Section 209.004 of the Texas Property Code previously required the filing of a management certificate for each association in the real property records for each county in which that association was located. Additionally, the Code included a list of items that must be included within a management certificate and ramifications for an association if it failed to record a management certificate. In the 2021 Legislative Session, the Texas Legislature amended Section 209.004 to expand the list of items that must be included in a management certificate, substantially increased the ramifications for failure to record a management certificate, and provided for a second location that each management certificate must be filed. This provision is applicable to all residential subdivision and townhomes, irrespective of their size.
In addition to the list of items that must now be included within a management certificate as found at Section 202.004(b) of the Texas Property Code, each association must now include the following: any amendments to its declaration, the telephone number and email address of the manager of the association, the website address of the association, and the amount and description of any fee charged by the association related to a property transfer within the subdivision.[1] An updated management certificate must be filed within the county clerk’s office by September 1, 2021.
The law creates an additional requirement that each association file its Management Certificate and any future amendments thereto with the Texas Real Estate Commission after filing with the county clerk’s office. Should the information on a Management Certificate change, then an association must prepare and file an updated management certificate. That updated management certificate must be filed with both the county clerk’s office and the Texas Real Estate Commission. Each association must file its updated Management Certificates with the Texas Real Estate Commission no later than June 1, 2022.[2]
Lastly, the law increases the ramifications faced by an association should it fail to comply with the filing requirements as set forth above. In addition to all current consequences which remain in place, the law now expressly states that an owner is not liable for attorney’s fees or interest relating to the collection of a delinquent assessments if those fees were incurred or accrued during a period of time during which a management certificate was not properly on file with the county clerk or the Texas Real Estate Commission.[3]
It is our firm’s recommendation that each association promptly prepare and file an updated management certificate and have it on file by September 1, 2021. If you need assistance with the preparation or filing of a management certificate, you may contact our office at Casey@HOALegal.com.
[1] Texas Property Code § 209.004(a)
[2] Texas Property Code § 209.004(b-1); Section 23(b) of SB 1588
[3] Texas Property Code § 209.004(e)