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HOA regulations changing with new state laws
The new laws amend the way HOAs give notices, hold elections and conduct meetings, among other things.
Because most Frisco neighborhoods have HOAs, many residents will be affected by the changes.
However, many of the changes will be minor, SBB Management Co. CEO Fred Shapiro said.
Shapiro’s company, which manages about 15 HOAs in Frisco, has been working with its member HOAs to help them understand the new laws and how they will affect any operations.
Overall, Shapiro said the new laws will bring about positive change.
“[The new laws] did a lot of positive things to tweak or further explain some laws that were made in prior [legislative] sessions that probably needed some explanation,” he said.
The laws were passed by this year’s Texas Legislature under Senate Bill 1168, SB 864 and House Bill 1072.
Two laws—which allow homeowners to rent or lease property and install a standby electric generator without HOA approval—went into effect upon passage.
The other laws—which deal with voting and elections, notices, boards, meetings, fines, foreclosures and payment plans—will take effect Sept. 1.
Shapiro said the laws passed this year are not nearly as strict as some bills proposed in previous legislative sessions.
HOA boards may have more work on their hands under the new laws, but the changes are logical and fair, Shapiro said.
Some of the new laws will help save HOAs time and money, such as the changes to giving notices, Shapiro said. HOAs can now adopt alternative methods, such as email, to give official notices to residents.
“The qualification is that the HOA has to seek and receive from the homeowner proper authority to use that as a method,” Shapiro said. “In other words, if you’re a homeowner, you’ve got the option of not registering your email with the association. Therefore the association will have to send you a snail mail, or U.S. Post Office mail.”
Shapiro warned that the email method would not be effective for certain types of notices, such as foreclosure notices.
Other new laws can give HOA boards more flexibility, he said.
For instance, board meetings can now be held by phone or over the Internet to include board members who cannot be in town for the meeting.
To help prepare HOAs for the new changes, SBB Management Co. has hosted meetings for HOAs with a local lawyer to explain the changes and what HOAs can expect.
Shapiro said he worries about any HOAs that do not have management companies to help them understand the new laws.
He said he recommends HOAs reach out to a lawyer before the laws go into effect.
Shapiro said most cities require neighborhoods to have HOAs. However, the city of Frisco does not, Frisco Development Services Director John Lettelleir said.
The city only requires HOAs in three circumstances: if the neighborhood has open space to maintain; if the neighborhood is a gated community or has a guarded entrance; or if the neighborhood has an amenities/recreational center to maintain.
However, many developers come into the city with HOAs planned already, Lettelleir said.
“That’s more or less a marketing item for the subdivision to say, ‘Hey, we have an HOA group,’” he said.
HOAs are not required to register with the city, but they can voluntarily register and be included in the city’s HOA directory, Lettelleir said.
The city encourages HOAs to register with the city because city staffers use the directory as a method to contact neighborhoods, Lettelleir said.
If there is a proposed ordinance or zoning change that could affect a certain neighborhood, city staffers will reach out to the HOA contact as a courtesy to let the residents know, he said.
“At the end of the day, what we’re after is having that relationship with the HOAs,” he said. “We want voluntary compliance and keeping the neighborhood up … because property value is an important revenue source for the city.”
Frisco does not oversee HOAs’ compliance with laws, including state laws, beyond what the city requires, Lettelleir said.
“When you don’t have any of those amenities [that are required to be maintained] and you have a voluntary HOA, it comes down to the residents themselves [as to] how active they keep it,” he said.
The state of Texas is third in the United States for the highest number of HOAs, according to the Community Associations Institute, an advocacy organization for community organizations.
In 2014, Texas had more than 19,000 community associations, including HOAs.
That number will grow in 2015 as more neighborhoods with HOAs are developed.
The responsibilities of an HOA depend on the size of the neighborhood and the amenities included in it, Grayhawk HOA President Don Amick said.
Overall, though, he said an HOA’s purpose is to maintain the integrity of the neighborhood.
In essence, an HOA is a governmental body that oversees the neighborhood, Amick said.
An HOA holds elections, enforces rules and holds public meetings like other governmental bodies, he said.
A developer will typically establish an HOA with the start of a neighborhood, creating the bylaws and parameters of the HOA, Shapiro said.
The developer eventually turns over control of the HOA to the neighborhood’s homeowners.
HOA rules cannot supersede city ordinances, Lettelleir said. If an HOA rule requires less than what the city requires, then city ordinances take precedent. If an HOA rule requires more than what the city requires, then it is up to the HOA to enforce those rules. The city cannot enforce HOA rules if the resident is following city ordinances, Lettelleir said.
Because of this, many HOAs have fewer powers than residents might think, Amick said.
“We don’t have control over everything in the community,” he said. “We try to interact with the city’s compliances.”
An HOA is responsible for collecting annual dues, which fund maintenance of the neighborhood and other community features.
Grayhawk’s dues mainly go toward lawn care for the community, which includes mowing, irrigating and planting in the common areas.
HOAs maintain the overall quality of the community, but residents must also individually play a role preserving the neighborhood, Amick said. HOAs cannot enforce standards that are not specified in existing city ordinances or HOA rules.
“No matter how hard you try as an HOA to maintain your properties, if the residents of that HOA don’t have the will to maintain their properties you’ve got a problem,” Amick said.
Amick said HOAs are important, and residents want an HOA to keep their neighborhoods nice even if it means paying dues and following neighborhood regulations.
“[HOAs are] there for a purpose,” he said. “The more people understand it, the better it is.”
