Working with HOAs Regarding SB 1588: Proactive and Practical Experience

By Jonathan Roberts at SilverTop Property Management and Member of CCAR's Property Management Committee

The CCAR January Property Management Committee meeting focused on Texas Senate Bill 1588. The 2021 Texas 87th Legislative Session closed with new bills that significantly affect property owners associations (POAs/HOAs) governed under Chapter 209 of the Texas Property Code (TPC).

Effective September 1, 2021, the bill repealed language allowing a POA/HOA to request a copy of the lease as long as the “sensitive information” was redacted. HOAs are now prohibited from requesting a copy of the lease and underlying credit reports of applicants.  The challenge to agents and property managers are many POAs/HOAs are not aware of this change and have not updated their procedures or bylaws, putting leasing agents and property managers in a compromising position.

The following may be a proactive and practical way to get into compliance without creating an adversarial exchange between the agent and association.

1. Cordially notify the POA/HOA of the recent changes, and send the updated TPC 209.016 language, notifying them you are allowed to provide contact information, including the name, mailing address, phone number, and e-mail address of each person who will reside at a property in the subdivision under a lease, and the commencement date and term of the lease. Other requests for tenant information is not acceptable.
2. Ask how they and the Board would like to proceed given this may be different from prior practice?  (If not different, then no action may be needed.)
3. Recommend that your policy is to clearly communicate with the property owner to formalize the “Tenant Selection Criteria” before executing a lease contract. The tenant selection criteria may include factors such as criminal history, credit history, current income, and rental history.
4. Our recommendation is if there are any concerns, the POAs/HOAs and property owner discuss and proactively agree to the “Tenant Selection Criteria” in advance of tenant placement rather than asking for it after.

The proactive approach of wanting to provide the POAs/HOAs and the Board needed information to complete the leasing process as expeditious and thorough as possible should be well received. If you want more guidance, come participate with us on the 4^th Wednesday of each month at 10am. Get more information about joining our committee by calling the CCAR office at 972-618-3800.