Many new subdivisions that are being built in Texas today contain restrictive covenants that require mandatory membership in the Property Owners' Association. These restrictive covenants give the Property Owners' Association the right to collect membership dues and other assessments for maintaining common areas. These restrictive covenants often give the Property Owners' Association control over architectural decisions concerning the homes located in the subdivision and allow for imposition of fines for failing to comply with the Property Owners' Association's rules and regulations. But what happens when you lose your job or suffer from some other financial crises, such as a divorce, and you are having trouble making ends meet and the Property Owners' Association notifies you that you are being fined or your right to use common areas of the subdivision is being restricted. To address the problems with Property Owners' Associations run amuck, Texas has passed the Residential Property Owners Protection Act which is found in Chapter 209 of the Texas Property Code.
Chapter 209 of the Texas Property Code applies only to a residential subdivision that is subject to restrictions or provisions in a declaration that authorize the Property Owners' Association to collect regular or special assessments on all or a majority of the property in the subdivision and applies only to a Property Owners' Association that requires mandatory membership in the association for all or a majority of the owners of residential property within the subdivision.
Before a Property Owners' Association may suspend an owner's right to use a common area, file a suit against an owner, other than a suit to collect a regular or special assessment, foreclose under an association's lien, charge an owner for property damage, or levy a fine for a violation of the restrictions, bylaws or rules of the association, the association or its agent must give written notice to the owner by certified mail, return receipt requested.
The notice must describe the violation or property damage that is the basis for the suspension action, charge, or fine, state the amount due the association from the owner and inform the owner that the owner is entitled to a reasonable period to cure the violation to avoid the fine or suspension, unless the owner was given notice and a reasonable opportunity to cure a similar violation within the preceding six months. The notice must also advise the owner that the owner may request a hearing on or before the 30th day after the date the owner receives the notice.
If the owner is entitled to an opportunity to cure the violation, the owner has the right to submit a written request for a hearing to discuss and verify facts and resolve the matter in issue before a committee appointed by the board of the Property Owners' Association or before the board if the board does not appoint a committee. If a hearing is to be held before a committee, the notice of the hearing must state that the owner has the right to appeal the committee's decision to the board by written notice to the board.
The association is required to hold a hearing not later than 30 days after the date the board receives the owner's request for a hearing and must notify the owner of the date, time, and place of the hearing not later than 10 days before the date of the hearing. The board or the owner may request a postponement, and, if requested, a postponement can be granted for a period of not more than 10 days. Additional postponements may be granted by agreement of the parties. The owner or the association may make an audio recording of the hearing.
However, the notice and hearing requirements do not apply if the association files a lawsuit seeking a temporary restraining order or temporary injunctive relief or files a lawsuit that includes foreclosure as a cause of action. The notice and hearing provisions also do not apply to a temporary suspension of a person's right to use common areas if the temporary suspension is the result of a violation that occurred in a common area and involved a significant and immediate risk of harm to others in the subdivision. The temporary suspension is effective until the board makes a final determination on the suspension.
A Property Owners' Association may collect reimbursement of reasonable attorney's fees and other reasonable costs incurred by the association relating to collecting the amounts, including any damages, due the association for enforcing the restrictions or the bylaws or the rules of the association only if the owner is provided a written notice that attorney's fees and costs will be charged to the owner if the delinquency or violation continues after a date certain.
An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice if the attorney's fees are incurred before the conclusion of the hearing or, if the owner does not request a hearing before the date by which the owner must request a hearing. On written request from the owner, the association must provide copies of invoices for attorney's fees and other costs relating only to the matter for which the association seeks reimbursement of fees and costs.
If the dedicatory instrument or restrictions of an association allow for nonjudicial foreclosure, the amount of attorney's fees that a Property Owners' Association may include in a nonjudicial foreclosure sale for an indebtedness covered by a Property Owners' Association assessment lien is limited to:
- one-third of the amount of all actual costs and assessments, excluding attorney's fees, plus interest and court costs, if those amounts are permitted to be included by law or by the restrictive covenants governing the property; or
- $2,500, which ever is greater.
At the Law Office of Stephen O'Rear, P.C. we help people who have disputes with their Property Owners' Association.