HOA Assessment Authority in Texas: Who Can Raise Dues and By How Much?

The Bottom Line

Assessment authority — the power to charge owners money — flows from a specific stack of documents and statutes, in this order: the recorded declaration, the bylaws, the applicable Texas statute, and the board’s fiduciary duties. The board cannot exceed the authority granted in those documents, but within that authority, the board has substantial discretion to set regular assessments through the annual budget. Special assessments and large assessment increases often trigger additional procedural requirements — sometimes a member vote, sometimes a notice-and-objection process, sometimes both. Texas law imposes open-meeting and notice requirements on the budget process, but does not cap regular assessment increases by dollar amount — any limit on the amount of an increase comes from the declaration itself. The board’s job is to know exactly which rules apply to its community and to follow them precisely.

Operational Context: Where Assessment Authority Comes From

Every community association is created by a recorded declaration — sometimes called the CC&Rs (covenants, conditions, and restrictions). The declaration is, in effect, the constitution of the community. It creates the association, defines what is common-area and what is private, and grants the association the power to charge owners for the cost of maintaining the common interest. Every dollar the association ever collects ultimately traces back to that grant of authority.

Within the declaration, the assessment provisions typically address four distinct things: (1) the purpose for which assessments may be levied (operating expenses, reserves, capital improvements, special purposes); (2) who has authority to set the assessment (usually the board, sometimes with member ratification); (3) any limits on the amount or the rate of increase; and (4) any procedural requirements (notice, hearings, voting thresholds, developer approval during the declarant control period).

The bylaws and the Texas statute layer on top of the declaration. Bylaws typically govern the procedural side — budget preparation timelines, meeting notice, member ratification requirements. Texas Property Code Chapter 209 supplies default rules where the declaration is silent and, in some cases, imposes mandatory rules the declaration cannot override.

Regular Assessments: The Annual Budget Lever

Regular assessments are the recurring contributions that fund the association’s annual operating budget and (in most well-run communities) its reserve contributions. They are typically collected monthly or quarterly and adjusted once a year through the board’s budget adoption process.

In most Texas associations, the board has the authority to set regular assessments — not to be confused with the authority to create the assessment in the first place. The declaration creates the assessment; the board sizes it. The sizing process typically looks like this:

1. Management or the treasurer prepares a draft annual budget covering operating and reserve contributions.
2. The board reviews the draft in one or more open board meetings. Under Texas Property Code § 209.0051, those meetings must be open to members, noticed at least 144 hours (six days) in advance for regular board meetings or 72 hours (three days) for special board meetings, and posted in a conspicuous manner with the subject matter identified.
3. The board adopts the budget and the associated assessment, typically by a simple majority unless the bylaws require a higher threshold.
4. Notice of the new assessment is sent to owners per the declaration, bylaws, and statute — usually 30 to 60 days before the new fiscal year begins.

Texas Property Code Chapter 209, the principal HOA statute, contains no statewide ceiling on year-over-year increases for residential subdivisions. The limit on the amount of an increase, if any, comes exclusively from the declaration itself.

Texas Condominium Associations

Texas condominium associations are governed primarily by Texas Property Code Chapter 82 (the Texas Uniform Condominium Act). The assessment framework in Chapter 82 parallels the Chapter 209 structure: the declaration creates assessment authority; the board sizes regular assessments through the budget process; special assessments require compliance with the declaration’s procedural requirements. Chapter 82 does not impose a numerical cap on regular assessment increases analogous to Florida’s 115% mechanism. Declaration-based limits control.

Special Assessments: A Different Authority Question

Special assessments are one-time charges levied to fund a specific purpose — typically a capital project, a reserve shortfall, a major repair, or an unbudgeted operating event such as an insurance deductible after a casualty loss. Because they fall outside the annual budget cycle, they typically carry stricter procedural requirements than regular assessments.

The most common requirements are:

• A specified purpose. The board must adopt the special assessment for an identified purpose, and the funds must be used for that purpose. Spending special-assessment funds on unrelated needs is a fiduciary problem and, in some circumstances, a statutory violation.
• Member approval for large special assessments. Most Texas declarations require a member vote for special assessments above a stated threshold — commonly a percentage of the annual budget. Voting thresholds vary; majority and two-thirds approval are both common.
• Heightened notice. Special assessment notices often require additional information — the purpose, the total amount, the per-unit allocation, the payment schedule, and the consequences of nonpayment.
• Open meeting adoption. The board meeting at which a special assessment is adopted must comply with the open-meeting and notice requirements of § 209.0051, including the required advance notice and the member’s right to speak on agenda items.

How the Authority Stack Resolves Conflicts

When provisions conflict, the controlling order is generally: statute (where mandatory) → declaration → bylaws → board policies. A board policy cannot create assessment authority the declaration didn’t grant. The declaration cannot override a mandatory statutory rule such as the open-meeting and notice requirements of § 209.0051.

Why This Matters

Wrongful assessment claims are among the most common lawsuits associations face. A board that increases assessments without authority, fails to follow notice procedures, or levies a special assessment outside its declaration limits invites litigation that can take years to resolve and can result in invalidation of the assessment, reimbursement of paid amounts, and personal exposure for the directors.

Assessment increases drive collection patterns. A large or poorly explained increase produces a predictable spike in delinquencies. The board that announces a 22% increase in a one-line notice without context creates a collection problem before the new fiscal year even begins. The board that explains the increase, ties it to specific operating cost changes, and offers a payment plan to affected owners collects significantly more of what it bills.

Authority disputes erode trust faster than the underlying numbers do. Owners can absorb a difficult assessment increase if they believe the board followed the rules. They cannot absorb the perception that the rules were ignored. The procedural integrity of the increase often matters more than the dollar amount.

Best-Practice Guidance

1. Inventory your assessment authority before each budget cycle.

The treasurer (or counsel during the first year of a new declaration) should produce a one-page summary of the assessment authority: what the declaration grants the board, what limits apply, what triggers a member vote, what statutory notice is required, and what dates anchor the budget calendar.

2. Comply with § 209.0051 for every budget-related board meeting.

The board meeting at which the budget is reviewed or adopted must be open to members, noticed at least 144 hours in advance (or 72 hours for a special meeting), and posted in a conspicuous manner. Members must have a reasonable opportunity to address the board before the board adopts the budget. Document notice compliance in the meeting minutes.

3. Build assessment increases into a multi-year plan.

One-time large increases generate more conflict than steady, predictable adjustments. A board that adopts a three-to-five-year assessment glide path tied to its reserve study and operating projections gives owners the predictability they need and gives itself the political room to make necessary adjustments.

4. Document the rationale.

The board’s minutes should record the operating cost drivers behind the increase: insurance renewal premium changes, contractor pricing, reserve study recommendations, utility cost increases. A minute book that shows deliberation is the single best defense to an authority challenge.

5. Communicate the increase before it appears on the bill.

The best practice is a written communication that arrives 60–90 days before the new assessment takes effect, explains the change in plain language, ties it to specific budget items, and identifies any payment plan or hardship options.

6. Reserve special assessments for actual special purposes.

Using a special assessment to fix a recurring operating shortfall is a sign that regular assessments are too low. Using a special assessment to fund a one-time capital project, an insurance deductible, or a casualty loss is appropriate. The distinction matters legally and operationally.

Common Mistakes & Pitfalls

Actionable Takeaways

1. Locate the assessment article in the declaration. Read it. Confirm that the board’s upcoming budget is consistent with the authority granted.
2. Identify any declaration cap on annual assessment increases.
3. Confirm that the board meeting(s) at which the budget is adopted comply with § 209.0051 — 144-hour notice for regular meetings, 72-hour notice for special meetings, conspicuous posting, and email distribution to registered owners.
4. Record the rationale for the increase in the meeting minutes.
5. Draft a one-page owner communication explaining the increase, the drivers, and any payment options.
6. If a special assessment is contemplated, confirm the declaration’s vote-threshold requirement before the board votes.
7. For multi-year cost pressure, build a three-to-five-year assessment plan tied to the reserve study and operating projections.

Related CIC-SC Resources

• Operating Fund vs. Reserve Fund — The Critical Distinction
• Reserve Funding Methods — Fully Funded, Threshold, and Percent Funded
• Responding to a Mid-Year Financial Shortfall
• Special Assessment Notice Template
• How to Read and Interpret Your Declaration
• Texas Open Meetings Requirements Under § 209.0051 — Complete Board Guide

References & Sources

1. Common Interest Community Standards Council, Fundamentals of Association Management — chapter on Assessment Authority and the Annual Budget Process.
2. Texas Property Code Chapter 209 — Texas Residential Property Owners Protection Act, including § 209.0051 (open board meetings), § 209.0052 (procurement and contract considerations), and the broader framework governing assessments and notices.
3. Texas Property Code Chapter 82 — Texas Uniform Condominium Act, including condominium-specific assessment provisions.
4. Texas Business Organizations Code Chapter 22 — nonprofit corporation framework governing board authority and procedural requirements.
5. AICPA, Audit and Accounting Guide: Common Interest Realty Associations — presentation of assessments, member equity, and special assessments.

Tags: assessment authority · regular assessment · special assessment · annual budget · declaration · Texas Chapter 209 · Texas Chapter 82 · § 209.0051 · fiduciary duty · open meetings

CICSC publishes this article for educational and informational purposes only. It is not legal, tax, accounting, engineering, insurance, or financial advice and does not establish an attorney-client relationship. Statutory references and operational frameworks are intended to support informed governance, not to substitute for advice from qualified legal counsel and other professional advisors familiar with your jurisdiction and your association's facts. CICSC, its authors, and its members assume no liability for actions taken in reliance on this content.