deed restriction enforcement 2012 · pdf fileavoiding potholes • your association’s...
TRANSCRIPT
Going The Distance withDeed RestrictionEnforcement – The Basics
Gregory P. Crinion and
Kourtney Schroeder
Crinion Davis & Richardson LLP
281-990-8300
The Rules of the Road:The Four Principles of Deed Restriction Enforcement
• We are neighbors and should act like neighbors in all things.
• All rules apply to everyone in all things.
• Management company, board member/ officer, committee or attorney
has no power without Board approval.
• We live in a difficult economic time—be cognizant that some neighbors
have financial issues.
Where Are the Rules for Deed Restriction Enforcement
Association
Federal/StateLaws
DeedRestrictions
Policies/Rules/
Guidelines
SubdivisionPlats
By-Laws
Articles ofIncorporation
Hierarchy of Rules Governing Enforcement
Federal/StateLaws
Articles ofIncorporation
By-Laws
DeedRestrictions
By-Laws
Policies/Rules/Guidelines
SubdivisionPlats
Avoiding Potholes
• Your association’s governing documents must be recorded with your County
Clerk together with information about the subdivision and your management
company.
• You can be personally liable for damages if you fail to file these documents.
• You cannot enforce any documents including policies that have not been
recorded (including charging late fees, fines, etc.).
• Make sure your governing documents cover all sections of the neighborhood.
Avoiding Potholes
• Every board member should have a complete set of governing
documents, Internal Revenue Service letters, Comptroller tax exemption
letter, and subdivision plats, and every board member needs to read and
understand them.
• Ask your association attorney to give you a one hour tutorial on your
governing documents.
Duties of the Board of Directors
• Duty of Good Faith
• Duty of Ordinary Care
• Duty of Loyalty
• Duty of Obedience
• Confidentiality
Duty of Good Faith
• Act in the best interests of the Association at all times
• Sincere effort to perform obligations, prepare for meetings, follow therules and advice given by the management company and attorney.
– Unless good reason not to do so
Duty of Ordinary Care
• Exercise judgment that a reasonable, prudent person would use in thesame circumstance
• Be knowledgeable about Association activities and details
• Make informed decisions and vote accordingly
• Read and understand governing documents
• Be consistent with decisions
• Do not play favorites
Duty of Loyalty
• Act in the best interests of the Association
• A Board Member may NOT:
– Borrow or lend money to the Association to make a profit or misdirectAssociation funds
– Enter into agreements with the Association when another deal morefavorable to the Association is available
– Be reimbursed for personal or frivolous expenses
• Reimbursement should be authorized by the Board
• Duty to vote NO
Duty of Obedience
• Board members must obey:
– Federal law
– Texas law
– Governing Documents of the Association
• Board members must not act based on personal opinions or beliefs ofwhat the rules “should be”
Confidentiality
• Board members are obligated to maintain confidentiality of confidentialmatters
– Including to spouse, friends, neighbors, etc.
• Confidential matters include
– Deed restriction violations
– Collection matters
– Attorney briefing
– Personal information
Board Member Liabilities
• Violating duties
• Failure to record documents
• Personal assets at risk
• Intentional misconduct not covered under Director and Officer’sInsurance
Property MaintenanceTravel in to the “repair shop” for a tune up!
Is There a Violation?
The Problem•A potentialviolation isreported
The GoverningDocuments
•Does theproblem conflictwith yourgoverningdocuments?
Past Practices•How has theBoard Addressedsimilar situationsin the past?
Texas ResidentialProperty Owners
Act
• Is it legal toenforce?
• How toenforce?
How to Enforce Your Deed Restrictions
Required Notice
& Opportunity fora Hearing
Suspend CommonArea Usage
Fine
File a Suit
Filing a Suit
• A lawsuit is filed to request an Injunction
– Request to collect any fines and attorney’s fees
– Request for up to $200 per day civil damages for the violation
• Proof
– Documenting violation may be difficult
• Potential Outcomes
– Injunction is granted
– Ordered to Mediation
– Settlement
– Lose
The New Roads Paved by the Texas Legislature
Flag Poles
• May not prohibit display of U.S., Texas, or U.S. armed forces flag
• Allowed Restrictions
– Size of flags and flagpoles over 20 feet
– Number and location of flagpoles
– Condition of flags and flagpoles
– Noise concerns
– Lights used to illuminate the flags
Solar Energy
• New Limitations on Restriction of Solar Energy Devices
• Allowed Restrictions
– Threatens public health or safety
– Located somewhere other than a roof or fenced in yard
– Extends beyond or higher than roof/fence line or does not conform to slopeof roof
– Certain colors
– Requiring approval by the Association
Shingles
• May NOT prohibit installation of damage resistant or energy efficientshingles if they are aesthetically similar to the rest of the community
Religious Symbols
• May NOT prohibit certain religious symbols displayed on the door ordoor frame of a dwelling
Rain Barrels
• Regulation limited to
– Size
– Type
– Shielding
– Materials
• May not make installation uneconomical
• May prevent installation on common area or between the street and thefront of a home
Have you Followed the Rules of the Road?
• We are neighbors and should act like neighbors in all things.
• All rules apply to everyone in all things.
• Management company, board member/ officer, committee or attorney
has no power without Board approval.
• We live in a difficult economic time—be cognizant that some neighbors
have financial issues.
Questions?