A Short Guide to Liens in Residential Subdivision Homeowner’s Associations
Under Texas law, an HOA has the right to place a lien on a property if the property owner fails to pay assessments (dues), fees, or fines. However, whether or not an HOA can foreclose on a property is dependent on if the lien is due to failure to pay assessments. Pursuant to Texas Property Code Sec. 209.009, an HOA cannot foreclose on a lien if “the debt securing the lien consists solely of: (1) fines assessed by the association; (2) attorney’s fees incurred by the association solely associated with fines assessed by the association….”
For example, imagine a homeowner has previously failed to pay dues, but is currently up to date on their dues, and as a result of the previous missed payments, the HOA imposed fines in addition to the assessments. Because the homeowner is up to date on their assessments, even though they have not paid their fines, the HOA may not foreclose on the property. Fines and attorney’s fees alone are never grounds on which an HOA may foreclose on a property.
However, a lien on your property due only to fines or attorney’s fees levied by your HOA may still affect the sale of the property. A lien secures the payment of a debt when a property gets sold. Therefore, while the HOA cannot force the foreclosure of your property under these circumstances in order to recover the debt, a lien filed to recover fines and attorney’s fees may still require the property owner to pay off the debts pursuant to the lien before the property can be sold.
Further, your HOA must follow notice requirements set forth in the Texas Property Code in order for a lien on your property to be valid and proper. Before an HOA may file a lien with the county, they must send a homeowner two notices. The first notice may be sent by first class mail or e-mail, and the second notice must be sent by certified mail at least 30 days after the first notice.
We often receive phone calls from homeowners indicating that their HOA has placed a lien on their property, or that their property is being foreclosed on when they had no idea of any assessment or fine delinquency. If you have received a Notice from your HOA indicating a lien has been placed on your property, or that your property is being foreclosed on, it may be in your interest to contact us to ensure that the HOA is acting within their rights, or otherwise ensure that your property remains in the lawfully correct hands.
Nacol Law Firm P.C. – Dallas Texas HOA Attorneys
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.
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
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