What are Special Assessments and Understanding Them
Special assessments are distinct from regular homeowner association dues in that they are not part of the annual operating budget and are typically levied to cover unforeseen expenses or projects that the association has not saved for in its reserve fund.
Steps for Levying a Special Assessment
- Review Governing Documents: The first step is always to review the HOA’s governing documents to determine the specific procedures and voting requirements for passing a special assessment. These documents dictate how much notice must be given to homeowners, the percentage of votes needed for approval, and any caps on the amount that can be assessed. The right of the HOA to request a Special Assessment are found within the CC&R’s of the association. The procedure to implement the Special Assessment are found in the Bylaws of the Association.
- Board Decision: Generally, the process begins with the HOA board determining the need for a special assessment. This usually involves identifying the specific project or expense, estimating costs, and deciding on the amount needed from each homeowner. This is not always the case, a special assessment may be authorized by a percentage of the members of the association if their call a special meeting an vote for such assessment.
- Notice to Homeowners: Homeowners should be given notice of the proposed special assessment. Texas law and the association’s governing documents will specify how much advance notice must be given before the vote. This notice period allows homeowners to review the proposal, ask questions, and express any concerns before voting takes place. There are certain exceptions that the CC&R’s may allow, such as a minor special assessment increase to maintain an annual budget, but these increases are usually quite limited to a certain percentage per Anum.
- Meeting and Vote: A special meeting of the homeowners is typically called for the purpose of discussing and voting on the proposed assessment. The governing documents will specify whether this vote can happen in person, by proxy, electronically, or by mail-in ballot.
- Voting Threshold: The necessary threshold for approval of a special assessment varies. Some associations require a simple majority of votes, while others may need a supermajority. The specific requirements will be outlined in the HOA’s governing documents.
- Collection of the Special Assessment: If the special assessment is approved, the HOA will notify homeowners of the amount they owe, the due date(s), and the method for making payments. The association must also provide information on how the funds will be used.
Legal Actions Pertaining to Special Assessment
- HOA Foreclosures: an HOA may not foreclose on a home residence solely for fines and attorney’s fees, though an HOA may foreclose on a residence for non-payment of annual or special assessments. This may be done pursuant to judicial or non judicial foreclosure depending on the dedicatory instruments of the HOA.
Challenges and Disputes
Disputes over special assessments are not uncommon. Homeowners who disagree with the assessment may challenge the process by which it was passed or the necessity of the assessment itself. Homeowners likely have to seek remedy in a District Court requesting either a temporary restraining order or a temporary injunction to stay such assessment until the Court can determine its validity. If the Management company and HOA Board held an improper meeting, tendered an improper notice, did not conduct a proper ballot for voting, or did comply with the technical requirements then all these requirements may be attacked in a District Court on behalf of the community.
Julian Nacol
Nacol Law Firm P.C.
Dallas Texas HOA Attorney
(972) 690-3333
Make My HOA Pay for My Attorney!
Attorney’s fees and costs in litigation can get high quickly, especially when the other party is a Homeowner’s Association. People are often scared by the potential costs of litigating a claim against their Homeowner’s Association, which invariably leaves them wondering if they can achieve a result where their Homeowner’s Association must pay for their attorney’s fees. The answer is YES … maybe.
Pursuant to Section 38.001(b) of the Texas Civil Practice and Remedies Code, “A person may recover reasonable attorney’s fees from an individual or organization … if the claim is for:
(1) rendered services;
(2) performed labor;
(3) furnished material;
(4) freight or express overcharges;
(5) lost or damaged freight or express;
(6) killed or injured stock;
(7) a sworn account; or
(8) an oral or written contract.”
For our purposes, number 8 applies primary, as it is highly likely any claims related to a Homeowner’s Association will not relate to the other items on the list. This section of the Civil Practice and Remedies Code tells us that if we can prove as a matter of law that our Homeowner’s Association breached a contract they had with us, we are entitled to recover the amount of our attorney’s fees from them.
Each Homeowner’s Association has a contract with its residents in the form of their governing documents, namely, the Bylaws and the Covenants, Conditions, & Restrictions. In layman’s terms, as an owner of property within the Homeowner’s Association, a homeowner agrees to be bound by the rules and restrictions set forth in these documents. Similarly, the Homeowner’s Association agrees to be bound by a similar set of rules and restrictions. This acts as an enforceable contract between a homeowner and the Association, and if such contract is breached by either party, pursuant to Section 38.001(b) of the Texas Civil Practice and Remedies Code, one party is entitled to recovering attorney’s fees against the party that breached the contract.
Additionally, pursuant to Section 5.006 of the Texas Property Code, “an action based on breach of a restrictive covenant pertaining to real property, the court shall allow to a prevailing party who asserted the action reasonable attorney’s fees in addition to the party’s costs and claim.
(b) To determine reasonable attorney’s fees, the court shall consider:
(1) the time and labor required;
(2) the novelty and difficulty of the questions;
(3) the expertise, reputation, and ability of the attorney; and
(4) any other factor.”
As implied by the name, a Homeowner’s Association’s Covenants, Conditions, & Restrictions are a list of restrictive covenants (or rules) that govern the conduct of both the homeowners and the Association. According to the above Section 5.006 of the Texas Property Code, a breach of one of those restrictive covenants by either a homeowner or Association entitles the other party to recovery of attorney’s fees, similar to that of the breach of contract statute described above.
None of the above statutes imply a guarantee that attorney’s fees and costs will indeed be awarded or that if they are awarded that one necessarily receives the full amount they have paid in attorneys fees. Rather, the above statutes imply that if one can establish either a breach of contract or a breach of restrictive covenant occurred, a party is allowed to recover attorney’s fees against the breaching party. That does not mean they must recover such fees. Ultimately, the determination of the amount of attorney’s fees that a party recovers comes down to a decision of a judge or a jury at trial.
Duties of Management Company
In Texas, homeowners associations (HOAs) and condominium associations (COAs) often hire management companies to handle the day-to-day operations and administrative tasks associated with running the community. These companies act as agents of the association, working under the direction of the association’s board of directors. Below are some of the core functions a management company might perform for an HOA or COA in Texas:
Administrative Services
- Communications: Managing communication with residents, including newsletters, announcements, Notice of fines, Deficiency notices for unpaid annual dues or special assessments.
- Record-Keeping: Maintaining the association’s records, including minutes of board meetings, financial records, contracts, and correspondence.
- Meeting Coordination: Organizing and facilitating association meetings, including preparing agendas, setting up meeting spaces, conducting annual elections, annual meetings, conducting special assessment meetings, and distributing meeting notices and materials.
- Compliance: Ensuring that members of the Association comply with the community’s governing documents and restrictive covenants.
Financial Management
- Accounting: Managing the association’s finances, including accounts payable and receivable, aiding in financial aduits, and producing financial statements and reports
- Dues Collection: Collecting monthly or annual HOA fees from homeowners, managing delinquencies, and, if necessary, initiating collection actions in accordance with the governing documents and state laws.
Property Management
- Maintenance and Repairs: Overseeing the maintenance and repair of common areas and amenities, including hiring and supervising contractors and vendors.
- Inspections: Conducting regular inspections of common areas and, in some cases, individual units (particularly in COAs) to ensure compliance with the community’s architectural standards and maintenance requirements.
- Contract Management: Negotiating and managing contracts for services such as landscaping, pool maintenance, security, and other services required for the community.
Enforcement of Rules and Regulations
- Rule Enforcement: Implementing the community’s rules and regulations, including notifying homeowners of violations and working with the board to address non-compliance.
Legal Compliance and Advisory
- Legal Liaison: Acting as a liaison between the association and legal counsel on matters requiring legal attention, including litigation, document review, and compliance issues. Move often than not, the management company will supply the legal counsel for the HOA or COA.
It’s important to note that the management company’s role is to implement the decisions of the COA or HOA board of directors, not to make those decisions, though this line becomes grey in many situations. The board retains the ultimate authority over the association’s governance. Bad Management companies will overly enforce compliance issues with the members and create contentious issues with the Board of Directors and Community members at large. It is normal to sue both the management company and the Association if litigation is necessary.
Julian Nacol
Nacol Law Firm P.C.
Dallas HOA Attorney
(972) 690-3333
Open Meeting Requirements for Homeowner Associations : Understanding Texas Property Code Section 209.0051
Does your homeowner association make major decisions without any input or accountability being held? Can the Board of Directors make such decisions during a closed executive session?
In Texas, homeowner associations (HOAs) play a significant role in managing and maintaining residential communities. One of the key legal requirements that govern HOAs is Texas Property Code Section 209.0051, which outlines the open meeting requirements that associations must follow. Understanding these rules is essential for both HOA board members and homeowners to ensure transparency and compliance with state law.
What is Texas Property Code Section 209.0051?
Texas Property Code Section 209.0051 is a provision within the Texas Residential Property Owners Protection Act that mandates open meeting requirements for HOAs governing subdivisions. This law is designed to promote transparency and homeowner participation in association decisions.
Key Open Meeting Requirements
Board Meetings Must Be Open to Homeowners
HOA board meetings must generally be open to all homeowners, allowing them to observe discussions and decisions that affect the community. This requirement ensures transparency and fosters homeowner engagement.
Notice Requirements
HOAs must provide homeowners with advance written notice of board meetings. The notice must include the date, time, location, and general subject matter of the meeting. Notices should be provided at least 144 hours (six days) in advance for regular board meetings and at least 72 hours (three days) in advance for special meetings.
Matters Requiring an Open Meeting
HOAs must hold open meetings for discussions and decisions related to:
- Adoption or amendment of homeowner association rules, bylaws, or regulations
- Approval of the annual budget and financial expenditures
- Assessment increases and special assessments
- Election of board members and appointment of officers
- Major contracts or agreements affecting the community
- Changes to architectural guidelines or community standards
- Any other matter that requires a vote by the board, unless it falls under executive session exceptions
Permissible Closed Sessions (Executive Sessions)
While most HOA board meetings must be open, certain topics may be discussed in a closed executive session. These include:
- Pending or anticipated litigation
- Contract negotiations
- Enforcement actions against homeowners
- Personnel matters
- Consultation with the association’s attorney.
After an executive session, any decisions made must be summarized in the open meeting minutes without disclosing confidential details.
Electronic and Telephonic Meetings
HOAs may hold board meetings electronically or via teleconference, provided they comply with the notice requirements and allow homeowners to listen in or participate as required by law.
Meeting Minutes and Record-Keeping
HOAs must keep written minutes of open meetings, documenting decisions and discussions. Homeowners are entitled to review these records upon request, ensuring continued accountability and transparency.
Why This Matters to Homeowners
For homeowners, understanding Section 209.0051 is crucial because it guarantees their right to stay informed and engaged in community governance. It ensures that HOA boards cannot make major decisions in secrecy and provides an opportunity for residents to voice concerns and opinions.
Compliance and Enforcement
Failure to comply with Texas Property Code Section 209.0051 can lead to legal challenges and disputes between homeowners and the HOA board. Homeowners who believe their HOA has violated open meeting laws may seek remedies under state law, including legal action if necessary.
Texas Property Code Section 209.0051 is an important safeguard for homeowners, promoting transparency and accountability in HOA governance. Whether you are an HOA board member or a homeowner, understanding these open meeting requirements helps ensure that decisions affecting your community are made fairly and in compliance with the law.
If you have questions about HOA meetings or need legal guidance on HOA-related matters, consulting with a qualified attorney can help you navigate your rights and obligations effectively.
Dallas Texas HOA Attorneys
Nacol Law Firm P.C.
(972) 690-3333
Home Owner Associations ( HOA ) : Are You in For Problems?
Everyone loves and hates their HOA. A HOA has the power to make every neighbor’s’ life a little easier by establishing restrictions that keep the neighborhood clean, safe, and accountable.
HOA’s also in some cases have been given power to make an individual homeowner’s life unhappy. Depending on the circumstances, a HOA in a neighborhood of homes may not have the same specific powers as a HOA in a condominium or townhouse setting. Regardless whether you are an owner of a home, condominium, or townhouse and you have been wronged by your HOA, here is a list of things you must do:
- Read the HOA by-laws CAREFULLY!!
- Keep all documentation of correspondence you have had with the HOA Board, the Executive Officers, and Management Co., if there is one.
- Prepare a demand letter citing the specific by-laws that support your position.
- Record the HOA meetings in which your issues are presented or addressed and request minutes of the meeting from the secretary.
- Do not delay hiring an attorney if the HOA is not responsive to your grievances.
Certain issues, depending on the by-laws, such as unjustified forced foreclosures, failure to repair plumbing or foundations, trying to force you to construct or build a fence on your separate property are worth seeking legal advice. An experienced attorney is needed if you are to take on a Texas homeowner’s association. Many by-laws are open to interpretation regarding what a Texas HOA must repair and what is not responsible for under the HOA by-laws. To battle a strong HOA organization it takes an experienced real estate lawyer and if you have been a victim of HOA oppression seek an experienced lawyer immediately.
Julian Nacol, Attorney
Nacol Law Firm P.C.
Dallas HOA Attorney
(972) 690-3333
NACOL LAW FIRM P.C.
8144 Walnut Hill Lane
Suite 1190
Dallas, Texas 75231
972-690-3333
Office Hours
Monday – Thursday, 8am – 5pm
Friday, 8:30am – 5pm
OUR BLOGS
SEARCH
JOIN OUR NETWORK
Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
