In Harris County Flood Control District v. Glenbrook Patiohome Owners Ass'n, 933 S.W.2d 570 (Tex. App. 1996), the First District Court of Appeals in Texas held that the right to collect unpaid assessment fees for the maintenance and improvement of the homes and the common areas within a patiohome community constituted property rights in favor of the patiohome owners' association. 933 S.W.2d at 575. As a condition for purchasing a residence, the declaration of covenants, conditions, and restrictions required individual owners to pay an annual assessment fee to the owners' association.
Prior to suit, the Flood Control District acquired twenty homes from the individual unit owners for the purpose of a road improvement project.
The trial court ruled in favor of the owners' association.
On appeal, the district court found that the covenants contained within the declaration ran with the condemned patio homes since the "covenant to pay maintenance assessments for the purpose of repairing and improving the common areas and the recreational facilities touches and concerns the land." Id. at 574-75.
Moreover, the declaration "explicitly bound the purchases and their assigns" to pay such fees, and, thus, "evidenced an intent that the restrictions run with the land." Id. at 575.
In determining whether such interest constitutes a compensable property interest, the court focused on two earlier decisions which held that a restrictive covenant granting a reversionary interest in land constituted a compensable property interest "if damaged or extinguished in a condemnation proceeding," id. at 576. (citing City of Houston v. McCarthy, 464 S.W.2d 381, 387 (Tex. Civ. App. 1971)), and that the obligation to pay neighborhood assessment fees creates an inherent property interest possessed by each homeowner in the subdivision. 933 S.W.2d at 576-77 (citing Inwood North Homeowners' Ass'n v. Harris, 736 S.W.2d 632, 636 (Tex. 1987)).
Based on McCarthy and Inwood, as well as the provision contained in the declaration, the court held that "the right to require property owners to pay assessment fees is an inherent property right owned by the remaining patiohome owners, resting in the control of and right of enforcement by Glenbrook," Harris County Flood Control District, 933 S.W.2d at 577, and, therefore, concluded that this right was compensable upon condemnation of the patio homes subject to the assessment fees. Id. at 579.