Can the Texas Legislature pass laws that override or void existing HOA covenants?

Plain-English summary

Representative Linda Harper-Brown, who chaired the House Committee on Government Efficiency and Reform, asked the Attorney General three questions about how far the Legislature can go when it passes laws that touch the rules a property owners' association (the kind of homeowners group often called an HOA) writes into its covenants. The questions grew out of an earlier statute, Property Code section 202.010, enacted by the Eighty-second Legislature, which bars an association from including or enforcing a covenant that stops an owner from installing a solar energy device. People had been asking what a law like that does to covenants that already existed when the law passed.

The AG grouped the first and third questions together because both came down to the constitutional ban on impairing contracts. Association covenants, the opinion explained, are treated as contracts between the parties, so they get the protection of the Contract Clauses in both the Texas Constitution (article I, section 16) and the U.S. Constitution (article I, section 10). But that protection has never been absolute. The Texas Supreme Court and the U.S. Supreme Court have both held that the rule against impairing contracts can give way to a statute necessary to protect public safety and welfare. For a law that substantially impairs a contract to survive, it has to serve a significant and legitimate public purpose, and the way it adjusts the parties' rights has to rest on reasonable conditions suited to that purpose. A court reviewing such a law starts by presuming it is valid and that the Legislature did not act unreasonably. The AG stopped there on the specific application, saying whether any particular statute can pass that test and lawfully reach a given covenant is for a court to decide.

The second question was different: was Property Code section 202.006 a bill of attainder? That statute requires an association to file all of its dedicatory instruments in the county real property records, and says those instruments have no effect until they are filed. A bill of attainder is a law that singles out a named person or an easily identified group and punishes them without a trial, and both constitutions forbid it. The AG walked through the three-part test courts use to decide whether a statute inflicts punishment: whether the burden fits the historical meaning of legislative punishment (imprisonment, banishment, confiscation of property, or barring someone from a profession), whether it reasonably furthers a nonpunitive purpose, and whether the legislative record shows an intent to punish. Section 202.006 imposes none of the historical punishments, its filing requirement serves the nonpunitive goal of making sure buyers have notice of the restrictions on a property before they buy, and nothing suggested the Legislature meant to punish associations. So the AG concluded a court would likely hold section 202.006 is not a bill of attainder.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

Representative Harper-Brown and the committee (as the opinion described it): The opinion answered the general constitutional questions, that association covenants are contracts protected by the Contract Clauses but that the protection yields to statutes serving a significant and legitimate public purpose, while declining to decide whether any specific statute survives that scrutiny as applied to a particular covenant, calling that a question for a court.

Property owners' associations (as the opinion described it): The opinion described association covenants as contracts protected by both constitutions, but explained that a law substantially impairing them can still stand if it serves a significant and legitimate public purpose on reasonable, appropriate terms. As to section 202.006's filing requirement, the opinion concluded a court would likely find it is not a bill of attainder.

Property owners and buyers (as the opinion described it): The opinion described section 202.006's requirement that associations file their dedicatory instruments, and the rule that those instruments have no effect until filed, as furthering the nonpunitive purpose of ensuring purchasers have notice of the legal restrictions on a property before they buy it.

Common questions

Are HOA covenants protected by the Constitution?
The AG explained that property owners' association covenants are treated as contracts, so they receive the protection of the Contract Clauses of both the Texas Constitution (article I, section 16) and the U.S. Constitution (article I, section 10).

If covenants are protected contracts, can a new law still change or void them?
Yes, under the right conditions. The AG noted that both the Texas Supreme Court and the U.S. Supreme Court have held the rule against impairing contracts can yield to a statute serving public safety and welfare. A law that substantially impairs a contract has to serve a significant and legitimate public purpose, with adjustments based on reasonable conditions appropriate to that purpose.

Did the AG say whether the solar-panel law (or any specific statute) is constitutional?
No. The AG laid out the test but said whether any specific statute can withstand that scrutiny, so that it could lawfully affect the rights set by a particular covenant, is for a court to determine.

Is the requirement to file HOA documents with the county a bill of attainder?
The AG concluded a court would likely say no. Property Code section 202.006 imposes none of the punishments historically associated with bills of attainder, its filing requirement furthers the nonpunitive purpose of giving buyers notice of restrictions, and nothing showed the Legislature intended to punish associations.

What is a bill of attainder, in plain terms?
The AG described it, drawing on Texas and federal cases, as a legislative act that singles out a named individual or an easily identified group and inflicts punishment on them without a trial. Both the Texas and U.S. Constitutions forbid such laws.

Background and statutory framework

The request arose against the backdrop of Property Code section 202.010, enacted by the Eighty-second Legislature, which prohibits an association from including or enforcing a dedicatory-instrument provision that prohibits or restricts an owner from installing a solar energy device (Tex. Prop. Code Ann. § 202.010(b) (West Supp. 2013)). The first and third questions concerned the constitutional bar on impairing contracts. Because association covenants are treated as contracts (Ostrowski v. Ivanhoe Prop. Owners Improvement Ass'n, 38 S.W.3d 248, 252 (Tex. App.-Texarkana 2001, pet. denied)), they fall under the Contract Clauses of the Texas and U.S. Constitutions (Tex. Const. art. I, § 16; U.S. Const. art. I, § 10, cl. 1), and article I, section 29 of the Texas Constitution declares that everything in the Bill of Rights is excepted out of the general powers of government.

The AG explained that the rule against impairment may yield to statutes necessary to safeguard public safety and welfare (Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 635 (Tex. 1996); Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 241 (1978)). A law that substantially impairs a contractual relationship must serve a significant and legitimate public purpose, with adjustments based on reasonable conditions appropriate to that purpose (Liberty Mut. Ins. Co. v. Tex. Dep't of Ins., 187 S.W.3d 808, 824-25 (Tex. App.-Austin 2006, pet. denied)), and a reviewing court presumes the statute valid (HL Farm Corp. v. Self, 877 S.W.2d 288, 290 (Tex. 1994)). Whether a specific statute survives that scrutiny as applied to a particular covenant, the AG said, is for a court.

The second question asked whether Property Code section 202.006, which requires associations to file all dedicatory instruments in the county real property records and gives those instruments no effect until filed, is a bill of attainder (Tex. Prop. Code Ann. § 202.006, § 202.006(a) (West Supp. 2013); Tex. Const. art. I, § 16; U.S. Const. art. I, § 9, cl. 3). Courts define a bill of attainder as a legislative act that punishes a named individual or easily identified group without a trial (Johnson v. Davis, 178 S.W.3d 230, 240 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (citing United States v. Lovett, 328 U.S. 303, 315 (1946))), and the prohibition reaches only statutes that inflict punishment (Selective Serv. Sys. v. Minn. Pub. Interest Research Grp., 468 U.S. 841, 851 (1984)). Applying the three-inquiry punishment test (In re Commitment of Miller, 262 S.W.3d 877, 888 (Tex. App.-Beaumont 2008, pet. denied); Nixon v. Adm'r of Gen. Servs., 433 U.S. 425, 470 (1977)), the AG found section 202.006 imposes none of the historical punishments, furthers the nonpunitive purpose of giving purchasers notice, and reflects no intent to punish, so a court would likely conclude it is not a bill of attainder.

Citations

Constitutional and statutory provisions:

• Tex. Prop. Code Ann. § 202.010(b) (West Supp. 2013) (bar on covenants restricting solar energy devices)
• Tex. Prop. Code Ann. § 202.006 (West Supp. 2013) (association must file dedicatory instruments; no effect until filed)
• Tex. Prop. Code Ann. § 202.006(a) (West Supp. 2013) (filing in county real property records)
• Tex. Const. art. I, § 16 (impairment of contracts; bill of attainder)
• Tex. Const. art. I, § 29 (Bill of Rights excepted from general powers of government)
• U.S. Const. art. I, § 10, cl. 1 (Contract Clause)
• U.S. Const. art. I, § 9, cl. 3 (bill of attainder)

Cases:

• Ostrowski v. Ivanhoe Prop. Owners Improvement Ass'n, 38 S.W.3d 248, 252 (Tex. App.-Texarkana 2001, pet. denied)
• Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 635 (Tex. 1996)
• Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 241 (1978)
• Liberty Mut. Ins. Co. v. Tex. Dep't of Ins., 187 S.W.3d 808, 824-25 (Tex. App.-Austin 2006, pet. denied)
• HL Farm Corp. v. Self, 877 S.W.2d 288, 290 (Tex. 1994)
• Johnson v. Davis, 178 S.W.3d 230, 240 (Tex. App.-Houston [14th Dist.] 2005, pet. denied)
• United States v. Lovett, 328 U.S. 303, 315 (1946)
• Selective Serv. Sys. v. Minn. Pub. Interest Research Grp., 468 U.S. 841, 851 (1984)
• In re Commitment of Miller, 262 S.W.3d 877, 888 (Tex. App.-Beaumont 2008, pet. denied)
• Nixon v. Adm'r of Gen. Servs., 433 U.S. 425, 470 (1977)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-1054
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2014/ga1054.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

April 28, 2014

The Honorable Linda Harper-Brown Opinion No. GA-1054
Chair, Committee on Government
Efficiency and Reform Re: Whether state statutes that prohibit or
Texas House of Representatives void certain restrictive covenants affect
Post Office Box 2910 covenants existing at the time the statutes are
Austin, Texas 78768-2910 enacted (RQ-1161-GA)

Dear Representative Harper-Brown:

You ask three questions concerning the Legislature's authority to enact legislation that may impact property owners' association ("POA") covenants.[1] As background, you explain that the Eighty-second Legislature enacted Property Code section 202.010, which, in relevant part, prohibits a POA from including or enforcing "a provision in a dedicatory instrument that prohibits or restricts a property owner from installing a solar energy device." TEX. PROP. CODE ANN. § 202.010(b) (West Supp. 2013); Request Letter at 1. You note that "[q]uestions have been raised regarding what effect legislation like this has on existing POA covenants." Request Letter at 1. Your request, however, does not ask specifically about this statute but instead questions generally the effect that new legislation could have on existing contracts. See id.

You first ask whether POA covenants "receive protection under various portions of both state and federal constitutions ..., and if so [whether] the Texas Legislature [must] afford POAs the same or greater protection than is given to these fundamental civil rights by the U.S. Supreme Court." Id. Your third question relatedly asks whether article I, section 29 of the Texas Constitution prohibits the Legislature from "pass[ing] legislation for the health, safety and welfare of the public" when doing so interferes with "areas that are protected by the Bill of Rights, specifically in reference to any legislation that may interfere with Article I, Section 16." Id. at 2. Because these questions both concern the constitutional prohibition on the impairment of contracts, we will answer them together.

POA covenants are treated as "contracts between parties." Ostrowski v. Ivanhoe Prop. Owners Improvement Ass'n, 38 S.W.3d 248, 252 (Tex. App.-Texarkana 2001, pet. denied). Article I section 16 of the Texas Constitution provides that "[n]o ... law impairing the obligation of contracts, shall be made." TEX. CONST. art. I, § 16; see also U.S. CONST. art. I, § 10 cl. 1 ("No State shall ... pass any ... Law impairing the Obligation of Contracts"). Article I, section 29 of the Texas Constitution further provides:

To guard against transgressions of the high powers herein delegated, we declare that everything in this "Bill of Rights" is excepted out of the general powers of government, and shall forever remain inviolate, and all laws contrary thereto, or to the following provisions, shall be void.

TEX. CONST. art. I, § 29.

Both the Texas Supreme Court and the United States Supreme Court have determined that the constitutional rule against impairment of contracts "may yield to statutes which are necessary to safeguard the public safety and welfare." Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 635 (Tex. 1996) (upholding the Edwards Aquifer Act against a challenge that it violated the Contract Clause of the Texas Constitution); Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 241 (1978) ("[T]he Contract Clause does not operate to obliterate the police power of the States."). In order to withstand a challenge under the Contract Clause, a state law that substantially impairs a contractual relationship must serve a "significant and legitimate public purpose," and the adjustment of the rights and responsibilities of the contracting parties must be based upon reasonable conditions and of a character appropriate to the public purpose justifying the adjustment. Liberty Mut. Ins. Co. v. Tex. Dep't of Ins., 187 S.W.3d 808, 824-25 (Tex. App.-Austin 2006, pet. denied). A court reviewing the constitutionality of a statute challenged under the Contract Clause would begin with the presumption that the statute is valid and that the Legislature has not acted unreasonably or arbitrarily. See HL Farm Corp. v. Self, 877 S.W.2d 288, 290 (Tex. 1994). Whether any specific statute can withstand this scrutiny such that it could lawfully affect the rights established by a particular POA covenant will be for a court to determine.

In your second question you ask whether "Texas Property Code 202.006 [is] a bill of attainder" such that it is unconstitutional under "state and federal constitutions." Request Letter at 1. Section 202.006 of the Property Code provides:

(a) A property owners' association shall file all dedicatory instruments in the real property records of each county in which the property to which the dedicatory instruments relate is located.

(b) A dedicatory instrument has no effect until the instrument is filed in accordance with this section.

TEX. PROP. CODE ANN. § 202.006 (West Supp. 2013). Both the Texas and United States Constitutions provide that "[n]o bill of attainder ... shall be made" by the Legislature. TEX. CONST. art. I, § 16; see U.S. CONST. art. I, § 9, cl. 3 ("No bill of attainder ... shall be passed."). Texas and federal courts define a bill of attainder as "a legislative act that applies to a named individual or to an easily identified member of a group in such a way as to inflict punishment without a trial." Johnson v. Davis, 178 S.W.3d 230, 240 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (citing United States v. Lovett, 328 U.S. 303, 315 (1946)).

"The proscription against bills of attainder reaches only statutes that inflict punishment on the specified individual or group." Selective Serv. Sys. v. Minn. Pub. Interest Research Grp., 468 U.S. 841, 851 (1984). Three inquiries are used to determine whether a statute inflicts punishment: "(1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute, viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes; and (3) whether the legislative record evinces a congressional intent to punish." In re Commitment of Miller, 262 S.W.3d 877, 888 (Tex. App.-Beaumont 2008, pet. denied) (cert. denied) (quoting Selective Serv. Sys., 468 U.S. at 852) (citation and internal quotation marks omitted).

With regard to the first inquiry, courts have recognized that a burden placed on citizens by a governmental authority does not necessarily equate to punishment. See Nixon v. Adm'r of Gen. Servs., 433 U.S. 425, 470 (1977). Historically, the list of punishments forbidden by the Bill of Attainder Clause has been limited to imprisonment, banishment, punitive confiscation of property and legislative bars to participation by individuals or groups in specific employments or professions. Selective Serv. Sys., 468 U.S. at 852. Section 202.006 imposes none of the burdens historically associated with "punishment." With regard to the second inquiry, the burden imposed by section 202.006 requires property owners' associations to file all dedicatory instruments with the county in order to make them effective. TEX. PROP. CODE ANN. § 202.006(a) (West Supp. 2013). A court would likely conclude that this burden on property owners' associations furthers a nonpunitive purpose of ensuring that purchasers of real property have notice of the legal restrictions placed on that property prior to purchasing. Third, you have not directed us to, and we have not independently found, any suggestion that the Legislature intended to punish property owners' associations by enactment of section 202.006. Because it appears that none of the three punishment inquiries are met, a court would likely conclude that Texas Property Code section 202.006 is not a bill of attainder prohibited by the Texas or United States Constitutions.

SUMMARY

Property owners' association covenants are treated as contracts between parties under Texas law and are therefore protected by the Contract Clauses of both the Texas and United States Constitutions. Both the Texas Supreme Court and the United States Supreme Court have determined that the constitutional rule against impairment of contracts may yield to statutes that serve a significant and legitimate public purpose.

A court would likely conclude that Property Code section 202.006 is not a bill of attainder prohibited by the Texas or United States Constitutions.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee

[1] See Letter from Hon. Linda Harper-Brown, House Comm. on Gov't Efficiency & Reform, to Hon. Greg Abbott, Tex. Att'y Gen. at 1-2 (Oct. 28, 2013), http://www.texasattorneygeneral.gov/opin ("Request Letter").