Property Owner's Association Legislation in Texas...
In the recent Texas Legislative Session there were several bills that pertained to the management, maintenance, and mishandling of POA/HOA's (Property Owner's Associations/Home Owner's Associations.) In Texas, POA's have long been a bone of contention, a necessary evil, if you will.
On one hand, residents want the enforcement of restrictions, maintenance of community amenities and accounting for funds. But on the other hand, many POA's are terribly mismanaged, irresponsible and in some cases discriminatory. Many a POA contact has held up real estate closings because they don't have time, don't feel like or don't believe they must complete resale certificates and provide documents required by the Texas Property Code to buyers of real property.
I have long been an advocate of transparency and compliance by POA's, especially since, in the State of Texas a POA has the power to foreclose on property. In one case about 8 years ago, I had to file complaints with every government entity who would listen and finally get an attorney to write a letter because a POA was discriminating against my buyers. It infuriated me that they had such power...I did get the deal closed and the fabulous ending to the story was that my buyers got on the board of the POA!!! Gotta love that!
The following information was provided by the Texas Association of REALTORS (TAR) Legislative Liaison.
You will recall from earlier Legislative Liaisons that the Texas Association of REALTORS® supported major legislation that would have reformed and modernized regulation of homeowner associations to ensure protection of homeowners’ rights while maintaining a legal framework for efficient and effective management of associations. Property owners and buyers within HOAs value the enhanced quality of life and increased property values created through the HOA structure, but continue to complain about a number of issues, including lack of transparency in HOA actions, money or collection issues, deed restriction enforcement, and lack of responsiveness from the HOA.
While the major reform bill died in the waning days of the session, a few bills passed related to HOAs that may affect Texas REALTORS®. Some property owners associations require new resale certificates to be issued once a property is under contract and about to close, causing undue delay and expense to the real estate transaction. SB 1918 requires a property owners association that has provided a resale certificate to provide an updated certificate upon request. The update must include the status of any unpaid dues or assessments, a statement regarding a property owners association exercise of a right of first refusal, and any changes to the information originally provided in the resale certificate. An updated resale certificate can only be requested within 180 days of the issuance of the original resale certificate and only by the party who requested the original certificate.
SB 1919 provides consequences for property owners associations that fail to file a management certificate with the county in which the association is located. Previous law includes the requirement, but contains no penalty if the certificate is not filed. If the management certificate is not filed under the new law, a purchaser of property in the property owners’ association would not be liable to the property owners association for any amounts due on the date of the transfer.
For more information about property in the Texas Hill Country contact Jeani Thomas Richie, Broker
