A man’s house may be his castle, but at some point, man decided his castle was much more valuable if it was surrounded by other castles of similar design, function, and similarly manicured lawns and gardens. As such, Property Owners Associations were formed. Also referred to as “Home Owners Associations”, Property Owners Associations are quasi-government entities whose intent is to maximize property values in a neighborhood by enforcing restrictive covenants. Restrictive covenants are usually filed by a developer prior to the establishment of a subdivision and are basically the “rules” of the neighborhood. Often, the restrictive covenants give the Property Owners Association the power to collect dues. In some instances, Texas law allows a Property Owners Association to foreclose on a homeowner’s property for failure to pay dues. As such, Property Owners Associations wield incredible powers.
Well written restrictive covenants can increase property values substantially. Since a person’s home is often their largest asset or investment, it is important to have a well run Property Owners Association to properly and fairly enforce these covenants. This will allow the value of one’s home to grow over time.
But beware of the poorly run Property Owners Associations! They can have the reverse effect of diminishing property values. When making a home-buying decision, it is important first to find out if your target property is subject to a Property Owners Association, and if so, it is just as important to determine the reputation of the Association.
In my representation of Property Owners Associations, I’ve found there are two types of poorly-run Property Owners Associations. The first are those with little-to-no involvement in the organization itself. These Associations don’t have enough manpower (or womanpower) to effectively enforce their restrictions and collect dues and keep the neighborhood looking sharp. The second type of poorly run Associations are the result of over-zealous personalities who have taken it upon themselves to run the Association in a tyrannical manner that initiates conflict, strife, and bickering amongst neighbors.
In order to prevent your Property Owners Association from becoming a “poorly-run” Property Association, I encourage everyone to become involved with their Property Owners Association. There are almost always available officer or committee positions available. Perhaps you have a busy schedule that prevents that degree of involvement. Perhaps you have kids with Little League schedules; maybe you work for a law firm that always wants you to work late; or it is possible you just may have a lot of cats to feed. At the very least, I encourage you to attend the annual meeting and make sure everything is running smoothly. After all, you may need to sell your castle for a profit one day.
If you have any questions about Property Owners Associations, or about the widespread updates in the laws affecting them, please feel free to contact us.