On May 27, 2013, the Texas Legislature concluded the 2013 legislative session. Unlike the 2011 legislative session, in which the Texas Legislature enacted the most significant reforms to Texas HOA laws in almost 20 years, the legislation passed by the Legislature in the 2013 session is relatively minor in scope. The following is a brief description of such soon-to-be new laws.

• Brief Summary of the 2013 HOA Law Reforms Enacted by the Texas Legislature (pdf)
• HB 35 – Residential Use of Adjacent Lots (pdf) – HB 35 adds Section 209.015 to Chapter 209 of the Texas Property Code, which governs Homeowners Associations that oversee subdivision developments (often referred to as “Subdivision Associations”).  New Section 209.015 restricts a Subdivision Association from adopting or enforcing a provision in a Dedicatory Instrument that would prohibit or restrict an owner of a lot on which a residence is constructed from using an adjacent lot also owned by such owner for “residential purposes.”  Section 209.015 defines use of an adjacent lot for “residential purposes” as the location of buildings, structures or other improvements customarily appurtenant to a residence (as opposed to use for business or commercial purpose), including the location on the adjacent lot of a garage, sidewalk, driveway, parking area, children’s swing or playscape, fence, septic system, swimming pool, utility line, water well and/or, if permitted by the applicable Declaration, the parking or storage of a recreational vehicle.  New Section 209.015 still requires a homeowner to obtain advance approval from the architectural committee (or Homeowners Association, as applicable) based on criteria prescribed by the applicable Dedicatory Instruments specific to the use of such lot for “residential purposes,” including reasonable restrictions regarding size, location, shielding, and aesthetic of the “residential purpose.”  In other words, if a homeowner wanted to install a swimming pool on an adjacent lot, the homeowner may now do so despite any restrictive covenant to the contrary but such homeowner must still get approval from the  architectural committee based on criteria applicable to swimming pools in the Homeowners Association’s Dedicatory Instrument, including any reasonable restrictions regarding the size, location, shielding, and aesthetics of the swimming pool.  If a homeowner elects to use an adjacent lot for “residential purposes,” when he or she goes to sell or transfer ownership of the lot on which the residence is built, he or she must either include the adjacent lot in the sales agreement and transfer such adjacent lot to the new owner of the lot containing the residence or must restore the adjacent lot to the original condition before he addition of the “residential purpose” improvements.
• HB 503 – Regulation of Contracts between Association and Directors (pdf) – HB 503 adds Section 209.0052 to Chapter 209 of the Texas Property Code.  New Section 209.0052 imposes certain restrictions upon the ability of a  Subdivision Association to enter into a contract for goods or services with a current Director, a person related to a current Director within the third degree by consanguinity or affinity, or a company owned by a current Director or  a person related to a current Director within the third degree by consanguinity or affinity.  A Subdivision Association may only enter into a contract with a current Director, a current Director’s relative, or a company owned by a current Director or a current Director’s relative if: (1) the Subdivision Association has received at least 2 other competitive bids for the contract from persons not associated with the Director, relative, or company (if reasonably available); (2) the applicable Director is not given access to the other bids, does not participate in any Board of Directors’ discussion regarding the contract, and does not vote on the award of the contract; (3) the relationship concerning the applicable Director is disclosed to or known by the Board of Directors and the Board of Directors, in good faith and with ordinary care, authorizes the contract by affirmative vote of the majority of the Directors who do not have a conflict of interest; and (4) the Board of Directors certifies by a resolution that the requirements of Section 209.0052 have been met.
• HB 680 – Location of Flags in Front Yard (pdf) – In 2011, the Texas Legislature enacted Section 202.011 of the Texas Property Code, which restricts the enforcement of restrictive covenants that would prohibit a Homeowner from flying the flags of the United States, Texas or a branch of the United States military on his or her lot, but which still allowed a HOA to adopt and/or enforce provisions in its Dedicatory Instruments that would regulate the size, number, and/or location of flags, flag poles and lights used to illuminate flags.  HB 680 modifies Section 202.011 to make clear that an HOA’s regulation of the location of flags cannot restrict a Homeowner from erecting at least one flagpole that is located in the “front yard” of the property or is attached to any portion of the Homeowner’s home.  For purposes of Section 202.0011, the term “front yard” is defined as “a yard within a lot having a front building setback line with a setback of not less than 15 fee extending the full width of the lot between the front lot line and the front building setback line.”
• HB 2075 – Condominium Omnibus Bill (pdf) – HB 2075 is the most significant in scope of all of the bills passed by the Texas Legislature in 2013.  HB 2075 amends several provisions of Chapter 82 of the Texas Property Code (known as the “Texas Uniform Condominium Act” or “TUCA” for short), and for such reason is referred to as an “omnibus” bill.  TUCA governs all Texas Condominiums created after 1993, but certain provisions of such statute also govern Texas Condominiums created prior to 1994.  The provisions of TUCA modified by HB 2075 apply to all Texas Condominium Associations.
• HB 2978 – Authority of Court to Order Mediation in a Rule 736 Proceeding (pdf) – In 2011, the Texas Legislature enacted a new law that requires Subdivision Associations to obtain a court order through an expedited foreclosure proceeding before it can non-judicially foreclose its assessment lien.  A court in which an expedited foreclosure proceeding is pending may now order the parties to mediate the matter if the delinquent Homeowner files a response to the Subdivision Association’s application for an expedited foreclosure proceeding and the court conducts a hearing to determine whether to order mediation.  If a mediation is ordered by the court, the costs of the mediation must be divided equally between the Subdivision Association and the delinquent Homeowner, and if the parties cannot agree upon the selection of a mediator, the court may appoint the mediator.
• HB 3176 – Appointment of Director By Board to Fill Vacancy (pdf) – In 2011, the Texas Legislature enacted Section 209.00593 of the Texas Property Code, which restricted a Subdivision Association’s Board of Directors from appointing a person to fill a vacancy on the Board unless the vacancy was caused by a resignation, death, or disability.  The 2013 Texas Legislature amended Section 209.00593 so as to authorize the Board of Directors to now appoint a person to fill a mid-term vacancy on the Board caused by any reason.
• HB 3800 – Indexing of Recorded Management Certificates (pdf) – HB 2075 and 3800 require all Texas County Clerks to now index management certificates recorded by Subdivision and Condominium Associations as either a “Property Owners’ Association Management Certificate” or a “Condominium Association Management Certificate.”  In order to ensure that all management certificates are recorded and indexed appropriately following the effective date of HB 2075 and HB 3800, all Subdivision and Condominium Associations are required to record a new management certificate with the local County Clerk sometime between September 1, 2013, and January 1, 2014.
• SB 198 – Protection of Drought-Resistant Landscaping and Water-Conserving Turf (pdf) – SB 198 modifies Section 202.007 of the Texas Property Code.  Section 202.007 restricts HOAs from enforcing a provision of a Dedicatory Instrument that would prohibit or restrict a Homeowner from using drought-resistant landscaping or water-conserving natural turf on his or her property.  A HOA may still require a Homeowner to obtain pre-approval of such landscaping or turf from the HOA to ensure, to the extent practicable, maximum aesthetic compatibility of such landscaping or turf with other landscaping in the subdivision, but a HOA’s approval may not be unreasonably denied or withheld.