Texas HOA foreclosure rules and limits

Texas Property Code 209.0092 takes the fast lane away from associations. Before it can foreclose an assessment lien on a home, the association has to obtain a court order, either through the expedited foreclosure process or a full judicial foreclosure. It cannot run a nonjudicial trustee's sale on its own, and an owner cannot be forced to waive that court-order requirement as a condition of buying or transferring the property.

Section 209.009 draws a second line. An association cannot foreclose a lien when the debt behind it consists only of fines, or attorney fees incurred solely in connection with those fines. It can still pursue unpaid assessments through foreclosure after getting the court order, and it can chase fines through a separate suit for a money judgment, but it cannot take the home over fines alone.

These limits protect you as an owner, but they also give you a lens on the association. A board that forecloses aggressively, or that writes rules letting it run a trustee's sale 'without court proceedings' or foreclose for 'any amounts owed including fines,' is telling you something about how it operates and whether its documents track current law.

Read these together before you make an offer:

• Recent board minutes for foreclosure activity and how often liens turn into foreclosure.
• The delinquency rate in the financial statements, which drives collection pressure.
• CC&Rs and rules that claim a power to foreclose without a court order or to foreclose for fines, which conflict with 209.0092 and 209.009.
• Any clause asking owners to waive the judicial-foreclosure requirement, which the statute does not allow as a transfer condition.

Foreclosure practice is a window into both the finances and the governance of an association, and a document that overstates the board's foreclosure power is a sign it has drifted from Texas law.

An HOA Notes brief reads the CC&Rs, the collection policy, and the minutes together, flags foreclosure provisions that conflict with the Property Code, and cites the page behind every finding.

Texas Property Code section 209.0092 (Judicial foreclosure required). Before proceeding with nonjudicial foreclosure of an assessment lien, the association must obtain a court order through an expedited foreclosure proceeding; the association cannot simply conduct a trustee's sale without judicial involvement; an owner may not be required to waive the judicial foreclosure requirement as a condition of a property transfer. The association may pursue foreclosure after obtaining the required court order, or may use a traditional full judicial foreclosure proceeding; an owner may voluntarily waive the expedited foreclosure requirement in a separate written instrument.

When you read the disclosure packet, watch for the Association may conduct a nonjudicial foreclosure sale upon 21 days notice, the Trustee shall have the power to foreclose the Association's lien without court proceedings, and waiver of judicial foreclosure rights is hereby incorporated into membership. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.