There have been growing concerns about power imbalances between HOAs and property owners in HOA communities. These concerns cover various topics such as:
- Challenges between property owners and oversight boards
- Costly fees related to real estate transfers
- Difficulty accessing necessary governance and operations information.
Texas lawmakers passed Senate Bill 1588, which went into effect in September 2021, to address concerns and limit how much power homeowners’ associations have over their residents.
Below you will find a summary of what homeowners need to know about Senate Bill 1588.
Texas Homeowners can put up a perimeter fence around their property for added security (front, sides, and/or back of homeowner’s property). The law states explicitly that the HOAs cannot restrict a new fence or gate around a homeowner’s front yard or driveway.
Homeowners associations will be permitted to enforce covenants that mandate the type of fence material used. If stated in the HOA covenants, homeowners will be required to obtain prior approval for the material of any new fence being built, just not the fence itself. Replacement or repairs of established fences with existing material does not need prior approval.
Homeowners can install security cameras and motion sensors on their property without prior approval. HOAs can still enforce covenants prohibiting homeowners from installing security measures outside of their own property.
Part of Senate Bill 1588 prevents HOAs from restricting homeowners from displaying religious items on their property or ordering residents to remove religious displays on their properties.
HOAs may only enforce covenants that prohibit religious items that violate a law, contain graphic language, pose a threat to public health or safety, or are offensive to the public (other than its religious content).
Resale Certificate Fees
Resale certificate fees are capped at $375, and updated resale certificate fees are capped at $75.
The deadline for the HOA to deliver such a certificate is now five days instead of seven days.
Homeowners will be permitted to seek a judgment against their HOA for no more than $5,000 for failure to deliver the certificate on time.
Senate Bill 1588 also stipulates how HOAs have to amend their budgets. HOAs that plan to amend their budgets must do so in an open, public forum or meeting.
Bids for Contract Work
All HOAs must obtain bids before awarding any contract of more than $50,000.
Architectural Review Committee Guidelines
The Bill prohibits a person from serving on an Architectural Review Committee (“ACC”) if the person is:
- a current Board member
- a current Board member’s spouse
- a person residing in a current Board member’s household
Late HOA Payments
The HOA may report delinquencies to a credit reporting agency, but they cannot charge the reporting fee back to the homeowner. The HOA must send the homeowner the requisite enforcement action “209” notice before reporting to a credit agency. Property owners now have 45 days instead of 30 days to cure the delinquency.
The above information is an overview of the many changes brought forth by the passage of Senate Bill 1588 in September 2021. Please note, however, that this is not an exhaustive list of all changes. This summary dives deeper and offers more detailed information that homeowners need to know about Senate Bill 1588.
Contact us to learn more about how these changes apply to your home buying or selling journey! (512) 699-9714 or [email protected].