Recently, we have received many questions from managers and board members regarding hearings under Chapter 209 of the Texas Property Code. Although Texas statute lists the requirements, it offers little guidance for conducting the actual hearing. The following article provides a breakdown of the legal aspects and procedures associated with 209 hearings and, due to the recent pandemic, offers a few tips to help boards proceed with 209 hearings virtually.

Notice Requirements:

Hearings under Chapter 209 of the Texas Property Code pertain mainly to violations, not the collection of delinquent assessments. Pursuant to Section 209.006 of the Texas Property Code, a property owners’ association (“POA”) or its agent (including an attorney) must provide an owner with notice via certified mail prior to: 1) suspending an owner’s right to use the common area; 2) filing a lawsuit against the owner (other than filing suit to collect assessments or foreclose); 3) charging an owner for property damage; or 4) levying a fine against an owner for a violation of the restrictions, bylaws or rules.[1] Specifically, the notice must include the following:

• describe the violation or property damage that is the basis for the suspension action, charge, or fine and state any amount due the association from the owner;
• inform the owner that the owner:
  • is entitled to a reasonable period to cure the violation and avoid the fine or suspension if the violation is of a curable nature and does not pose a threat to public health or safety;
  • may request a hearing on or before the 30th day after the date the notice was mailed to the owner; and
  • may have special rights or relief related to the enforcement action under federal law, including the Servicemembers Civil Relief Act (50 U.S.C. App. Section 501 et seq.), if the owner is serving on active military duty;
• specify the date by which the owner must cure the violation if the violation is of a curable nature and does not pose a threat to public health or safety; and
• be sent by verified mail to the owner at the owner’s last known address as shown on the association records.[2]

+ Virtual Tip: The requisite notice described above may include an email address (e.g., board member, manager, etc.) for owners to submit their requests for a hearing in lieu of mail. Oftentimes, this procedure makes the hearing request process easier for both parties. If email is utilized, it is recommended that the board conduct all business moving forward related to the hearing through the same method of communication unless otherwise required by law.

Curable vs. Uncurable Violations

As mentioned herein, an owner may be entitled to a reasonable period to cure a violation. However, in the POA industry, violations come in many shapes and sizes and it is often difficult to determine whether a violation should be considered “curable” or “uncurable.” Texas statute provides some guidance to address this issue:

• Curable violations are capable of being remedied such as parking violations, maintenance violations, an owner’s failure to construct improvements or modifications in accordance with approved plans and specifications, and an ongoing noise violation (e.g., barking dog).[3]
• Uncurable violations are violations that have occurred but are not continuous or considered a condition capable of being remedied by affirmative action. Some examples include shooting fireworks, an act constituting a threat to health or safety, a noise violation (e.g., a party), property damage, or holding a garage sale or other prohibited event.[4]

It is recommended that a board adopt a governing documents enforcement policy (including fines, if permitted by a POA’s governing documents) to address the procedures related to enforcement of violations within a community. Importantly, a well drafted policy will include language providing that, if there is reasonable uncertainty as to whether a violation is curable or uncurable or a threat to public health or safety, the board shall have the authority to make the determination and decide which enforcement procedure will be followed. A POA should work with its attorney to determine the appropriate steps to implement this policy if desired.

Hearing Requirements:

Section 209.007 of the Texas Property Code sets forth the requirements for a hearing before the board. Pursuant to this provision, if an owner is entitled to an opportunity to cure the violation, the owner may submit a written request for a hearing to discuss and verify facts and (hopefully) resolve the matter before the board.[5] The provision also states that, as an alternative, the hearing may be before a committee appointed by the board.[6] If the hearing is to be held before a committee, the requisite notice provided under Section 209.006 of the Texas Property Code described above must state that the owner has the right to appeal the committee’s decision to the Board by written notice.[7]

If a hearing is requested, the POA must hold the hearing within 30 days after the date the board receives the owner’s request for a hearing.[8] No later than 10 days prior to the hearing date, the board must notify the owner of the date, time and location of the hearing (notice may be sent via mail, email, etc.).[9] If a postponement is required, the board or the owner may request same and the postponement shall extend for an additional 10 days.[10] However, the parties may also agree to further postponements, if necessary.[11] Please note that postponements are common so it is important for both parties to have an open line of communication in order to settle on an agreeable time, date and place for the hearing.

The notice and hearing requirements under Section 209.006 of the Texas Property Code do not apply if: 1) a POA files a lawsuit seeking a temporary restraining order or temporary injunction; 2) a POA files a lawsuit seeking foreclosure of its lien; or 3) an owner’s right to use the common area is temporarily suspended as a result of a common area violation involving significant and immediate risk of harm to other individuals.[12]

+ Virtual Tip: The board has the option to conduct the 209 hearing virtually, and we recommend all 209 hearings be conducted in this manner until the current crisis subsides. Zoom, GotoMeeting, and WebEx are just a few of the virtual meeting platforms that may be utilized to hold virtual 209 hearings. Using a virtual meeting platform is typically more efficient and convenient for both parties and allows the parties to participate in the hearing from the comfort of their homes or offices, which provides flexibility and saves time and resources.

Conducting the Hearing:

Prior to the 209 hearing, the board (or committee, if applicable) should review its governing documents, the underlying issues, and any other information relevant to the violation to ensure the board is up to date on the matter at hand. If the account is currently with the POA’s attorney, the issues are complex, or the owner intends to bring his/her attorney, the board should request that its counsel be present at the 209 hearing. Of course, the POA’s counsel may also be present to ensure the hearing runs smoothly and, if necessary, conduct the hearing (e.g., the owner has been aggressive in the past or the board believes the meeting may become heated).

If the hearing is to be conducted in-person, the board will choose the date, time and location. Ideally, the location should be an official POA location, such as a clubhouse, management office or the POA’s attorney’s office. However, if these locations are not readily available, a board should select a quiet, private location that is conducive for meeting purposes. As noted above, virtual meeting platforms may be utilized as well.

During the meeting, the board’s manner should be cool, calm, and collected. The meeting should always be conducted in a neutral, reasonable, and professional way. The principal purpose is to provide the owner with his/her right to speak with the board and attempt to resolve the violation in an amicable way. Upon commencement of the hearing, the board should advise the owner of the procedures for the hearing, introduce the hearing body (the board or committee members present, as well as the attorney or manager if in attendance), and who will be conducting the meeting (e.g., president, attorney, manager, etc.) The evidence to be presented by the owner to support his/her case may be provided to the board beforehand or offered at the beginning of the hearing. It is also recommended that the board or committee explain the hearing process prior to allowing the owner to begin, such as decorum, any time limitations, the decision making process (when and how it will be made), and the right of appeal (if applicable).

Importantly, the 209 hearing is not a debate. The owner should be provided with an opportunity to present evidence and discuss his/her side of the story; however, the owner should not be permitted to interrogate or antagonize the board. The board may ask questions if necessary and, upon conclusion, should thank the owner for his/her time and advise the owner that the board will discuss the matter and notify the owner of its decision at a later date. Although there is no statutory requirement that the board notify the owner of the board’s decision, it is the pragmatic approach. The decision may be provided to the owner via email or mail; however, it is recommended that a formal letter on the POA or POA’s counsel’s letterhead be sent in order to formally memorialize the board’s decision.

+ Virtual Tip: If the 209 hearing will be held virtually, all evidence to be presented should be distributed to each participant prior to the meeting. This can be done via email, if that has been the board and owner’s preferred method for communication, or printed copies can be delivered via mail.

+ Virtual Tip: When utilizing a virtual meeting platform to conduct a 209 hearing, many of the platforms allow the organizer of the meeting the option to include both private and open channels within the meeting. This tool can be useful if deliberation is necessary so that those who will not take part in the private discussion can be moved to a virtual waiting room and brought back into the meeting during open discussion.

Summary:

The COVID-19 pandemic has had a detrimental effect on many homeowners throughout Texas. If a 209 hearing is requested during this time, the board may consider leniency depending on the circumstances. For instance, the board may provide more time to the owner to cure the violation or implement other approaches to work with the owner. However, the violation enforcement process must still continue.  As we all shift to a virtual world, it is crucial that boards are aware of meeting alternatives, understand the 209 hearing process and, of course, remain professional and reasonable throughout the hearing procedure. POAs should work closely with their attorneys during these ever-changing times to ensure all aspects of 209 hearings are appropriate and compliant under Texas law.

[1] Tex. Prop. Code § 209.006(a).

[2] Tex. Prop. Code § 209.006(b).

[3] Tex. Prop. Code § 209.006(i).

[4] Tex. Prop. Code § 209.006(g) & (h).

[5] Tex. Prop. Code § 209.007(a).

[6] Tex. Prop. Code § 209.007(a).

[7] Tex. Prop. Code § 209.007(b).

[8] Tex. Prop. Code § 209.007(c).

[9] Tex. Prop. Code § 209.007(c).

[10] Tex. Prop. Code § 209.007(c).

[11] Tex. Prop. Code § 209.007(c).

[12] Tex. Prop. Code § 209.007(d).