ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

December 9,2004 

The Honorable Fred Hill 

Chair, Committee on Local Government 

Ways and Means 

Texas House of Representatives 

Post Office Box 2910 

Austin, Texas 78768.2910 

Opinion No. GA-0279 

Re: Whether the placement of one-party foreclosable 

contractual liens on landby a developer that supersede 

the homestead rights created in article XVI, section 

50 of the Texas Constitution violates the Texas 

Homestead Act (RQ-0236-GA) 

Dear Representative Hill: 

You have asked a specific question: “Whether the placement of one-party foreclosable 

contractual liens on the land by the developer that supersede the homestead rights created in Article 

XVI, Section 50 of the Texas Constitution violate[s] the Texas Homestead Act.“’ 

I. Homestead Protection in the Texas Constitution and Statutes 

We begin by briefly reviewing Texas homestead protections from forced sale. Texas is 

credited with enacting the first homestead law in 1839. See Estate ofJohnson v. Comm ‘r, 718 F.2d 

1303, 1307 n.13 (5th Cir. 1983) (citing 1839 Laws of the Republic of Texas). Today, Texas’ 

homestead protection from creditors’ liens is found principally in article XVI, section 50 of the 

Texas Constitution and chapter 41 of the Property Code. See TEX. CONST. art. XVI, 5 50; TEX. 

PROP. CODE ANN. $5 41.001-,024 (Vernon 2000 & Supp. 2004-05); see&o TEX. CONST. art. XVI, 

@ 51 (defining homestead), 52 (descent and distribution). Article XVI, section 50 not only protects 

a homestead from forced sale by creditors but provides that “[n]o mortgage, trust deed, or other lien 

on the homestead shall ever be valid unless it secures a debt described by this section.” TEX: CONST. 

art. XVI, 4 50(c). Article XVI, section 50 expressly enumerates eight exceptions to homestead 

protection from forced sale: (1) purchase money security, (2) taxes due on the homestead, (3) certain 

owelty on partition, ,(4) refinancing of certain liens, (5) security for improvements, (6) certain 

circumscribed extensions of credit in the nature of an equity loan, (7) reverse mortgages, and (8) 

special financing concerning manufactured homes. Id. § SO(a)(l)-(S). 

‘Letter from Honorable Fred Hill, Chair, Committee on Local Government Ways and Means, Texas House of 

Representatives, to Honorable Greg Abbott, Texas Attorney General (June 9,2004)[hereinafter Request Letter]; Letter 

from Honorable Fred Hill, Chair, Committee on Local Government Ways and Means, Texas House of Representatives, 

toNancy Fuller, Chair, Opinion Committee, Office ofAttomeyGenera1 (July 19,2004) [hereinafter Supplemental Letter] 

(both letters on tile with Opinion Committee, also available af http://www.oag.state.6i.us). 
The Honorable Fred Hill - Page 2 (GA-0279) 

Section 41.001 of the Property Code reiterates exceptions for homestead and burial plots. 

TEX. PROP. CODE ANN. 5 41.001(a)-@) (V emon Supp. 2004-05) (listing seven of the eight 

constitutional exceptions). The remainder ofchapter 41 concerns homestead issues not pertinent to 

your inquiry.* 

II. Znwood North Homeowners’ Association. Inc. v. Harris 

The Texas Supreme Court addressed in 1987 whether Texas homestead laws preclude 

foreclosure of a developer’s lien for homeowners’ association fees and assessments. See generally 

Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632 (Tex. 1987). In Inwood, a 

subdivision developer had filed a declaration of restrictions and covenants in local real property 

records reciting that all lots in the subdivision were impressed with a covenant to pay a maintenance 

fee or other assessment to a homeowners’ association or similar entity, that such covenants run with 

the land, and that such covenants were secured by a lien. See Znwood, 736 S.W.2d at 633. 

Individuals who thereafter purchased property in the subdivision received a deed referencing the 

covenants to pay the fees and the lien against the property to secure payment. See id. The 

subdivision’s homeowners’ association sued to recover delinquent maintenance fees from 

homeowners and sought foreclosure of liens securing the fees. Id. at 634. 

The court in Inwood acknowledged that security for homeowners’ association fees was not 

a true vendor’s lien, but was instead more in the nature of a contractual lien, not among the express 

constitutional exceptions to homestead protection. See id. The court observed that “[hlomestead 

rights, however, may not be construed so as to avoid or destroy pre-existing rights,” and that “[i]t 

has long been held that an encumbrance existing against property cannot be affected by the 

subsequent impression of the homestead exception on the land.” Id. at 635. 

The court in Znwood held that an owner is free to impress property with a covenant running 

with the land, and that a “developer of the subdivision, as owner of all land subject to the [developer’s] 

declaration, is entitled to create liens on his land to secure the payment of assessments.” Id. at 634. 

The court further determined that subsequent purchasers were bound by references in their deeds to 

the covenants as well aa by all instruments in a particular purchaser’s chain of title. See id. at 635. 

Because the developer had placed the restrictions on the land before it became the homestead ofthe 

homeowners, the court concluded that “the homeowners were subject to the liens in question and an 

order of foreclosure would have been proper.” Id. at 635-36. 

The court in Znwood stated that its decision was reinforced by the legal principle that “[a] 

homestead right in real property cannot rise any higher than the right, title or interest acquired by the 

homestead claimant.” Id. at 636. The court determined that the purchase of a lot in the subdivision 

carried with it “as an inherent part of the property interest, the obligation to pay association fees for 

‘See TEX. PROP. CODE ANN. $5 41.002 (Vemon 2000) (deftig the extent of urban and ma1 homesteads), 

41.003 (effect oftemporary renting), 41.004 (abandonment), 41.005 (design&n ofhomestead), 41.0051 (advertising 

regarding taxrefunds), 41.006 (limitations on certain sales), 41.007 (home improvement contract requirements), 4 1.008 

(federal law conflicts), 41.021 (designation ofhomestead in aid ofjudgment), 41.022 (designation procedures), 41.023 

(designation by court appointed commissioner), 41.024 (sale of excess). 
The Honorable Fred Hill - Page 3 (GA-0279) 

maintenance and ownership ofcommon facilities and services,” along with the concomitant remedy 

of foreclosure for failure to pay those fees. Id. The court concluded that constitutional homestead 

rights “will not operate to circumvent an inherent characteristic of the property acquired” and that 

the homeowners’ association was entitled to foreclose its contractual lien on the houses ofdelinquent 

homeowners. Id. 

III. Post-Znwood Develonments 

In 2001, the 77th Legislature enacted the Texas Residential Property Owners Protection 

Act (the “Act”). See Act ofMay27,2001,77thLeg., R.S., ch. 926,s 1,200l Tex. Gen. Laws 1857 

(adding chapter 209 to the Property Code, codified at TEX. PROP. CODE ANN. $9 209.001- 

.01 1 (Vernon Supp. 2004-05)). The Act was added “to provide guidelines for the operations of 

[community] associations a well as specific protections for Texas homeowners living in associationmanaged communities.” SENATE COMM. ON STATE AFFAIRS, BILL ANALYSIS, Tex. Comm. 

Substitute S.B. 507,77th Leg., R.S. (2001) (enrolled version). The Act gives owners of property a 

number ofprocedural protections, including the right to redeem property following foreclosure. See 

TEX. PROP. CODE ANN. $5 209.006-.Oll (Vernon Supp. 2004-05). The Act does not, however, 

change the essential holdings in Znwood that (1) a property owner such as a developer may impress 

the property with a covenant to pay association maintenance fees, enforceable by foreclosure, by 

tiling a declaration of covenants and restrictions in the deed records, (2) a subsequent purchaser with 

notice of the declaration in the purchaser’s deed and chain of title is bound by the declaration, and 

(3) the subsequent purchaser’s rights that arise upon purchase do not circumvent the remedy of 

enforcing the covenants by foreclosure. 

Recently, the Texas Supreme Court reiterated Znwood’s holding: 

ln Znwood, we considered whether the homestead laws of Texas 

protect a homeowner against foreclosure for failure to pay 

homeowners association assessments. As a general rule, ahomestead 

is protected against the debts of those who live in the homestead. 

However, the deed restrictions for the subdivision included a 

vendor’s lien permitting foreclosure on the homestead for failure to 

pay the fee assessment. Because the property owner had notice when 

purchasing the property that a lien attached to the land, we held that 

foreclosure was permissible. 

Brooks v. NortJiglen Ass ‘n, 141 S.W.3d 158,170 (Tex. 2004) (citations omitted). The court applied 

the holding in Znwood to particular deed restrictions and concluded that because they did not give 

notice that late fees might be imposed on assessments, such fees were not enforceable by foreclosure. 

Zd. at 170-7 1. 

IV. Discussion 

The question, as specifically phrased, is “[wlhether the placement of one-party foreclosable 

contractual liens on the land by the developer that supersede the homestead rights created in Article 
The Honorable Fred Hill - Page 4 (GA-0279) 

XVI, Section 50 of the Texas Constitution violate[s] the Texas Homestead Act.” Supplemental 

Letter, supra note 1, at 1. Although we did not locate the phrase “one-party foreclosable contractual 

liens” in the constitution, statutes, or case law, we assume you refer to a developer’s unilateral 

action, as in Znwood, of encumbering property by filing a declaration of restrictions and covenants, 

enforceable by foreclosure. Likewise, by “Texas Homestead Act,” we assume you mean homestead 

protection from forced sale by creditors in the Texas Constitution and the Property Code. See 

ZnwoodN. Homeowners’Ass’n, Inc. Y. Harris, 707 S.W.2d 127,129 (Tex. App.-Houston [lst Dist.] 

1986) (referring to article XVI, section 50 ofthe Texas Constitution as the “Homestead Act”), rev’d 

on other grounds, 736 S.W.2d 632 (Tex. 1987); United States Y. West, 22 F.3d 586,598 n.33 (5th 

Cir. 1994) (equating the protections in section 41.001 of the Texas Property Code with the “Texas 

Homestead Act”). Consequently, we address whether a property owner who unilaterally files a 

declaration ofcovenants and restrictions, enforceable by foreclosure, violates subsequent purchasers’ 

homestead rights under article XVI, section 50 of the Texas Constitution and section 41.001 of the 

Property Code. 

The Texas Supreme Court in Znwood determined that a developer may encumber real 

property with a secured covenant running with the land by filing a declaration of restrictions and 

covenants and that such covenants bind subsequent purchasers with notice. SeeZnwood, 736 S.W.2d 

at 635-36. Because the developer’s encumbrance came into being before the purchasers acquired 

constitutional and statutory homestead rights in the property, the lien could be enforced by 

foreclosure. See id. The court’s holding in Znwood, that “[hlomestead rights may not be 

construed so as to avoid or destroy pre-existing rights,” applied to homestead rights whether 

under the Texas Constitution or chapter 41 ofthe Property Code. See id. at 635; see also id. at 637 

(Mauzy, .I., dissenting, noting that “the legislature has tracked the Constitution” in section 41 .OOl(a)- 

(b) of the Property Code). To answer your question, underlnwood and its progeny, a developer may 

unilaterally encumber real property with a covenant running with the land, enforceable through 

foreclosure, without violating the constitutional and statutory homestead rights of subsequent 

purchasers with notice. Of course, whether particular covenants are enforceable by foreclosure 

depends on the particular instruments and circumstances involved. See, e.g., Brooks, 141 S.W.3d 

at 170-71 (holding that because particular deed restrictions did not give notice of certain late fees, 

foreclosure was an inappropriate remedy for collecting them); Tex. Att’y Gen. Op. No. GA-0237 

(2004) at 6-8 (determining that an assessment within the scope of a statutory lien could be enforced 

by foreclosure only if the lien predated the attachment of a homestead interest); Tex. Att’y Gen. 

LO-97-01 9, at 3-4 (determining that a property owners association’s right to foreclose on homestead 

property for certain costs depends on whether the lien for such costs (1) attached to the property prior 

to the homestead right and (2) resulted from a restriction that runs with the land). 

We have received extensive briefing that takes issue with the Texas Supreme Court’s analysis 

and reasoning in Znwood and recommends “‘repeal’ of the Inwood law.“’ That may be good policy 

and, as such, would be appropriate for the legislature to address or for the Texas Supreme Court to 

consider. The attorney general’s constitutional duty to render legal advice, however, does not 

include the authority to legislate or to establish bindingjudicial precedent. See TEX. CONST. art. IV, 

‘See Brief from Harvella Jones, Texas Homeo\mers’ Advocate Group, to Nancy Fuller, Chair, Opinion 

Committee, Office of Attorney General, at 6 (July 20,2004) (on file with opinion Committee). 
The Honorable Fred Hill - Page 5 (GA-0279) 

5 22; TEX. GOV’T CODE ANN. 5 402.042 (Vernon 1998); see also Bullock Y. Enserch Exploration, 

Inc., 614 S.W.2d 215,21X,220 (Tex. Civ. App.-Austin 1981, writ refdn.r.e.) (an attorney general 

opinion does not have the authority of a statute), cert. denied, 455 U.S. 946 (1982); Bass v. Aransas 

County Zndep. Sch. Dist., 389 S.W.2d 165, 176 (Tex. Civ. App.-Corpus Christi 1965, writ refd 

n.r.e.) (attorney general opinion is not bindingjudicial precedent). See also Holmes Y. Morales, 924 

S.W.2d 920,924 (Tex. 1996) (attorney general opinion is not binding on the courts). Consequently, 

we may advise only about the current status of the law, which is that the Texas Supreme Court’s 

opinion in Znwood, as recently reaffirmed in Brooks, is dispositive of your question. See Brooks, 

141 S.W.3d at 170; Znwood, 736 S.W.2d at 634-36. 
The Honorable Fred Hill - Page 6 (GA-0279) 

SUMMARY 

A property owner may encumber real property with a 

covenant running with the land, which, depending on the particular 

instruments and circumstances involved, may be enforced by 

foreclosure without violating subsequent purchasers’ constitutional 

and statutory homestead rights. 

Very tr$y yours, 

BARRY R. MCBEE 

First Assistant Attorney General 

DON R. WILLETT 

Deputy Attorney General for Legal Counsel 

NANCY S. FULLER 

Chair, Opinion Committee 

William A. Hill 

Assistant Attorney General, Opinion Committee