Recently, we published an update to the 2019 Texas Legislative Session. One of the outcomes of that session was the passing of House Bill 1025. So, how does this affect association board members and homeowners?
Let’s recap the two components to this bill:
Electing Directors by Section
This first component takes effect September 1, 2019 and allows an association to opt to create rules that would structure board membership for communities with multiple sections to reserve certain spots on the board for specific sections. This new law would benefit associations where each section has distinctive differences and/or needs. For example, differences in construction (e.g., townhomes versus single-family homes), price ranges (such as $300k versus $600K), or style (garden homes versus villas).
For example, if a community has five sections and five directors, they could designate that one director
come from each section to represent that section. The representative from each section must reside within that section of the community or own a home in that section of the community. Property Code allows an association to mandate that one or more board members reside in the subdivision but may not require that all reside in the subdivision. The association may elect to require that one or more of these board members elected reside within the section they are running to represent.
In order to structure a community in this manner and apply residency restrictions on board candidates, the board would need to revise the governing documents by having the association’s attorney draft an amendment to be adopted by the board or the members, depending on which governing document(s) will need to be amended, as well as the specific amendment process set out in the association’s governing documents.
Prohibition on Board Member Cohabitation
The second component of this bill went into effect immediately and prohibits electing board members who cohabitate. This is a new subsection (a-3) to Section 209.00591 of the Texas Property Code.
Simply put, a person cannot serve on the board if the person cohabits at the same primary residence with another board member. This would apply to various scenarios, such as a father and adult son, roommates who co-own the residence, or a husband and wife.
Here’s the caveat to this bill:
This does not impact previously-elected board members – they can serve the remainder of their term. However, upon expiration of their respective term(s), these members cannot seek reelection while living together in the same primary residence.
Also, this does not apply to associations still in the development period, nor does it apply to associations with ten or fewer lots.
Because this is state law, it supersedes the association’s governing documents, meaning that no resolution is necessary in order to prohibit persons from the same primary residence from serving on the board at the same time.
We hope that this information cleared up any confusion you or your members may have experienced with the recent changes to Texas Property Code 209. It is our goal at Spectrum Association Management to keep our boards up-to-date on the latest changes to HOA law.