Woodland Oaks Homeowners' Association

SB 507 Provides Protection To Homeowners

SB 507 Provides Protection To Homeowners

Feb 02, 2002

On January 1, a new law passed by the 2001 Legislature went into effect that establishes guidelines for the operation of homeowners?’ associations. The law, SB 507 - Texas Residential Property Owners Protection Act, provides protections for residents living in subdivisions in which membership is required of all or a majority of homeowners. While this law like most is very detailed, the following is an overview of the highlights of the new law. It should be noted that the new law still allows an association to foreclose on a member?’s property; however, the new law provides strict guidelines that both an association and homeowner must follow. Remember, this is just an overview of SB 507. If you are interested, you should read SB 507 in its entirety.

Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION.
(a) Before a property owners' association may suspend an owner's right to use a common area, file a suit against an owner other than a suit to collect a regular or special assessment or foreclose under an association's lien, charge an owner for property damage, or levy a fine for a violation of the restrictions or bylaws or rules of the association, the association or its agent must give written notice to the owner by certified mail, return receipt requested.
(b) The notice must:
(1) describe the violation or property damage that is the basis for the suspension action, charge, or fine and state any amount due the association from the owner; and
(2) inform the owner that the owner:
(A) is entitled to a reasonable period to cure the violation and avoid the fine or suspension unless the owner was given notice and a reasonable opportunity to cure a similar violation within the preceding six months; and
(B) may request a hearing under Section 209.007 on or before the 30th day after the date the owner receives the notice.

Sec. 209.008. ATTORNEY'S FEES.
(a) A property owners' association may collect reimbursement of reasonable attorney's fees and other reasonable costs incurred by the association relating to collecting amounts, including damages, due the association for enforcing restrictions or the bylaws or rules of the association only if the owner is provided a written notice that attorney's fees and costs will be charged to the owner if the delinquency or violation continues after a date certain.
(b) An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 or, if the owner does not request a hearing under that section, before the date by which the owner must request a hearing. The owner's presence is not required to hold a hearing under Section 209.007.
(c) All attorney's fees, costs, and other amounts collected from an owner shall be deposited into an account maintained at a financial institution in the name of the association or its managing agent. Only members of the association's board or its managing agent or employees of its managing agent may be signatories on the account.
(d) On written request from the owner, the association shall provide copies of invoices for attorney's fees and other costs relating only to the matter for which the association seeks reimbursement of fees and costs.
(e) The notice provisions of Subsection (a) do not apply to a counterclaim of an association in a lawsuit brought against the association by a property owner.
(f) If the dedicatory instrument or restrictions of an association allow for non-judicial foreclosure, the amount of attorney's fees that a property owners' association may include in a non-judicial foreclosure sale for an indebtedness covered by a property owners' association's assessment lien is limited to the greater of:
(1) one-third of the amount of all actual costs and assessments, excluding attorney's fees, plus interest and court costs, if those amounts are permitted to be included by law or by the restrictive covenants governing the property; or
(2) $2,500.
(g) Subsection (f) does not prevent a property owners' association from recovering or collecting attorney's fees in excess of the amounts prescribed by Subsection (f) by other means provided by law.

Sec. 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN CIRCUMSTANCES.
A property owners' association may not foreclose a property owners' association's assessment lien if the debt securing the lien consists solely of:
(1) fines assessed by the association; or
(2) attorney's fees incurred by the association solely associated with fines assessed by the association.

Sec. 209.010. NOTICE AFTER FORECLOSURE SALE.
(a) A property owners' association that conducts a foreclosure sale of an owner's lot must send to the lot owner not later than the 30th day after the date of the foreclosure sale a written notice stating the date and time the sale occurred and informing the lot owner of the owner's right to redeem the property under Section 209.011.
(b) The notice must be sent by certified mail, return receipt requested, to the lot owner's last known mailing address, as reflected in the records of the property owners' association. Dee McGee & Glyn Williams