HOAs need assessments to maintain their communities. Homeowners need a clear bill, a workable way to catch up, and meaningful safeguards before losing their home.
The proposal brings defined collection charges and a court-based foreclosure process to covered Texas subdivision HOAs, using the property-tax framework as its model.
Walk through the proposalChoose a step to see what the HOA can do and what the homeowner can expect.
This is a simplified sequence. Existing lien notices, cure periods, and other applicable prerequisites still matter; a charge date is not permission to foreclose.
The analogy is about a collection structure: a defined debt, predictable charges, an opportunity to cure, and an enforceable remedy.
A model, not an identical system. The HOA draft has its own eligibility rules, billing schedule, notice provisions, and transition charges. It does not turn an HOA into a taxing authority or copy every tax rule.
Change the unpaid assessment and month. See how defined charges work without a separate stack of collection bills.
The assessment is still due. Delay still has a cost. The reform limits how that cost grows and keeps unrelated fines out of the assessment lien.
The policy argument is straightforward: a clear route to payment can protect community revenue while reducing the risk that collection costs overwhelm the underlying debt.
This is the coalition’s rationale, not a forecast of collection rates or HOA budgets.
Regular and special assessments remain owed. An HOA may include management, administration, and collection operations in its regular assessment.
Authorized penalty, interest, and a capped collection penalty remain available. Specified foreclosure costs can also be recovered.
Partial payments must be accepted and applied to assessments first. Accepting less than the full amount does not surrender collection rights on the remainder.
If assessment debt remains unresolved and safeguards are satisfied, the HOA may seek a court judgment and sale. A compliant payment plan pauses that enforcement.
The legal form of the community matters. Building height alone does not determine which chapter governs.
The draft preserves prior law for assessments already delinquent before that date, earlier non-assessment charges, pending foreclosure actions, and existing payment plans under its transition provisions. New billing disclosures apply to bills delivered on or after that date; the deferral provision applies to suits filed on or after it.
Plain answers for stakeholder conversations.
No. The assessment remains owed, and lawful charges and collection remedies remain. A payment plan spreads repayment over time; a qualifying deferral delays enforcement. Neither cancels the underlying debt.
No. The collection penalty is capped at the lesser of contract compensation or 20% of delinquent base assessments plus the ordinary penalty and interest. The base assessment, allowed penalty and interest, specified foreclosure costs, and any applicable special or transitional charge are separate. The draft bans separate attorney and collection-agent fees for collecting assessment debt beyond the capped collection penalty.
The draft excludes fines and related fees from the assessment lien, even when assessments are also unpaid. An HOA may seek a personal judgment for amounts outside the lien, but that judgment cannot be enforced against the owner’s residence homestead. Current Chapter 209 already bars fines-only foreclosure; the proposal goes further by excluding fines from mixed-debt foreclosures too.
The draft retains the payment-plan policy requirement for associations with more than 14 lots, subject to statutory exceptions and prior-plan eligibility limits. It sets a three-month minimum generally and a 12-month minimum for a residence homestead with the §11.13 exemption, with up to 36 months at the owner’s option. Plans use substantially equal monthly installments, have no setup or administration fee or down-payment requirement, and remain available after suit is filed. Interest may continue; compliant owners are protected from suit or foreclosure on amounts covered by the plan.
No. The proposed HOA protection is tied to an actual Tax Code §33.06 homestead tax deferral or abatement, including eligible older, disabled, or disabled-veteran owners. The owner must deliver written proof to the HOA. The lien remains, interest accrues at the deferred-tax rate (currently 5% annually), and earlier lawful charges are preserved. Pending cases and sales require additional steps. The draft also sets notice and waiting-period rules after the protection ends.
The draft allows an optional one-time penalty of up to 10% for specified emergency special assessments unpaid 30 days after the later of the due date or notice: casualty repairs, a government or court order, or an imminent health or safety threat. For regular assessments levied in 2028–2030 and billed before June 1, it also allows a one-time July 1 charge of the lesser of 5% of the unpaid amount or $100. These require authorization and disclosure. Ordinary operating costs may remain part of regular assessments.
Current law generally uses an expedited court order, allows a full judicial foreclosure, and includes an owner-waiver route. The draft repeals the expedited/waiver provision and requires a judgment foreclosing the lien and ordering sale in every covered foreclosure. It also strengthens service requirements and requires plain-language rights and legal-help information in the petition.
The HOA must provide a free, itemized payoff statement within 10 business days of a written request. Paying the stated amount within 30 days satisfies the assessment debt, and the HOA must move to dismiss a pending foreclosure suit within 10 days after payment. Prohibited charges are void; the draft requires refund or credit within 30 days of a written request and permits a suit for the charge, actual damages, $500 per improper charge, court costs, and reasonable attorney’s fees.
Proposal details follow the October 4 working draft. Existing-law references were checked October 15, 2026.
Draft Bill: HOA Collections and Foreclosures Reform Bill (Prop. Code Ch. 209), October 4, 2026, 12 pages. Draft §2: charges, payments, deferrals; §§3–6: plans and fees; §§7–12: liens, courts, redemption, conforming amendments; §§13–14: transition.
The comparison explains a policy model; it does not claim the two systems are identical or establish how the proposal would affect collection revenue.
Assessments remain due. The proposal allows defined penalties, 1% monthly interest on unpaid base assessments, and a collection penalty capped at contract compensation or 20% of assessment, ordinary penalty, and interest, whichever is less. Specified foreclosure costs remain recoverable. Separate collection add-ons are prohibited.
Eligible payment plans provide substantially equal monthly installments, up to 36 months at the owner’s option, without setup fees or a down payment. Compliance pauses enforcement for covered amounts. Eligible tax deferrals can postpone collection and foreclosure; debt and liens remain.
Foreclosure requires a court judgment, service safeguards, and a plain-language rights notice. Fines and related charges stay out of the lien, including when assessment debt is also owed. Chapter 209 covers qualifying subdivision HOAs and excludes condominiums. Proposed effective date: January 1, 2028, with transition rules.