Leadership by the Texas Realtors enabled homeowners to have their best year since 2015. The builders were helpful (!), and the Justices of the Peace were strongly supportive. Many legislators contributed, including some who supported important bills that did not get enacted. Given other priorities, it was a tribute to all concerned that our issues made the front burner.

This year’s bills provided specific protections for homeowners, some “good government” requirements, and some benefits for real estate sales. Other improvements were modest, but suggest that we may get more improvements next session.

(For reasons related to complexity of legislating on other issues, although multiple bills were enacted, there was substantial overlap. Thus, the provisions of SB 581and HB 3571 are also largely within SB 1588 (as sections 2 and 4 respectively). Entirely distinct is SB 318.

What follows is a summary. It does not have everything that is important. You should refer to the actual text of the statute for more detailed understanding, and details applicable to particular associations also matter. I expect there will be disputes as to the meaning of some of the new provisions. Please do not forget my disclaimer.

Major Changes Secure Religious Expression (SB 1588 §2, SB 581)

After many years of advocacy by our team and others, amendments to Property Code § 202.018 is now in effect. It expands homeowner rights, and tenant rights, to display items of significance to people with sincerely held religious beliefs. Prior law protected just the entry. This law allows placement of religious items on most of the property. Limited exceptions allow associations some power to regulate if a display: (1)  threatens public health or safety; (2) violates a law other than a law prohibiting the display of religious speech; (3) contains language, graphics, or any display that is patently offensive to a passerby for reasons other than its religious content; (4) is installed on property owned by someone else: (5) violates any applicable building line, right-of-way, setback, or easement; or (6)  is attached to a traffic control device, street lamp, fire hydrant, or utility sign, pole, or fixture.

Major Changes Protect Owners at Hearings on Deed Violations (SB 1588 §18)

Property Code § 209.007 is improved to require that, for deed restriction violations that can be cured, hearings in subdivisions must be with the board of directors (not a committee). At least 10 days before such a hearing, the association must provide the homeowner with all relevant documents, photographs, and communications. If they do not, the hearing should be postponed. At the hearing, the association must explain the basis of the violation. This ends practices of boards that provided no information, and merely attended with plans not to act.

Major Changes Protect Owners at ACC Hearings (SB 1588 §11)

For subdivisions with more than 40 lots, new Property Code § 209.00505 imposes requirements to secure homeowner rights when they must obtain ACC approval, such as to build or renovate a home. It prevents board members and their families from serving on the ACC, requires written explanation of the basis for any denial, and requires that owners be allowed an appeal to the board, which owners can record.

Major Changes Protect Owner Security in Subdivisions (SB 1588 §4, HB 3571)

Addressing a common complaint that associations refuse to let owners protect themselves and their property, new Property Code § 209.007 confirms owners can have security cameras, motion detectors, perimeter fences, or other security measures on their own property. Associations can, still, regulate the type of fencing. (Although placed in Chapter 202, this provision does not apply to condominiums, or to master mixed-use associations governed by Chapter 215.)

Major Changes Protect Owner Credit in Subdivisions (SB 1588 §17)

Associations all too frequently have used the threat of impaired credit to coerce homeowner actions. New 202.065 specifies procedures, prevents reporting delinquencies to a credit service if a dispute is open (pending), and forbids charging the owner a fee for any such report.

Major Changes Ensure Bidding for Larger Contracts (SB 1588, §13)

In subdivisions, 209.0052(c) requires bids for work costing more than $50,000. This is particularly important as a check against directors who want to profit personally by contracts with the association.

Major Changes For Condominium Unit Owners Seeking Records (SB 318)

Amendment to 82.114(b) with new 82.1141updates the process for unit owners in condominiums to get records, following important practices adopted in subdivisions. This underscores that legislators recognize how much access to records remains a problem. Following the model of homeowner rights in subdivisions, we could obtain more rights for condominium unit owners (and some of these were in legislation previously introduced by Senator Huffman).

New Section 202.022 Protects Neighborhood Children (SB 1588, §3)

New 202.0022 allows subdivision and condominium (townhome) owners with pools to install protective fences. While associations retain some regulatory authority, owners always can use an otherwise lawful fence that is mesh, designed not to be climbable, and up to six feet high, so long as it’s black.

Section 209.004 Strengthens Management Certificates (SB 1588, §10)

As amended 209.004 will require subdivision management certificates to list charges imposed for transfer, and the certificate must be filed with the Texas Real Estate Commission, made available to the public. Failure to do so can prevent the association from enforcing rules and collecting attorney fees. Many transfer fees are excessive, and this will at least make them subject to scrutiny. Frankly, they should be capped (if not forbidden).

Section 209.0051 Improves Open Meeting Mandates (SB 1588, §12)

Section 209.0051 is amended to double the required time to advance notice a regular board meeting (3 days to 6 days), and sets a minimum of 3 days advance notice for a special board meeting. It also requires open meetings for all budget amendments (not only changes of 10%)

Section 209.0063 Now Requires Fines Be Reasonable (SB 1588, §15)

After vigorous opposition over many years, 202.0063 now expressly requires fines, attorney fees, third party collection costs, and other charges to “reasonable” – or at least it should. Of course, what normal people consider reasonable is often very different from what associations claim. The effective force of this provision remains to be determined, and there is no effective enforcement provision (such as the right to challenge the fine in small claims court).

Section 209.0064 Allows More Time To Pay Assessments (SB 1588 §16)

Section 209.0064 increases, from 30 to 45 days, the time to cure fee delinquencies.

Section 207.004 May Facilitate Subdivision Sales (SB 1588, §7)

Section 207.004(b) now requires resale certificates to be provided in 5 days instead of 7. It also allows a judicial mandate to provide the certificate as well as damages of up to $5,000 plus Court costs and attorney fees.

Section 202.006 Requires Recording Deed Restrictions (SB 1588, §1)

Neither condominiums nor associations can collect assessments without recorded restrictions.

Section 207.003 Weakly Limits Resale Certificate Charges (SB 1588, §6)

Section 207.003(c) requires charges for resale certificates to be reasonable, and caps them at $375, with updates capped at $75. While this cap is better than in subdivisions that charge $400 or $500, it is still far greater than any realistic costs for assembly, copying, and delivery. (Oddly, at one point the industry of association managers and lawyers opposed requirements for resale certificates. Now they have turned it into an excessive profit center.)

Sections 209.016 Changes Information That Associations Can Learn About Tenants (SB 1588, §§ 20 & 22)

Section 209.016 now affirmatively lists personal information that associations can demand about tenants from owners who rent their homes. It does not resolve the greater disputes that arise over rental properties in many subdivisions.

New Section 209.017 Takes A Step Toward Use Of Justice Courts To Facilitate Dispute Resolution (SB 1588, §21) New section 209.017 confirms that owners can sue in small claims court for violations by the association. While this is not new, it indicates that the Legislature is considering adding remedies for homeowners that will be available through small claims court.