What is a Dedicatory Instrument for a Homeowners Association?
In Texas, a “dedicatory instrument” for a Homeowners Association (HOA) is a term that encompasses a wide range of documents that govern the establishment, operation, management, and maintenance of a residential community. These instruments lay out the rules, restrictions, obligations, and rights related to the properties and the homeowners within an HOA. The Texas Property Code, which provides the legal framework for the creation and operation of HOAs in Texas, specifically refers to and defines dedicatory instruments to ensure transparency, governance, and the orderly management of communities. These dedicatory instruments are initially created by a developer prior to the creation of the subdivision and govern the use of the land. Dedicatory Instruments maybe modified, altered, or changed by the community’s members in interest with a valid vote or depending on the type may be modified, altered, or changed by the Board of Directors.
Key Components of Dedicatory Instruments
Dedicatory instruments typically include, but are not limited to, the following types of documents:
- Declaration of Covenants, Conditions, and Restrictions (CC&Rs): This is often considered the primary document of an HOA. It sets forth the covenants and restrictions that govern the use of lots within the subdivision, including architectural controls, maintenance obligations, and the use of common areas and facilities. The CC&Rs also outline the rights and obligations of the homeowners and the HOA.
- Bylaws: The bylaws of an HOA detail the structure of the association’s governance. This includes provisions for the election and duties of the board of directors, the conduct of meetings, voting rights, and the manner of determining membership dues and assessments.
- Articles of Incorporation: If the HOA is incorporated, the articles of incorporation are a part of the dedicatory instruments. These establish the HOA as a legal entity and include basic information such as the association’s name, purpose, and the initial office and registered agent.
- Rules and Regulations: These are additional guidelines established by the HOA’s board of directors concerning the details of property use, maintenance standards, and other community policies not explicitly outlined in the CC&Rs.
- Plats: Plats are detailed maps that describe the layout of the subdivision, including the location of lots, common areas, and easements.
- Policies, Procedures, and Guidelines: These can include various rules or guidelines adopted by the HOA, such as architectural guidelines, enforcement policies, fine schedules, and procedures for resolving disputes.
Legal Significance
The dedicatory instruments are binding legal documents. Homeowners are generally required to adhere to the covenants, conditions, and restrictions set forth in these documents upon purchasing a property within the HOA’s jurisdiction. These instruments are recorded in the county’s public records to provide notice to current and prospective property owners.
Transparency and Access
Under Texas law, HOAs are required to make their dedicatory instruments available to members, ensuring transparency in governance and operations. Homeowners should be provided access to these documents upon request and often through the association’s website. Pursuant to a recent update in Texas Law the HOA are required to post CC&R’s and Bylaws on the website to insure the members have access.
Understanding the scope and implications of dedicatory instruments is crucial for both current and prospective homeowners, as these documents significantly influence the rights, responsibilities, and lifestyle within the community governed by an HOA.
Julian Nacol
Nacol Law Firm P.C.
Dallas Texas HOA Attorney
(972) 690-3333
Redeeming a Property Within a Residential Subdivision Homeowner’s Association
Homeowners often begin to panic when they discover their HOA has either filed to foreclose or has already foreclosed on their property. Often, this happens (sometimes improperly) without the homeowner realizing or having knowledge the HOA was about to foreclose. The question then becomes, what happens if the property is foreclosed on and sold? The answer to this question is governed by Texas Property Code Sec. 209.010 and 209.011.
After an HOA forecloses on and conducts the sale of an owner’s lot, written notice must be sent to the lot owner within 30 days of the sale. After the sale, the lot owner or lienholder has 180 days from the notice of sale to redeem (meaning to legally take back) the property. A lienholder (such as the bank financing the mortgage), however, may not redeem the property until the passage of 90 days after the homeowners association mailed the written notice of sale.
When the property is purchased by the HOA at the foreclosure sale, the lot owner must pay the following to the association in order to redeem the property:
(1) all amounts due the association at the time of the foreclosure sale;
(2) interest from the date of the foreclosure sale to the date of redemption on all amounts owed the association at the rate stated in the dedicatory instruments for delinquent assessments or, if no rate is stated, at an annual interest rate of 10 percent;
(3) costs incurred by the association in foreclosing the lien and conveying the property to the lot owner, including reasonable attorney’s fees;
(4) any assessment levied against the property by the association after the date of the foreclosure sale;
(5) any reasonable cost incurred by the association, including mortgage payments and costs of repair, maintenance, and leasing of the property; and
(6) the purchase price paid by the association at the foreclosure sale less any amounts due the association under Subdivision (1) that were satisfied out of foreclosure sale proceeds.
When the property is purchased by a third party other than the homeowners association, lot owner, or lienholder, the lot owner must pay the following to the association and the third party in order to redeem the property:
(1) must pay to the association:
(A) all amounts due the association at the time of the foreclosure sale less the foreclosure sales price received by the association from the purchaser;
(B) interest from the date of the foreclosure sale through the date of redemption on all amounts owed the association at the rate stated in the dedicatory instruments for delinquent assessments or, if no rate is stated, at an annual interest rate of 10 percent;
(C) costs incurred by the association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney’s fees;
(D) any unpaid assessments levied against the property by the association after the date of the foreclosure sale; and
(E) taxable costs incurred in a proceeding brought under Subsection (a); and
(2) must pay to the third party who purchased the property at the foreclosure sale:
(A) any assessments levied against the property by the association after the date of the foreclosure sale and paid by the purchaser;
(B) the purchase price paid by the purchaser at the foreclosure sale;
(C) the amount of the deed recording fee;
(D) the amount paid by the purchaser as ad valorem taxes, penalties, and interest on the property after the date of the foreclosure sale; and
(E) taxable costs incurred in a proceeding brought under Subsection (a) of Property Code Sec. 209.011.
Redemption can be a complex process. This article is in no way intended to encompass the entirety of the redemption process, rather, our intent is to lay out the basic timeline and requirements for post-foreclosure redemption. We highly recommend contacting us to help you through the process. Refer to Texas Property Code Sec. 209 for the relevant statutes.
Dallas HOA Attorneys
Nacol Law Firm P.C.
(972) 690-3333
Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.
Condominium Associations: Duty Owed by Officers and Directors to Unit Owners
Pursuant to Texas Property Code Sec. 82.103, “Each officer or member of the board is liable as a fiduciary of the unit owners for the officer’s or member’s acts or omissions.” This means that each officer or board member has a fiduciary duty to the other members of the COA, that is, the unit owners. Additionally, officers or directors of COAs are not liable to the association or any unit owner “for monetary damages for an act or omission occurring in the person’s capacity as an officer or director unless: (1) the officer or director breached a fiduciary duty to the association or a unit owner; (2) the officer or director received an improper benefit; or (3) the act or omission was in bad faith, involved intentional misconduct, or was one for which liability is expressly provided by statute.”
The combination of these two statues essentially indicates that officers and members of the board have a fiduciary duty to the unit owners, and that the officers and board members can be held liable for monetary damages if they breach that fiduciary duty.
A fiduciary duty can be described as a responsibility of care, loyalty, good faith, honesty, full disclosure, and to refrain from self-dealing, among other things. At its core, this duty is essentially an obligation for one to pursue the interests of another over one’s own. Texas law has established that determining whether a breach of fiduciary duty has occurred is a fact-based question, meaning that the fact finder (judge or jury) will determine if a breach has occurred based on the factual circumstances.
Nonetheless, even if a director or officer may be said to be liable under Sec. 82.103(e) referenced above, a director or officer may still escape liability if such is provided for in the association’s declaration, bylaws, articles of incorporation, or other applicable statutes or regulations.
In conclusion, while the determination as to whether officers or directors of a COA have breached their fiduciary duty is highly dependent on the facts and circumstances, there is certainly some fiduciary duty owed by the directors and officers to act in the best interests of the homeowners. If you have any concerns that your COA has breached its fiduciary duty to you, it may be in your interest to contact us and schedule a consultation in order to determine if action should be taken against your COA.
Dallas COA Attorneys
Nacol Law Firm P.C.
(972) 690-3333
Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.
Attorney’s Fee Recovery Against a Condominium Association
In Texas, the ability to recover attorney’s fees when suing a Condominium Association (COA) depends on the specific circumstances of the case and the statutory provisions under which the lawsuit is filed. Texas law provides various avenues for the recovery of attorney’s fees, but these often hinge on the nature of the legal dispute, the contractual agreements between parties, and specific legislative provisions that may allow for the recovery of such fees. Here are some general considerations and steps to follow when seeking attorney’s fees in a lawsuit against a COA:
- Review Governing Documents and Contracts
Start by reviewing the COA’s Declaration, Bylaws, and any applicable contracts or agreements. These documents may contain provisions related to dispute resolution and the recovery of attorney’s fees. Some agreements specifically stipulate that the prevailing party in a dispute is entitled to recover reasonable attorney’s fees from the other party.
- Consult Texas Statutes
The Texas Property Code pursuant to Texas Uniformed Condominium Act Section 82.161 allows for attorney’s fees to be recovered to a prevailing party. More specifically it states that the prevailing party in an action to enforce the declaration, bylaws, or rules is entitled to reasonable attorney’s fees and costs of litigation from the non prevailing party. Additionally, Texas Property Code Section 5.006 allows mandatory attorney’s fees that are reasonable and necessary if a restrictive covenant is breached.
- Consider the Nature of Your Claim
The ability to recover attorney’s fees often depends on the type of claim being filed. For instance, claims involving breach of contract, breach of restrictive covenants, declaratory actions allow for attorney’s fees. These are statutory and contractual in nature, thus lend to attorney fee recovery. Claims such as negligence, fiduciary duty breach, or fraud claims are tortious and lead only to actual damages and punitive or exemplary damages but not attorney’s fees.
- Seek Legal Advice
Because laws and legal procedures can be complex and vary widely based on the specifics of each case, it’s crucial to seek advice from a legal professional experienced in Texas condominium law and litigation. An attorney can provide guidance tailored to your situation and help maximize your chances of recovering attorney’s fees.
Remember, each legal situation is unique, and the success of recovering attorney’s fees will depend on the specific facts of your case, the applicable law, and the discretion of the court.
Julian Nacol
Nacol Law Firm P.C.
Dallas Texas Condominium Association Lawyer
(972) 690-3333
Redeeming a Property Within a Condominium Owner’s Association
Homeowners often begin to panic when they discover their Condominium Owner’s Association has either filed to foreclose or has already foreclosed on their property. Often, this happens (sometimes improperly) without the homeowner realizing or having knowledge the COA was about to foreclose. The question then becomes, what happens if the property is foreclosed on and sold? The answer to this question is governed by Texas Property Code Sec. 82.113.
After the property has been foreclosed on and sold, the redeeming lot owner has 90 days from the date of the property to redeem the unit. If the COA is the purchaser, the owner must pay the association the following:
- all amounts due the association at the time of the foreclosure sale,
- interest from the date of foreclosure sale to the date of redemption at the rate provided by the declaration for delinquent assessments,
- reasonable attorney’s fees and costs incurred by the association in foreclosing the lien,
- any assessment levied against the unit by the association after the foreclosure sale, and
- any reasonable cost incurred by the association as owner of the unit, including costs of maintenance and leasing.
If a party other than the association is the purchaser, the redeeming lot owner must pay the purchaser the following:
- an amount equal to the amount bid at the sale;
- interest on the bid amount computed from the date of the foreclosure sale to the date of redemption at the rate of six percent;
- any assessment paid by the purchaser after the date of foreclosure; and
- any reasonable costs incurred by the purchaser as the owner of the unit, including costs of maintenance and leasing.
The owner redeeming the property may also be required to pay the association any outstanding assessments as well as attorney’s fees and costs incurred by the association in foreclosing the lien.
Redemption can be a complex process. This article is in no way intended to encompass the entirety of the redemption process for properties within Condominium Owners Associations, rather, our intent is to lay out the basic timeline and requirements for post-foreclosure redemption. We highly recommend contacting us to help you through the process. Refer to Texas Property Code Sec. 82 for the relevant statutes.
COA Attorneys Dallas TX – Nacol Law Firm PC
Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.
NACOL LAW FIRM P.C.
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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
