Bylaws: Are They Required for Your HOA?

Broadly speaking, there are two main documents (although there may be others) that govern your HOA—the Declaration and the Bylaws. The Declaration by and large places restrictions on the use of the land governed by the HOA, while the Bylaws generally lay out rules and guidelines for the HOA to enforce those restrictions. The Declaration is the most binding of these documents—pursuant to Tex. Prop. Code 82.053(c), “If there is a conflict between the provisions of the declaration and the bylaws, the declaration prevails….” 

In some cases, old or poorly run HOAs may not have Bylaws or may not have filed them correctly with the county in which they are located. Most HOAs are formed as non-profit corporations. The Texas Business Organization Code, Chapter 82, governs non-profit corporations. 

Pursuant to Tex. Bus. Org. Code Sec. 22.102(a): “The initial bylaws of a corporation shall be adopted by the corporation’s board of directors or, if the management of the corporation is vested in the corporation’s members, by the members.”

Pursuant to Tex. Bus. Org. Code Sec. 22.104(a): “After the certificate of formation [the document which forms the is filed, the board of directors named in the certificate of formation of a corporation shall hold an organization meeting of the board, either in or out of this state, at the call of the organizers or a majority of the directors to adopt bylaws and elect officers for other purposes determined by the board at the meeting.” 

Pursuant to Tex. Prop. Code Sec. 209.005(m)(1): “A property owners’ association composed of more than 14 lots shall adopt and comply with a document retention policy that includes, at a minimum, the following requirements: (1) certificates of formation, bylaws, restrictive covenants, and all amendments to the certificates of formation, bylaws, and covenants shall be retained permanently….”

In Sterling/Suggs Ltd. P’ship v. Canyon Lake Island Prop. Owners Ass’n, the HOA filed an action to enforce a Rule 11 settlement agreement entered with a homeowner. No. 03-20-00131-CV, 2022 Tex. App. LEXIS 1309 (Tex. App.—Austin Feb. 25, 2022, no pet.). The parties were ordered to arbitration. The arbitrator found, and the parties agreed, that the HOA had not filed their bylaws with the county in accordance with Tex. Prop. Code Sec. 202.006(b) which states, “a dedicatory instrument has no effect until the instrument is filed in accordance with this section.” The arbitrator found that the HOA did not have the authority to enter into any agreement because they had not filed their bylaws which would “create and empower the Board of Directors to act.” 

As an aside, Sterling and a number of other cases support the conclusion that bylaws are a dedicatory instrument (necessitating they be filed with the county), however there is case law to support the fact that bylaws are not necessarily dedicatory instruments. See Stork v. Tres Lagos Property Owners Ass’n, Inc., 442 S.W.3d 730, 738 (Tex. App.—Texarkana 2014, pet. denied).

In Sterling, while the HOA had adopted bylaws, the court held the HOA was unauthorized to act simply because the Bylaws had not been filed with the county pursuant to Tex. Prop. Code Sec. 202.006(b).  Accordingly, if an HOA has failed to file their bylaws with the county, or has failed to adopt bylaws at all, there is a strong argument to be made, similar to Sterling, that at least some actions they might take are not authorized. Furthermore, on a logical level, the decision in Sterling makes sense considering that if an HOA board is allowed to act without bylaws to govern their actions, there could be tyrannical consequences.  

Dallas HOA Attorneys
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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.