What is a Restrictive Covenant?
When a homeowner purchases a home controlled by an HOA, the homeowner (and the HOA) agrees to and are bound by certain restrictive covenants. These covenants are stated in the governing documents of the HOA⎯specifically, the HOA’s Covenants, Conditions, & Restrictions (“CC&Rs”). Typically (or rather, hopefully), all of the HOA’s governing documents are provided to the home buyer prior to or at closing. Unfortunately, although understandably, because these governing documents are filled with hundreds of pages of legal jargon, the vast majority of homeowners do not care to read these restrictive covenants prior to purchasing their home, nor do they even know where to look.
Here is what you need to know about restrictive covenants:
In essence, a restrictive covenant limits the permissible uses of land within the HOA. In other words, they provide the homeowner with a set of limitations as to what they can and cannot do with their property. These restrictions can be wide ranging; however, most homeowners encounter issues when attempting to modify or alter their property or landscape in some way. Restrictive covenants are treated as contracts between the homeowner and the HOA, and a breach of these covenants can result in one party seeking legal remedy against the other. A 2017 Texas Court of Appeals case described restrictive covenants as such:
“A declaration containing restrictive covenants in a subdivision defines the rights and obligations of property ownership, and the mutual and reciprocal obligation undertaken by all purchasers in a subdivision creates an inherent property interest possessed by each purchaser.”
It is important to note, however, that any restrictive covenant must not violate any Texas statute⎯most importantly, the Texas Property Code⎯or else it is a violation of Texas law. Texas Property Code §§ 202.003 & 202.004 lay the groundwork for the construction and enforcement of restrictive covenants:
Texas Property Code § 203.003
(a) A restrictive covenant shall be liberally construed to give effect to its purposes and intent.
(b) In this subsection, “family home” is a residential home that meets the definition of and requirements applicable to a family home under Chapter 123, Human Resources Code. A dedicatory instrument or restrictive covenant may not be construed to prevent the use of property as a family home. However, any restrictive covenant that applies to property used as a family home shall be liberally construed to give effect to its purposes and intent except to the extent that the construction would restrict the use as a family home.
Texas Property Code § 203.004
(a) An exercise of discretionary authority by a property owners’ association or other representative designated by an owner of real property concerning a restrictive covenant is presumed reasonable unless the court determines by a preponderance of the evidence that the exercise of discretionary authority was arbitrary, capricious, or discriminatory.
(b) A property owners’ association or other representative designated by an owner of real property may initiate, defend, or intervene in litigation or an administrative proceeding affecting the enforcement of a restrictive covenant, or the protection, preservation, or operation of the property covered by the dedicatory instrument.
(c) A court may assess civil damages for the violation of a restrictive covenant in an amount not to exceed $200 for each day of the violation.
Courts tend to hold that the intent of any particular restrictive covenant shall be interpreted by a court if the covenant is disputed. However, courts will hold common law rules favoring the “free and unrestricted use of land” over all else. Furthermore, courts have held that any ambiguity in a covenant must be strictly construed against the party seeking to enforce the covenant.
While this blog is intended to be an overview of restrictive covenants, each situation and covenant is unique and deserves its own analysis as to whether it is binding on a homeowner and whether it complies with Texas law.
Julian Nacol
Nacol Law Firm P.C.
Dallas Texas HOA Attorney
(972) 690-3333
Airbnb / Vrbo : Amendments to Your HOA’s Governing Documents
For those who own property within an HOA, the idea that an HOA can frequently amend its restrictions on the use of property in the community can be disconcerting, especially for those property owners seeking to list their property on Airbnb, Vrbo, or other similar short-term rental sites. With the growth of Airbnb in recent years, there has been a corresponding growth in HOAs restricting the use of property within their communities for short-term rental purposes. This leaves many property owners and potential property owners wondering if an HOA can restrict the use of their property for short-term rental purposes AFTER they have already begun short-term renting them. In short, the answer is yes, and here is why:
As this specific area of law is relatively new, there is little case law to reference to specifically as it regards to Airbnbs, however the little that exists seems to be where courts will lean in the future because of its correspondence to basic legal principles. A great summary of how courts will likely view restrictions on short-term rental property use comes from a 2022 Texas Court of Appeals case—Adlong v. Twin Shores Property Owners Association:
When buyers purchase property subject to a declaration capable of amendment if certain procedures are followed, they are “on notice that the unique form of ownership they acquired when they purchased their property was subject to change through the amendment process, and that they would be bound by properly adopted amendments.” So, property owners that purchase property that is part of a valid existing HOA “know in advance that the rules might change and that they are often subjecting themselves to the will of the majority” in the HOA.
Essentially, the court stated that homeowners should know that buying a home within an HOA could mean that the restrictions governing their property use could change, and in effect they are consenting to those changes. This makes logical sense, too—if each homeowner was only subject to the restrictions that were in place when they moved into the HOA, it would be nearly impossible for an HOA to determine who is subject to which restrictions and would render future amendments virtually meaningless. If an HOA’s restrictions were treated as such, there could exist a theoretical community where half of a community can only paint their homes purple, and another half can paint their homes any color other than purple, simply because one half moved into the community after the other half. While this is a juvenile example, this appears to be Texas courts’ logic when it comes to this issue.
In conclusion, if you are looking to use your property for short-term rental purposes or are looking to buy a property for the same reason, it may be in your interest to look at homes not controlled by an HOA.
- Adlong v. Twin Shores Prop. Owners Ass’n, 2022 Tex. App. LEXIS 1970, *23
Julian Nacol
Nacol Law Firm P.C.
Dallas HOA Attorney
(972) 690-3333
Architectural Control Committee
In Texas, like in many other states, Homeowners Associations (HOAs) commonly have an Architectural Control Committee (ACC) tasked with maintaining the aesthetic and structural standards of the community. The ACC plays a powerful, if not tedious, role in ensuring that any modifications, improvements, or construction activities within the HOA comply with the community’s governing documents, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and any applicable design guidelines. Though many members of the ACC Board strive to be fair and reasonable, that is seldom the case, and the ACC power is more often than not abused. Here’s an overview of the ACC’s function, authority, and processes, particularly as they pertain to Texas:
Function and Authority
- Establishment: The ACC’s authority and function are typically established in the HOA’s CC&Rs or bylaws. These documents outline the committee’s role, powers, and the procedures it must follow when reviewing and approving or denying homeowners’ requests for architectural changes. The procedures and guidelines are normally contained with the CC&R’s that detail the exact procedure used to affirm or deny a request.
- Review Process: Homeowners wishing to make exterior changes to their property, including landscaping, additions, renovations, or new constructions, must usually submit a detailed request to the ACC for approval before commencing work. This process helps maintain visual harmony and property values within the community.
Guidelines and Standards
- Design Guidelines: Many ACCs have specific design guidelines that provide homeowners with clear expectations about the types of changes that are likely to be approved. These guidelines can cover aspects such as color schemes, materials, fencing styles, and landscaping requirements. It is common to have an structural plans developed by an architect, bids, and materials submitted to the Architectural Control Committee to obtain approval prior to beginning any alterations of the property.
Decision Making
- Timeliness: Texas law may specify timelines within which the ACC must make a decision after receiving a request. If the ACC fails to respond within the designated time frame, the request may be deemed approved, depending on the HOA’s governing documents. Though if a response is not forthcoming, the CC&R’s may stipulated that it is deemed denied, thus reading the CC&R’s are pivotal.
- Appeals: The HOA’s governing documents often outline a process for homeowners to appeal Architectural Control Committee decisions. This process allows for reconsideration of denied requests under certain conditions. If no procedures are contained within the governing documents, then Texas Property Code Sec. 209.00505 applies.
- Compliance with State Law: In Texas, the operation of ACCs and the enforcement of architectural standards must comply with state law, including any statutes that regulate the duration of deed restrictions and the powers of HOAs. Tex. Prop. Code Sec 209.00505 details qualification of board members, appeal process, and notice requirements for the ACC pursuant to Texas Law.
- Fairness and Non-Discrimination: The ACC must operate in a manner that is fair, consistent, and non-discriminatory. Decisions cannot be arbitrary and must be based on the guidelines set forth in the governing documents. Arbitrary and Capriciousness is a primary affirmative defense for a Homeowner to any alleged violation that the ACC alleges pursuant to its final decision.
Challenges and Disputes
- Dispute Resolution: Disputes between homeowners and the ACC are not uncommon. Many HOAs have dispute resolution procedures, which may include mediation or arbitration, to address conflicts arising from architectural control decisions. Though these are common in new CC&R’s, these dispute resolution procedures are lacking in older HOA Subdivisions.
- Legal Action: Homeowners who believe their requests have been unjustly denied may consider legal action. This is often the case because of the appeal Architectural Control Committee abuse and ignorance of the current procedures and police conferred by Texas Law.
The ACC is a police component of community governance within an HOA, attempting to dictate the community’s aesthetic standards and property values pursuant to the subjective beliefs of whoever is on the board of the ACC at that time.
Julian Nacol
Nacol Law Firm P.C.
Dallas HOA Attorney
(972) 690-3333
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
Building a Fence in an HOA: What, Why, and How?
We often receive calls from frustrated homeowners who have either had their request to build a fence around their property denied by their Homeowner’s Association’s Architectural Committee, or who have been fined by their Homeowner’s Association for erecting or altering a fence around their property. While there may be some limitations to the appearance of your fence, a Texas Homeowner’s Association is prohibited from restricting your right to build a fence around the perimeter of your property.
Pursuant to Section 202.023(b) of the Texas Property Code, a Homeowner’s Association may not include or enforce any provision in their governing documents that “prevents a property owner from building or installing security measures, including but not limited to a security camera, motion detector, or perimeter fence.”
However, Section 202.023 does allow Texas Homeowner’s Associations to regulate “the type of fencing that a property owner may install.” In our extensive experience examining the governing documents of Homeowner’s Associations, these provisions typically take shape as limits to the height, material, and color of the fence. If your Architectural Committee has denied your application to build a fence on these grounds, or you have been fined because your fence is not in accord with restrictions to this effect, it is likely that they have every right to enforce those restrictions.
It is worth noting that the above referenced Section 202.023 is titled “Security Measures” within the Texas Property Code. So, while the HOA can place some restrictions on a homeowner’s fence, if those restrictions reasonably interfere with the security a fence can provide, a homeowner may have a valid objection to such a provision within an Association’s restrictive covenants, however it is important to contact a qualified attorney to make an assessment to that effect. In conclusion, if your Homeowner’s Association is limiting your ability to put up a perimeter fence for reasons other than aesthetics, it would likely be beneficial to contact The Nacol Law Firm to determine any recourse you may have.
NACOL LAW FIRM P.C.
8144 Walnut Hill Lane
Suite 1190
Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
