By Private Persons.
• Subchapter I. Criminal Penalty.

 

New Texas HOA Laws

It’s not uncommon for legislators to introduce new HOA laws or amend existing ones. House Bill 614 and House Bill 886 are prime examples.

 

House Bill 614

Known as the Fines and Enforcement Policy, HB 614 seeks to improve transparency and fairness within HOAs. The bill requires associations to create a clear policy that includes violation categories, fine schedules, and hearing details. Associations must also make this policy available on a publicly accessible website.

The bill took effect on January 1, 2024.

 

House Bill 886

House Bill 886 amends Section 209.0094 of the Texas Property Code to establish specific procedures HOAs must follow before filing an assessment lien for unpaid dues.

According to the bill, HOAs must send two notices to a delinquent homeowner:

• The first notice is sent via first-class mail or email to the owner’s last known address;
• The second notice is sent via certified mail, and a return receipt is requested at least 30 days after the first notice.

Homeowners associations must wait at least 90 days after sending the second notice before filing an assessment lien. However, these notice requirements don’t apply to property owners covered under the Servicemembers Civil Relief Act.

The bill went into effect on September 1, 2023.

 

Specific Texas HOA Laws

With the sheer volume of chapters and sections to sift through, you might have trouble finding what you’re looking for. To help you out, here are some of the most important provisions to understand.

 

Creating a Homeowners Association

According to the Texas Nonprofit Corporation Act, HOAs in the state must form as nonprofit corporations and file Articles of Incorporation with the Secretary of State.

 

Recording of HOA Governing Documents

Texas law requires homeowners associations to record their governing documents, including the bylaws and CC&Rs, to make them publicly available (Section 202.006). This promotes transparency, accountability, and accessibility.

 

Rule Enforcement

According to Texas law, HOAs must provide homeowners with written notice of their violation (Section 209.006). Associations must also allow homeowners to fix the violation before levying fines. If the HOA does impose fines and penalties, homeowners must go through a fair hearing process first.

The HOA’s governing documents must clearly outline the enforcement procedures. Furthermore, they must be reasonable.

 

Architectural Control

Homeowners associations generally have the authority to regulate architectural alterations and improvements of individual homes. Typically, homeowners must complete and submit an application form before making any changes. A committee or the HOA board will review the application before approving or denying it.

 

Property Use Restrictions

Homeowners associations generally have the authority to regulate property use within the community. Such regulations include parking rules, fencing restrictions, and specific displays or decorations.

 

Prohibited Restrictions

Homeowners associations may not generally prohibit or fine members for the following:

• Adopting methods for composting solid waste (Section 202.007)
• Setting up rain barrels or other water-efficient irrigation systems (Section 202.007)
• Landscaping with drought-resistant plants or water-conserving natural turf (Section 202.007)
• Adding solar energy systems (Section 202.010)
• Installing roof shingles (Section 202.011)
• Flying the American flag, Texas state flag, or military flags, provided they follow federal flag display laws (Section 202.012)
• Placing religious items on entry doors, as long as they comply with Texas and U.S. constitutional standards (Section 202.018)
• Setting up a standby electric generator (Section 202.019)
• Legally transporting, storing, or using firearms if the homeowner is authorized to possess them (Section 202.021)

 

Financial Records

The HOA board must create a budget that depicts the expected income and expenses for the year. Boards must also maintain financial records accurately and meticulously. This ensures transparency and accountability and promotes trust among members.

 

Records Inspection

Homeowners associations must make books and records reasonably available to members for examination. Both Section 209.005 and Section 215.0135 cover this right.

 

Dispute Resolution

Texas law offers alternative dispute resolution (ADR) options to avoid litigation, which can be costly and time-consuming (Section 209.007). If the parties fail to resolve their conflict through ADR, they may seek other legal recourses.

 

Liens and Foreclosures

Homeowners associations may place an assessment lien on properties when homeowners fail to pay their fees. Texas law also allows HOAs to initiate foreclosure proceedings to recoup the debt. However, HOAs must fulfill certain requirements when foreclosing on a home.

Key provisions may be found below:

• Section 209.009. Foreclosure Sale Prohibited In Certain Circumstances.
• Section 209.0091. Prerequisites To Foreclosure: Notice And Opportunity To Cure For Certain Other Lienholders.
• Section 209.0092. Judicial Foreclosure Required.
• Section 209.0093. Removal Or Adoption Of Foreclosure Authority.
• Section 209.0094. Assessment Lien Filing.
• Section 209.010. Notice After Foreclosure Sale.
• Section 209.011. Right Of Redemption After Foreclosure.

 

Disclosures

Before buying a home, purchasers must receive a set of disclosures and documents (Section 207.003). These include the governing documents of the HOA and its financial statements, among other things.

 

Legal Help for HOAs

Texas HOA laws can be complex and confusing, especially to the untrained eye. Fortunately, professionals in the HOA industry, including lawyers and HOA management companies, can assist with interpreting these laws and ensuring your community complies.

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