7 Ways New Legislation Affects Your Texas COA

The 2021 Texas 87th Legislative Session has closed with new bills that will significantly affect condominium owner's associations (COAs) governed under Chapter 82 of the Texas Property Code (TPC). These may require adopting a new policy or an amendment to an existing policy of your governing documents. 
 
While the focus of Senate Bill 1588 – Relating to the Powers and Duties of Property Owner's Associations primarily addresses property owner's associations (POAs), there were a few key changes that will also impact the operation of your condo association. These will likely require amendments or adoptions of policies into your governing documents. In addition, other lesser-known bills which will cause changes for COAs were also passed. Your management company should already be reaching out to inform you of any anticipated changes to your association or building operation.
 
We know that wading through the mountains of information can be overwhelming. So, to help your board navigate, we've provided a summary of changes enacted by these various bills, effective dates, what's new, and recommended action items for your board below.
 
As always, FirstService Residential recommends that you consult your association's legal counsel before considering any changes to your governing documents or community policies*. For convenience, as you have those conversations, we've referenced the portions of the TPC and other Texas codes affected. Let's get started!
 
 

New Legislation impacting Texas COAs: 

1. Records Retention and Production Policies – SB 318, TPC 82.114(b)

Effective Date: September 1, 2021
What's New: Condominiums now have specific record production and retention requirements like those found in Chapter 209. Requests for records must be made to the association by certified mail, and the association must produce the documents in 10 days. 

A board must record a Records Production and Copying Policy that describes the association's costs for the compilation, production, and reproduction of information requested. Fees are capped at the amounts charged by government agencies under 1 Tex. Admin. Code 70.
An association composed of eight or more units must adopt and comply with a document retention policy that requires, at a minimum, the following retention periods 

• Governing documents – Permanently

• Financial books and records – 7 years

• Meeting minutes of owners and the board – 7 years

• Tax returns and audit records – 7 years 

• Owner account records – 5 years

• Contracts with a term of one year or more – at least four years after the contract ends

Action item: Must adopt a newly required Open Records Production Policy and Records Retention Policy.  
 
 

2. Religious Displays – SB 1588 & SB 581, TPC 202.018  

Effective Date: Immediately
What's New: Religious items may be displayed anywhere on the owner's property without size restrictions. Previously, an owner could only display religious items on the entry of the dwelling and size restrictions applied. 
 
However, an association may also adopt/enforce a policy that limits the activity if the display: 

• Threatens public health or safety

• Violates a law other than a law prohibiting the display of religious speech

• Contains language, graphics, or any display that is patently offensive for reasons other than its religious content

• Is installed on property owned or maintained by the property owners' association or on common property

• Violates a setback restriction or is attached to a traffic control device or fire hydrant

Action item: Adopt or amend a Religious Display Policy to reflect these changes and include limits as described. Consult with legal counsel to ensure that language used in your Policy and responses to owner inquiries does not provide grounds for potential discrimination.
 
 

3. Resale Certificate Fees – SB 1588, TPC 207

Effective Date: September 1, 2021
What's New:  COAs may not charge more than $375 for a resale certificate and $75 for an updated resale certificate. In addition, certificates must now be provided within five business days (previously 7) after a second request is sent by certified mail. Failure to deliver the certificate within this time frame will subject the COA to liability for up to $5000 in damages in addition to court costs and attorney fees.
 
Action item: Adopt or update applicable policies to reflect the changes in delivery times and adjust fees to the $375 and $75 caps if fees are over those numbers.
 
 

4. Constitutional Carry – HB 1927, Texas Penal Code Sections 30.06-07

Effective Date: September 1, 2021
What's New:  Allows anyone over the age of 21 who can legally carry a firearm to do so without a handgun license. Private businesses, such as management companies, can still post restrictions following 30.06 and 30.07 of the Texas Penal Code regarding possession of firearms.
 
Action item: For communities restricting gun carry, consult with your legal counsel to ensure compliance with Texas Penal Code regarding the ability to post carry restriction notices.
 
 

5. Swimming Pool Enclosures – TPC 202.022 

Effective Date: September 1, 2021.
What's New: A condominium owner's association (COA) may not prevent an owner from installing a swimming pool enclosure on the owner's property that conforms to applicable state or local safety requirements. In addition, a COA may enforce rules that govern the appearance of the enclosure; however, a POA cannot prohibit one that consists of black metal frames with transparent mesh panels. 
 
Action Item: Your association architectural control committee (ACC/ARC) can no longer deny requests for pool enclosures. Suppose your governing documents have no pre-existing policies for pool enclosures. In that case, your association may not need to create a new policy now, as the point is moot if not restricted by architectural guidelines. However, if your governing documents do have rules that limit the appearance of modifications, an amendment may be necessary to stipulate what material and sizes are allowed. 
 
 

6. Golf Cart License Plate Requirements Eliminated – HB 1281, Texas Transportation Code 551.403

Effective Date: September 1, 2021
What's New:  Golf carts are allowed in master-planned communities if: Community is a residential subdivision under Chapter 209 or has in place uniform restrictive covenants. Also, no license plate is required if the posted speed limit is 35 mph or less.
 
Action item: Adopt or amend a Golf Cart policy specifying where and at what speed it is driven.
 

7. Claims arising during a pandemic or disaster related to a pandemic – SB 6, Texas Civil Practice & Remedies Code 148.003 

Effective Date: September 1, 2021
What's New:  SB 6 is a large, complicated multi-part bill. COAs need to be aware of additions to Chapter 148 of the Civil Practice and Remedies Code. Specifically, Section 148.003 – Liability for Causing Exposure to Pandemic, subsections (a) and (b) are focused on the liability for individuals and businesses when exposing a person to pandemic disease.
 
Subsection 1(a): A person, including corporations governed by Section 311.005 of the Texas Government Code, is not liable for injury or death caused by exposing an individual to a pandemic disease during a pandemic emergency. Unless the claimant can establish the person who exposed the individual knowingly failed to warn the individual or remediate a condition they knew was likely to expose the individual to disease. 
 
Subsection 1(b): The person is not liable unless the person knowingly failed to implement or comply with government standards, guidance, or protocols intended to lower the likelihood of exposure.
Both subsections have further stipulations that must be met for a person or a person's business to be considered liable.
 
Action item: Consult with legal counsel and adopt a new Pandemic Policy to ensure compliance with Section 148.003 of the Texas Civil Practice & Remedies Code

These seven areas reflect the relevant legislative changes for COAs throughout Texas. Your association should be moving quickly to address these changes as most go into effect by September 1, 2021. In addition, legal counsel will likely be busy with recommendations and reviews of new policies for many clients, so reach out early to ensure that your association can comply by the deadline.
 
A good management partner should be aware of these changes in legislation and have already developed a strategic plan to address them in any buildings they manage. Your general manager and their support teams within the management company, like accounting, will coordinate and work in conjunction with your board and legal counsel to develop new policies and amend existing documents before the September deadline. Your management team should also have the resources, responsiveness, and technology solutions in place to communicate and educate your owners on these legislative changes.

 

*Disclaimer: Content contained within this news alert provides information on general legal issues and is not intended to provide advice on any specific legal matter or factual situation. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel.