Following a year of upheaval in the POA industry caused by legislative changes brought on by SB 1588 during the 87th Texas Legislative Session, processes are beginning to run more smoothly, especially as they pertain to homeowner hearings. Questions still remain on the hearing processes for both 209 and ACC hearings and the differences between the two. In this article, we will break down the statutory requirements for each hearing and highlight the differences to help you better prepare for your next hearing.
209 Hearing
We will first take a look at the 209 hearing for deed restriction violations. As we discussed in our blog last month, deed restriction violations are divided into two categories – curable and uncurable. If the owner is entitled to an opportunity to cure the violation the owner has the right to submit a written request to the Board for a hearing to:
- Discuss and verify facts; and
- Resolve the matter in issue with the Board (pre-SB 1588, could hold hearing before a committee).
The 209 hearing is now more like a mini-trial. The hearing must be held, unless there is an agreed-upon postponement by each party, no later than the 30th day after the date the Board receives the written request for the hearing. Following SB 1588, Sec. 209.007 of the Texas Property Code was amended to provide that, not later than 10 days prior to the hearing, the POA must deliver a packet to the owner containing the evidence it will introduce at the hearing (the statute specifies photos, documents, and communications). If the evidence is not provided, an owner is automatically entitled to a 15-day postponement. At the hearing, the Board must present its case first, and then the owner or owner’s representative is entitled to present his/her case. In addition, each party may make an audio recording of the hearing.
ACC Hearing
The ACC hearing involves questions or resolutions relating to applications for improvements to the POA’s architectural control committee. SB 1588 also changed the law for this process. Single-family POAs with over 40 lots that are not under developer control are now required to have an architectural control committee separate from the Board of Directors. In the event the ACC denies an application, a notice of denial must be sent to the owner that:
- Describes the basis for the denial in reasonable detail and changes, if any, to the application or improvements required as a condition to approval; and
- Informs the owner that the owner may request a hearing on or before the 30th day after the date the denial notice was mailed to the owner.
The Board must hold the hearing within 30 days after the date the Board receives the owner’s request for a hearing. A notice must be sent to the owner providing the date, time and place of the hearing not later than 10 days before the date of the hearing (only one hearing is required). During the hearing, the Board (or designated representative) and the owner are provided an opportunity to discuss, verify facts and resolve the denial by the ACC. Both the Board and owner are permitted to postpone for a period of not more than 10 days. Audio recording is permitted by both parties.
Understanding the Differences
As you can see, there are many similarities between the two hearings, but now, the 209 DRV hearing has specific structure detailing how the hearing must be conducted from the evidence packet requirement to the order of presentation. The ACC hearing is less structured. A hearing packet is not required and involves more of a discussion between the owner and the Board. An ACC hearing is similar to the old 209 hearing process.
Before conducting any hearing, it is helpful to consult with the POA’s legal counsel to ensure the POA is following the hearing process according to the new statute requirements. To learn more about the 209 hearing process, join RMWBH for a DRV 201 webinar on June 7. We will discuss the notice requirements and offer best practices on conducting the 209 hearing.
