Following state laws and regulations are simply a given when it comes to being an HOA Board. Sometimes, these laws can be confusing to navigate and precious time is spent trying to decipher these issues. With the help of an association management team, your Board can focus on improving the community and let their qualified management team guide them through the laws. Here are five legal issues that Community Association Boards face on a regular basis and how they impact a Board.

1. Foreclosure Regulations

In the past, community associations had plenty of power when it came to foreclose on a home that was delinquent on dues or other payments. However, recent laws have been put into place that helps assist homeowners that have fallen behind on payments. Foreclosure is no longer a given. In the state of Texas, the ability to foreclose on individual properties is taken away if 67 percent of the homeowners decide to strip this power.

However, in situations where foreclosure is able to occur, there are still provisions that include:

• The debt due can be paid via a payment plan,
• Foreclosure on a home cannot begin until 60 days past a written notification,
• A court order is required for foreclosure on a home.

2. Election of Board Members and Unmet Quorum Requirements

A quorum, by definition, is the minimum number of HOA board members who must be at a meeting before business can begin. Your association bylaws will have the quorum requirements in them. Meetings that do not meet the quorum must be adjourned and rescheduled.

However, recent state law has shown that there is the permission of the election of board members at annual meetings, even when quorum requirements are not met.  In the past, if a board could not get a quorum for an annual meeting this election for new board members would not occur and if held, would be an invalid election.

3. Less Control Over Homeowner Property

While associations still have the power to make community members follow specific guidelines and bylaws, the past years have granted them less control over certain areas of homeowner’s properties. Some of the most impacting changes in power are:

• Religious displays and flags may now decorate a home within certain limits. Religious displays are limited to 24-square inches and flags may be displayed on poles 20 feet or less.
• Solar panels are now permitted on the property.
• Barrels for rainwater harvesting are allowed within reason.

Your Board’s management team will be able to help the Board understand the limits of control in your community.

4. Liability Laws

Liability laws are important when it comes to the decisions that a board must make in certain situations. For example, is a landlord liable when an association is responsible for a certain liability like ice removal?

Liability laws can be confusing to owners of property because in general, they can be very fickle. This is why it is critical for your community association Board to hire an association management company to help iron out any creases and ensure that everyone involved in a situation knows where they legally stand.

5. Transparency is Key

According to law, all Texas community associations are required to host open meetings. They must also keep accurate records and alert homeowners of the date, time, and location of meetings. Failure to do so is grounds for a lawsuit on part of the residents.

Goodwin & Company Will Help Your Association Navigate Texas Law

If your association’s Board is having a tough time understanding Texas Community Association laws, let Goodwin & Company help. Our team has the experience, knowledge, and skills that will help your Board free-up time for other community matters. Contact us today to find out more about the services that we offer in your area.

Non-payment of Community Association fees is an inevitability that all associations will need to address at some point.  Addressing non-payment can be uncomfortable since board members are members of the communities in which they govern. Therefore, it is a good idea to allow a third-party management company to step in and help handle some of the unpleasantries of management like non-payment. Here are some of the ways that management companies approach one of the tougher issues in community associations.

1. Come Up with a Grace Period and Late Fee

Most community associations have grace periods built into their governing documents; the time frame of which can vary from community to community.  It is important to clearly communicate the grace period to homeowners so that they can plan financially and know how much time they have to make payment before late fees could be applied.  Creating a late fee is a sufficient way to get a message across without being too aggressive. The threat or application of late fees can be a good incentive for garnering payment.  However, sometimes, even a late fee isn’t enough to collect payment.

2. Payment Plans Can Be Implemented

Sometimes a bill falls so behind that they amount has become too high for a payer to pay in one installment. Fortunately, with the help of your management company’s accounting services, a payment plan can be implemented at no further stress to you.

Payment plans make the balance more manageable for the paying community member and help bolster cash flow so that the money your community needs is coming back into your accounts. Payment plans are usually the last steps before negative consequences (aside from late fees) are applied to a community member. A clear understanding of these consequences is required for a payment plan to be successful.

3. Access Can Be Restricted

One perk of living in a well-managed community association is the amenities. If payment continues to be delayed, a further step that can be taken is to restrict access to said amenities like:

• Pools
• Tennis Courts
• Fitness Centers
• Clubhouses

Restricting access to amenities is one of the strongest and most cost-effective ways that community associations can enforce collection of assessments.

4. HOA Association Management Handles the Painful Steps

The final steps lead the community into legal territory including an official attorney demand letter, lien, and potential foreclosure. Most governing documents will outline which steps the association has at its disposal to aid in collecting on delinquent accounts when other methods do not work.  It is at this point in the process that bringing in a collections attorney (preferably one well-versed in community association collections) is recommended.  The legal process is intricate and if not done properly, can open the association up to lawsuits; so it is important to have a team who knows the laws, how to communicate with residents, and can make sure everything is done by the book.

Goodwin & Company Takes Care of the Tougher Parts of Community Association Management

Collecting on delinquent accounts can always be difficult.  On one hand, you want to be considerate of your members’ individual situations and work with them where you can. But on the other hand, you need to make sound business decisions for your association and ensure it is financially stable.  By working with Goodwin & Company, we can handle these payment situations and allow you to focus on the other aspects of serving your community. Get in touch with us today to find out about our financial services and how we can benefit your community.