POA Law 101: The Texas Property Code Chapters All Community Managers and Board Members Need to Know
The POA industry is filled with policies, rules and regulations. As self-governing entities, POAs adopt governing documents, bylaws and more that outline the expectations for all residents. But it is not just the residents that have to follow rules and regulations. The majority of the rules and regulations POAs are required to follow are set forth, in the Texas Property Code. In this article, we break down the chapters community managers and board members need to be aware of to ensure a POA is run successfully.
What is a POA?
A property owners association (“POA”), is an all-encompassing term for different types of associations within the association industry. In Texas, we commonly see HOAs (homeowners associations) and COAs (condominium associations). An HOA refers to an association made up of single-family residential lots where the association owns the common areas, and the owners have a right to use the common areas because they are members of the association. The COA refers to units in a single building or series of buildings that form the association where the common elements are owned in an undivided interest by the unit owners. Then, there is the ever-confusing townhomes, which can either be in an HOA or a COA depending upon how the governing documents are drawn up. The biggest clues to know whether a townhome is a single-family home or condominium are knowing who owns the dirt, whether the deed lists it as a lot/block description or a unit number, does the deed speak to an undivided interest and is the property subjected to the Texas Property Code Chapters governing condominiums.
Property Code Chapters Governing POAs
Now that we have outlined the differences between the types of associations, how does the State of Texas regulate the differences between them in the Texas Property Code? The regulation of POAs is focused on four chapters of the Property Code: 81, 82, 209 and 202.
Chapter 81
This chapter of the Texas Property Code regulates condominiums (and some townhomes) where the Declaration was recorded prior to January 1, 1994. Examples of prominent sections include those regulating the creation of the condominium, interest in common elements and condominium records.
Chapter 82
This chapter of the Texas Property Code is referred to as the Texas Uniform Condominium Act (TUCA). TUCA applies to condominiums (and some townhomes) where the Declaration was recorded on or after January 1, 1994. TUCA was drafted to provide better guidance for COAs and clear up some of the aspects of Chapter 81 that were unclear to both COAs and their unit owners. Note, some aspects of Chapter 82 apply to COAs governed by Chapter 81. Examples of prominent sections include those regulating insurance, powers of the COA, plats and plans and more.
Chapter 209
This chapter of the Texas Property Code is known as the Texas Residential Property Owners Protection Act. Chapter 209 regulates HOAs composed of single-family lots (and some townhomes). Sections of Chapter 209 mirror aspects of Chapter 82 of the Texas Property Code, but only apply to single-family residential lots. Examples of prominent sections include those regulating board meetings, voting, assessment liens and more.
Chapter 202
This chapter of the Texas Property Code is composed of sections that apply to both condominiums governed by Chapters 81 and 82 and single-family lots governed by Chapter 209. Examples of prominent sections include those regulating religious displays, flag displays and solar panels.
These four chapters of the Texas Property Code and the statutes within them will take the majority of community managers and board members’ focus to ensure their POAs are following the laws correctly. There are other Chapters of the Texas Property Code managers and board members should keep up to date with as well. These include Chapter 5, Chapter 204 (only applies to select counties) and Chapter 207 of the Texas Property Code, Chapter 22 of the Business Organizations Code and Chapter 259 of the Elections Code. For questions on any of these chapters, community managers and board members should contact their legal counsel for more information.
