2021 Legislative Session Analysis – Mandatory Actions for Residential Subdivisions

Manning & Meyers

Changes to Texas Property Owners’ Association Law

The 2021 Texas Legislative Session brought about numerous changes to Texas Property Owners’ Association Law. The changes to Condo law and HOA law include both mandatory and permissive actions that residential subdivisions, condominium associations, and townhome communities must make to their daily operations. What follows is a summary and analysis of some of those changes made during the 2021 Legislative Session as well as a breakdown of actions associations must make so as to be compliant with the new laws. Should you have any questions, please feel free to reach out to Manning & Meyers and we will be happy to assist you in your compliance efforts.

Mandatory Actions for Residential Subdivisions and Townhomes

 

1) Filing of Dedicatory Instruments in Real Property Records

Ensure that all dedicatory instruments are filed in the real property records in each county where the association is located. Dedicatory instruments are each governing instrument covering the establishment, maintenance, and operation of an association. They include restrictive covenants, bylaws, rules and regulations, and any amendments thereto.

2) Adjust Your Maximum Resale Fees

Decrease the maximum fee charged for a resale certificate to $375.00. Decrease the maximum fee charged for an updated resale certificate to $75.00.

3) Ensure all Dedicatory Instruments are on a Website Available to the Members

If you are an association that is either greater than 60 lots or managed by a management company, you must ensure that you have a website that is available to all members. Further, you must ensure that all your dedicatory instruments appear on that website.

4) Update Your Management Certificates

You must update your management certificates to now also include: any amendments to your declaration, the telephone number and email address of the manager of the association, the website address of the association, and the amount and description of any fee charged by the association related to a property transfer within the subdivision. An update must be on file with the county clerk by September 1, 2021.

5) File Your Management Certificate with The Texas Real Estate Commission

You must ensure that your Management Certificate and any future amendments thereto are filed with the Texas Real Estate Commission by June 1, 2022, after they are filed with the county clerk’s office.

6) Change the Members of Your Architectural Review Committee

You must ensure that all members of your Architectural Review Committee are comprised of members who are not board members, their spouses, or members of their household.

7) Create a Formal Denial Letter for Architectural Request Denials

You must ensure that all denials of Architectural Changes be sent via certified mail, hand delivery, or electronic mail, and include the basis for the denial, changes the owner may make, if any, as a condition for improvement, and the right of the owner to appeal the denial to the board.

8) Appeal Hearings Before the Board of Architectural Request Denials

Every owner who requests a hearing before the board as related to the denial of their request for an architectural change must be granted their request for a hearing. The notice and hearing procedures are similar to finding hearing procedures under Texas Property Code Section 209.007.

9) Increase the Time Period for Notice of Regular Board Meetings

You must ensure that members are provided at least 144 hours (6 days) notice of regular board meetings if the association notices these meetings online or by posting in a conspicuous place within the community.

10) Establish a Bids Process for Contracts in Excess of $50,000

You must establish a process that requires the solicitation of bids or proposals for contracts that will cost more than $50,000.

11) Send an Owner a Certified Mail Notice & Opportunity to Cure Prior to Credit Reporting

You must send a delinquent owner a notice via certified mail and provide them an opportunity to cure the delinquency in accordance with Section 209.006 prior to reporting an owner to a credit reporting service.

12) Increase the Cure Period to 45 days in Certified Mail Collection Notice

You must increase the time allowed by owners to cure a delinquent balance delineated within the certified mail notice sent to an owner in accordance with Section 209.0064 of the Texas Property Code. The cure period in the notice must be increased to 45 days.

13) Stop Charging Owners for Credit Reporting

You may no longer charge a delinquent owner for reporting their balance to a credit reporting service.

14) Send Owners Notice Prior to Credit Reporting

Prior to reporting a delinquent owner to a Credit Reporting Service, you must send that owner notice and opportunity to cure the delinquency and provide them an opportunity for a hearing.

15) Provide Owners Evidentiary Packets Prior to Section 209.007 Hearings Before the Board

At least 10 days prior to a hearing conducted under Section 209.007 of the Texas Property Code (e.g., fines, property damage, suspending the right to use the common area, etc.), you must provide the owner an evidentiary packet which contains all documents, photographs, and communications you intend to introduce at the hearing.

Plano, Texas