Don't Count On Leasing (and possibly other) Rights in Subdivisions: Texas Supreme Court declines to take up short-term rental amendment cases
Today, January 26, 2024, the Texas Supreme Court declined to take up decisions from the Austin and Houston courts of appeals which allow majorities in subdivisions to take away leasing rights from existing owners. The cases are:
So thus far, the Beaumont, Austin, and Houston Courts of Appeals allow leasing rights to be taken away by amendments to restrictive covenants.
My clients the Bayliffs have just filed a petition in the Texas Supreme Cout in a case involving the sale of the common-area parkland. The Austin Court of Appeals — yet again — allowed a majority to amend the covenants to permit the common elements to be sold off and converted to a home lot. BLF LLC v. Landing at Blanco Prop. Owners Ass'n, No. 03-22-00423-CV, 2023 WL 8607028 (Tex. App. – Austin Dec. 13, 2023, pet. filed) (mem. op.).
That leaves 10 other courts of appeals which have not addressed the issue whether amendments can take away important rigths, including Dallas, Fort Worth, Tyler, San Antonio, El Paso, Amarillo, and Corpus Christi.
While it is impossible to predict how this issue will get resolved in those other appeals districts, the existence of decisions in Austin, Beaumont, and Houston is a problem for everyone. Anyone planning to buy a home in a subdivision has got to be advised that rights they think they are buying may be taken away immediately after purchase.
It is vital that all buyers of subdivision homes in Texas (whether there is an HOA or not) consult an attorney before doing so. Texas law does not allow subdivisions with HOA's to require a 100% vote for amendments, so it becomes difficult for most buyers to escape the problem of amendments which take away rights.
- Chu v. Windermere Lakes Homeowners Ass'n, Inc., 652 S.W.3d 899, 902 (Tex. App. – Houston [14th Dist.] 2022)
- Angelwylde HOA, Inc. v. Fournier, No. 03-21-00269-CV, 2023 WL 2542339 (Tex. App. – Austin Mar. 17, 2023)
- Cauthorn v. Pirates Prop. Owners' Ass'n, No. 01-22-00401-CV, 2023 WL 5535665 (Tex. App. – Houston [1st Dist.] Aug. 29, 2023)
- Cottonwood Trail Investments, LLC v. Pirates Prop. Owners' Ass'n, No. 01-22-00400-CV, 2023 WL 5535664 (Tex. App. – Houston [1st Dist.] Aug. 29, 2023)
So thus far, the Beaumont, Austin, and Houston Courts of Appeals allow leasing rights to be taken away by amendments to restrictive covenants.
My clients the Bayliffs have just filed a petition in the Texas Supreme Cout in a case involving the sale of the common-area parkland. The Austin Court of Appeals — yet again — allowed a majority to amend the covenants to permit the common elements to be sold off and converted to a home lot. BLF LLC v. Landing at Blanco Prop. Owners Ass'n, No. 03-22-00423-CV, 2023 WL 8607028 (Tex. App. – Austin Dec. 13, 2023, pet. filed) (mem. op.).
That leaves 10 other courts of appeals which have not addressed the issue whether amendments can take away important rigths, including Dallas, Fort Worth, Tyler, San Antonio, El Paso, Amarillo, and Corpus Christi.
While it is impossible to predict how this issue will get resolved in those other appeals districts, the existence of decisions in Austin, Beaumont, and Houston is a problem for everyone. Anyone planning to buy a home in a subdivision has got to be advised that rights they think they are buying may be taken away immediately after purchase.
It is vital that all buyers of subdivision homes in Texas (whether there is an HOA or not) consult an attorney before doing so. Texas law does not allow subdivisions with HOA's to require a 100% vote for amendments, so it becomes difficult for most buyers to escape the problem of amendments which take away rights.