New Laws Help Protect Texas Homeowners Against HOAs

For many years I have heard horror stories from clients in regards to home owner’s associations.  Most frequently, it comes from individuals who are simply perplexed by the excessive fees such associations can charge for merely delivering required paperwork.  When you purchase a property that is located in a community with a home owner’s association (HOA) you need an official copy of the HOA documents and a resale certificate.  These documents tell you the rules for the community, what the HOA fees cover, the HOA’s financials, and if the seller is delinquent on any HOA dues.  Obviously, all of these things are important documents to look over if you are planning to purchase in the community.  However, the fees associations demand for such documents are sometimes downright highway robbery.

Passed earlier this year, Senate Bill 1588 helps mitigate these concerns.  Effective September 1st, HOAs are barred from charging inordinate fees for subdivision information statements and resale certificates.  The bill placed a cap of $375 on the cost for subdivision information statements, and limited HOAs to charging a max of $75 for a resale certificate.  This is a huge win, as I have seen HOAs charging thousands for these simple documents in the past.
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In addition to setting caps on the amount HOAs can charge for these resale documents, the legislation also included a few other safeguards aimed at protecting Texans.  The bill does the following:

• requires HOAs with at least 60 lots or a management company to maintain a website with HOA documents available to property owners
• protects property owners from negative credit reporting in regards to HOA fee disputes
• bars HOAs from prohibiting certain pool enclosures, religious displays, or home security features
• requires HOAs to provide timely notice to members about upcoming meetings
• requires HOAs to solicit multiple bids for jobs in excess of $50,000

While these changes are certainly appreciated among industry professionals and consumers, the new legislation has one major pitfall.  This legislation is wonderful for those residing in or purchasing a home in a community with a property owner’s association, but it does not protect anyone who lives in a condo association.  With the increasing costs of land in central Texas, more and more builders are creating single family homes that live and act like a house, but are technically condos.  These homeowners as well as traditional condo owners are still susceptible to exorbitant charges from condo associations.

Do you have questions about buying or selling in an area with a home owner’s association in the greater Austin area?  Contact me today.