Homeowner’s Associations (“HOAs”) in Texas have enormous power, subject to restrictions found in their formation documents and state law, ranging from the authority to collect dues from homeowners to enforcing restrictions on construction or how a homeowner’s lawn should appear. While many homeowners live subject to an HOA, the do not necessarily understand what authority an HOA has over the decisions a homeowner wants to make regarding their property. Our firm works with HOAs seeking to enforce restrictions and collect dues, and also homeowners who believe their HOA has overstepped their boundaries.
Typically, an HOA is created by the developer who places restrictive covenants on all the lots in the development by filing the HOA’s Covenants, Conditions, & Restrictions (“CC&R’s”) in the county property records. A not-for-profit company is formed to be the governing body of the HOA, governed by its own bylaws, and is responsible for enforcing the restrictive covenants. The developer will normally maintain control of the HOA while actively selling the majority of the lots in the subdivision. It then transfers control to the homeowners to manage the HOA for themselves. The homeowners then elect a board of directors which governs the HOA and enforces the CC&R’s.
The general purpose of an HOA is to protect home values and maintain a consistent appearance throughout the development. The CC&R’s can include conditions and restrictions for the type of materials used on the dwelling (such as stone or brick), the location, height, and the material and color of walls, and roofing materials. CC&R’s can also require approval from the board or a committee for changes or alterations to dwellings, changes to use of the property, or issues such as where vehicles can be parked outside and whether outbuildings are allowed.
Typically, the HOA board is elected yearly by a “quorum” of homeowners in the subdivision. A quorum requires a certain number of homeowners to elect the members of the board of directors for the vote to be valid. Because of the lack of importance placed on management of the HOA, it is often difficult to find homeowners willing to be prospective board members and to run for a position on the board. Many homeowners forget about the importance of who sits on the HOA board until they either need something, such as approval that there are no outstanding dues owed by a homeowner seeking to sell their home, or want to enforce the CC&R’s because an unruly neighbor has painted their home neon pink.
The board is responsible for setting the annual budget, making sure adequate funds exist to meet the HOA's obligations, and enforcing the CC&R’s. Most HOAs are responsible for maintaining the common areas of the subdivision, such as a neighborhood pool, the roads in the neighborhood, landscaping of the common areas, trash service, etc. The HOA therefore needs to have funds to accomplish their tasks. The board members have legal duties and responsibilities to the homeowners to maintain and enforce the CC&R’s above all else.
It is recommended that a prospective buyer review the HOA bylaws, CC&R’s, and financials to understand what restrictions they will be subject to before they purchase the property. It should be understood the primary obligation of a homeowner is to pay their HOA assessment dues and the HOA’s primary obligations is to collect on those dues. If you have questions, please contact Rosenblatt Law Firm for more information.