The Importance of Recording a Management Certificate.
Under Texas law, all Texas Homeowners Associations (or “HOAs” for short), including HOAs that govern both condominium and subdivision developments, are required to record a “Management Certificate” in the Official Public Records of each county in which any portion of the HOA is located. So, what is a Management Certificate and why is it so important?
In simple terms, a “Management Certificate” is a written statement that identifies certain requisite information concerning a HOA, its governing documents and its management. More specifically, a Management Certificate identifies the following information:
(1) the name of the Subdivision or Condominium Development;
(2) the name of the Subdivision or Condominium HOA;
(3) if it is a Subdivision Development, the recording data for the Subdivision Plat creating the Subdivision Development;
(4) the recording data for the Declaration applicable to the Subdivision or Condominium HOA;
(5) the name and mailing address of the Subdivision or Condominium HOA;
(6) the name and mailing address of the person managing the Subdivision or Condominium HOA or its designated representative; and
(7) any other information the Subdivision or Condominium HOA considers appropriate.
Management Certificates are also required to be updated anytime any of the information specified therein changes. While most of the information specified in a Management Certificate rarely changes, if there is a change in the name and/or mailing address of the person managing the HOA, which occurs whenever a HOA hires a new property manager, the HOA must record an updated Management Certificate.
Making sure that your HOA maintains an accurate Management Certificate on record in the county’s Official Public Records is very important because Management Certificates are often used by title companies to identify the designated management representative of a HOA and such representative’s contact information for purposes of obtaining information from the HOA in order to facilitate the sale of a home. In addition, the failure to record and/or update a Management Certificate may affect a Subdivision HOA’s ability to collect delinquent assessments owed by a delinquent lot owner.
To avoid any such issues, every Texas HOA should record a Management Certificate and continuously update such Management Certificate anytime any of the requisite information changes.
For more information about the all laws applicable to Texas HOAs, check out Texas Homeowners Association Law, 2nd ed., a legal reference book on the federal and state laws applicable to Texas HOAs that is written in “plain English” on a topic by topic basis, at www.TexasHOALaw.com.
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