Texas House Bill HB1639

Texas 2011 - 82nd Regular

• Out of House Committee: 5/2/11
• Introduced: 2/22/11
• Refer: 3/3/11
• Report Pass: 4/28/11

Caption

Relating to the recovery of attorney's fees in foreclosure actions by property owners' associations.

Impact

The proposed legislation is expected to have significant implications on the financial considerations surrounding foreclosure actions in Texas. By prohibiting property owners' associations from recovering attorney's fees from owners during foreclosure, the bill aims to support property owners who may already be under financial stress. This measure could lead to a decrease in the overall costs associated with foreclosure for homeowners, making the process less daunting. Such an amendment to the law may incentivize associations to explore alternative resolutions with homeowners regarding overdue assessments, rather than prematurely resorting to foreclosure.

Summary

House Bill 1639 pertains specifically to the collection of attorney's fees and costs incurred by property owners' associations in the context of foreclosure actions. The bill amends the Texas Property Code, particularly Section 209.008, to establish that property owners are not liable for attorney's fees charged to them due to foreclosure actions initiated by associations concerning assessment liens on their properties. This change is intended to alleviate the financial burden on homeowners facing foreclosure by preventing these associations from charging for legal costs incurred during such processes.

Contention

Debates surrounding HB 1639 may arise from different perspectives on the role and authority of property owners' associations. Supporters of the bill might argue that it protects the rights of homeowners while promoting fairness in the foreclosure process. In contrast, opponents may view this as a limitation on the rights of associations to collect dues owed to them, which could impact their operational effectiveness and financial stability. The discussion is likely to center around balancing the interests of property owners and associations, particularly in the context of maintaining community financial health versus protecting individual homeowners.

Notable_points

The bill includes stipulations that it only applies to foreclosures initiated after its effective date and does not retroactively alter any prior attorney's fee liabilities. This ensures that associations can still rely on previously established legal avenues for recovering costs incurred before the bill's enactment. The bill confirms a broader intention to reform foreclosure practices in Texas, especially for those from property owners' associations, indicating a legislative recognition of the complexities involved in property ownership and community governance.