What to Know About the New HOA Laws

New legislation passed in 2021 will now impact Texas homeowners who live in communities that manage homeowner associations (HOAs) or property owners’ associations (POAs). This change was brought by the 87th Texas Legislature on a Senate bill now coined as the REALTOR Bill. These new HOA laws were created to establish a better balance between property owners and HOAs, as well as give more property rights to homeowners than ever before.

HOAs and POAs are valuable for the communities they serve, but often hold a lot of power over people’s homes. If you’re one of the 6M homeowners in Texas living within a HOA, it’s important to be informed of your protections to ensure your rights are being respected by your association.

Here’s what you need to know:

1. Fees are capped for subdivision information ($375), resale certificates ($75), and updated resale certificates ($75).

This is important for buyers looking to join the neighborhood and sellers who are leaving. Subdivision information helps buyers understand the annual cost for membership and the obligations a homeowner will be asked to follow. A resale certificate grants the seller to transfer the ownership to their new buyer. Certificates must be provided within five business days after a second request is sent by mail. An experienced agent will work with the title company to help you request the subdivision information and apply for the resale certificate.

2. HOAs that have at least 60 lots or a contract with a management company are required to maintain websites with management certificates, meeting information, and notifications.
Homeowners need to be informed on the decisions and new changes that HOAs implement for the community. Requiring a website that is consistently managed and updated with meeting minutes will help eliminate confusion and create more transparency between the HOA and the homeowner.

3. HOAs are required to solicit bids for contracts for services over $50,000 and prevent conflicts of interest within HOA architectural review boards.
This clause also helps HOAs establish more transparency on who they are hiring for services, ensures correct auditing, and keeps members informed on new architectural decisions that impact the community. Board members and their spouses are also no longer allowed to serve on architectural review committees.

4. 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.
This is a big one for property owner rights and allows the homeowner to set up security cameras around their home, create gating around their pools, and practice religious ceremonies without interference. Associations still have the right to interfere if displays threaten public health, display offensive language or graphics, or restricts access to a fire hydrant.

5. HOAs are allowed to request the tenant’s contact info and know the lease beginning and end dates.
If a homeowner decides to rent their property to a tenant, HOAs are allowed to request basic information about who will be residing in the home. This helps HOAs ensure tenants are following the rules of the community without getting the property owner directly involved.

6. 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.

Previously, homeowners were given 30 days to pay their past due HOA payments. The new legislation gives homeowners 45 days. HOAs also have to provide detailed notice to the owner and provide a payment plan option before reporting delinquencies to credit reporting services.

HOAs keep communities beautiful and amenities maintained. But the REALTOR bill will help property owners gain more transparency and establish a balanced role of power. Learn more about HOA reform legislation and the other benefits this bill brings to our state. Or if you would like to speak to someone directly about your questions about the new HOA laws, reach out to an experienced real estate agent today.

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