New HOA Laws in Texas just went into Effect

Four days ago, prolific new REALTOR-supported reforms to HOA laws in Texas went into effect and the new protections for homeowners are especially of note. The 2021 Texas 87th Legislative Session closed with new bills that significantly affect property owner’s associations (POAs / HOAs) governed under Chapter 209 of the Texas Property Code (TPC).

Specifically, Senate Bill 1588 – Relating to the Powers and Duties of Property Owner’s Association included quite a few changes that will certainly impact the operation of homeowners associations. These changes bring more balance between the rights of property owners and their associations.

So if you’ve ever felt like your HOA management is out of control, the good news is that you’re not alone. The better news is that balance is coming.

HOA Changes

⁣The 87^th Texas Legislature passed these changes as Senate Bill 1588, which was authored by Sen. Bryan Hughes and Rep. Chris Turner.

• HOA fees are capped at $375 for subdivision information, and $75 for updated resale certificates.
• The Texas Real Estate Commission (TREC) will create a publicly accessible central database of Texas HOAs by December 1, 2021. HOAs that have filed management certificates in county records before December 1 are required to file with TREC by June 1, 2022.
• HOAs that have at least 60 lots or a contract with a management company are required to maintain websites with management certificates and meeting information and notifications.
• HOAs are required to file dedicatory instruments with the county and provide certain contact information on all dedicatory instruments and management certificates.
• Property owners have new protections from negative credit reporting when a fine or fee is in dispute, and HOAs are required to give a detailed report of charges and offer a payment plan before reporting delinquencies.
• The legislation prevents some conflicts of interest within HOA architectural review boards.
• HOAs are barred from requiring access to lease agreements and are only allowed to request tenant’s contact information and lease beginning and end dates.
• HOAs are required to solicit bids for contracts for services over $50,000.
• HOAs are barred from prohibiting certain pool safety enclosures, the installation of certain security measures on an owner’s private property, or certain religious displays.
• HOA boards are required to provide members with timely notice about meetings.
• The legislation provides improved due process in dispute resolution and additional legal avenues when seeking resolution from a dispute with an HOA.

It’s no secret that the real estate market is currently going through unprecedented growth. With record low interest rates AND record low inventory, it’s one of those rare markets where we find that both buyers and sellers are winning. The changes that Senate Bill 1588 bring will equate to lower closing costs for both parties and that’s a true win-win.