Many homeowners send emails asking for help with problems they are experiencing with their HOA. Although Texas Homeowners for HOA Reform (THHR) understands and is sympathetic with the plight of homeowners, THHR is not able to offer any legal advice. THHR can, however, offer these suggestions and links to websites containing information that might answer some questions Texas homeowners have.
Every property owner within of an HOA, whether it's voluntary or mandatory, should be provided a copy of the HOA's governing documents. These documents might be the Articles of Incorporation, Deed Restrictions (sometimes called the Covenants, Conditions and Restrictions [CCRs]), and the By-Laws. In associations with more than one section, each section might have its own Deed Restrictions (CCRs). Make sure you have the Deed Restrictions for your section. Ideally, home-buyers should obtain the Deed Restrictions prior to signing a contract to purchase a home to determine whether the home-buyer finds any provision in the Deed Restrictions objectionable. The home-buyer also needs a copy of any amendments to these documents as well as any policies adopted by the board. A home-buyer should work with his realtor and or the title company to request copies of these documents from the HOA Board or the HOA's managing agent. There could be a fee for copying these documents so be sure to ask about the fee when you make your request.
Read these documents carefully. If there is a cap on the mandatory assessments and or a limit on how much the board can increase the assessments without property owner approval, it will be contained in these documents. The Texas Statutes do not contain any laws regarding caps or increases in HOA assessments. An HOA's By-Laws should contain requirements and procedures for the election of board members, recalling board members, voting procedures and requirements, along with many more policies and procedures specific to that HOA. The Deed Restrictions should contain the architectural requirements and procedure for approval to make modifications to a property within its HOA.
Current Texas statutes do offer some limited help for the homeowner. Property Code 207 contains the procedure Texas property owners may follow to obtain copies of their HOA's documents and statements. Below is a link to the Texas Property Codes.
By clicking on this link, you will leave the THHR website and be taken to the Texas Legislature Online website page containing the Texas Property Code. Find Property Code Chapter 207. Open one of the document types for Chapter 207.
Property owners should attend association general meetings and exercise their right to vote in electing board members and other issues brought before them. Unfortunately, there is no right to vote in HOAs. Many HOA Boards will ignore property owners' votes and property owners may never be aware that their votes were not counted.
In many HOAs, property owners may vote for board members or other issues using proxies or absentee ballots. When property owners do not wish to vote on the issues, the proxies or absentee ballots should be marked so that Board members or HOA agents cannot control the votes.
THHR also suggests that property owners attend board meetings, if possible, to listen to discussions on issues regarding the association. Unfortunately, there is no Open Meeting or Open Record requirements in HOAs. If able, take notes or record the meetings for future reference.
THHR suggests property owners in mandatory HOAs pay their dues in full and on time, if at all possible. If property owners know they are unable to pay their dues on time, THHR suggests property owners contact their HOA boards and explain the situation. Some HOA boards are willing to work with property owners who are not able to pay their dues on time when property owners contact them to explain the situation, and are willing to agree to a payment schedule. Current Texas laws do not prevent HOAs from foreclosing on homes for failure to pay dues, regardless of the reasons or circumstances. If property owners experience problems with their HOAs, it is important to keep dues current. Never pay by cash without a receipt.
Property owners should give instructions how to apply payments for dues, fines or fees. However, HOA managing agents and attorneys are advising HOA Boards to adopt resolutions that purport to authorize the Boards (and agents) the power to re-characterize the payments against property owners' instructions. This means that if property owners are accused of owing multiple debts to the HOA, boards may apply dues payments to other charges regardless of instructions, thus making dues delinquent and the property owners' homes susceptible to foreclosure. The primary beneficiaries of this re-characterization scheme are HOA attorneys and management companies. The HOA's foreclosure power is thus used to divert dues payments from HOA property owners into the coffers of HOA vendors.
Before making any modification to the home's exterior, read the property's governing documents (deed restrictions) to determine if architectural approval is required. If approval is required, the governing documents might give the procedure for doing this. If not, contact the HOA board or the HOA's managing agent to obtain instructions and an application form. Some HOA boards and managing agents will demand that property owners refrain from making modifications until they grant their approval. Their authority to impose such demands may be limited by the restrictive covenants (deed restrictions) that often include provisions for automatic approval if the architectural committee (ARC) has not acted within some time frame (e.g., 30 days, 45 days, etc.) If a modification is made without prior approval, the board can force a property owner to change and/or remove the modification at the property owner's expense or face huge fines and legal fees. The practices of some boards and managing agents seem oriented to purposefully create the risk of significant legal fees for property owners. THHR strongly encourages keeping records of any communications with the ARC. For example, to ensure that you have proof of when you submitted a modification request, consider sending the application via certified mail, return receipt requested.
Texas property owners should become familiar with all the Texas Property Code. At times these statutes may be difficult for the layman to understand, but THHR suggests reading these statutes as they might answer some questions. The link to the Texas Property Code is below.
Clicking on this link will take you out of this website and to the Texas Legislature Online website page containing the Texas Property Code. See Chapter 201 through 211 for the Restrictive Covenants statutes.
Don't make two common mistakes and assume the HOA has a correct mailing address and that the mortgage company is paying HOA dues through an escrow account which includes paying taxes and insurance. Many property owners have suddenly found themselves on the verge of foreclosure because they didn't receive a statement from their HOA about paying the dues. If the HOA has an incorrect address, regardless if it's their error or not, and the property owners' dues are delinquent, the property owner may not receive a delinquency notice until the HOA attorney becomes involved and serves notice of judicial foreclosure. In non-judicial foreclosure, the property owner's first notice might occur when the sheriff shows up to remove the property owner from what he just found out is no longer his home. By the time the property owner is formally served with legal action, the total amount for legal fees, penalties, court costs and delinquent dues that the property owner will be forced to pay to prevent foreclosure on his home could be thousands of dollars.
A simple phone call and a short letter may prevent this from happening. Call the mortgage company to confirm whether or not it pays the HOA dues from the escrow account, and write a short letter to the HOA to make sure they have the correct address. Keep copies of any written communication with the HOA board, managing agent, and HOA attorney.
If property owners within a voluntary association learn that other property owners have initiated a movement to convert to a mandatory HOA, please read this paper. Be careful about door-to-door petitioners asking for signatures to "show support for improving the neighborhood." Unfortunately, there are groups utilizing such techniques to deceive property owners into signing a petition that leads to the imposition of mandatory HOA membership which imposes perpetual liens upon the property with the threat of foreclosure for unpaid assessments.
If property owners are displeased with the behavior of their HOA and want to regain control for the benefit of the property owners, then read this paper from www.HOAdata.org.
Terminating an HOA depends upon many factors. It is best to seek legal counsel if property owners wish to terminate an HOA.