Several new REALTOR®-supported homeowners association reform laws took effect September 1. These changes will bring more balance between the rights of property owners and their property owners’ associations.
The 87th Texas Legislature passed these changes as Senate Bill 1588, which was authored by Sen. Bryan Hughes and Rep. Chris Turner.
- Fees are capped for delivery of subdivision information, including the initial resale certificate (at $375) and updated resale certificates (at $75).
- 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, 2021 are required to file with TREC by June 1, 2022.
- HOAs that have at least 60 lots or have contracted with a management company are required to make a current version of dedicatory documents available on a website maintained by the HOA or management company.
- All HOAs are required to file dedicatory instruments with the county (counties) 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.
- New laws improve some conflicts of interest within HOA architectural review boards.
- HOAs are barred from requiring access to lease agreements and are only allowed to request a tenant’s contact info 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.
- New laws improve due process in dispute resolution and provide additional legal avenues when seeking resolution from a dispute with an HOA.
REALTORS® made the difference
The passage of monumental HOA reform legislation wouldn’t have happened without you. Texas REALTORS® launched a call for action via email to all members as the bill was moving through the legislative process, providing a convenient way for REALTORS® to urge their representatives to support SB 1588. The call for action resulted in more than 12,500 supportive messages—a record-high response.
In addition, the website myhoastory.com collected real-world stories from homeowners and REALTORS® about the challenges they’ve faced with HOAs.
thank you TAR & TREC on getting these issues addressed and resolved.
Long overdue.
Thanks for this information. Is it possible for us to have a .jpg of this so we can post to social media and in our emails to clients?
You can search for “pdf to jpg”to find websites that will do this immediately at no cost.
There’s a link to a one-page .pdf that you can download, above.
http://apbc.ngskmc-eis.net/wp-content/uploads/TexasRealtors_HOAReforms_OnePager.pdf
If an HOA has less than 60 lots but does have a contract with a management company would they still be required to have a website?
Yes, HOAs that either 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.
-Jaime Lee, director of advocacy communications
does this include townhomes with a management company?
You can have police run tags on a car and know if there is insurance or not.
If there was a system like that it would change so many things for the better to help Condo.Owners.
Our management company is canceling due to the cost. What can I do about this?
Also the management certificate has not been filed with the Texas Real Estate Commission. What can I do about this as well?
Our HOA is the most terrible HOA I’ve ever dealt with in my 26 yrs of owning homes. This helps some. Thank you TREC. Spectrum HOA is absolutely awful and pick one only the people they don’t “like” in their neighborhoods. We need some resolution to that as well.
But thank you for this so far.
We are organizing a class action lawsuit against Spectrum and have over 130 homeowners. Every name counts. Contact me to be added to the list.
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Michael, my name is Chris and am having issues with Spectrum over the past 2 years. How can I get information about this law suit?
Ask for copy of insurance. Once you get Certificate – see if NAIC number matches Insurance carrier. Call insurance Corporate office and ask if they see insurance policy.. We don’t have Spectrum but same Broker Agency I believe writing ‘insurance’ that didn’t exist on our end. I hope that is not the case for you all.
We had Spectrum too. TERRIBLE! We switched to a company called Superior HOA Management, their main office is in San Antonio.
As I understand the new laws, they only apply to housing subdivisions not condo and townhouse HOAs.
Condo HOA’s are the a major problem and they need to be rained in. Hopefully this will happen soon.
Unfortunately, there is a very large property management association in Austin with a very large well paid lobbing group that works to prevent any changes to laws that affect condo HOAs.
Hope TAR can get through to the legislature to pass some well needed and meaningful laws to make needed changes.
Why would you think a TH or Condo HOA not be included in these new laws?
Condominium associations are governed under a different section of Texas law, so they are not impacted by most the provisions of these new laws.
-Jaime Lee, director of advocacy communications
I would like to see Condo laws be updated as well.
I have the same question as Stuart – where does it state condo HOA’s are NOT included?
Condominium associations are governed under a different section of Texas law, so they are not impacted by most the provisions of these new laws.
-Jaime Lee, director of advocacy communications
what about Townhouses? what do they fall under?
Condominium associations are governed under a different section of Texas law, so they are not impacted by most the provisions of these new laws.
-Jaime Lee, director of advocacy communications
Are condominiums now required to solicit bids for contracts that exceed $50,000.00?
Good job with HOA Reformation.
The HOA fight is not over nor should we let them think it is. Moving forward we need to continue to grow on these issues and move in the right direction for the general public.
Copper Canyon HOA in Bulverde, TX has the transfer fee including %0.25 of the sale price plus $1000 working capital fee. Does it new HOA law apply to them?
This legislation did not address transfer fees, only resale certificate fees. However, we know this is an ongoing issue and will continue to look for ways to protect real estate consumers in the future legislative sessions.
-Jaime Lee, director of advocacy communications
Loved the improvements that help the Homeowners. In my opinion, tighter restrictions and accountability on HOA’s should have been implemented a long time ago. Thank you Legislatures for your diligence and support of homeowners.
Great job TAR & TREC for HOA reformation.
Are subdivisions grandfathered in if they currently charge higher than the new capped amounts? If so, does that include new builds after September 1st?
What roles do HOA’s play when neighbor A can not get neighbor B to address a tree limb that is in neighbor A’s backyard.
I always thought that anything hanging over your fence is fair game. Especially when there’s high winds and that branch could come down in your yard and damage the fence.
In a past life, my neighbor just came over and told me to cut the tree limb. No “HOA” middle person necessary. Buying in an HOA was the single biggest mistake of my life.
I’m not an attorney but I understand that you need to be careful trimming your neighbor’s tree. If the limbs are such that they threaten damage to your home or block significant light that results in damage to your property then you should be okay trimming them but if they have been hanging over your property for many years your neighbor may have a prescriptive easement preventing you from trimming it excessively or at your property line. Also, if your trimming kills the tree ( like removing more than 30% of the limbs will likely cause) you’re liable for that.… Read more »
An HOA in Harlingen, single family, amended their documents several years ago to add that an owner of a home in the S/D could not rent their home for any reason. If a tenant was in the home when the amendment was passed the tenant could stay in the home until the end of their lease but the owner could not re-lease the home. I do not see anything in this this that prohibits this type of taking of private property rights or how an owner can appeal the change.
What are the prevented conflicts of interest within ACC review boards?
A person may not be appointed or elected to serve on an architectural review authority if they are a current board member, a current board member’s spouse, or a person residing in a current board member’s household.
-Jaime Lee, director of advocacy communication
Is this for any HOA or certain size? Our HOA has 31 houses and our board says they are the architectural review authority.
Is someone going to answer this question
only in neighborhoods with 40 more more units
Bravo!!! I was one of those callers pushing for such of overdue reform. Yeah! Finally justice is served. This is great – No more closing surprises on extra fees to deliver HOA resale certificates and documents.
great job is done for the general public
This is great news!
Awsome, I have lived in an HOA community for 14 yrs paying $300 a year. The only things they did for the community was hire someone to post the American flag in front of each home on certain holidays, have McGruff and Fire/Police department provide info and stickers once a year, cut the bushes and grass not much next to the main road and replace bulbs on the entry community signs. That’s a lot of money as a whole for very little service. Just recently moved to a new community with a higher HOA of $480, which I think it’s… Read more »
Does this affect the transfer fee percentage an HOA can charge a resident when they sell the property? For instance, my HOA will charge 1% of sale price when i sell the property.
This legislation did not address transfer fees, only resale certificate fees. However, we know this is an ongoing issue and will continue to look for ways to protect real estate consumers in the future legislative sessions.
-Jaime Lee, director of advocacy communications
Does this apply to voluntary HOA’s?
I’m looking for this same answer…
Your post says that Resale Certificates cap at $75, but I only see updated certificates as a cap of $75. Where in the bill does it show that resalce retificate preparation is capped as we have an HOA that is stating they won’t be changing their dues to match this.
Our HOA says the same thing. They charge $200 for an initial resale certificate and $25 for an updated one if your closing falls through and they have to update it for a second closing. They say the bill only pertains to the “updated” resale certificate, which is ridiculous. I’m sure the bill would have addressed the initial fee.
Senate Bill 1588 modifies Section 207.003 of the Texas Property Code, which governs the production of resale certificates by a property owners association that administers a subdivision development. As amended, Section 207.003 imposes restrictions on the amounts charged for a resale certificate (no more than $375 for a resale certificate and no more than $75 for an updated resale certificate)
Does flying an American flag fall into religious displays? Obviously it’s not religious, but it’s a stand on American freedom and choice, which is the same as having the right to express religous beliefs.
Hi, do these laws cover condominiums as well.
Thank you very much, Sen. Hughes and Representative Turner!! Laws needed for so long!!
By the way, I called TREC about getting guidance with my HOA issues. I was told TREC had nothing to do with HOAs, Then I called TREC back some days later to ask someone else. Again, I was offered no help whatsoever. I called in May, 2021. TREC frontline personnel need better information.
Condominium associations are governed under a different section of Texas law, so they are not impacted by most the provisions of these new laws.
-Jaime Lee, director of advocacy communications
I currently live in Condo HOA and needing to know what provisions do impact the Condos HOA. This information is important so I can be able to share this with the community.
Thanks
how are “subdivision information” fees defined?
Yes – that needs to be addressed.
A response to this question would be helpful….
If a home is damaged ( unlivable) , a homeowner is fighting with the insurance company to fix it post damages due to leaks and the Texas Snow Storm and black mold and fungi and the home is not currently lived in, and the homeowner is a single mom, can the HOA rightfully foreclose on the home after the homeowner has made several attempts to negotiate a lucrative down payment and substantial monthly payments to ensure the association gets paid? The attempts were made to allow the homeowner money to repair the home ( she snd her children’s primary residence… Read more »
Can HOA laws override city codes. If city code does not allow fences around the front yard, but the assoc. in anyone neighborhood does who wins?
City ordinances overrule HOA rules. One is law. The other is not. Call your city code compliance division.
Awesome news!
Does this apply to COAs as well?
What is the new law regarding fencing in the front of homes on a subdivision?
Where can I find Texas property code for residential HOA’s with if you were than 20 properties
Thanks to my neighbor’s realtor informing me of these monumental changes in law that protects us homeowners from outlandish and unsubstantiated fines and fees requested by the HOAs and their attorneys. This law alone stopped my HOA’s attorney from requesting and collecting additional fees from me after I paid past due invoiced dues, and attorney fees for collections:
“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.”
My HOA refuses to give me a detailed report of my charges and refuses to accept my payments until I have paid their Attorney in full.
Their Attorney refuses to explain their charges and keeps adding more charges while threatening to sell my home at auction.
I have paid them 1/2 of what they claim that I owe them, but I have no idea how they arrived at their figures.
My bank put a stop payment on the last check that I sent them because they believe it to be fraud.
Please help.
We built / bought a home in June 2020. At the time of contract, we were told our HOA dues would be $600 a year. The builder / developer (Gehan) transitioned in April / May 2021. It’s now October 2021, and we are told our HOA dues are increasing to $1180 a year, which is almost a 100% increase. I believe our developer defrauded the buyers in that they purposely set our dues too low to begin with, as well as negligent in that they underfunded our HOA. What recourse do the homeowners have?
Same thing happened in our subdivision! I would love a response!
What about not being able to park your car on the street in front of your home or in the driveway no more than 6 hours.
You should check with the city. Most cities own the public streets. If the city owns the street, I don’t believe the Hoa can govern them. Only if the streets are privately owned by Hoa.
HOAs have NO say on public streets. That is solely the jurisdiction of the local government.
Do you know where I can find county policy regarding this?
Our management company employee is evaluating ACC applications. There is no committee at the moment. Is that violation of this new law?
This new law would require updates to bylaws. Is there a deadline for that?
No update to your bylaws are required per se. Actual law makes your bylaws in conflict null and void.
“Fees are capped for subdivision information ($375)”
Is this for the fees that a homeowner pays to live in an HOA? Would that be annual? We pay twice a year.
Thank you for your question. The fee for subdivision information is the amount the HOA can charge the buyer, seller, title company, etc. to prepare and deliver what are known as management certificates. This is the info that the HOA is required to file with the county deed records and with the Texas Real Estate Commission.
This is not the same as the fees a homeowner pays to the HOA.
-Jaime Lee, director of advocacy communications
May be some good things that will come from the new laws; however, there are ALWAYS negative repercussions from new laws. Now cost $75 to have a board that will likely barely review a replacement fencing installation; previous cost was $0 with Subdivision HOA!!
Unfortunately the transfer/conveyance fee was not addressed and now has gone up.
Are HOAs legal political subdivisions or agency’s of a county?
Does this new law impact fees HOA’s can charge for what they are calling initiation fees and transfer fees? I am interested in a property in Granbury that says a new homebuyer must pay a $1500 transfer fee plus a $6500 initiation fee. This seems quite excessive to me.
Our HOA is raising our monthly fee 53%. I heard that there is a cap on how much they can raise the fee. Is that true? Is it 20%?
Thanks
Can my HOA go up on my dues with out explanation as to how they can increase our HOA DUES WITHOUT A LETTER OF INTENT OR A MAJORITY VOTE? my original deed states our HOA have to have a majority vote.
is a storm door covered as a security measure
Minor thing but – does this mean we have to change governing docs so the architecture committee is called ARA instead of ACC?
Is an HOA allowed to request a copy of the lease and require that a tenant stays more than one year? And can HOA also request that the owner/landlord provide a background check to the HOA of their tenant?
I am selling a lot I bought in a large subdivision with an HOA still controlled by developer. They want to charge me $1500 as the seller “re-sale fee” . I thought these had been outlawed, but are they still legal?
I live in Sun City Texas. The HOA charges a homeowner a resale/administration fee of $200 when he/she sells his/her property. In addition, it charges a transfer fee of 25 basis points of the selling price of the property.
In 2020 the average transfer fee was $1,008. Given that he resale/administration fee is supposed to cover the cost of transferring the property on the Association’s books, is the transfer fee of $1,008 legal?