The 87th Texas Legislative Session introduced several new laws impacting property owners associations (POAs). At the time, one law that brought more questions than answers was Section 10 of SB 1588 requiring POAs to file their management certificates with the Texas Real Estate Commission (TREC). Now, six months after the requirement began, and with the final deadline for POAs to file their management certificates with TREC approaching, what have we learned about the process and what questions, if any, remain?
Background
With the passage of Section 10 of SB 1588, Section 209.004 of the Texas Property was amended to require management certificates to include declaration amendments, the phone number and email address for the managing agent or representative, website information and the amount and description of fees related to the transfer of property. In addition to the requirements on what is to be included in the management certificates, beginning December 1, 2021, a requirement for POAs to file their management certificates with TREC was put into place.
While most community managers and board members are familiar with filing the POA’s management certificate with the real property records in the county the POA is located in, the TREC requirement has added an additional step. Management certificates updated and filed after December 1, 2021, only have seven days to be filed with TREC after they are filed in the real property records. Those POAs who filed in their county’s real property records before December 1, 2021, have until June 1, 2022, to file the certificate with TREC.
The Process
The process for uploading certificates has become fairly simple after a few initial hiccups. TREC’s website for management certificates is https://www.hoa.texas.gov/. Once on the site, to upload a certificate an account for the POA will need to be created by following the prompts on the screen. For managers, registering multiple POAs, TREC has provided additional information on a resolution to a problem that was initially preventing multiple uploads. Once the account is created, the PDF of the document can be uploaded to the site.
What Have We Learned and What Questions Remain?
Six months since the TREC site launched, we have learned the process is much simpler than it initially appeared. What remains to be seen is what the ramifications will be for POAs who have not filed their management certificates by the Jun 1, 2022 deadline. Currently, there are 4,169 management certificates uploaded to the TREC site. CAI estimates there are over 20,000 POAs in Texas.1 This means many POAs have yet to file their management certificate with TREC. As a reminder, Sec. 209.004 does not apply to condominium associations governed by Chapters 81 and 82 of the Texas Property Code. To date, nothing has been announced by the State of Texas regarding potential penalties for not meeting the deadline. In order to avoid potential penalties and meeting the TREC deadline, the POA should work with its manager and/or legal counsel to ensure the management certificate is updated in accordance with Section 209.004 and filed with TREC.
1 https://foundation.caionline.org/wp-content/uploads/2020/08/2020StatsReview_Web.pdf
