My question involves a condominium located in the State of: Texas
In Texas there are several new laws regarding HOAs. ( which I have included below)
I am a board on a Single Family Home HOA.
Due to the change in laws the management company is revising the collection policy and during discussion/review of this it was discovered that one thing they are changing is the last letter sent to homeowner which has some language to the effect of "You have 2 options. 1. Pay in Full or 2. Pay monthly the amount of $XX per month."
They claim this is due to change in laws that without this we will not be able to do collections.
Now how this works is that since the new law came out the Assessments get paid off first when applying a delinquent payment. However Assessments are the only thing that can be used to file for foreclosure. So the management company figures that if they send this the homeowner either pays in full or is automatically entered into a payment plan. Once the homeowner has not paid in 30 days the first payment plan payment they are in default of a payment plan therefore the HOA doesn't have to apply the payment priority to the assessments first.
This "forced" payment plan is not mentioned in the collection policy of either the HOA or the management company. There is nothing about it in any policy only that a homeowner is allowed to enter into a payment plan and the details of that...
I think this whole Idea is a bad circumvention of state law. I think it is unethical. And I suspect that if it really went to court we would lose the case of saying that the homeowner "entered into a payment plan" by simple virtue of them not responding to a collection letter.
That being said, my other board members tend to look for a "professional" opinion and this is what the management company is saying we have to do so they are happy to oblige.
The number of people this would actually effect is anywhere from 0 to maybe 5 or so at this point, but I can't see the future. That being said there isn't going to be a big uproar about this from the community for one they don't know and most don't care because they are paying.
So am I off my rocker?
Does this all sound perfectly legit to you?
Is there anything I can use to show that you can't force someone to "enter into" a payment plan if they don't actively accept it?
Another somewhat unrelated question...
Would Late Fees / collection Fees be considered the same as "fines assessed by the association" or would they fall under "other amount owed to the association".
§ 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN
CIRCUMSTANCES. A property owners' association may not foreclose a
property owners' association's assessment lien if the debt securing
the lien consists solely of:
(1) fines assessed by the association; or
(2) attorney's fees incurred by the association solely
associated with fines assessed by the association.
and
209.0063
Sec. 209.0063. PRIORITY OF PAYMENTS.
(a) Except as provided by Subsection (b), a payment received by a property owners’
association from the owner shall be applied to the owner’s debt in the following
order of priority:
(1) any delinquent assessment;
(2) any current assessment;
(3) any attorney’s fees or third party collection costs incurred by the
association associated solely with assessments or any other charge that
could provide the basis for foreclosure;
(4) any attorney’s fees incurred by the association that are not subject to
Subdivision (3);
(5) any fines assessed by the association; and
(6) any other amount owed to the association.
(b) If, at the time the property owners’ association receives a payment from a
property owner, the owner is in default under a payment plan entered into with
the association:
(1) the association is not required to apply the payment in the order of
priority specified by Subsection (a); and
(2) in applying the payment, a fine assessed by the association may not be
given priority over any other amount owed to the association.

