Texas passes bill to protect active military from HOA foreclosures

Active military personnel will get more protection from homeowners associations who attempt to foreclose for past-due membership fees, according to a bill passed Thursday by the Texas Legislature. Senate Bill 101 passed the House on Thursday. It previously passed the Senate in March and now goes to the governor’s desk to be signed, vetoed or allowed to become law without a signature. If the bill becomes law, it will take effect Sept. 1. Sponsored by Sen. Leticia Van de Putte (D-San Antonio), S.B. 101 was designed to add protections to the Service Member’s Civil Relief Act, a federal law that protects active military personnel from foreclosure. Homeowners associations got a black eye last year when a Dallas-area HOA foreclosed on Mike Clauer while the Army National Guard captain was deployed in Iraq. The foreclosure — for a $300,000 home that was fully paid for — was to settle a debt of about $3,500 in overdue HOA fees, according to media reports at the time. The case spawned intense national media scrutiny of homeowners associations and the power they wield to launch foreclosure actions for unpaid dues. Van de Putte’s bill is meant to provide an additional safeguard to the federal SCRA against nonjudicial foreclosures — the noncourt method used to foreclose on homes in Texas. The bill amends state property code to require that a notice is sent to a debtor in default with a statement that is “conspicuous, printed in boldface or underlined type” that says something to the effect of “Assert and protect your rights as a member of the armed forces of the United States. If you are or your spouse is serving on active military duty … please send a written notice of the active duty military service to the sender of this notice immediately.” Another bill that would further rein in HOAs also is under consideration this week in the Texas House as state legislators work to wind down the 82nd legislative session at the end of May. In what is decidedly a more stringent bill on HOA activities, Senate Bill 142, sponsored by Sen. Royce West (D-Dallas), passed the Senate in April and moved out of a House committee last week. It awaits a full vote by the House. West’s bill permits homeowners to pay assessments levied by HOAs in installments, restricts how foreclosures are handled and requires HOAs to disclose operational documents to homebuyers at the time of a home sale, including organization bylaws and restrictions. On foreclosures, the bill requires any initiated by an HOA be conducted through the courts. An amendment added to the bill also prohibits homeowners associations from foreclosing on a member of the military on active duty, or for nine months after the active duty period ends. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.