I’m Not Paying my Fees because You haven’t Fixed the Pool

Posted on April 30, 2012 by zrojas

What about the homeowner who says “I’m not paying my fees because you haven’t fixed the community pool? Is this a valid excuse?

When an association pursues collections, homeowners will often attempt to come up with excuses for nonpayment, whether they believe such excuses to be meritorious or are merely attempting to delay the process. Especially in difficult economic times when associations may be strapped for cash and delaying certain improvements, owners who want to get out of paying their assessments commonly withhold assessment payments and present a defense to collection actions of some maintenance issue or other claimed defect or perceived wrong. Thus, an association or association attorney should be prepared to respond with a supported argument that the obligation to pay assessments is an independent covenant which runs with the land and is not, therefore, subject to withholding, self-help or off-set. There is a plethora of case law to support this position, including Agassi West Condominium Assn. v. Solum (N.D. 1995) 527 N.W. 2d 244; Panther Lake Homeowners Assn. v. Juergensen (Wash. App. 1995) 887 P.2d 465; Park Place Estates Homeowners Assn. v. Naber (1994) 29 Cal. App. 4th 427; Kirktown Homes v. Arey (Mo. App. 1991) 812 S.W.2d 198. A helpful discussion of the reasoning behind homeowners’ lack of a right to offset is found in the case of Trustees of the Prince Condominium v. Prosser (1992) 412 Mass. 723, 726-727, in which the Massachusetts Supreme Judicial Court analogized condominium assessments to real estate taxes and reasoned that:

Whatever grievance a unit owner may have against the condominium trustee must not be permitted to affect the collection of lawfully assessed common area expense charges. A system that would tolerate a unit owner’s refusal to pay an assessment because the unit owner asserts a grievance, even a seemingly meritorious one, would threaten the financial integrity of the entire condominium operation. For the same reason that taxpayers may not lawfully decline to pay lawfully assessed taxes because of some grievance or claim against the taxing governmental unit, a condominium unit owner may not decline to pay lawful assessments.

This analogy to real estate taxes can be useful in explaining the duty to pay assessments. The covenantal and/or statutory obligation springs from the mere existence of the real estate as an incident of ownership. It is not a fee for services, nor a quid pro quo for goods, nor is it premised on a contract to pay. By accepting title to this parcel of real estate, the owner becomes obligated to pay their share of the expenses of the community of which the parcel is a part. The owner does not pick and choose to which expenses they contribute, nor how the money will be spent. Those decisions are within the domain of the governing body of the community.

Nor does the owner have the right to offset for some claimed damage or transgression. The obligation is wholly independent of any duty flowing from the community to the owner. As cited in the Park Place Estates case referenced above, and citing to Baker v. Monga (1992) 32 Mass.App. 450, fn. 8 [ N.E.2d 1162, 1164]: “The independent nature of the covenant to pay in timely fashion common charges to the condominium unit owner’s organization is implicit in the contractual agreement of the association’s members that maintenance charges and other proper assessments are necessary to the sound ongoing financial management and stability of the entire complex.”

This does not mean that owners are prohibited from questioning the lawfulness of the assessment, and they often do. However, both statutes and case law from various jurisdictions have required that even if a unit owner claims the assessment is illegal, such owner must pay under protest and then seek a determination of the legality and, if appropriate, a refund. See, e.g., Blood v. Edgar’s, Inc. (1994) 36 Mass. App. Ct. 402 and Cal. Civ. Code § 1367.6.

Posted in General Association Issues | Leave a comment

To Foreclose or Not to Foreclose? Should an Association?

Posted on April 17, 2012 by zrojas

The probability of actually foreclosing on a home by an Association is very small. However, if you begin the foreclosure process, you should be prepared to go all the way to the steps of the County Courthouse.

If the Association does foreclose, positive things may happen. The owner might finally wake up, especially when the Sheriff or Constable shows up to evict him from his own property. It should be noted that the Association, if it is the purchaser, takes the property “subject to” any outstanding superior lien. However, the Association has no obligation to pay any debt secured by a superior lien. The superior lien-holder can, of course, foreclose on the property. If this occurs all junior liens are wiped out.

Even though an association has a legal right to foreclose on a property for failure to pay delinquent maintenance fees, the reality behind the process is that very few properties are actually foreclosed upon. With all the legal collection matters that we’ve handled over the years, only a couple of properties which had already been abandoned have actually been foreclosed upon. This is true because the legal process we employ provides the detailed notice and adequate warning sufficient to motivate debtors to payoff their obligations early in the collection process. Moreover, it is the leverage created from the remedy of foreclosure that ultimately causes the most obstinate of individuals to pay their outstanding debt. Importantly, homeowners are now provided with an opportunity under state law to redeem, or repurchase their property, during a period of at least six (6) months following its sale at foreclosure. If the Association was the purchaser at foreclosure sale, typically, the homeowner would pay, in order to require their property, only those costs already owed to the Association under the terms of the judgment authorizing the foreclosure.

Posted in General Association Issues, Uncategorized | Leave a comment

Adopting a Formal Collection Policy

Posted on March 27, 2012 by zrojas

A number of goals may be served simply by adopting a formal collection policy Resolution. A collection policy can educate owners about their obligations to the association and the consequences of not meeting those responsibilities on time. Owners who read a well-written collection policy will know what to expect from the board. They will know that the board is serious about dealing aggressively with nonpayment of assessments. In many instances, this information alone is the best deterrent to owner delinquency.

A well-drafted collection policy provides a checklist and a road map to guide the board and the manager. It serves as a clear delegation of authority by the board to the association’s officers and agents. It also provides a mechanism for exercising discretion for unforeseen circumstances such as loss of employment, illness, or death of a wage earner. When it is clear in advance what is to be done, there is no time or effort wasted in deciding what to do next. Adhering to the specified procedure ensures consistent, predictable handling of collection activities. This disciplined approach enhances the timely collection of sums due the association.

Can a formal written collection policy help a Board from getting sued?

Consistent enforcement, backed up by a clearly written policy, avoids or answers charges that the association is proceeding in a selective or discrimmatory manner. Such allegations by a delinquent owner can erect substantial obstacles to judicial enforcement of the association’s rights If proven, it can delay or even defeat the association’s recovery.

How does a Board create a formal collection policy?

Like all policies adopted by the board, a collection policy should be embodied in a proper resolution. It should specify the problem to be solved, delineate the authority for taking the approved action, and designate the procedures to be followed and the circumstances under which they are required or permitted.

What remedies can an Association set forth in its collection policy?

The remedies an association may use will vary based on its governing documents and enabling statutes. Particular care must be taken to ensure that any action specified in the policy resolution is within the power of the association and its board. If the board exceeds its power it may open itself and the association to liability, and it may handicap efforts to collect back assessments. And the damage may not be limited to this one case – if an association appears before the same judge in the future, its credibility may continue to suffer.

Posted in General Association Issues, Legislative Issues, Maintenance Fee Collection | Leave a comment

Assessment Collection – An Association’s Lifeblood

Posted on March 5, 2012 by zrojas

The collection of assessments is central to the viability of any community association as assessment revenue is typically a community association’s sole source of income. The operating premise of most associations is that an annual budget is prepared based on the association’s projected expenses for the year (including contributions to a reserve fund), and the association levies assessments in the amount required by the budget. The assessments are divided among the owners either uniformly or in such other proportion as is provided by the association’s governing documents. In order for the association to be sufficiently funded, each owner must timely pay their assessments, which represents their share of the common expenses.

Unfortunately, most associations do not adequately budget for delinquencies and defaults (bad debt), and for some associations, usually smaller associations, this may not be an option. However, in this troubled economy, a line item for bad debt should be included in all but perhaps the smallest and/or most financially secure community associations.

Regardless of whether an association has adequately prepared for delinquencies, efficient and rigorous compliance and enforcement of the association’s collection policies and procedures are an integral component of the successful governance of any association. In addition to the problems that a board of directors faces in operating an association without adequate revenue, delinquent assessments can create tension and animosity among neighbors. In all but perhaps the largest associations, owners have a particular sensitivity to ensuring that their co-owners meet their assessment obligations. Though most of us seem to accept that not everyone will pay their tax obligations, whether income or real estate, few community association owners have the same tolerance for fellow owners failing to meet their assessment obligations. That is because this hits them in their own pocket books. The smaller an association is then the higher the level of awareness is when some owners are carrying the weight of their delinquent neighbors. So, how does an Association proceed to collect assessments in a difficult economy? What type of collection process should be employed?

From an overview perspective, what are the keys to successful assessment collection?

A. Business-like approach
B. Sound Procedures rigorously followed
C. Accurate & complete owner/property data
D. Communications/Education
E. Timeliness – Follow-through
F. Consistency

A number of Associations, because they are elected volunteers who happen to own homes within a community, see the Association as a social club. How might they take a more business-like approach?
A. Decide on the importance of collecting Assessments.
B. It may be necessary to educate the Board members to:
1. Fiduciary (legal) responsibilities under the “Laws of Agency”.
2. Liabilities under the Texas Non-Profit Corporation Act.
3 . i.e., This ain’t no social club!
C. Be fair, but firm.
1. Most importantly, be fair to the owners who have paid.
2. Financial hardship? It’s probably a matter of priorities. If they still have electricity, they can afford it.
D. Don’t try to be liked by delinquent owners.
E. Use an attorney who specializes in this field.

So how might a Board go about establishing the procedures for a collection program?

A. The Association’s “dedicatory instruments” determine the basic strategy.
1. Dedicatory instruments include:
a. Declaration of Covenants, Conditions, and Restrictions (the Deed Restrictions), or Condominium Declaration;
b. Articles of Incorporation;
c. Bylaws;
d. Resolutions of the Board of Directors; and
e. rules and regulations of the Board and the Association

2. Look for:
a. The existing (continuing) lien on the property.
b. The amount of the assessment and annual increases and/or maximum limits.
c. Interest rates on past due amounts.
d. What methods can be used.
e. Whether costs become part of the assessment due and can be recovered.
f. Whether a late processing fee is feasible.
g. Notice requirements (e.g., to the lender).

What methods of collection/enforcement are generally available to an Association? What are the Pros and Cons for each? How does an Association decide which to use?

1. Publish list of delinquent owners.
a. The idea here is to embarrass owners into paying.
b. However, this practice is fraught with legal liabilities and is generally not recommended. Check with your attorney.

2. Report to Credit Bureau.
a. Advantage: is relatively inexpensive.
b. Disadvantages: frequently, the delinquent owner has other delinquencies and isn’t intimidated; have to belong to the Credit Bureau; have to meet the Credit Bureau’s notice requirements; is passive.

3. Cut off services (like water service, or use of pool).
a. Advantages: cutting utilities, like water service, gets their attention in a hurry; denying the use of the pool can be effective if they have children.
b. Disadvantages: may be prohibited by the legal documents or other statutes; may be impossible or impractical to enforce; may create a bigger problem (for example, terminating garbage collection); in the case of the pool or recreation center, can create the impression that the assessment is a “pool fee” (“1 don’t use the pool, so why should I pay it?”).
c. If can be done and enforced, is an excellent tool to be used in conjunction with other methods.

4. Personal Judgment — Small Claims Court/Justice of the Peace Court.
a. Advantage: is (seemingly) fast and inexpensive.
b. Disadvantages: is effective only if owner is intimidated by it; resultant judgment is not enforceable against homestead; may require lengthy (and expensive) discovery process; doesn’t attach to the property unless Abstract filed; can be appealed to the County Court; may run the risk of losing the right to foreclose the existing lien.
c. Can be useful to go after delinquent owner after the lender has foreclosed on the property, if you can find him and are confident that he has assets you can levy upon.

5. Foreclose the Association’s existing lien.
a. Either County or District Court. (concurrent jurisdiction)
b. Advantages: guaranteed to get the owner’s attention; is effective against homestead; automatic award of attorney fees; may get damages; is the remedy provided for in your dedicatory instruments; protects against wrongful foreclosure lawsuits.
c. Disadvantages: at times can be time consuming, owner may not believe you until late in the process.
d. This is your premier collection tool!

How detailed must a collection procedures be? Examples.

Very detailed and specific in your procedures. Example of language in letters used to notify:

Weak: “30 days after due-date, a Delinquency Notice will be sent.”

Better: Every account with an unpaid balance of $25.00 or more 30 days after due-date will be sent a Delinquency Notice via Certified Mail. This Notice will advise the owner that, unless payment in full is received within 10 days, the Association’s attorney will be instructed to prepare an Affidavit of Lien against the property and at least $90.00 in legal fees will be added to the assessment due. The Certified mail postage cost of this notice will be added to the assessment due before the notice is sent.”

What about verbal or personal approaches?

Avoid personal or verbal approaches: they lead to misunderstandings and aren’t professional. All communications should be in writing. (You could get shot). Writings create a “paper trail” of the notices provided….prevents “short term” memory losses often obtained by debtors.

Posted in General Association Issues, Legislative Issues, Uncategorized | 4 Comments

The Fair (Consumption based) Tax – A Viable Alternative

Posted on February 3, 2012 by zrojas

           Over the last year, the American people have been inundated from presidential hopefuls about bringing “change” to our government and our economy. However, a quick review of what was offered by both sides reveals that the “change” being offered was not really new at all; rather it was just “repackaged”. Bigger government or smaller government. Higher taxes or lower taxes. The pendulum swings back and forth every decade or two but, unfortunately, real change – fundamental, enduring, positive change –never seems to get affected.

Today’s topic, the Fair Tax, represents real change to the frustration and inequity of our current tax system. It is fair, transparent, efficient and intelligent. It would allow Americans to take home their whole paycheck, is progressive, ensures that American’s are taxed only once on any good or service, would lower the price of goods on products and services, keeps jobs and companies in America, provides greater savings, lower interest rates, and promotes a freer, faster growing economy.

It sounds like a panacea, doesn’t it? With our current economy and the projections of same into the future, it sounds like something we, as Americans, need right now. So, why don’t we have it? Why hasn’t it been adopted? Because Washington, and our government, is not about change; but, rather, our government is about perpetuating its own existence. Real change must always be “grassroots” driven.

The Fair Tax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. The Fair Tax is replacement, not reform. It replaces federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.

Yes, in fact, consumption is a more stable source of revenue than income. The yearly changes in the tax bases for years 1974 to 2004 show that Personal Consumption Expenditures have always grown from year to year; whereas Adjusted Gross Income dropped from 2000 to 2001 and from 2001 to 2002 – two years in a row. The higher growth rates of AGI in boom years result in overspending and then when the economy slows down either budget cuts are needed or, what is more often the case, taxes are raised or the budget deficit increases.

Retail businesses would collect the tax from the consumer, just as state sales tax systems already do in 45 states; the Fair Tax is simply an additional line on the current sales tax reporting form. Retailers simply collect the tax and send it to the state taxing authority. All businesses serving as collection agents receive a fee for collection, and the states also receive a collection fee. The tax revenues from the states are then sent to the U.S. Treasury.

Yes, the Fair Tax is fair, and in fact, much fairer than the income tax. Wealthy people spend more money than other individuals. They buy expensive cars, big houses, and yachts. They buy filet mignon instead of hamburger, fine wine instead of beer, designer dresses, and expensive jewelry. The Fair Tax taxes them on these purchases. If, however, they use their money to build job-creating factories, finance research and development to create new products, or fund charitable activities (all of which help improve the standard of living of others), then those activities are not taxed.

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax. These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases. When the Fair Tax removes income, capital gains, payroll, and estate and gift taxes, the pre-Fair Tax prices of these goods and services will fall. The removal of these hidden taxes may also allow wages to rise.

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax. These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases. When the Fair Tax removes income, capital gains, payroll, and estate and gift taxes, the pre-Fair Tax prices of these goods and services will fall. The removal of these hidden taxes may also allow wages to rise.

The flat tax and the Fair Tax share some important similarities. They are both flat-rate taxes that are neutral with respect to savings and investment. The flat tax, however, retains the invasive income tax administration apparatus and can easily revert to a graduated, convoluted mess, as it has many times over many years. Very few people really understand the flat tax. A large part of the burden of the flat tax – the business tax – will remain hidden from people in the retail price of goods and services. In contrast, the Fair Tax is simple, easy to understand, and visible. It cannot be converted into an income tax. Under a flat tax, individuals would still file an income tax return each year. Under the Fair Tax, individuals never file a tax return again, ever! Under the flat tax, the payroll tax would be retained and income tax withholding would still be with us. Under the Fair Tax, the payroll tax, which is a larger and more regressive tax burden for most Americans than is the income tax, is repealed. Under the Fair Tax, what you earn is what you keep. No more withholding taxes; no more income tax.

Everyone will have to think about taxes in a different way. Income – what we earn – no longer has to be documented, measured, and tracked for tax purposes. The only relevant measure of our tax liability is the amount we choose to spend on final, discretionary consumption. Tax-related issues are suddenly a lot simpler and more straightforward than they used to be. The aggravation and anxiety associated with “April 15th” disappears forever after passage of the Fair Tax. The Fair Tax is not new – most Americans come into contact with such taxes daily, since 45 states currently use them to collect state revenues. Job creation booms. Residential real estate booms. Financial services boom. Exports boom. Retail prospers. Farming and ranching prosper. Churches and charities prosper. Civil liberties are enhanced. In short, it is difficult to imagine the far-reaching, positive effects of this change.

Posted in General Association Issues, Legislative Issues, Uncategorized | 4 Comments

New Texas Community Association Laws

Posted on November 23, 2011 by zrojas

The 82nd Texas Legislature recently enacted sweeping new laws in an effort to regulate residential property owners associations. Close to 40 independent statewide community association specific law changes were enacted which drastically change how an association can operate and govern. Getting a handle on the new laws is challenging because the Legislature did not adopt a single comprehensive law.  Instead, there is a “grab bag” of legal changes divided among 18 specific bills which, collectively, spell an end to the old way of doing business.  The same old advice, forms, and documentation will not work anymore.  Some of these legal changes are effective immediately, some took effect on September 1, 2011, and the rest will be in place by the end of this year.

            So, what do these new laws mean?  What do you need to do to ensure that your actions are in compliance with the new laws?  What must you now do before pursuing delinquent assessments? What new documents must be created and filed in the real property records? How must you now apply payments received from an owner?  How must you conduct elections, provide notice, and allow voting under the new rules? More importantly, what penalties are in place if you don’t comply?

               In an effort to help answer these questions, we are setting forth, in several consecutive electronic newsletters, the specific law changes that were recently enacted.  In this issue, we discuss additional changes made to the statutes of Texas and highlight, with an accompanying summary, Sections 202.007 (a) (Amended) of the Texas Property Code, Section 43.0012 (Amended) of the Park and Wildlife Code,  Chapter 82.118 (Amended) of the Condominium Act , and Chapter 214 of the Local Government Code. To review the specific law changes and our summary of same, please click here.
 

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            In an effort to address all of your questions with regard to the new association laws, we have prepared extensive written materials which provide an indispensible roadmap to the law changes. The materials itemize, among other things, the new laws, the  type of associations impacted by the law, the text of the law, and a summary of the law written in “Reader’s Digest” plain English. To view a copy of the table of contents as well as an excerpt (relating to just one of the new laws) from our booklet entitled “The New Laws Affecting Texas Community Associations,” please click here [Table of Contents].   NORTH|Law is a niche law firm that devotes its legal practices to community association representation.  As we practice exclusively in this highly specialized area of law, we are experienced in many of its nuances and understand the “practical impact” that these new laws will have upon your ability to govern and manage a community. In response, we have created a “Compliance Kit” that will help you to establish and create the “building blocks” of successful compliance.

            To that end, we can meet with you, at no charge, and present you with the complete version of our booklet “The New Laws Affecting Texas Community Associations.” Our presentation to you includes a complete summary of the new laws as well as a no-charge legal consultation with regard to your questions about the changes. It is our hope that the meeting will help jumpstart your efforts in establishing the building blocks of compliance for your communities by enabling you to:

  • Understand the changes in laws
  • Establish a plan of action, and
  • Execute your plan

            Should you desire to set up a meeting with us to obtain the complete written materials and receive our free consultation, please email Ms. Zandra Rojas at zrojas@thenorthlaw.com . As you might surmise, the response to this offer has been quite good. Consequently, to accommodate your need to both understand the changes as well as to create a compliance plan before the entire law goes into effect, we would appreciate your timely response to this offer.

Posted in Corporate Governance, General Association Issues, Legislative Issues, Uncategorized | 1 Comment

Still Lost? A Roadmap to Legislative Compliance.

Posted on October 20, 2011 by zrojas

 The 82nd Texas Legislature recently enacted sweeping new laws in an effort to regulate residential property owners associations. Close to 40 independent statewide community association specific law changes were enacted which drastically change how an association can operate and govern. Getting a handle on the new laws is challenging because the Legislature did not adopt a single comprehensive law.  Instead, there is a “grab bag” of legal changes divided among 18 specific bills which, collectively, spell an end to the old way of doing business.  The same old advice, forms, and documentation will not work anymore.  Some of these legal changes are effective immediately, some took effect on September 1, 2011, and the rest will be in place by the end of this year.

 The new laws directly impact what an association can do, and how it can do it. As a consequence, as a matter of law, several new policies addressing, among other things, alternative payment guidelines, record production, and record retention, must be created and filed in the real property records of the county where the association is located. In addition, new procedures with regard to collecting outstanding accounts, new protections afforded to deed restriction violators, and new rules in connection with holding monthly meetings and conducting annual elections must be addressed. Due to the new changes, an association must modify most of its existing policies and file all written policies, resolutions and guidelines, old and new, which set forth how you presently govern and/or operate your community.

 New Written Policies Required by Texas Law 

The new Texas laws require the creation and filing of several new association policies including:

  •  A Policy of Record Production and Copying (Section 209.005 of the Texas Property Code)
  • A Record Retention Policy (Section 209.005 of the Texas Property Code)
  • Alternative Payment Schedules for Delinquent Accounts (Section 209.0062 of the Texas Property Code)

The new policies should amend and restate prior policies, if any, previously adopted by your association to ensure that each new written policy supplements earlier policies. The new policies must be in place, and on file, before the end of the year. Some of the new laws prescribe penalties for associations who fail to timely create and file the newly-required policies.

The new laws relating to the policies that must be adopted set forth very specific protocols that must be followed. Your aim should be to modify and/or replace your existing policies with ones that are in compliance with the new legal requirements, while being tailored, to the extent possible, to your community’s previous manner of dealing with an issue.

Collections Policy

The new Texas laws impact how an association can collect its delinquent accounts including, but not limited to, requiring that an alternative payment schedule is offered to a debtor, requiring that a mandatory “30 day cure period” is offered to a debtor, requiring that a certified delinquency notice (with specific requirements) is sent to a debtor, and establishing when costs relating to a delinquent account, other than interest and administrative fees, can be imposed.

  • You need to create a delinquency notice format consistent with the new laws or. In the alternative, modify you existing notice format so that it conforms with the new laws. (Section 209.0064 of the Texas Property Code)
  • You need to create a written collection policy and an alternative payment schedule (Section 206.0062 of the Texas Property Code) which both satisfies the new legal requirements and places you in the position to collect outstanding accounts as quickly and as efficiently as possible.
  • You need to establish written partial payment guidelines (as well as guidelines for the application of payments received) which comply with the new laws. (Section 209.0063 of the Texas Property Code)
  • You need to establish a written protocol and format for collection that fully complies with the new laws and begins with the initial invoice, proceeds through the required delinquency notices, and satisfies, in an expedited and efficient manner, the legal predicate required for collection your delinquencies. (Sections 209.0062, 209.0063, and 209.0064 of the Texas Property Code)

Voting/Election Policies

A number of legal changes (Sections 209.0051, 209.0056, 209.0057, 209.0058, 209.0059, 209.00591, 209.00592, 209.00593, 209.00594 of the Texas Property Code) impact the manner in which meeting notices are provided, the manner in which general and executive meetings can be held, the voting rights of the membership, how a vote is tabulated, alternative methods of voting, specific language required on an absentee ballot, as well as when, and how, a recount should be conducted. You need to ensure that your current meeting and election protocol is consistent with the new laws.

Filing Dedicatory Instruments

 An association is now required to file all documents which govern the establishment, maintenance, and operation of a community. (Section 202.006 and 202.011 of the Texas Property Code) The new laws state that, unless a document is filed in the county records, it has no legal effect. Consequently, all documents, resolutions, written policies, etc. which, in the past, the association has created and used to operate or govern the community must be filled with the real property records. You need to identify those documents which must be filled in order to ensure that each continues to have a legal effect. In addition, in light of the recent legal changes, resale certificates (Sections 207.003 of the Texas Property Code), management certificates (specific notice requirements), and the notice sent by you requesting deed restriction compliance (Section 209.006 of the Texas Property Code) must be reviewed and updated.

Modification of Rules Relating to Flag Displays, Religious Displays, Solar Devices, Rain Barrels, and Roofing Materials 

As a result of the legislative changes, subject to some limitations, an association may regulate, but cannot prevent, an owner from erecting certain flag displays, religious displays, solar devices, rain barrels, and roofing materials. You need to review your governing documents and ensure that your rules and guidelines addressing these types of improvements are compliant with the new law.

Legislative Compliance Kit:  the Details

Record Policy
Review changes to the law affected by the Texas Legislature; In accordance with the modifications made to Chapter 209.005 of the Texas Property Code, preparation of mandatory Policy for Record Production and Copying for inspection/review of Association records which complies with the new state law and replaces all previously adopted resolutions;  Prepare same in a resolution format for the Board’s review; preparation of a Certificate of Authorization to accompany the resolution and necessary for filing same in the real property records;

Retention Policy
Review changes to the law affected by the Texas Legislature;  In accordance with the modifications made to Chapter 209.005 of the Texas Property Code, preparation of mandatory Policy for Record Retention which complies with the new state law and replaces all previously adopted resolutions;  Prepare same in a resolution format for the Board’s review;  Preparation of a Certificate of Authorization to accompany the resolution and necessary for filing same in the real property records;

Collection Policy
Review changes to the law affected by the Texas Legislature;  In accordance with the modifications made to Chapter 209.0062, 209.0063, 209.0064 of the Texas Property Code, preparation of Policy for Collection, Application of Payments, and establishing a mandatory Alternative Payment Schedule which both satisfies the new legal requirements and places the Association in the position to collect outstanding accounts as quickly and effectively as possible;  Prepare same in a resolution format for the Board’s review;  Preparation of a Certificate of Authorization to accompany the resolution and necessary for filing same in the real property records;

30 Day Collection Letter
Review changes to the law affected by the Texas Legislature;  In accordance with the modifications made to Chapter 209.0063 of the Texas Property Code, preparation of a 30 Day Delinquency Letter which complies with all new requirements established including specifying the amount owed, providing an opportunity to enter into a payment plan consistent with the guidelines adopted by the Association, and providing for a 30 Day Cure Period;

 Amended Guidelines
Review changes to the law affected by the Texas Legislature;  In accordance with the modifications made to Chapter 202.007, 202.010, 202.011, 202.012, and 202.018 of the Texas Property Code, preparation of a policy that regulates the installation and maintenance of solar panels, flag displays, religious displays, rain barrels, and roofing materials and which complies with the new state laws and replaces all previously adopted policies;  Prepare same in a resolution format for the Board’s review;  Preparation of a Certificate of Authorization to accompany the resolution and necessary for filing same in the real property records;

Meeting/Election Policy
Review changes to the law affected by the Texas Legislature;  In accordance with the modifications made to Chapters 209.0051,209.0056, 209.0057, 209.0058, 209.0059, 209.00591, 209.00592, 209.00593, and 209.00594 of the Texas Property Code, preparation of policies relating to, among other things, the protocol to be used in connection with meetings, elections, and voting policies such that same complies with the new law and replaces all previously adopted protocol;  Prepare same in a resolution format for the Board’s review;  Preparation of a Certificate of Authorization to accompany the resolution and necessary for filing same in the real property records;

Review/File Documents
In accordance with Sections 202.006 and 202.011 of the Texas Property Code, all documents, resolutions, written policies, etc. which, in the past, the association has created and used to operate or govern the community must be filed with the real property records;  Identify documentation which is required to be filed;  Modify deed restrictions notice letter required by Section 209.006 of the Texas Property Code to accommodate changes in the law;  Review management certificate to ensure appropriate address information is set forth;  Preparation of Affidavit of Authentication to accompany the documentation necessary to be filed.

Should you desire to set up a meeting with us to discuss compliance with the new laws and receive our free consultation, please email Ms. Zandra Rojas at zrojas@thenorthlaw.com  or Kara Turner at kturner@thenorthlaw.com.

Posted in General Association Issues, Legislative Issues | 1 Comment

New Texas Community Association Laws

Posted on September 30, 2011 by cailaw

           The 82nd Texas Legislature recently enacted sweeping new laws in an effort to regulate residential property owners associations. Close to 40 independent statewide community association specific law changes were enacted which drastically change how an association can operate and govern. Getting a handle on the new laws is challenging because the Legislature did not adopt a single comprehensive law.  Instead, there is a “grab bag” of legal changes divided among 18 specific bills which, collectively, spell an end to the old way of doing business.  The same old advice, forms, and documentation will not work anymore.  Some of these legal changes are effective immediately, some take effect by September 1, 2011, and the rest will be in place by the end of this year.

            So, what do these new laws mean?  What do you need to do to ensure that your actions are in compliance with the new laws?  What must you now do before pursuing delinquent assessments? What new documents must be created and filed in the real property records? How must you now apply payments received from an owner?  How must you conduct elections, provide notice, and allow voting under the new rules? More importantly, what penalties are in place if you don’t comply?

               In an effort to help answer these questions, we are setting forth, in several consecutive electronic newsletters, the specific law changes that were recently enacted.  In this issue, we discuss additional changes made to the Texas Property Code and highlight, with an accompanying summary, Sections 209.091 (New Law), 209.092 (New Law), 209.0093 (New Law), 209.0094 (New Law), and 209.014 (New Law). To review the specific law changes and our summary of same, please click here.
 

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            In an effort to address all of your questions with regard to the new association laws, we have prepared extensive written materials which provide an indispensible roadmap to the law changes. The materials itemize, among other things, the new laws, the  type of associations impacted by the law, the text of the law, and a summary of the law written in “Reader’s Digest” plain English. To view a copy of the table of contents as well as an excerpt (relating to just one of the new laws) from our booklet entitled “The New Laws Affecting Texas Community Associations,” please click here [Table of Contents] and here [excerpt from Chapter 209.005, Texas Property Code amendments and analysis]. 

            NORTH|Law is a niche law firm that devotes its legal practices to community association representation.  As we practice exclusively in this highly specialized area of law, we are experienced in many of its nuances and understand the “practical impact” that these new laws will have upon your ability to govern and manage a community. In response, we have created a “Compliance Kit” that will help you to establish and create the “building blocks” of successful compliance.

            To that end, we can meet with you, at no charge, and present you with the complete version of our booklet “The New Laws Affecting Texas Community Associations.” Our presentation to you includes a complete summary of the new laws as well as a no-charge legal consultation with regard to your questions about the changes. It is our hope that the meeting will help jumpstart your efforts in establishing the building blocks of compliance for your communities by enabling you to:

  • Understand the changes in laws
  • Establish a plan of action, and
  • Execute your plan

            Should you desire to set up a meeting with us to obtain the complete written materials and receive our free consultation, please email Ms. Kara Turner at kturner@thenorthlaw.com. As you might surmise, the response to this offer has been quite good. Consequently, to accommodate your need to both understand the changes as well as to create a compliance plan before the entire law goes into effect, we would appreciate your timely response to this offer.

Posted in Corporate Governance, Deed Restriction Enforcement, General Association Issues, Legislative Issues | Leave a comment

New Laws Affecting Texas Community Associations (continued)

Posted on September 16, 2011 by cailaw

           The 82nd Texas Legislature recently enacted sweeping new laws in an effort to regulate residential property owners associations. Close to 40 independent statewide community association specific law changes were enacted which drastically change how an association can operate and govern. Getting a handle on the new laws is challenging because the Legislature did not adopt a single comprehensive law.  Instead, there is a “grab bag” of legal changes divided among 18 specific bills which, collectively, spell an end to the old way of doing business.  The same old advice, forms, and documentation will not work anymore.  Some of these legal changes are effective immediately, some take effect by September 1, 2011, and the rest will be in place by the end of this year.

            So, what do these new laws mean?  What do you need to do to ensure that your actions are in compliance with the new laws?  What must you now do before pursuing delinquent assessments? What new documents must be created and filed in the real property records? How must you now apply payments received from an owner?  How must you conduct elections, provide notice, and allow voting under the new rules? More importantly, what penalties are in place if you don’t comply?

               In an effort to help answer these questions, we are setting forth, in several consecutive electronic newsletters, the specific law changes that were recently enacted.  In this issue, we discuss additional changes made to the Texas Property Code and highlight, with an accompanying summary, Sections 209.0062 (New Law), 209.0063 (New Law), 209.064 (New Law), and 209.009 (New Law). To review the specific law changes and our summary of same, please click here.
 

—————————————————

            In an effort to address all of your questions with regard to the new association laws, we have prepared extensive written materials which provide an indispensible roadmap to the law changes. The materials itemize, among other things, the new laws, the type of associations impacted by the law, the text of the law, and a summary of the law written in “Reader’s Digest” plain English. To view a copy of the table of contents as well as an excerpt (relating to just one of the new laws) from our booklet entitled “The New Laws Affecting Texas Community Associations,” please click here [Table of Contents] and here [excerpt from Chapter 209.005, Texas Property Code amendments and analysis]. 

            NORTH|Law is a niche law firm that devotes its legal practices to community association representation.  As we practice exclusively in this highly specialized area of law, we are experienced in many of its nuances and understand the “practical impact” that these new laws will have upon your ability to govern and manage a community. In response, we have created a “Compliance Kit” that will help you to establish and create the “building blocks” of successful compliance.

            To that end, we can meet with you, at no charge, and present you with the complete version of our booklet “The New Laws Affecting Texas Community Associations.” Our presentation to you includes a complete summary of the new laws as well as a no-charge legal consultation with regard to your questions about the changes. It is our hope that the meeting will help jumpstart your efforts in establishing the building blocks of compliance for your communities by enabling you to:

  • Understand the changes in laws
  • Establish a plan of action, and
  • Execute your plan

            Should you desire to set up a meeting with us to obtain the complete written materials and receive our free consultation, please email Ms. Kara Turner at kturner@thenorthlaw.com. As you might surmise, the response to this offer has been quite good. Consequently, to accommodate your need to both understand the changes as well as to create a compliance plan before the entire law goes into effect, we would appreciate your timely response to this offer.

Posted in Deed Restriction Enforcement, General Association Issues, Legislative Issues, Maintenance Fee Collection | Leave a comment

Texas Community Association Legislative Changes

Posted on September 2, 2011 by cailaw

           The 82nd Texas Legislature recently enacted sweeping new laws in an effort to regulate residential property owners associations. Close to 40 independent statewide community association specific law changes were enacted which drastically change how an association can operate and govern. Getting a handle on the new laws is challenging because the Legislature did not adopt a single comprehensive law.  Instead, there is a “grab bag” of legal changes divided among 18 specific bills which, collectively, spell an end to the old way of doing business.  The same old advice, forms, and documentation will not work anymore.  Some of these legal changes are effective immediately, some take effect by September 1, 2011, and the rest will be in place by the end of this year.

            So, what do these new laws mean?  What do you need to do to ensure that your actions are in compliance with the new laws?  What must you now do before pursuing delinquent assessments? What new documents must be created and filed in the real property records? How must you now apply payments received from an owner?  How must you conduct elections, provide notice, and allow voting under the new rules? More importantly, what penalties are in place if you don’t comply?

               In an effort to help answer these questions, we are setting forth, in several consecutive electronic newsletters, the specific law changes that were recently enacted.  In this issue, we discuss additional changes made to the Texas Property Code and highlight, with an accompanying summary, Sections 209.00592 (New Law), 209.00593 (New Law), 209.00594 (New Law), and 209.006 (Amended). To review the specific law changes and our summary of same, please click here.
 

—————————————————

            In an effort to address all of your questions with regard to the new association laws, we have prepared extensive written materials which provide an indispensible roadmap to the law changes. The materials itemize, among other things, the new laws, the  type of associations impacted by the law, the text of the law, and a summary of the law written in “Reader’s Digest” plain English. To view a copy of the table of contents as well as an excerpt (relating to just one of the new laws) from our booklet entitled “The New Laws Affecting Texas Community Associations,” please click here [Table of Contents] and here [excerpt from Chapter 209.005, Texas Property Code amendments and analysis]. 

            NORTH|Law is a niche law firm that devotes its legal practices to community association representation.  As we practice exclusively in this highly specialized area of law, we are experienced in many of its nuances and understand the “practical impact” that these new laws will have upon your ability to govern and manage a community. In response, we have created a “Compliance Kit” that will help you to establish and create the “building blocks” of successful compliance.

            To that end, we can meet with you, at no charge, and present you with the complete version of our booklet “The New Laws Affecting Texas Community Associations.” Our presentation to you includes a complete summary of the new laws as well as a no-charge legal consultation with regard to your questions about the changes. It is our hope that the meeting will help jumpstart your efforts in establishing the building blocks of compliance for your communities by enabling you to:

  • Understand the changes in laws
  • Establish a plan of action, and
  • Execute your plan

            Should you desire to set up a meeting with us to obtain the complete written materials and receive our free consultation, please email Ms. Kara Turner at kturner@thenorthlaw.com. As you might surmise, the response to this offer has been quite good. Consequently, to accommodate your need to both understand the changes as well as to create a compliance plan before the entire law goes into effect, we would appreciate your timely response to this offer.

Posted in General Association Issues, Legislative Issues | Leave a comment