Texas House Bill 614’s Impact on HOA Transparency

“It’s a lack of clarity that creates chaos and frustration. Those emotions are poison to any living goal.” ― Steve Maraboli, Life, the Truth, and Being Free

Maraboli’s quote is an excellent reflection of HOA (Homeowner Associations) communities where members have struggled to understand their HOAs rules and regulations and have been penalized as a result.

Many times, this is due to a lack of clarity—not being aware and not understanding what HOA guiding documents require of them as homeowners. And it’s this lack of clarity or transparency that also conflicts with an HOAs’ goal of achieving a harmonious and happy community.   

  

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Well, the introduction of Texas House Bill 614 puts clear communication as a top priority for HOAs in Texas for the betterment of homeowners; and it will have a huge impact because Texas has:

• 22,300 HOAs
• 6,122,000 people living in HOA communities, over 20.6% of its population
• 2,203,000 homes in HOAs

source: Foundation for Community Research

So, let’s learn more about Bill 614 starting with the important role HOAs play in their communities and why clarity and transparency from HOAs are so important.  

  

HOAs run community operations

HOAs hold a lot of power in their communities because they oversee the running of the operations, guided by their HOA guiding documents, to make the community operate as smoothly as possible.

HOAs are composed of elected volunteers living in the community, called board members, who establish and enforce rules and regulations in a planned community, and homeowners in the HOA community agree to abide and be governed by the terms of their HOA.

Therefore, how an HOA manages a community—good or bad—directly impacts members. So it’s clear that the HOA and the guiding documents it uses must make sense to the homeowners who have to live under their governance.

The fact is, HOA guiding documents can be hard to understand or unclear, especially from a legal standpoint, which leads to HOAs delivering expensive fines to unsuspecting homeowners when rules have been broken.   

  

The complexity of HOA guiding documents

Once members agree to live in a planned community, they must adhere to the guiding documents their HOA uses to oversee the community. Sometimes, those documents can include legal terminology or are written in such a way that the intended meaning is unclear.

HOA guiding documents include:

Federal, state and municipal laws

These laws supersede all other HOA governing documents, so if any laws are added or amended that affect HOAs and their members, all other guiding documents must fall in line with them.

Bylaws 

Bylaws detail the internal workings of the HOA, covering topics such as board member elections, meetings, powers, and responsibilities. As the organization’s guidebook, bylaws establish the HOA’s structure and operational procedures. 

Articles of Incorporation 

Filed with the state, the Articles of Incorporation establish the HOA as a legal entity. These articles define the HOA’s purpose, location, and basic structure, which is fundamental to its legal standing. 

Rules and Regulations 

Rules and regulations provide specific details on day-to-day matters, addressing issues like noise restrictions, pet regulations, and the use of shared areas. These rules complement the broader guidelines set by the CC&Rs, ensuring a smoothly functioning community. 

Architectural Guidelines 

Architectural guidelines set standards for home construction, renovations, and external appearances. These rules contribute to the overall aesthetic appeal of the community, promoting a consistent and pleasing environment. 

Homeowners and HOA board members must sort through, understand and adhere to these governing documents because they provide the foundation for a planned community and all homeowners who live there must comply.  

  

Wading through the black and white of HOA Rules

As you can see, there is a ton of content in HOA guiding documents, with a lot to reference and cross-reference to other documents and that refer to a myriad of rules pertaining to:

• Parking
• Garbage removal
• Pets
• Unapproved architectural changes
• Landscaping
• Noise
• Home rentals
• And more…

All of the above and other topics can lead to violations and levied fines if the rules aren’t followed.

And, let’s be honest, do all members fully know of and understand all the stipulations in HOA guiding documents?  

Judging by the large number of violations and fines, starting from $100 and up, handed out by HOAs to tens of thousands of homeowners every year, the answer is no.  

It’s not always a case of willful disobedience though, but rather members are not aware or do not understand all the ways they can be in violation of HOA guiding documents and their rules.

Well, the state of Texas must have taken note of this because here comes help in the form of House Bill 614.

  

Texas House Bill 614: Balances power between HOAs and homeowners

To help address the problem of homeowners not being aware, or unclear about HOA rules, how they may have broken them, and what the financial penalties are, Texas passed house bill 614, in January 2024.

Bill 614 aims to bring clarity to homeowners, by making HOAs present violation-related information more clearly, to both educate homeowners and increase transparency—ultimately reducing the number of violations committed and fined.    

Here’s what the Bill requires.  HOAs in Texas must create a policy that gives property owners a clear and better understanding of what the violations are, and the fines attached to them.  

  

House Bill 614 requirements   

HOAs must provide to homeowners and residents:

1. General categories of violations
2. Fine schedule (monetary penalties related to various offenses)
3. Hearing information (a formal process where details of the violation can be determined and resolved)
4. Access to the policy posted on the internet and delivered to members (annually via first class mail or email)

Essentially, rules and regulations will come to the forefront of homeowner attention.

  

Texas HOAs Putting Bill 614 into action

A good HOA looks out for the benefit and welfare of the community. HOAs in Texas can keep this as a priority and will start by:

Adopting Bill 614
Create a policy that outlines the process of imposing and collecting fines for HOA violations.   

List fines
Create a list of fines for each category.

Post policy
Publish the new policy on the HOA website and deliver copies to property owners by hand, mail or email.

HOAs can get some assistance delivering on these requirements with tools to help spread the word.

  

Helpful tools to facilitate Bill 614

Communication is a constant challenge for HOAs. It’s not easy ensuring homeowners have all the information they need when they need it. So, many HOAs use community management software to make sure important information is available to members.

For example, in the case of Bill 614, HOAs can implement communication software solutions to build stronger connections with HOA owners by creating a digital file library where homeowners can easily access the new policy, list of fines for each category and fine category.

The documents can be accessed through any digital device, including mobile phones, which most people carry with them every day. By keeping rules and associated documents in a centralized document storage space, members will have access to the information they need when they need it and HOAs can demonstrate they are meeting the transparency goal of Bill 614.   

Printed copies are mandatory per the Bill, but they can still be misplaced, damaged, or thrown out.

  

Greater accountability for HOAs and fairness for Members

Approximately 6,138,000 Texans live in 21,680 community associations (Community Associations Fact Book 2022). With a growing population in Texas and more people looking to buy homes in HOA communities, Bill 614 allows prospective and current HOA homeowners to get a clearer picture of what and how rules and regulations can impact their lifestyle and their finances.

HOAs in Texas must make it as plain as possible to homeowners and residents what their rules and regulations are while making the information accessible and clear.