HOA Operations & Structure
What must be included in the notice of a board meeting and what is the minimum requirement it should be sent to the membership?
The date, time, location, and general subject of the meeting (agenda).
Texas Property Code states notices must be sent out 144 hours at a minimum prior to the meeting.
What is the difference between operating funds and reserve funds?
Operating funds cover daily expenses, while reserve funds are for long-term capital repairs.
What is the purpose of an Architectural Control Committee (ACC)?
To review and approve homeowner modifications to maintain community standards.
What is the primary role of the HOA Board of Directors?
To govern the association, enforce rules, and manage finances.
What is the purpose of a reserve study and how often should they be updated?
To plan for long-term capital repairs and replacements.
Reserve studies should be updated every 3-5 years on average.
What laws govern HOA operations in Texas?
Texas Property Code and Texas Uniform Condominium Act (TUCA)
What is a management certificate, and why is it important?
It is a document filed with the county that identifies the HOA, its' management company and the details of each.
It is important because there is a requirement in the state of Texas that these be filed for every HOA. If there is any change of information needed on the management certificate, an updated one must be filed within 7 days.
True or False: Financial audits are required in the state of Texas? (Condos excluded.)
FALSE!
They are not required. However, the association's governing documents may require that they be done every so often. Condos are required annually per TUCA.
What is the legal risk of enforcing rules not properly adopted or documented?
A potential liability or invalidation of enforcement actions.
All governing documents must be legally approved by the Board, properly filed with the county, and distributed to the HOA before enforcement.
What is the hierarchy of governing documents, beginning with the highest authority to lowest?
-Federal/State/Local Laws
-Plat/Map
-DCC&Rs
-Articles of Incorporation
-Bylaws
-Rules & Regulations/Policies
What financial document must be reviewed regularly to ensure proper cash flow management?
The income statement or profit and loss report. Also known as the revenue and expense report.
What is the process for enforcing a rule violation?
1st Notice (Initial Violation) - Allow time to cure
2nd Notice or 209/TROPA Notice - Allow time to cure and/or warning of fines/revoke amenities privileges, hearing requests, etc.
3rd Notice - Fine Letter/Revoke Amenities Privileges/etc.
How many different types of HOAs are there and what are their names?
-Planned Communities
-Condominiums
-Cooperatives
How can an HOA ensure transparency in financial reporting to homeowners?
By regularly distributing financial statements, budgets, and audit results or making them readily available for review on an HOA's website/portal.
What is the role of the Community Association Manager in board meetings?
To advise, document, and support board operations without voting authority.
Serve in a consultant capacity!