Relating to encumbrances that may be fixed on homestead property.
Impact
If enacted, HB 1977 would modify existing laws surrounding the protection of homesteads from creditor claims by allowing specific debts to result in encumbrances. This could have profound implications for homeowners, particularly those living in communities governed by property owners' associations. Homeowners may need to ensure timely payment of association fees to prevent encumbrances from being placed on their homes, which could ultimately affect their financial security and home equity.
Summary
House Bill 1977 proposes amendments to the Texas Property Code concerning homestead property and encumbrances that may be placed upon it. The key change involves allowing property owners' associations to place encumbrances on homesteads for unpaid fees related to the maintenance of common facilities or fines levied by the association. This legislation aims to clarify the conditions under which homestead properties can be encumbered and introduces a specific provision for property owners' association debts, in line with other existing encumbrances such as those related to taxes or construction costs.
Contention
The introduction of this bill may lead to contention regarding the balance of power between property owners' associations and homeowners. Proponents may argue that the new provision is necessary for the financial sustainability of community associations, while opponents might express concerns over the potential for abuse, as homeowners could face increased pressure to pay fees or fines. Furthermore, the potential for further encumbrance could pose risks to homeowners' ability to retain their properties during financial difficulties, raising discussions around consumer rights and protections.
Additional_notes
Importantly, this bill's enactment is contingent upon a constitutional amendment that must be passed by voters, which adds an additional layer of complexity to its implementation. The interactions between local governance, homeowners, and state law will likely come under increased scrutiny as this bill progresses.
Enabling for
Proposing a constitutional amendment permitting an encumbrance to be fixed on homestead property for an obligation to pay certain property owners' association fees and prohibiting the forced sale of the homestead to pay those fees unless authorized by the members of the association in accordance with general law.
Relating to a limitation on the total amount of ad valorem taxes that a school district may impose on certain residence homesteads following a substantial school tax increase.
Proposing a constitutional amendment to remove the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Relating to the limitation on the total amount of ad valorem taxes that a school district may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 20 consecutive tax years.
Proposing a constitutional amendment authorizing the legislature to provide for exceptions to the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Relating to the establishment of a limitation on the total amount of ad valorem taxes that a county may impose on the residence homesteads of individuals who are disabled or elderly and their surviving spouses.
Proposing a constitutional amendment authorizing the legislature to limit the maximum appraised value of residential real property for ad valorem tax purposes to 105 percent or more of the appraised value of the property for the preceding tax year, to exempt from ad valorem taxation the total appraised value of property purchased by an individual for the first tax year the individual qualifies the property as the individual's residence homestead if the property is the individual's first residence homestead and has an appraised value of less than $300,000, and to limit the total amount of ad valorem taxes that a political subdivision may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 25 consecutive tax years.
Relating to limitations on increases in the appraised value for ad valorem tax purposes of residence homesteads and single-family residences other than residence homesteads.
Relating to limitations on increases in the appraised value for ad valorem tax purposes of residence homesteads and single-family residences other than residence homesteads.
Proposing a constitutional amendment authorizing the legislature to provide that the appraised value of a residence homestead for ad valorem tax purposes for the first tax year that the owner of the property qualifies the property for a residence homestead exemption is the market value of the property and that, if the owner purchased the property, the purchase price of the property is considered to be the market value of the property for that tax year and to limit increases in the appraised value of the homestead for subsequent tax years based on the inflation rate.