Turns out, things can get pretty ugly. HOAs can issue compounding fines and fees, or even take your home from you. And there’s really no limit set forth by Texas legislators.
HOAs are recognized by Texas code as legal municipalities, given the power to establish rules that can result in fines and fees. These organizations – which can be run by local homeowners that are easier to track or managed by massive companies that are difficult to communicate with – have full power to enforce these rules and fines.
Not paying HOA fees or fines can get Texas homeowners in seriously hot water. Texas legislators haven’t set any cap on how much or how often an HOA can charge residents. These decisions are left to HOA boards to decide, though must HOA bylaws or articles of incorporation detail any limits approved. Plus, most Texas HOA bylaws outline a public process for voting on fee or fine increases.
Any HOA with 15 or more homes incorporated must allow payment plans for overdue fees used for maintenance, improvements, insurance or other amenities. But ignoring the terms of the payment plan can mean those bills go to collections and possibly damage your credit, as Texas law allows HOAs to report delinquent fines, fees or assessments to credit reporting agencies.
In both cases, however, HOAs must notify the homeowner in writing. Texas law requires writing notice before charging attorneys’ or collection fees, and organizations must give written notice of all overdue charges at least 30 business days before sending the delinquent payments to a credit reporting agency.
HOAs can place a lien on your home and foreclose on your property in Texas if fines or fees go unpaid for too long or pile up too high. Though, it’s supposed to be used as a last resort.
“As a last resort, property owners’ association may place an assessment lien on the property,” a guide on the Texas State Law Library notes. “The association can then force the sale of the property and collect the money owned by the homeowner.”
This power isn’t inherent under state law, however. Yet again, the right to foreclose on a home for lack of payment must be specifically outlined in the HOA’s bylaws. Plus, the HOA must send two notices before taking someone’s home – one by certified mail and second at least 30 days later. That second notice must be sent at least 90 days before filling the lien.