Proposed HOA Reform Bills In Texas

Homeowners associations (HOAs) are formed to improve neighborhoods and increase property values, but sometimes their actions conflict with owners’ interests. New legislation seeks to limit their powers and protect owners and tenants. The proposals are articulated in Texas Senate Bill 1588 and House Bill 3367. 

Regulating Charges 

The bills require HOAs only to charge property owners resale certificate fees when it is necessary and make sure the fee is reasonable. The fee should not exceed $250 for creating the certificate and $30 for an update of the certificate. 

Access to Information 

The bills require HOAs to create a statewide database that provides information about their latest decisions, provisions, and amendments and avail it on a publicly accessible website. Every association is obligated to maintain a website and other internet platforms. The website should provide details about its name, mailing address, and the contacts of its managers or designated representative. 

Prior Notification 

The HOA Bill Reform requires associations to provide property owners with a written notice before suspending their rights to use common areas, filing suits, levying fines or reporting them to a credit reporting agency. Further, HOAs cannot report owners to credit reporting agencies for delinquent fees, fines, or assessments if the property owner has a pending dispute related to the charges. Before making a negative credit report, the HOA must send the property owner a detailed account of all the delinquent charges and give them an opportunity to enter into a payment plan. 

Alternative Dispute Resolution

In case of a dispute, the property owner is entitled to an appeal before the board and must get notification from the board prior to the hearing. The association must provide the owner with all the evidence prior to the hearing. During the hearing, the owner is entitled to challenge the evidence and raise pertinent issues relevant to the case. 

Tenant Protection 

Associations cannot make provisions that give them the power to approve rental applications or leases. Further, they cannot demand information related to an applicant or a tenant’s consumer or credit report. 

As a Texas resident, I am convinced that a well run HOA will sustain property values. HOA reform is an on-going issue and one that will continue to evaluation. The Texas Senate Bill 1588 and House Bill 3367 will be reviewed again in September 2021. Please contact me for questions about HOAs or click here for local deed restrictions.