Bill Caption

Relating to the operation of certain property owners' associations.

Fiscal Notes

No fiscal implication to the State is anticipated.

Bill Analysis

SB 1168 would make the following key changes to the operation of property owners’ associations (POA) regulated under the Property Code:

• It would clarify the meaning of “verified mail.”

• 67 percent of property owners would have to agree to any deed restriction changes.

• A POA board meeting could be held through electronic means, such as conference call or video conference.

• If the POA holds a vote or election, a property owner within the POA may request a recount. However, the recount would have to be done professionally, thus the POA could charge the owner who is requesting the recount.  The POA would have to send the owner an estimated invoice that must be paid before the recount takes place. If the estimate is more or less than the estimate, the POA must reimburse the owner the difference or the owner must reimburse the POA for the difference.    

• A person who is responsible for counting POA votes would not be allowed to disclose how an individual voted.

• POAs would be permitted to require board members to reside in the subdivision that is subject to deed restrictions.   

• It would allow a POA to offer a payment plan that extends for more than 18 months for any amount.

• It would make clarifications of an owner’s right to cure a violation before a POA would take any enforcement action.  

• It would prohibit a POA from selling a property with a foreclosure right.

• Lastly, it would allow the POA to decide whether to have a judicial or expedited foreclosure process.

Vote Recommendation Notes

5/21/2015 update:

No changes have been made to this bill in House committee. The second chamber sponsor is Rep. Jason Villalba.

First chamber recommendation: 

The terms of a POA are between the association and its members. People who live in a neighborhood with a property owners associations have the right and responsibility to read the governing documents and agree to those documents as a condition of buying in that neighborhood. If the governing documents are unsatisfactory, prospective homeowners can choose a different neighborhood to live in. Association members can petition the association to make changes or seek a position on the board of directors to affect change directly. 

The state's micromanaging of property owners associations is akin to dictating the terms of private contracts.

While we disagree with the underlying statute, we recognize that this legislation simply makes changes to terms the legislature has already set. As such, the bill itself does not offend our liberty principles and we remain neutral.