Untitled Texas Attorney General Opinion
KP-0171
| Tex. Att'y Gen. | Jul 2, 2017Background
- The City of Ovilla (a Type A general-law municipality) included HOA dues on monthly water bills for members of two homeowners associations (HOAs) and remitted those dues to the HOAs.
- The HOAs reimbursed the City for a portion of the City’s accounting software maintenance and service costs; the software was purchased to account for HOA dues collection rather than for utility billing.
- HOA dues arise from restrictive covenants and dedicatory instruments governing residential subdivisions; dues are contractual obligations used for the private benefit of subdivision owners.
- Type A general-law municipalities have only statutory powers expressly granted or necessarily implied to effect those powers; courts construe such powers narrowly.
- No statute expressly authorizes a Type A general-law municipality to collect funds on behalf of a private entity such as an HOA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a Type A general-law municipality may lawfully collect HOA dues on behalf of HOAs | Collecting dues promotes municipal welfare by maintaining property and property values | The practice is authorized as an ordinance necessary for the municipality’s government, welfare, or good order | Held: No — Type A general-law municipality lacks express or implied authority to collect HOA dues |
Key Cases Cited
- Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637 (Tex. 2004) (general-law municipalities have only state-conferred powers)
- Town of Lakewood Vill. v. Bizios, 493 S.W.3d 527 (Tex. 2016) (powers of general-law municipalities are strictly construed; implied powers limited to those indispensable to express powers)
- Baywood Estates Prop. Owners Ass'n, Inc. v. Caolo, 392 S.W.3d 776 (Tex. App.-Tyler 2012) (HOA assessments enforced via restrictive covenants)
- Harris Cty. Flood Control Dist. v. Glenbrook Patiohome Owners Ass'n, 933 S.W.2d 570 (Tex. App.-Houston [1st Dist.] 1996) (HOA covenants construed like contracts)
- Boudreaux Civic Ass'n v. Cox, 882 S.W.2d 543 (Tex. App.-Houston [1st Dist.] 1994) (restrictive covenants treated as contracts)