Can a POA Board Adopt Fining Policies if the CC&Rs Are Silent in Texas?
Property Owners’ Associations (POAs) play a crucial role in maintaining community standards, enforcing rules, and ensuring property values remain stable. However, one common question that arises in Texas is whether a POA’s Board of Directors can impose fines for violations if the association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) does not explicitly mention fining as a method of enforcement. The answer depends on several key factors, including Texas state law, the association’s governing documents, and due process considerations.
- Texas Law Governs POA Authority
Texas has specific laws regulating POAs and their enforcement powers. Chapter 209 of the Texas Property Code (applicable to residential POAs) outlines the procedures that property associations must follow when imposing fines.
Key requirements under Texas law include:
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- POAs must provide written notice of the violation and an opportunity to cure before imposing a fine.
- Homeowners must be given a hearing if requested.
- Fines must be reasonable and comply with any limitations set in the CC&Rs or bylaws.
However, if the CC&Rs do not explicitly grant the POA the authority to fine, the Board cannot impose fines unilaterally based on Texas law alone.
- Reviewing the POA’s Bylaws and Governing Documents
Even if the CC&Rs do not specifically mention fines, the POA’s bylaws or rules and regulations might provide some enforcement authority. If the bylaws grant the Board broad discretion to establish enforcement mechanisms, they may be able to implement fines as part of their authority to regulate the community.
However, bylaws cannot override the CC&Rs. If the CC&Rs are silent or explicitly exclude fines, the Board may need to seek an amendment to grant fining authority.
- Amending the CC&Rs to Include Fining Authority
If the POA’s governing documents do not mention fines, the safest approach is to amend the CC&Rs. This process typically requires a vote by the membership, with a required approval percentage outlined in the governing documents.
The amendment process may include:
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- Drafting clear language specifying fine amounts and enforcement procedures.
- Holding a community vote to approve the amendment.
- Recording the amendment with the county clerk to ensure enforceability.
- Due Process Considerations
Regardless of whether a POA has explicit authority to fine, proper due process must always be followed to avoid legal challenges. A fair enforcement policy should include:
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- Clear notification: Homeowners must be informed of violations and potential fines.
- Opportunity to be heard: Homeowners should have the chance to appeal or challenge fines.
- Reasonable fines: Penalties should be proportionate and not excessive.
- Alternative Enforcement Methods
If fining is not an option, POAs in Texas can explore other enforcement mechanisms, such as:
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- Suspending privileges (e.g., access to amenities like pools or clubhouses).
- Filing a lawsuit to enforce compliance.
- Placing a lien for unpaid assessments (if permitted by Texas law and governing documents).
If your POA’s CC&Rs do not specifically allow fines, the Board cannot simply adopt a policy imposing them without proper authority. The best course of action is to review Texas law, analyse governing documents, and, if necessary, amend the CC&Rs to provide clear fining authority. Ensuring compliance with due process protections will help the POA enforce rules fairly while avoiding legal disputes with homeowners.
Dallas Property Owner Association Attorneys – POA Attorneys
Nacol Law Firm P.C.
(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.
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Dallas, Texas 75231
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization