A Marine Corps veteran sued by his Cypress-area homeowners association over a 20-foot flag pole in his backyard is claiming victory as a bill protecting his display of patriotism awaits Gov. Rick Perry's signature.

The bill, spurred by the lawsuit against former drill sergeant Mike Merola, is one of several on the governor's desk that would restrict the powers of homeowners associations. Others would increase transparency, bolster owners' voting rights and prevent the groups from banning solar panels and small religious displays.

The most important reforms, real estate attorney Richard Weaver said, are those dealing with foreclosure and dues, including one that would introduce a "priority of payments" to ensure that payments from owners who have fallen into arrears would be applied to the past-due amounts first.

"In the past, the HOA might have used homeowner funds to pay attorneys instead of delinquent fees and still try to foreclose," said Weaver, who has represented both HOAs and homeowners for seven years. "By paying the delinquent fees first, a homeowner may avoid foreclosure."

HOAs also would be required to provide better notice before sending an owner's account to a collection agency and before foreclosing, and would be forced to let homeowners pay their annual dues in installments over at least three months.

'Not enough'

Weaver and real estate lawyer David Kahne, who has represented homeowners in suits against HOAs for more than a decade, said the reforms, though an improvement, are insufficient.

"The reforms that appear likely to pass are clearly not enough. Homeowners need more protection," Kahne said.

"The Legislature has paid an increasing amount of attention to those homeowner associations that have been abusing their powers," he continued. "By setting limits on some of those powers, the Legislature is directly protecting homeowners and sending a signal to all associations that they need to be more respectful of the rights of homeowners."

Real estate attorneyBruce Schimmel, who has represented HOAs and homeowners for three decades, disagreed, saying lawmakers had "gone overboard," though some proposals would clarify years-old legal questions.

"When the Legislature hampers associations' collection of their fees and requires them to give additional notices and go to court, it adds layers of procedures that are very costly and very time-consuming and which, ultimately, end up being paid for by the delinquent owner," Schimmel said.

Sandy Denton, chairman of Texas Community Association Advocates, a lobby group for HOAs, said the changes could cause some associations to raise their fees.

"If the association could not collect its third-party costs ... the rest of the neighbors get stuck paying that bill, and that's not fair to the 95 percent of people who pay their bills on time," she said.

Still, Denton said her group supports most of the reforms.

"For the most part, people who are operating within standard best practices, the implications to them are going to be far less than those who are operating outside the norm," she said.

Sen. Royce West, D-Dallas, whose interest in HOA issues began five years ago when his office was flooded with homeowner complaints, said the bills are sufficient to curb HOA abuses.

"We truly have provided a more democratic process for homeowners to govern" HOAs, West said. "What we have to do is just monitor the implementation of the reforms … to determine whether there were any gaps in what we did."

Merola's bill was authored by Rep. Dwayne Bohac, R-Houston, and would protect the right of homeowners to display the flag of the United States, the state of Texas or any military branch.

HOAs would be able to govern a flagpole's size and location, the size of the flag and other details, but the bill would ensure residents could install a flagpole up to 20 feet high.

"As far as I'm concerned, I've won," Merola said.

Bohac called the bill a common-sense change.

"While I understand the need for homeowners associations to maintain some type of continuity, I'm shocked that neighborhoods would not allow homeowners to install a flagpole with a U.S. flag," Bohac said.

Lawsuit ongoing

Merola's HOA, the Lakeland Village Community Association, has said the flag can be flown on a 6-foot pole mounted on a home, as bylaws stipulate.

It is unclear whether the HOA will dismiss its suit if the bill becomes law.

"If the law is passed, it was not in effect at the time the Merolas were in violation of the deed restrictions," the HOA's lawyer, Nina Tran, said. "It's not going to affect our standing in the lawsuit."

Merola's attorney, Lee Thweatt, said he is drafting a motion to dismiss the suit.

"The law specifically contemplates a freestanding, 20-foot flagpole height, and that's exactly what Mr. and Mrs. Merola have in their backyard," he said.

The suit seeks $10-per-day fines as long as the pole is standing, an order to remove it and payment of attorneys' fees, which totaled $19,445 as of April 1, Thweatt said.

Victory or not, Merola said he plans eventually to move out of the subdivision.

mike.morris@chron.com