We are often asked by our clients how payments must be applied once an owner has sent in a payment. The Texas Legislature addresses this matter to a revision to Texas Property Code 209.0063. This took effect January 1, 2012. This section of the code states that A payment received by an association must be applied to an owner’s debt in the following order of priority:
a. Delinquent Assessments;
b. Current Assessments;
c. Attorney’s fees or 3rd party collection costs associated with assessment collection or any charge that could be a basis for foreclosure;
d. Attorney’s fees not subject to #3 above;
f. Any other amount owed the Association.
Payment Plan Exception: There is an exception to the above guidelines if at the time the payment has been received the owner is in default under a payment plan. If at the time a payment is received an owner is in default under a PP, the above priority guidelines do not apply. However, a fine may not be giving priority under over any other amounts due and owing.