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New HOA Laws For Texas
New Homeowner Association Laws In
Texas Will Stop Most Abuses Especially
Foreclosures
December 27, 2011

There is some new legislature in Texas that is designed to prevent the abuses that thousands
of homeowners suffered living under the rules of homeowner associations in Texas. The new
rules were signed into law by Governor Rick Perry and will take effect on January 1, 2012.

Highlights of the new Texas HOA law

Homeowners who are delinquent in their homeowner association dues must be offered an
alternative payment plan prior to foreclosure proceedings. Under the alternative payment plan,
the borrower will not be burdened with additional fees and penalties. HOAs must file their
alternative payment plan with the county courts.

Payments received must follow a specific priority when being applied to amounts owed. The
monies received from a member must be applied in the following order.

1. Delinquent assessments.
2. Current assessments.
3. Attorney fees.
4. Fines.
5. Other amounts owed.

Collection agency fees can only be demanded after proper notice has been served, and the
opportunity given to the homeowner to pay off or bring current all debts within 30 days. When
an account is turned over to a company for collections, the HOA must be very specific and
follow the guidelines.

1. The HOA must give written notice to the delinquent homeowner by certified mail.

2. The amount delinquent must be specified and the total amount required to bring the account
current must be stated.

3. The HOA must provide the homeowner with acceptable options needed to avoid the
collection process.

4. The HOA must allow the homeowner at least 30 days to bring the delinquent account
current.

5. The HOA can not sell or transfer the delinquent account to a third party. However, the HOA
is allowed to use the account as collateral for a loan.

The new guidelines for foreclosures limit proceedings to debts owed for more than 60 days
with proper notice from the HOA. There is also a process for HOAs to to remove the right to
foreclose using the HOAs rules and regulations.

In order to foreclose on a member under an assessment lien, an HOA must get a court order.