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December 31, 2006

Below is a link to the entire December 2006 Interim Report from the House Committee on Land and Resource Management. You will leave this website and go to a page on the Texas House website. Click on the link to the House Committee on "Land & Resource Management" which will open a .pdf file.

http://www.house.state.tx.us/committees/reports/79interim/welcome.htm

Texas Homeowners for HOA Reform, Inc. is encouraged by the L&RM Committee's recommendations. Below is the exact charge and the Committee's Recommendations as contained in the Interim Report.

Charge Three

"Study the powers and practices of homeowner associations in Texas and the possible need for legislation, such as the proposed Texas Uniform Planning Community Act, to address the rules, enforcement, restrictions and other matters within the authority of a homeowner association. (Joint Charge with the House Committee on Business and Industry)."

CONCLUSION

The protection of private property rights is one of the core functions of all governments. This nation, and this state in particular, has always held fast to the notion that the true independence of its citizens rests squarely with the ability of those people to hold private property with the assurance that government will not interfere with that natural right.

However, also central to the idea of private property is the concept that individual property owners can contract away all or portions of that right as they see fit. Government has a very limited role in interfering with such contracts, as long as such contracts do not violate either manmade or natural law. When potential homeowners contract to be part of an HOA through deeds of sale, they should not generally look to the government to protect them when they are unhappy with the bargain that they made.

On the other hand, when HOAs (which have taken on many of the attributes and functions of governmental entities) violate the spirit of the letter of the law regarding their duties and rights, then it becomes incumbent on government to rein in these abuses.

RECOMMENDATIONS

1) A new chapter in the Texas Property Code, with state-wide and general application, should be enacted that addresses the creation, governance, obligations, and rights of property owners' associations. Although the Committee supports the enactment of certain provisions proposed in TUPCA, the Committee does not support the wholesale enactment of TUPCA.

The new chapter should apply to most if not all of the association in the state.

Since the new chapter will not be uniform to any other state law it should not have the word "Uniform" in the title.

Current provisions in law regarding property owners' associations should be repealed to the extent that they are duplicative or inconsistent with the new chapter.

2) The new chapter should generally be directed at protecting the interests of homeowners, with the balance of power and presumptions in their favor and not that of the associations that represent them.

3) The new chapter should include provisions that encourage, to the greatest extent possible, member participation in the discussions and actions of the association as a whole.

4) The new chapter should include provisions that encourage non-legal and inexpensive resolutions to the conflicts that occur between the association and its members.

5) The new chapter should limit remedies allowed to associations to the least extreme necessary to enforce obligations due to it.

Non-judicial foreclosure by HOAs should be prohibited by law.

Judicial foreclosure by HOAs, if continued in law, should be authorized only under limited circumstances and in accordance with procedure allowed by law.

Foreclosure proceedings by HOAs, if continued in law, should be allowed to be instituted only when a homeowner owes the association an amount that surpasses a high threshold dollar amount.

If the legislature determines that foreclosure should be a remedy available to HOAs, a meaningful right of redemption should be authorized.

6) The new chapter should take into account the ever-changing nature of HOAs and the various stakeholders, in addition to associations and homeowners, that will be affected by any new law.