In a move to enhance transparency and protect homeowners, the Texas Legislature has passed House Bill 886 (H.B. 886), a significant piece of legislation that affects property owners’ associations and their ability to levy fines. This bill, which comes into effect on September 1, 2023, mandates property owners’ associations to provide multiple notices of delinquency before filing an assessment lien on a property.
Many Texans live in subdivisions governed by a property owners’ association (POA), also known as a “homeowner association” or “community association.” These residents are responsible for paying dues to their POA. Under existing state law, a POA has the power to place a lien on a property for nonpayment of dues, which can potentially lead to foreclosure. H.B. 886 was introduced to increase property owner protection under POA governance by requiring POAs to provide multiple notices of delinquency before they can file an assessment lien on a property.
What Does H.B. 886 Do?
H.B. 886 requires a POA to provide two notices of delinquency before filing an assessment lien. The first notice must be provided by first class mail to the property owner’s last known mailing address, as reflected in records maintained by the POA, or by email to an email address the property owner has provided to the POA. The second notice of delinquency must be provided by certified mail, return receipt requested, to the property owner’s last known mailing address, not earlier than the 30th day after the first notice is given.
The bill prohibits a POA from filing the lien before the 90th day after the date the second delinquency notice was sent to the owner. The bill applies only to an assessment that becomes delinquent on or after the bill’s effective date. You can read the full text of the bill here.
Why is H.B. 886 Important?
This legislation is a significant step towards ensuring fair and transparent practices in Texas property owners’ associations. By requiring clear and timely communication about potential fines, H.B. 886 helps to protect homeowners from sudden and unexpected liens on their property. This includes homeowners who often face barriers to understanding the complex rules and regulations set by their property owners’ associations.
Impact on Property Owners’ Associations
For property owners’ associations, H.B. 886 necessitates a review and potential revision of their existing rules and regulations. Any provisions that do not comply with the new law will need to be removed or amended to ensure transparency and fairness in the levying of fines.
H.B. 886 represents a significant shift in Texas property law, aiming to promote transparency and fairness in the levying of fines by property owners’ associations. As we move towards the bill’s effective date, property owners’ associations will need to ensure their rules and regulations comply with this new legislation. For homeowners, particularly those who have faced sudden and unexpected liens, H.B. 886 offers increased protection and the promise of fairer practices in their property owners’ associations.
As always, it’s important to stay informed about changes in legislation that may impact you. If you have any questions about H.B. 886 or how it might affect you, consider reaching out to a legal professional for advice. You can also refer to the bill analyses here and here for more detailed information.