HOA Fines: How Your HOA Can Seek Recourse
It is assumed for the purposes of this article that the fines levied by the HOA referenced herein are proper, valid, and do not violate the Texas Property Code or other applicable statutes. This article is in relation to residential subdivision homeowner’s associations governed by Texas Property Code Chapter 209.
There are three principal (though not the only) ways an HOA may remedy the fines on a homeowner’s account: (1) file a lien against the property; (2) report the delinquency of an owner to a collection agency; and (3) file suit on the homeowner.
Liens
After an HOA has placed fines on your account, they may seek to place a lien on your property in order to secure payment when the property is sold. Pursuant to Tex. Prop Code Sec. 209.009:
“A property owners’ association may not foreclose on a property owners’ association’s assessment lien if the debt securing the lien consists solely of:
- Fines assessed by the association;
- Attorneys fees incurred by the association solely associated with fines assessed by the association; or
- Amounts added to the owner’s account as an assessment under Section 209.005(i) [records reproduction requests] or 209.0057(b-4) [charges to a homeowner for vote recounts].
While Texas law does not automatically grant HOAs the authority to create liens, the HOA can create that authority if it is granted in their governing documents. The documents should specify (if any) which types of charges may be subject to a lien (e.g., past-due assessments, fines, attorneys fees, etc.).
Collections (see Tex. Prop. Code. Sec. 209.0064)
An HOA may also seek recourse by reporting delinquencies to a collection agency. An HOA cannot hold a homeowner liable for fees incurred by the HOA for retaining a collection agency to collect the outstanding balance unless the HOA sends the homeowner notice via certified mail that:
“(1) specifies each delinquent amount and the total amount of the payment required to make the account current;
(2) if the association is subject to section 209.0062 or the association’s dedicatory instruments contain a requirement to offer a payment play, describes the options the owner has to avoid having the account turned over to a collection agent, including information regarding availability of a payment plan through the association; and
(3) provides a period of at least 45 days for the owner to cure the delinquency before further collection action is taken.”
Filing Suit
Lastly, an HOA may seek to enforce a restrictive covenant and obtain monetary damages from a homeowner. Pursuant to Tex. Prop. Code Sec. 202.004(b)-(c):
“(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.”
If an HOA files a suit of this nature, they are typically seeking specific performance, meaning they are asking the court to force the owner to do or stop doing a specific action in order to comply with the governing documents. However, as stated in subsection (c) above, the HOA can also seek payment of fines in the amount of $200 for each day of the violation.
In conclusion, while this list is not comprehensive, there are a variety of ways an HOA can seek to collect overdue fines on your homeowner’s account. If you have any concerns about the actions of your HOA, please contact us.
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.
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
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