Chelsea Row Owners Association

A path forward for our HOA

Three legal opinions across 35 years agree on how our governing documents work. Here's what they say, what's actually broken, and how we fix it.

Prepared for the Board and Owners · Annual Meeting, May 16
01 — Executive summary

Where we are, in one minute

Our governing documents are not broken. Three different attorneys — in 1990, 2006, and 2025 — have each independently confirmed how the maintenance and insurance allocation works. What's broken is operational: enforcement, owner education, reserves, and engagement. Those are fixable now, without amending the Declaration.

The core insight The Declaration's repair allocation is reconciled by asking why the repair is needed, not what is being repaired. Wear-out is the HOA's responsibility. Damage from fire, hail, wind, or owner negligence is the owner's responsibility. Three legal opinions converge on this reading.

This briefing walks through the legal authority for that reading, what each governing document actually controls, the operational issues we still need to address, and a realistic plan for the May 16 meeting and the year following.

02 — The framework

How the Declaration actually works

For decades, owners and boards have struggled to reconcile what feels like a contradiction in the Declaration: the HOA maintains the exteriors, but owners insure them. Three lawyers have answered this the same way.

The reconciling question
Why does this repair need to be made?
Wear & aging
HOA's responsibility

Under §6.1, the Association maintains, repairs, replaces, and cares for the exterior — including roofs, gutters, downspouts, exterior surfaces, and walks.

  • Roof shingles worn from age
  • Paint deterioration
  • Gutter and downspout replacement
  • Routine exterior surface care
Damage from event
Owner's responsibility

Under §4.12 and §6.2, owners must insure their townhouse and repair damage from fire, hail, wind, or owner negligence.

  • Hail damage to roof
  • Wind damage to siding
  • Fire damage
  • Damage from owner negligence
If the owner refuses to repair Per all three legal opinions, the HOA can perform owner-responsibility repairs and assess the cost back to the owner — backed by the foreclosure remedy in §4.8. Owners can be compelled to use their insurance, or pay out of pocket, but cannot leave their unit unrepaired in a way that affects the rest of the community.
03 — The legal record

Three opinions, 35 years, one conclusion

This isn't a novel interpretation or one attorney's view. The wear/damage doctrine has been confirmed by three different attorneys across more than three decades, each independently reaching the same reading.

1990
John D. Ewald · McMurtry, Ewald & Blackwelder, P.C.
The Association is charged with the responsibility of maintenance, care and replacement of the roofs if they wear out. The Owners are charged with repair or rebuilding the entire Townhouse, or any part of it (including the roof), if damage is caused from fire or other hazards or by the negligence of the Owner. The distinction is based on why the repairs need to be made.
Established the foundational framework. Also confirmed: HOA can do repairs and recover by lawsuit or foreclosure if owner refuses; HOA can buy insurance and bill the owner if owner fails to maintain coverage; owner pays the deductible since owner is responsible for the cost of repair.
2006
Patrice Arnold · Arnold & Associates Attorneys at Law
Almost 16 years later, Mr. Ewald's evaluation is still, in my opinion, the most reasonable interpretation of the shared repair obligations imposed by the Declaration.
In the context of a proposed roof-replacement special assessment, Arnold confirmed Ewald's framework and added: the HOA can build roof reserves under §4.2; can levy a special assessment for wear-out replacement under §4.4 (with 67% approval); and recommended a 110% assessment to cover contingencies plus delinquencies.
2025
Gregory S. Cagle · Cagle Pugh, Ltd. LLP
I reviewed the governing documents, and the 1990 legal opinion of John Ewald and the 2006 legal opinion of Patty Arnold, and I agree with both of them.
Cagle's recent confirmation adds practical clarifications: townhouse owners need an HO-3 policy (not HO-6, which is for condominiums); hail damage is owner-responsibility under §4.12 because extended coverage endorsements include hail; the HOA cannot compel owners to file insurance claims, but can compel them to pay for the repair one way or another.
What this means for our planning The Declaration does not need to be rewritten to fix the maintenance/insurance allocation. Three attorneys have read it the same way. What we need is to operate consistently with the doctrine — verify owner insurance, fund reserves for wear-out replacements, and use the existing enforcement mechanisms when owners are non-compliant.
04 — How our governance works

Three documents, three thresholds

Even with the doctrine settled, it still matters which document controls which kind of change — because the proposed Resolutions revision must respect the limits of the level it's at.

Tier 1
Declaration of Covenants 1986
Property rights, insurance obligations, maintenance allocation, party walls, voting structure
67% of owners + 51% of mortgagees
Tier 2
Bylaws 1983, amd. 1989
Governance procedures, meeting rules, board structure, quorum, officer duties
Majority of a 10% quorum at any meeting
Tier 3
Dedicatory Instruments 2011 — "Resolutions"
Collections, fines, installation rules, records, parking, leasing, insurance verification
Board vote only no membership vote needed
The procedural point Bylaws §11.1 (majority of a 10% quorum) authorizes amendments to the Bylaws and the adoption of Board-level rules. It does not authorize amendments to the Declaration. The Declaration §10.3 has its own process, requiring 67% of owners (31 of 46 lots) and, for material amendments, 51% of First Mortgagees. Any "Revised Resolutions" the Board adopts must stay within the limits of what Board-level rules can do.
05 — What's actually broken

The real issues are operational

With the doctrine settled by three legal opinions, the picture changes. The Declaration isn't broken. What's broken is implementation — the day-to-day operations that make the doctrine work in practice.

01

Owner insurance verification & HO-3 compliance

High priority

Per Cagle's 2025 opinion, owners need HO-3 policies covering both interior and exterior of their dwelling — not HO-6 (which is for condominiums and only covers interiors). Many owners may currently be carrying the wrong type of policy, leaving them exposed and creating gaps when damage occurs.

The Declaration §4.12(a) already requires owners to "furnish annually to the Association proof of insurance coverage." Whether the HOA is actually verifying this annually, and whether the policies presented are HO-3 with adequate replacement-cost coverage, is the question.

Lives in
Already in §4.12(a); enforcement is operational
Fix requires
Board-level insurance verification policy + annual audit
02

Roof reserves for wear-out replacement

High priority

The HOA is responsible for wear-out roof replacements per §6.1. Arnold's 2006 opinion confirmed §4.2 authorizes the HOA to build roof reserves, and §4.4 authorizes a special assessment with 67% owner approval when needed. But if reserves are inadequate, the HOA risks having to do an emergency special assessment under crisis conditions.

A current reserve study would tell us where we stand. The 2006 opinion specifically noted there was no current reserves analysis at that time. Twenty years later, the question is whether one has been done since.

Lives in
Authority exists in §4.2; execution is operational
Fix requires
Commission a professional reserve study
03

Damage-event protocol

Medium priority

When hail, wind, or fire affects multiple adjacent units (the "shared roofline" scenario), the doctrine says it's owners' responsibility. But coordinating a single contractor across multiple owners' insurance claims is operationally complex. Without a written protocol, every event becomes an ad-hoc negotiation.

This is a Board-level rule that can be adopted now: when damage affects shared elements, the HOA coordinates contractor selection and the work, billing each affected owner for their share. This implements the existing doctrine; it doesn't change it.

Lives in
Doctrine is settled; written protocol is missing
Fix requires
Board-adopted damage-response procedure
04

Quorum at 10% & engagement

Medium priority

A 10% quorum (Bylaws §5.5) means just 5 of 46 owners can bind the community. That's poor governance — but raising the threshold without solving the engagement problem just means the HOA can't conduct business.

The fix is paired: raise quorum to 20%, and authorize electronic voting and written-consent procedures so engagement is easier. This is a Bylaws amendment, doable at any meeting with quorum.

Lives in
Bylaws §5.5
Fix requires
Bylaws amendment at May 16 meeting
05

Owner education on the doctrine

Medium priority

Most current owners weren't around for the Ewald, Arnold, or Cagle opinions. The framework that controls every roof, paint, and damage decision is essentially invisible to them. New owners receiving resale certificates may have no idea about HO-3 vs. HO-6 distinctions or what they're actually responsible for.

An owner-facing summary of the wear/damage doctrine — distributed annually, included in resale packets, posted on whatever owner portal exists — would prevent most disputes before they start.

Lives in
No document — communication gap
Fix requires
Plain-language owner guide + annual mailing
06

Meeting agendas and notice

Lower priority

Texas Property Code §209.0051 requires notice for board meetings, and an agenda is straightforward best practice. Cheap to adopt as Board policy with no membership vote.

Lives in
Board procedure (no document)
Fix requires
Board resolution adopting an agenda policy
06 — The recommendation

Don't amend what works. Operate it better.

The original framing was "the Declaration has structural gaps that need amendment." With three legal opinions confirming the doctrine, that framing is wrong. The Declaration is workable. The work is at Tier 3 — Board-adopted policies and operational discipline.

What we want to avoid

Restating the Declaration

  • Months of attorney drafting
  • Need 31 owner signatures
  • Need 51% of mortgagees
  • Risk: produces nothing materially different from current doctrine
  • Cost: $5–15k+ in attorney fees
What we should do

Operationalize the existing doctrine

  • Codify wear/damage doctrine in Resolutions
  • Insurance verification protocol (HO-3, replacement cost)
  • Reserve study + funding plan
  • Damage-response procedure
  • Owner education materials

Tier 3 — Board-level rules (act now)

Most of the work happens here. None of this requires a membership vote — the Board can adopt all of these:

  • Insurance Verification Policy — annual proof-of-insurance audit, requirement that policies be HO-3 with replacement-cost coverage matching §4.12, consequences for non-compliance (HOA buys policy and bills owner, per §4.12(a))
  • Maintenance & Damage-Response Resolution — codifies the wear/damage doctrine in plain language, defines HOA-coordinated repair process when damage affects shared elements, references the three legal opinions as supporting authority
  • Reserves Policy — commissions a professional reserve study, sets target funding levels for the roof reserve and other capital items, defines how reserves are reviewed annually
  • Agenda & Notice Policy — written agendas required at least 10 days before meetings, posting requirements, electronic distribution where possible
  • Owner Doctrine Guide — short plain-language explanation of wear vs. damage, HO-3 vs. HO-6, what owners are responsible for, distributed annually and in resale packets

Tier 2 — Bylaws amendments (May 16)

Doable with majority of a 10% quorum at the annual meeting:

  • Raise quorum to 20% (with grace mechanism for failed-quorum meetings)
  • Authorize electronic voting and written-consent procedures
  • Require agendas distributed before meetings
  • Modernize meeting notice provisions for email delivery

Tier 1 — Declaration (probably leave alone)

Given that three attorneys agree the existing Declaration works as intended, a full restatement is hard to justify. There may eventually be cases for narrow amendments (modernizing language around technology, electronic notice, etc.), but those are not urgent.

The Board should hold open the option of a future targeted amendment if the wear/damage doctrine ever becomes contested — but that's a problem for another year. Do not restate the Declaration as part of the May 16 plan.

07 — At the meeting

What May 16 should accomplish

The annual meeting is where we present the doctrine clearly, vote on the Bylaws amendments, and announce the Tier 3 work the Board is authorizing.

Realistic agenda

  1. Standing business — financials, board elections if applicable
  2. The doctrine, explained — present the wear/damage framework with reference to the three legal opinions; this is the single most important communication moment of the year
  3. HO-3 insurance review — explain why owners may need to update their policies, what HO-3 is, what coverage amount they need under §4.12
  4. Bylaws amendments — vote on quorum increase, e-voting authorization, agenda requirement
  5. Board's Tier 3 plan — present the policies the Board will adopt over the summer (insurance verification, reserves, damage-response, owner guide)
  6. Q&A and discussion — open floor

What we should not try to do

08 — The plan

12-month roadmap

Now → May 16 ~3 weeks
Board action

Prepare the meeting

  • Adopt agenda and notice policy as a Board resolution
  • Draft the Bylaws amendments to be voted May 16
  • Draft a short doctrine summary for owner mailing
  • Send proper notice and agenda to all owners
  • Solicit reserve-study quotes (so we can announce a vendor at the meeting)
May 16 Annual meeting
Bylaws vote

Educate, vote, announce

  • Present the wear/damage doctrine with reference to the three legal opinions
  • Vote on Bylaws amendments (quorum, e-voting, agendas)
  • Announce the Tier 3 work plan and timeline
  • Open Q&A
Jun → Jul Months 1–2
Operational

Reserve study and insurance audit

  • Commission and complete the reserve study
  • Begin annual insurance verification cycle, identifying owners with non-HO-3 policies
  • Notify non-compliant owners with 60-day cure period
  • Distribute owner doctrine guide
Aug → Oct Months 3–5
Board action

Adopt the Tier 3 policy package

  • Insurance Verification Policy
  • Maintenance & Damage-Response Resolution
  • Reserves Policy (informed by the reserve study)
  • Record updated dedicatory instruments with Travis County under §202.006
Nov → Apr Months 6–11
Operational

Implementation and steady-state

  • Apply enforcement protocol to non-compliant owners (HOA-purchased coverage, billed back)
  • Begin reserve funding to study-recommended levels
  • Test the damage-response procedure if needed
  • Year-2 annual meeting: report results, calibrate
09 — Questions

FAQ

I thought the Declaration had a "gap" between maintenance and insurance — isn't that broken?
It looks like a gap until you understand the wear/damage doctrine. Three attorneys (1990, 2006, 2025) have confirmed the Declaration is internally consistent: HOA handles wear-out, owners handle damage from events. The "gap" is really a division of responsibility based on cause. With proper insurance verification and reserves, the system works as designed.
What's the difference between HO-3 and HO-6, and why does it matter?
HO-6 is a condominium policy — it covers only the interior of a unit because the condo association insures the structure. HO-3 is a homeowner's policy that covers both the interior AND exterior of a dwelling. Chelsea Row is not a condominium; we're a townhouse community where each owner owns a lot. Owners need HO-3 coverage equal to the replacement cost of their entire townhouse, including the exterior. If you're carrying HO-6, you're underinsured under §4.12.
What happens if I don't carry the right insurance?
Per §4.12(a), the HOA can buy coverage for your unit and bill you for the premium as part of your assessments — collectible like any other assessment, with foreclosure as a final remedy. Per Cagle's 2025 opinion, if there's damage that should have been covered by insurance and you didn't have insurance, you're personally liable for the cost of repair. Either way, you end up paying. Maintaining proper coverage protects you.
Hail damage to my roof — who pays?
You do, through your insurance. Per Cagle's 2025 opinion: hail is covered by the standard extended coverage endorsement that §4.12 requires you to carry. The HOA does not pay for hail damage repair, even though the HOA maintains the roof for wear-out. This is the wear/damage doctrine in action: you insured it; you repair it.
Can the HOA force me to file an insurance claim?
No. Per Cagle 2025: "the Association does not have the authority to force owners to use their insurance to cover the cost of repair." But the HOA can perform the repair and bill you for the cost. You can pay out of pocket if you prefer, but you cannot leave damage unrepaired.
What about my deductible if a claim is paid?
Per Ewald 1990: the owner pays the deductible. The owner is responsible for the cost of repair; insurance just covers most of it. The deductible is part of the owner's repair cost.
If insurance overpays the actual repair cost, who keeps the excess?
Per Ewald 1990: the owner is responsible for and pays the insurance, so the owner gets to keep the excess.
What if my roof needs replacement because it's worn out — how does that get paid for?
That's the HOA's responsibility under §6.1. Funded either by reserves (which is why a reserve study matters) or by a special assessment under §4.4 (which requires 67% owner approval, applied uniformly to all lots per §4.6). If you replaced your roof recently due to damage and a wear-out special assessment is later proposed, Arnold's 2006 opinion outlined a way to credit you: a roofing inspector's certification that your roof has 10+ years of remaining life can satisfy your share of the assessment.
Why don't we just rewrite the Declaration to make this clearer?
Three reasons. First, three attorneys agree the existing Declaration works as intended — there's nothing structurally broken to fix. Second, amendment requires 67% of owners (31 of 46) plus 51% of mortgagees, which is a months-long signature campaign. Third, what we'd produce after all that effort wouldn't materially differ from the existing doctrine. Better to spend the time and money on the operational improvements that actually solve owners' problems.
Is the proposed "Revised Resolutions" document a good idea?
Yes, with proper scope. A revised dedicatory instruments package codifying the wear/damage doctrine, insurance verification protocol, damage-response procedure, and reserve policy is exactly the right Tier 3 work. The Board has authority to adopt it under Bylaws §8.1 and Texas Property Code §202.006. What it should NOT do is purport to amend the Declaration — that's beyond what Board-level rules can accomplish.
What's the fastest way for an owner to know they're compliant?
Three things: (1) verify your policy is HO-3, not HO-6; (2) verify the dwelling coverage equals current replacement cost of your townhouse (your insurer can run a replacement-cost estimate); (3) provide annual proof of insurance to the management company. The Board will be standing up an annual verification process this summer.