Prop. Code- Section 209 Flashcards
1
Q
To what is Section 209 Applicable
A
Chapter 209 only applies to Residential Subdivisions that are subject to Restrictions that allow a POA to collect Regular or Special Assessments.
Chapter 209 is not applicable to condominiums governed by Section 81 and 82 of the Texas Property Code
2
Q
Must a POA record a management certificate
A
Yes. It must be recorded in the County Clerk’s office where a portion of the Residential Subdivision is located.
3
Q
What are the requirements of a Management Certificate
A
1) Signed and acknowledged by officer or manager;
2) Name of Association;
3) Name of Subdivision;
4) Recording data for Subdivision;
5) Recording data for Declaration;
6) Mailing address for Association;
7) Name and Mailing address for management company or Association’s designated representative; and
8) Any other information the Association considers appropriate.
4
Q
What is the deadline to update a management certificate?
A
If information changes, the Association has 30 days to record an updated management certificate.
5
Q
Are the POA or its officers liable for failing to record an updated Management Certificate?
A
No. Not unless not unless the failure to record an update was willful or caused by gross negligence.
6
Q
What are the effects on a purchaser, lender, or title insurance company if a POA fails to record or update a management certificate?
A
None of those three parties are liable for:
1) Any amount due on the date of transfer to a BFP; and
2) Any amount that accrued prior to the date of transfer to the BFP.
7
Q
What are the effects of the failure to record a management certificate or updated management certificate on a lien filing?
A
The lien is only enforceable for amounts that accrue after the transfer to a BFP.
8
Q
Section 209 allows for the statutory amendment of Declarations, Bylaws, or All Dedicatory Instruments?
A
Declarations only.
9
Q
What is the requirement to amend a Declaration under Section 209?
A
A Declaration may be amended by the affirmative vote of 67% of the total votes entitled to vote on the amendment. This is true even if the Declaration is silent as to amendment.
10
Q
You are looking to amend your Declaration. Section 209 allows for 67%. What controls, your Declaration or Section 209?
A
Section 209 controls if your Declaration contains a higher percentage.
Your Declaration controls if it contains a lower percentage.
11
Q
May the bylaws be amended to conflict with the declaration?
A
No.
12
Q
May an Association adopt an alternative method of providing notice to owners within an Association, even if another method is prescribed by law?
A
Yes
13
Q
What must the Association first do prior to using the alternative method of notice?
A
Obtain the owner’s assent to using the alternative method of notice.
The Association may not require an owner to allow the Association to use an alternative moethod of providing notice.
14
Q
May an association use an alternative method of notice to an owner if an owner does not assent to the alternative method of notice?
A
No
15
Q
May an Association require an owner to use an alternative method of notice?
A
No
16
Q
What types of POA records must be made open and available for inspection or copying?
A
1) All books;
2) Records; and
3) Financial Records
17
Q
Who is entitled to inspect the books and records of an Association?
A
1) An Owner;
2) Owner’s Agent (must be designated in writing)
3) Owner’s Attorney (must be designated in writing)
4) Owner’s CPA (must be designated in writing)
18
Q
Is the Owner or their designated agent entitled to copies of the books and records of an Association?
A
Yes
19
Q
Are Attorney Files subject to inspection by an Owner?
A
No. The Records Production and Copying Policy does not require the production of a document that is attorney work product or subject to attorney-client privilege.
The only exception are Attorney’s Invoices for fees and costs for which the Association seeks reimbursal.
20
Q
How do you submit a Records Request to a POA?
A
Owner or owner’s authorized representative must submit the request:
1) In writing;
2) Via Certified Mail;
3) Sent to mailing address of Association or authorized representative on management certificate;
3) Must describe in detail the records requested; and
4) Must state if you want to inspect or make copies.
21
Q
How many days does an Association have to respond to a records request by an Owner?
A
10 business days. The date begins 10 days after the Association received the records request.
22
Q
How must an Association respond to a records request from an Owner that requests inspection of documents?
A
Association must respond w/in 10 business days and state the dates during normal business hours that the owner may inspect the books and records……to the extent those books and records are in the possession custody and control of the Association.
23
Q
How must an Association respond to a records request from an Owner that requests copies of documents?
A
Association must respond w/in 10 business days.
They must produce the records that are in their possession and control.
24
Q
When must a records inspection take place?
A
During normal business hours during a mutually agreed upon time.
25
What if an owner is inspecting documents and wants copies? How is that to be handled?
The owner or his agent must identify the books and records for the Association to copy and forward to them.
The Association does not have to immediately copy the records.
26
What formats are acceptable in response to a records request?
1) Hard Copy;
2) Electronic; or
3) Any other format "reasonably available" to the Association.
27
What if the Association is unable to produce the records requested on or before the 10th business day of receipt of an owner's request?
The Association must respond in writing within 10 business days. They must notify the requestor that:
1) The Association is unable to comply with the records request w/in 10 business days of receipt of the request; and
2) States a date on which the books and records will be sent or made available for inspection. The date may not be later than 15 business days after the "extention notice" is provided.
28
If an owner's records request is denied, how may they respond?
They may file a petition in JP Court requesting relief. They may bring an action only after sending a pre-suit notice letter to the Association.
It may be filed in any JP Court precinct in which all or part of the POA property is located maintains jurisdiction.
29
If the JP Court determines that an owner is entitled to records and they were wrongfully denied access to POA records, what remedies may the JP court award?
JP Court may award one or more of the following:
1) A judgment requiring the Association to allow access to the records;
2) Court costs and attorney's fees;
3) That the owner may deduct their court costs and attorney's fees from any future regular or special assessment owing the Association.
30
If an owner files a JP Court action for records and the Association prevails, what remedies may the court award?
1) Court costs; and
| 2) Attorney's fees.
31
If a records request is denied and the owner wants to file a JP Court action, what must the owner do prior to filing suit?
Send a pre-suit notice letter. It must:
1) State the owner's intent to bring the JP court action.
2) Be sent via CM/RRR or sent via USPS w/ signature confirmation;
3) Be sent to the mailing address of the Association or Association's managing agent as reflected in the most current management certificate;
4) State with sufficient detail all books and records being requested.
32
Must an Association have a Records Production and; Copying Policy?
Yes. It must be adopted by the Board of Directors and recorded as a Dedicatory Instrument in the County Deed Records.
33
What are the requirements for a Records Production and Copying Policy
1) It must prescribe the costs the Association will charge for compliance with a records request (compilation, production, or reproduction) - You may not charge an owner for costs of production unless you have a Recorded Records Production and Copying Policy.
2) The costs may include costs of materials, labor, and overhead.
3) The costs may not exceed those costs outlined under Title 1, Section 70.3 of the Texas Administrative Code.
34
What are allowable charges for copies under Title 1, Section 70.3 of the Texas Administrative Code?
10 cents.
20 cents if dual sided
35
What are allowable charges for a rewritable CD under Title 1, Section 70.3 of the Texas Administrative Code?
$1
36
What are allowable charges for a DVD under Title 1, Section 70.3 of the Texas Administrative Code?
$3
37
What are allowable charges for VHS under Title 1, Section 70.3 of the Texas Administrative Code?
$2.50
38
What are allowable charges for Audio Cassette under Title 1, Section 70.3 of the Texas Administrative Code?
$1.00
39
What are allowable charges for oversize copies under Title 1, Section 70.3 of the Texas Administrative Code?
50 cents
40
What are allowable charges for labor under Title 1, Section 70.3 of the Texas Administrative Code?
$15.00 per hour.
If the records request is 50 pages or few, you may not charge for labor. UNLESS the records are in a remote storage facility or in two unconnected buildings.
41
Can you charge attorney's fees in complying with a records request?
No.
42
What are some of the things you can charge an owner for under Title 1, Section 70.3 of the Texas Administrative Code
1) Copies- .10 cents
2) DVDs- $3
3) VHS- $2.50
4) Audio Cassette- $1.00
5) Labor- $15/hr
6) Miscellaneous supplies (labels, postage, etc.)
7) Credit card transaction fees charged by the credit card company.
8) Other electronic media- actual cost
9) Oversize paper- .50 cents
43
May an association require advance payment from an owner for complying with a records request?
Yes
44
What is the advanced payment process that an Association may go through with an owner in complying with a records request?
1) The Association may require advance payment from an owner who requests compilation, production, and reproduction of records.
2) A final invoice must be delivered to the owner w/in 30 business days of the production of the records.
3) If a refund is due, the refund must be issued to the owner within 30 business days of the final invoice.
4) If the final invoice requires additional payment from the owner, the owner has 30 business days to make payment.
5) If the owner does not make payment of any additional amount due within 30 business days, it may be added to the owner's account as an assessment.
45
What information not subject to inspection and copying by an owner?
1) Attorney files and records- with the exception of invoices.
2) Violation history of an owner;
3) Personal financial information of an owner;
4) Records of payment or nonpayment of an owner;
5) Association employee information (i.e. personnel file)
6) Contact information of an owner (other than address)
Exceptions to the above:
1) Summary Manner- Information may be released in a summary manner that does not identify the owner;
2) Written Approval- Association receives written approval from the owner whose information is requested;
3) Court order.
46
Must even a small Association comply with a records request?
Yes. Section 209 does not have a carve out on records production for small Associations. All Associations must have a Records Production and Copying Policy.
47
Must a small Association have a Records Retention Policy?
No. If 14 lots or under, they are not required by law to have such a policy.
48
What records must be retained permanently pursuant to a Records Production and Copying Policy?
1) Certificates of Formation;
2) Bylaws;
3) Restrictive Covenants;
4) Any amendments to the above.
49
What records must be retained for 7 years pursuant to a Records Production and Copying Policy?
1) Financial Books and Records;
2) Tax returns;
3) Audit Records.
4) Board meeting minutes;
5) Owner meeting minutes;
50
What records must be retained for 5 years pursuant to a Records Production and Copying Policy?
Account records of current owners.
51
What records must be retained for 4 years pursuant to a Records Production and Copying Policy?
Contracts with a term of 1 year or more.
The 4 year period begins when the contract expires.
52
Section 209 requires Board Meetings to be open to Owners. What is and what is not a Board Meeting?
1) A Board Meeting includes deliberation between a quorum of the board during which the POA business is considered and board takes formal action.
2) It does not include: (so long as not formal action is not taken)
a) Social Functions;
b) Attendance at a convention;
c) Ceremonial events; and
d) Press conferences.
53
Must all Regular and Special Board meetings be open to owners?
Yes. Subject to the right of the board to adjuour and reconvene in executive session.
54
What matters may be taken into executive session?
1) Personnell;
2) Litigation- Pending or threatened;
3) Contract negotiations;
4) Enforcement Actions;
5) Attorney- confidential communications with POA atty
6) Owner Issues- if it would invade the owner's privacy
7) Matters that are to remain confidential by request of the the affected parties and agreement of the board.
55
What must a POA Board when reconvening after going into executive session?
Summarize the action taken in executive session and place the actions in the meeting minues.
This must be done without breaching the privacy of the parties involved.
56
Where must board meetings be held?
In the county where all or part of the Association is located, or a contiguous county.
Exception to the above- A meeting that is held by telephonic or electronic means.
57
May a board meet by electronic or telephonic means?
Yes
58
What are the requirements for an electronic Board Meeting.
1) Every board member may hear and be heard by every board member;
2) All owners in attendance may hear all board members;
3) Owners may listen by using the same electronic method used by Board Members.
4) The Meeting Notice includes instructions for owners to access the electronic meeting.
**Note the above does not include a requirement that owners be allowed to SPEAK at an electronic board meeting.
59
What are the requirements for Board Meeting Minutes?
1) They must be kept at regular and special board meeetings.
2) They are subject to inspection & copying
60
Must members be notified of Board Meetings?
Yes. They must be notified of regular and special board meetings.
61
What must a board meeting notice include?
It must state:
1) Date;
2) Hour;
3) Place;
4) General subject of meeting; and
5) General subject of any matter to be discussed in executive session.
62
Must you email a member notice of a board meeting if you have their email address?
No. If you notify owner's of board meetings by mail, you do not have to send email notice.
If you not notify of board meetings by mail, then you must send email notice.
It is the owner's duty to keep an email address on file.
63
What are the different ways you may notify owners of a board meeting?
1) Mail
2) Physically Posting- Physically posting notice in a conspicuous place in the community. Can be on common or private property. so long as it is reasonabley designed to provide notice; or
3) Online Posting- may post on any internet website matinained by the Association or other "Internet Media"
64
What are the notice requirements for different methods of board meeting notice?
1) Mail: 10-60 days prior to meeting;
2) Physically Posting: 72 hours prior to start of meeting
3) Online Posting: 72 hours prior to start of meeting.
65
What are the rules governing recessing of board meetings?
The Board may recess a board meeting so long as:
1) It is done in good faith;
2) It is reconvened for the following day (no extra notice provided);
3) If it is reconvened for a second time, the board has to provide notice online or in a physically conspicuous place w/in 2 hours of adjourning the meeting.
66
When may a board take action without notice to the community?
To consider the following:
1) Routine and administrative matters;
2) Unforseen emergencies; and
3) Urgent necessities.
The board may vote by electronic means or by telephone.
All board members must first be given the opportunity to express their opinion to all other members and to vote.
67
How must you document any Board action taken without notice?
Any action taken must be documented in the minutes of the next regular or special board meeting.
68
What may a board not vote upon without prior notice to the Owners of the Association?
1) Fines
2) Denial of ACC
3) Initiation of Foreclosure
4) Enforcement Actions - unless a TRO or violation involves threat to health or safety
5) Assessments-
a) Damage assessments
b) Increase in assessments
c) Special assessments
6) Suspension of an owner's right before the owner has an opportunity to attend a board meeting to present the owner's position.
7) Lending or borrowing money
8) Amendments to Dedicatory Instruments;
9) Annual budget- adoption of or amendment to.
10) Sale or purchase of real property;
11) Filling vacancy on board
12) Election of an officer
13) Construction of capital improvements- does not include the repair, replacement, or enhancement of existing improvements.
69
What notice is required for board meetings when the POA is in the developmental period?
The notice requirements for board meetings only apply under the following:
1) Adopting or amending Dedicatory Instruments;
2) Assessments-
a) Increasing regular assessments; or
b) Levying/Increasing a special assessment
3) Electing non-Developer board members of the Association or establishing a process for doing such.
4) Changing voting rights of the members of the Association.
70
Under what circumstances may a POA contract with
1) Board member,
2) Relative of board member, or
3) Company owned by a board member?
Only if:
1) They bid on the contract with at least 2 other competetive bids from persons not associated with the board member (if reasonably available in the community);
2) Board member is not give access to the other bids;
3) Board member does not particpate in discussions regarding the contract;
4) Board member does not vote on issue;
5) The material facts regarding the relationship are disclosed to or are known by the board.
6) The board, with good faith and ordinary care, authorizes the contract by an affirmative vote of the majority of the board who does not have an interest in the matter.
7) The board certifies that the requirements of this section have been satisfied.
71
Must owners be notified of elections or votes taken at an owner's meeting?
Yes
72
What are the requirements to notify owners of elections or votes taken at owner meetings?
1) Must notify owners in writing.
2) At least 10-60 days prior to election.
3) Must notify every owner entitled to vote in the election.
73
What are the requirements to notify owners of elections or votes not taken at a meeting?
Section 209.0056- (electronic, absentee ballots, proxies?)
1) Must notify owners in writing.
2) At least 20 days prior to election.
***Note***- there is not 60 day max requirement as there is in owner meeting notices.
74
If there are owner meeting notice requirements in a dedicatory instrument, what controls, the dedicatory instrument or Section 209?
Section 209 supercedes any contrary requirement in a dedicatory instrument.
75
How does someone properly submit a vote recount request?
1) Must be submitted in writing (in one of three ways)
a) Verified Mail;
b) USPS w. signature confirmation; or
c) In person to Association Manager
2) Must submit w/in 15 days of the latter of:
a) Date election was held; or
b) Date of announcement of results of election.
76
Describe the:
1) Recount invoice submission process,
2) Timetable for reply, and
3) What happens if the owner does not pay.
1) Estimate Costs & Send Invoice w/in 20 days: Association must estimate cost of recount by person qualified to tabulate votes and send an invoice for the estimated costs to the requesting owner no later than the 20th day after the date of the request.
2) Owner must pay invoice w/in 30 days of the date the invoice was sent.
3) If the owner does not pay the invoice, the owners demand for recount is considered withdrawn and the recount is not required.
77
Describe what happens in recount process if:
1) Association underestimates costs of recount; or
2) Association overestimates costs of recount.
3) Recount changes results of election.
Association must send a final invoice to the owner by 30th BUSINESS day after date the results of the recount are provided.
a) Additional amounts owed: If not paid by owner w/in 30 business days of final invoice (60 business days out) then the amounts may be added to the owner's account as an assessment.
b) Refund is owed: Must submit refund to owner at time the invoice is sent to the owner.
78
What happens if the recount changes the results of the Election?
1) Is owner reimbursed for cost of recount?
2) What about board member actions before recount?
1) If recount changes election results then Association must refund the excess to the owner within 30th DAY after the results of the recount are provided.
2) Any action taken by board in period between initial election and completion fo recount is not affected by the recount.
79
1) When does the Association have to hire someone to perform the recount?
2) What are the requirements for a person who performs a recount?
1) After they receive the recount funds from the owner.
2) Requirements for person performing recount:
Person agreed upon by Association and person requesting recount; or
Current or Former:
a) County judge;
b) County Election Administrator;
c) County vote registrary
d) JP Judge;
Recount administrator cannot be:
a) Member of board; or
b) Related to anyone one board w/in 3 degrees of consanguinity.
80
What is the timeline for completion of the recount?
Recount must be completed w/in 30 days of the receipt of the payment for the recount.
81
To whom must the Association provide the results of a recount?
The Association is only required to notify the owner who requested the recount of the results.
82
What are the requirements of member ballot in a POA election?
1) Must be in Writing; and
2) Signed by the member.
Electronic ballots constitute written and signed ballots.
83
What are "Secret Ballots"?
Associations may create rules for secret ballots, so long as they create rules that:
1) Ensure that a member is only allowed to vote once; and
2) The rules ensure all votes are counted.
This is an exception to the requirement that all votes must be in writing and signed.
84
What is a vote observer?
In any board election, each candidate may name ONE person to obesrve the counting of the ballots provided that:
1) A disruptive observer may be removed; and
2) The observer may not be able to view the name of the person who cast the ballot.
85
May an owner be disqualified from voting in an election?
No.
A provision in a dedicatory instrument that disqualifies a member from:
1) Voting in a POA election of board members; or
2) on any matter concerning teh rights or responsibilities of the owners is void.
*****NOTE- this section does not apply to a POA that is subject to Chapter 552 of the TX Government Code.
86
What are the exceptions to "Members may not be disqualified from voting in board elections?"
1) That section does not apply to POAs that are subject to Chapter 552 of the TX Government Code.
2) The Association's Bylaws may require that one or more board members live in the POA, but may not require that all of them live there. ***NOTE***- this exception is not applicable during the developmental period.
3) If board member has been convicted of a felony or a cime involving moral turpitude within the past 20 years, he is immediately ineligble to serve, considered removed from the board, and prohibited from future service.
* ***To substantiate this: Board must be presented with written, documented evidence of such from a database or other record mainted by a GOVERNMENTAL law enforcement authority. Cannot simply be rumor.
87
May a Declaration provide for a period of Declarant control? If so, what does that entail?
1) Yes. A Declaration may provide for a period of Declarant control.
2) Declarant control means that a declarant or person designated by a declarant may appoint and remove board members or officeres of the POA.
88
What are the limits on Declarant Control?
1) 75% & 1/3 member Board if # of lots defined-
Regardless of the period of declarant control, on or before 120th day after the date 75% of the lots that may be created are conveyed to owners other than declarant, at least 1/3 of the board members must be elected by owners other than delcarant.
2) 10 years & 1/3 member Board if # of lots not defined-
If Declarant does not include the number of lots that may be created, at least 1/3 of the board members must be elected by owners other than declarant not lather than the 10th anniversary of the date the declaration was recorded.
89
What are all of the different ways that an owner may cast a ballot?
1) In person;
2) By proxy;
3) Absentee ballot;
4) Electronic ballot (email, fax, or website); or
5) Any other method available in a Dedicatory Instrument.
90
Is a POA required to allow an owner to cast a ballot via Absentee Ballot or by Proxy?
Yes
91
Is a POA required to allow an owner to cast an electronic ballot?
No. Not unless it is required by the Declaration.
92
What are the requirements for Electronic Ballots?
1) Must be able to identify the owner casting the ballot; and
2) Must give a receipt after casting the ballot.
93
What must a solicitation for votes by Absentee ballot include?
1) The absentee ballot itself;
2) That includes each proposed action with an opportunity to vote for or against each proposed action;
3) Instructions for delivery of the completed absentee ballot (delivery location); and
4) the following language: "By casting your vote via absentee ballot you will forgo the opportunity to consider and vote on any action from teh floor on these proposals, if a meeting is held. This means that if there are amendments to these proposals your vote will not be counted on the final vote on these measures. If you desire to retain this ability, please attend any meeting in person. You may submit an absentee ballot and later choose to attend any meeting in person, in which case any in-person vote will prevail."
++++Note- This is not required for an electronic ballot. Only Absentee ballot.
94
What are the circumstances that an absentee ballot or electronic vote will not be counted:
1) If the owner casting the vote appears at the meeting and votes in person (the vote in person cast at the meeting supersedes the electronic or absentee ballot);
2) If language at a proposition is amended at a meeting (a nomination taken from the floor from a board member election does not count as an amendment)
95
What is an "electronic ballot"?
A ballot:
1) That is given by:
a) Email
b) Fax; or
c) Posted on the internet.
2) For which the identity of the member casting the ballot can be confirmed; and
3) for which a member may receive a receipt of the electronic transmission AND receive a receipt of the ballot.
96
What are the notification requirements if an electronic ballot is posted on a website?
Notice of the posting must be sent to each owner that contains instruction on obtaining access to the posting.
97
Do the Absentee and Electronic Ballott requirements apply to a POA that is subject to Section 552 of the TX Govt. Code?
No.
98
If a board member term expires, how must they be elected?
They must be elected by members of the Association.
99
May a board member be appointed to fill a vacancy on the board?
Yes
100
If a board member is appointed to fill a vacant position, how long is their term?
They serve for teh remainder of the unexpired term that they are filling.
101
Must all Associations solicit candidates for board member elections?
No. There are three exceptions:
1) POA is less than 100 lots;
2) POA is in developmental period; and
3) Does not apply to a representative board whose members are elected by representatives of a POA who are elected by owner members.
102
What are the requirements for solicitation of board member candidates?
1) 10 Days Prior to Election- Solicitation must be done at least 10 days prior to election.
2) Instructions on how to be added as a candidate;
3) Deadline for submission. The deadline must not be earlier than the 10th day after the date the solicitation is made.
103
If a candidate requests to be placed on the ballot in response to a soliciation, must the Association place them on a ballot?
Yes, so long as they meet the elgibility requirements.
104
What are the three methods to solicis candidates for a board member posting?
1) Mail- mail to each owner;
2) Physically post in conspicuous place in community (common property or private property reasonably designed to give notice);
a) Email- If post in community, must give notice via email as well if email address is on file;
3) Online- May post on any internet website maintained by Association or other Internet media.
a) Email- If post online, must give notice via email as well if email address is on file;
105
Who may not tabulate ballot or have access to ballots?
1) Person who is a candidate in an election;
2) Person subject to Association vote; or
3) Person related to the above by 3rd degree of consanguinity;
Anyone else may tabulate ballots.
106
What are the non-disclosure requirements of an individual who tabulates ballots?
Any person who tabulates ballots may not disclose to any other person how a member voted.
107
Who may have access to ballots?
Only a person who tabulates ballots or peforms a recount may be given access to ballots.
108
When is a violation notice letter not required?
1) Suit to collect assessment or foreclose;
2) Notice letter sent to owner within previous 6 months; or
3) Violation is of an uncurable nature.
109
What types of violations are of an uncurable nature?
1) Shooting fireworks;
2) Threat to health or safety (materially affects physical health or safety of ordinary resident)
3) Noise violation (not ongoing)
4) Property damage; or
Garage sale or other event prohibited by Dedicatory Instruments.
110
What type of violations are curable?
1) Parking violations;
2) Maintenance violations;
3) ACC violations; and
4) Noise violationgs that are ongoing (e.g. barking dogs)
111
When is a 209.006 notice letter required?
Prior to:
1) Suspending an owner's right to use a common area;
2) File suit against an owner;
3) Charging an owner for property damage; or
4) Fining an owner for violations of restrictive covenants.
112
What are the requirements of a 209.006 notice letter?
1) Sent by CM (RRR not required)
2) Describe violation or property damage;
3) State any amount due the Association;
4) Inform the owner that they may:
a) Cure the violation and avoid a fine if the violation is of a curable nature adn does not pose a threat to public health or safety;
b) Request a hearing under 209.007 within 30 days of the date of the notice; and
c) have right to relief under SCRA if they are on active military duty.
5) Must specify date violation must be cured by.
6) Must also state the owner's ability to appeal the decision of a committe of the board to the entire board.
113
Are all Associations required to have a PP Policy?
No. Only those that are greater than 14 lots in size.
114
What are the requirements of a PP Policy?
1) Association must have one if they are greater than 14 lots in size.
2) Association has to allow an owner to enter a payment plan for regular or special assessments and any other amounts due the association.
3) Association cannot penalize the owner for entering a payment plan, but may charge administrative fees and interest.
4) Payment plan min term is 3 months.
5) Payment plan max term is 18 months.
6) Must be filed in county clerk's office.
115
When is an Association not required to allow an owner to enter a PP?
1) If that owner has defaulted upon a previous payment plan within the previous two years.
2) If that owner has entered into a payment plan within the previous 12 months.
3) If a 209 collection notice has been sent to an owner and the cure period in the collection notice has expired.
116
What priority must payments be applied?
1) Delinquent Assessments;
2) Current Assessments;
3) Attorney's fees or 3rd party collection costs associated solely with assessments that could provide the basis for foreclosures.
4) Attorney's fees not subject to #3 above.
5) Fines;
6) Any other amounts owed the Association (admin fees, interest).
++++Exception to the above- The above guidelines do not apply if at the time the payment is received the owner is in default under a payment plan, however, in applying the payment, it must apply to fines last.
117
What is the exception to the priority of payment guidelines?
1) if the payment is received and the owner is in default under a payment plan.
However, any payment received the payment must be applied to fines last.
118
What must an Association do prior to holding an owner accountable for fees charged by a collection agent?
Send a collection notice to the owner.
It must be sent prior to holding an owner responsible for fees of a "collection agent".
"Collection Agent" has the same definition as that of "Debt Collector" under the Federal Fair Debt Collection Practices Act.
119
What are the requirements of a 3rd party collection notice that must be sent to a debtor under Section 209.0064?
1) Sent by Certified Mail
2) Specifies each delinquent amount owing
3) Specifies total amount owing
4) Lays out options available to owner, including a PP
5) Provides a 30 days period to cure the delinquency prior to further collection action being taken.
120
Under what circumstances is an owner not liable for fees of a collection agent?
1) If a notice letter is not sent pursuant to TPC 209.0064;
2) If the obligation for payment by the Association to the collection agent is in any way dependent or contingent on amounts recovered; or
3) the agreement between the Association and collection agent does not require payment by the Association of all fees to a collection agent for an action.
121
May the agreement between an Association & Collection agent prohibit the owner from contacting the Board or Management Company?
No.
122
May an association sell or transfer an interest in its accounts receivable?
No.
+++Exception- they may use it as collateral for a loan.
123
When is an owner entitled to a hearing in front of a board or committee of the board pursuant to TPC 209.007?
If they are entitled to an opportunity to cure a violation, they are entitled to a hearing in front of the board or a committe of the board.
124
How does an owner obtain a hearing pursuant to TPC 209.007?
The owner must make a written request for such a hearing.
125
What is the purpose of the TPC 209.007 hearing?
To verify facts and resolve the matter in issue.
126
Is the owner entitle to appeal the board's decision at a TPC 209.007 hearing?
If the hearing was in front of a committee of the board, then yes.
The TPC 209.006 notice that went to the owner to notify him of his opportunity for a hearing must state the owner's ability to appeal to the entire board. The owner initiates an appeal by written notice to the board.
127
When must a hearing under TPC 209.007 be held?
Within 30 days of the owner's request for the hearing.
128
How is the owner to be notifed of the hearing under TPC 209.007?
The owner must be notified of the date, time, and place of the hearing at least 10 days prior to the hearing.
129
How may an owner or board postpone a TPC 209.007 hearing?
Either the board or owner may request a postponement. If requested, the postponement must be granted. The postponement may not be longer than 10 days.
Additional postponements may be granted upon agreement of the Association and owner.
The owner's presence is not required at a TPC 209.007 hearing.
130
May an owner or Association record the TPC 209.007 hearing?
Yes. Either party may record the hearing.
131
When is an owner not entitled to a TPC 209.007 hearing?
1) If the Association files suit seeking a TRO or temporary injunctions;
2) If Association files suit that includes foreclosure as a cause of action;
3) The violation occurred in a common area and involves a significant risk of harm to others and the owner is temporarily suspended from using the common area. (e.g. An owner being dangerous at a pool- they do not get a hearing before you are entitled to suspend their common area access).
132
If an owner did not get a TPC 209.007 hearing notice because the Association filed suit for foreclosure or for a temporary injunction, may the owner file a motion compelling mediation?
Yes.
The Association and owner may also agree to Alternative Dispute Resolution.
133
What must an Association do prior to collecting reimbursal for attorney's fees relating to enforcing restrictions in a Dedicatory Instrument?
1) Send Owner written notice that they will be responsible for attorney's fees if delinquency or violation continues; and
2) Date Certain- Must state a certain date upon which they will be responsible for atty fees.
******Exception- If Association files counterclaim against an owner, they do not need to send written notice to the owner prior to collecting reimbursal for attorney's fees.
134
Is an owner liable for attorney fees if they were incurred prior to a TPC 209.007 hearing?
No. Or, if the owner did not request a hearing, the owner is not responsible for atty fees incurred prior to the date the owner had to request the hearing.
135
Describe Association banking practices requirements.
All amounts collected from owners must be:
1) Deposited into an account maintained at a financial institution in the name of the Association or its managing agent;
2) The only signatories of the account may be the Board, managing agent, or employees of the managing agent.
136
Must an Association provide copies of attorney invoices to an owner?
Yes. However, they only need to provide invoices relating to matters in which the Association seeks reimbursal.
137
Are attorney's fees limited in non-judicial foreclosures?
Yes. If the Association is proceeding forward with a nonjudicial foreclosure then the maximum attorney's fees they may collect is limited to the greater of:
1) 1/3 of amount of all actual costs (assessments, interest, court costs, etc.), excluding attorney's fees;
2) $2,500.00.
However, this subsection does not preclude an POA from recovering attorney's fees in excess of the above by other means provided by law.
138
Pursuant to TPC 209.009, when may an association not foreclose its assessement lien?
If the debt securing the lien consists solely of:
1) Fines;
2) attorney's fees incurred by the association solely associated with fines asssessed by the Association;
3) amounts added to an owner account as an assessment due to underestimation of a records request by an owner.
4) amounts added to an owner account as an assessment due to an underestimation of recount costs.
139
What must an Association do prior to filing for a judicial foreclosure or expedited foreclosure?
1) Provide written notice of the delinquency to all inferior lienholders of record whose lien is evidenced by a deed of trust; and
2) The recipient has 61 days from the date of the notice to cure the delinquency.
3) Notice must be sent Certified Mail to the address of the lienholder as shown in the property records.
140
What are the exceptions to the requirement to obtain a court order in an Application for Expedited Foreclosure?
1) The owner of the property, at the time the foreclosure is sought, agrees to waive expedited foreclosure. (**A waiver cannot be a condition of transfer of title to real property)
2) Judicial Foreclosure is sought;
141
Do all associations have a power of sale?
No. Only those Associations whose dedicatory instruments have a power of foreclosure.
If they have they grant the right of foreclosure then they have the power of sale.
142
How may owners remove the ability of the Association to foreclose?
Owners holding at least 10% of the votes within the Association may petition the Association.
If they petition the Association then a special meeting must be held and a vote be taken.
They may amend the declaration by a vote of at least 67% of the total votes within the Association.
143
Is a lien or any instrument evidencing non-payment of assessments a legal instrument?
Yes. It is a legal instrument affecting title to real property.
144
Who must be sent a post foreclosure notice?
1) Must be sent to the owner (at last known mailing address)
2) Must send to each lien holder of record that is subject to foreclosure (send to address on deed of trust. If no address on deed of trust, you do not have to send it to lien holder).
3) Must send to each transferree or assignee of a deed of trust who has provided notice to the Association of such assignment and an updated address. Notice of the assignment must be sent to the address of the Association per the management certificate via CM/RRR.
145
What are the contents of a post foreclosure notice and when must it be sent?
1) It must be sent w/in 30 days of the sale.
2) It must be sent via CM/RRR.
3) Date of Sale
4) Time of sale
5) Notice of the owner's and lienholders right of redemption pursuant to TPC 209.011.
146
When must a post foreclosure affidavit be recorded?
Within 30 days of the date of the sending of the post foreclosure notice. (This means you could conceivably record the post foreclosure affidavit 60 days after the date of the sale if the post-foreclosure notice was sent on the 30th day after the sale).
147
What are the requirements of the post-foreclosure affidavit?
1) Must be recorded in county deed records within 30 days of date post-foreclosure notice was sent;
2) State date on which post-foreclosure notice was sent;
3) Contain legal description of the lot.
148
Are post foreclosure notices and affidavits required in a judicial foreclosure?
Yes.
149
What must a 3rd party purchaser do prior to transferring a redemption deed to the lot owner upon redemption?
Obtain an affidavit from the Association stating that all amounts owed the association under 209.011(e) have been paid.
The affidavit must be provided to the purchaser no later than 10 days after they receive all amounts under 209.011(e).
Failure to comply with this section does not affect the validity of a redemption.
150
How must an Association or 3rd party purchaser obtain possession of occupied property after a foreclosure sale?
Institute a forcible entry and detainer action.
151
What are the redemption timeperiods under for a residential subdivision foreclosure?
1) Owner has 180 days from the date the post foreclosure notice was mailed.
2) Lienholder has 90-180 days from the date the post foreclosure sale notice was mailed. Lienholder may only redeem if the owner has not first redeemed.
152
May an association or 3rd party at foreclosure sale transfer title to anyone other than a redeeming owner during the redemption period?
No.
153
What must an owner pay to an Association to redeem a property sold at FC sale to an Association?
1) All amounts due at the time of the FC Sale.
2) Interest (at rate in Dedicatory Instruments. If no rate in dedicatory instruments, then 10%)
3) Costs incurred in foreclosing the lien and conveying the property (including reasonable attorney's fees).
4) Reasonable costs (including mortgage payments, costs of repair, maintenance and leasing)
5) Assessments accrued after the date of the foreclosure;
6) Purchase price paid by Association at foreclosure sale;
154
What must a redeeming owner or lienholder pay to redeem a property sold to a 3rd party at FC sale? (5 things each)
The owner must pay both the Association and the 3rd party purchaser.
Payments to the Association:
1) All amounts due the Association at the time of the sale less any amounts received at the foreclosure sale. (must pay the difference between the debt and amount received at the sale)
2) Interest (at rate in Dedicatory Instruments. If no rate in dedicatory instruments, then 10%)
3) Costs incurred in foreclosing the lien and conveying the property (including reasonable attorney's fees).
4) Assessments accrued after the date of the foreclosure;
5) Any costs/fees incurred in a forcible entry and detainer action.
Payments to the purchaser at FC sale:
1) The purchase price paid at the foreclosure sale;
2) The amount of the deed recording fee;
3) Any taxes, penalties, or interest paid by purchaser;
4) Assessments accrued after the date of the foreclosure and paid by the purchaser;
5) Any costs/fees incurred in a forcible entry and detainer action.
155
When must a redemption deed be prepared?
When must it be delivered?
Who must it be prepared by?
If an owner redeems the lot, the redemption deed must be immediatly prepared, executed, and deliver it to the owner.
It must be prepared by the purchaser of the property at foreclosure sale.
156
What if a purchaser at foreclosure sale fails to prepare a redemption deed?
The redeeming party (owner or lienholder) may file an action against the owner and recover attorney's fees if they prevail.
157
What happens if the redeeming owner or lienholder fails to record the redemption deed or an affidavit before the expiration of the redemption period stating that they have redeemed the property?
The redeeming owner or lienholder loses their right of redemption against a bonafide purchaser for value.
158
What must be filed in order to rebut the presumption that the lot owner or lienholder did not redeem the property?
1) A redemption deed from the purchaser at the foreclosure sale; or
2) An affidavit that states:
a) The property has been redeemed;
b) Contains legal description of the property; and
c) Name and mailing addres of person who redeemed the property.
159
What happens to all rents collected during the redemption period? (by Association or 3rd party purchaser)
They are credited towards the redemption amount.
If there are excess proceeds they must be refunded to the property owner.
160
What is the legal status of the following after a redemption:
1) Leases entered into by a 3rd party purchaser; or
2) Liens and encumbrances on the property prior to foreclosure?
1) The property remains subject to all liens and encumbrances on the propery prior to foreclosure.
2) Any lease entered into by a 3rd party purchaser is subject to the owner's right to reoccupy the property immediately after redemption.
161
What if an owner makes a partial payment towards the redemption before the redemption period expires?
1) The Association must refund any partial payment.
2) It must be mailed to mailing address of the property;
3) Must be mailed within 30 days of the expiration of the redemption period.
162
How must an owner trigger redemption?
1) The lot owner must send a written request via CM/RRR to redeem the property.
2) It must be postmarked on or before the 180th day of the redemption period.
163
What affect does the owner's written request to redeem the property have on the redemption period?
The redemption period is extended until the 10th day after the date the Association and any 3rd party purchaser provides written notice to the lot owner of any amounts that must be paid to redeem the property.
164
What must the Association or 3rd party purchaser record if the lot owner fails to redeem the property?
They must record an affidavit in the county deed records that the lot owner did not redeem the property.
It must be recorded after the 180 day period and any 10 day extension expires.
165
May an Association amend its dedicatory instruments to grant the Association an easement through or over an owner's lot without the owner's consent?
No.
This section does not preclude the Association for accessing the owner's lot to remedy a violation of the dedicatory instruments.
166
When may a developer controlled Association NOT amend their Dedicatory Instruments?
1) If the developer has the majority rights a dedicatory instrument may not be amended during the time between:
a) The developer loses the majority of the voting rights or other form of control of the POA; and
b) The time a new board of directors of the Association assumes office following the loss of the majority of the voting rights by the developer.
167
Must a POA call an annual meeting of the members?
Yes. TPC 209.014
168
What is the owner's remedy if the Association fails to call an annual meeting?
An owner may demand that a meeting of the members be called.
That meeting must be held not later than 30 days after the date of the owner's demand.
169
What are the requirements to demand an annual meeting by an owner?
1) In Writing;
2) Sent via CM/RRR
3) Must send to 2 places and All Owners:
a) Registered agent of Association; and
b) Mailing address of Association per the Management Certificate.
c) Must send copy to every member of the Association.
170
What is the owner's remedy if no meeting is called on or before the 30th day after the demand for the annual meeting?
1) 3 or more owners may form an election committee
| 2) Committee shall file written notice of its formation with the county clerk.
171
What are the requirements of an election committee notice filed with the county clerk?
1) State that election committee has been formed.
2) Purpose of committee is to call meeting of owners for sole purpose of electing board members.
3) Name & Residential Address of every committee member.
4) Name of the Subdivision
5) Signed & Notarized by each committee member.
172
May more than one election committee operate at a time?
No. Only one election committee may operate under this section at a time.
The first committee to file a proper notice in the county clerk's office and comply with all other notification requirements is the committee with the power to act.
173
How long does an election committee have to act?
A committee has 4 months to hold a successful election after the notice is filed in the county clerk's office.
If they do not hold a successful election within 4 months, they are dissolved by operation of law.
An election that is conducted by dissolved committee is inneffective.
174
What purpose(s) may an election committee be held?
They may call a meeting for the sole purpose of electing board members.
Notice, quorum, and voting provisions contained in the Association bylaws apply to any meeting of the election committee.
175
May an Association enforce or adopt a provision in a dedicatory instrument that prohibits or restricts the owner of a lot on which a residence is located from using for residential purposes an adjacent lot owned by the property owner?
No. However,
1) The owner must obtain approval of the ACC prescribing reasonable restrictions for use of the adjacent lot.
2) The association may put into place reasonable restrictions regarding size, location, shielding, and aesthetics before the owner begins construction of any improvement on the adjacent lot.
176
If an owner owns an adjacent lot and erects improvements on that adjacent lot, what are that owners options upon sale?
1) Include the adjacent lot in the sales agreement and transfer the lot to the new owner; or
2) Restore the adjacent lot to its original conditions such that it would be suitable for the construction of a separate residence.
177
Under what circumstances may an owner sell an adjacent lot that has improvements? (selling lot apart from the sale of the owner's primary residence)
Only if the owner restores the lot to its original condition so that it would be suitable for the construction of a separate residence.
178
What controls when building upon an adjacent lot- State Law or the Dedicatory Instruments of the Association?
State Law.
A provision in the Dedicatory Instruments of the Association that violates that section is void.
179
What may an Association not require of a landlord or tenant when they rent property within the Association?
A POA may not adopt or enforce a provision in a dedicatory instrument that:
1) Requires a tenant or rental applicant to be submitted to and approved for tenancy by the Association.
2) Requires the following information to be submitted to the Association:
a) Credit Report;
b) Lease or rental application submitted by the tenant
180
May an Association require a copy of a lease or rental agreement from tenants within the Association?
Yes. However, any sensitive personal information may be redacted.
"Sensitive Personal Information" is:
1) SSN
2) Drivers License #;
3) Government ID #
4) Account, Credit Card, or Debit Card #
181
May an Association regulate leases?
Generally, yes.
Per Section 209.016(d), "nothing in this section shall be construed to prohibit the adoption or enforcement of a provision in a dedicatory instrument establishing a restriction relating to occupancy or leasing."
