73R6234 LJD-F
By Eckels, Carona H.B. No. 156
Substitute the following for H.B. No. 156:
By Corte C.S.H.B. No. 156
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the adoption of the Uniform Condominium Act.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 7, Property Code, is amended by adding
1-5 Chapter 82 to read as follows:
1-6 CHAPTER 82. UNIFORM CONDOMINIUM ACT
1-7 SUBCHAPTER A. GENERAL PROVISIONS
1-8 Sec. 82.001. SHORT TITLE. This chapter may be cited as the
1-9 Uniform Condominium Act.
1-10 Sec. 82.002. APPLICABILITY. (a) This chapter applies to
1-11 all commercial, industrial, residential, and other types of
1-12 condominiums in this state for which the declaration is recorded on
1-13 or after January 1, 1994. A condominium for which the declaration
1-14 was recorded before January 1, 1994, may be governed exclusively
1-15 under this chapter if either:
1-16 (1) the owners of units vote to amend the declaration,
1-17 in accordance with the amendment process authorized by the
1-18 declaration, to have this chapter apply and that amendment is filed
1-19 for record in the condominium records in each county in which the
1-20 condominium is located; or
1-21 (2) a declaration or amendment of declaration was
1-22 recorded before January 1, 1994, and the declaration or amendment
1-23 states that this chapter will apply in its entirety on January 1,
1-24 1994.
2-1 (b) An amendment to a declaration under Subsection (a)(1)
2-2 that implements a vote of the unit owners to be governed by this
2-3 chapter may not affect the rights of a declarant or impose duties
2-4 on a declarant that are greater than or in addition to the
2-5 declarant's duties immediately before the date of the vote or
2-6 amendment.
2-7 (c) This section and the following sections apply to a
2-8 condominium in this state for which the declaration was recorded
2-9 before January 1, 1994: Sections 82.005, 82.006, 82.007, 82.053,
2-10 82.054, 82.102(a)(1)-(7) and (12)-(22), 82.111, 82.113, 82.114,
2-11 82.116, 82.157, and 82.161. The definitions prescribed by Section
2-12 82.003 apply to a condominium in this state for which the
2-13 declaration was recorded before January 1, 1994, to the extent the
2-14 definitions do not conflict with the declaration. The sections
2-15 listed in this subsection apply only with respect to events and
2-16 circumstances occurring on or after January 1, 1994, and do not
2-17 invalidate existing provisions of the declaration, bylaws, or plats
2-18 or plans of a condominium for which the declaration was recorded
2-19 before January 1, 1994.
2-20 (d) Chapter 81 does not apply to a condominium for which the
2-21 declaration was recorded on or after January 1, 1994, and does not
2-22 invalidate any amendment to the declaration, bylaws, or plats and
2-23 plans of any condominium for which the declaration was recorded
2-24 before January 1, 1994, if the amendment would be permitted by this
2-25 chapter. The amendment must be adopted in conformity with the
2-26 procedures and requirements specified by those instruments and by
2-27 Chapter 81. If the amendment grants to a person a right, power, or
3-1 privilege permitted by this chapter, all correlative obligations,
3-2 liabilities, and restrictions prescribed by this chapter also apply
3-3 to that person.
3-4 Sec. 82.003. DEFINITIONS. (a) In this chapter:
3-5 (1) "Affiliate of a declarant" means any person who
3-6 controls, is controlled by, or is under common control with a
3-7 declarant. A person "controls" a declarant if the person is a
3-8 general partner, officer, director, or employer of the declarant;
3-9 directly or indirectly or acting in concert with one or more other
3-10 persons, or through one or more subsidiaries, owns, controls, holds
3-11 with power to vote or holds proxies representing more than 20
3-12 percent of the voting interests in the declarant; determines in any
3-13 manner the election of a majority of the directors of the
3-14 declarant; or has contributed more than 20 percent of the capital
3-15 of the declarant. A person "is controlled by" a declarant if the
3-16 declarant is a general partner, officer, director, or employer of
3-17 the person; directly or indirectly or acting in concert with one or
3-18 more other persons, or through one or more subsidiaries, owns,
3-19 controls, holds with power to vote, or holds proxies representing
3-20 more than 20 percent of the voting interests in the person;
3-21 determines in any manner the election of a majority of the
3-22 directors of the person; or has contributed more than 20 percent of
3-23 the capital of the person.
3-24 (2) "Allocated interests" means the undivided interest
3-25 in the common elements, the common expense liability, and votes in
3-26 the association allocated to each unit.
3-27 (3) "Association" means the unit owners' association
4-1 organized under Section 82.101.
4-2 (4) "Board" means the board of directors or the body,
4-3 regardless of name, designated to act on behalf of the association.
4-4 (5) "Common elements" means all portions of a
4-5 condominium other than the units and includes both general and
4-6 limited common elements.
4-7 (6) "Common expense liability" means the liability for
4-8 common expenses allocated to each unit.
4-9 (7) "Common expenses" means expenditures made by or
4-10 financial liabilities of the association, together with any
4-11 allocations to reserves.
4-12 (8) "Condominium" means a form of real property with
4-13 portions of the real property designated for separate ownership or
4-14 occupancy, and the remainder of the real property designated for
4-15 common ownership or occupancy solely by the owners of those
4-16 portions. Real property is a condominium only if one or more of
4-17 the common elements are directly owned in undivided interests by
4-18 the unit owners. Real property is not a condominium if all of the
4-19 common elements are owned by a legal entity separate from the unit
4-20 owners, such as a corporation, even if the separate legal entity is
4-21 owned by the unit owners.
4-22 (9) "Conversion building" means a building that at any
4-23 time before creation of the condominium was occupied wholly or
4-24 partially by persons other than purchasers and persons who occupy
4-25 with the consent of purchasers.
4-26 (10) "Declarant" means a person, or group of persons
4-27 acting in concert, who:
5-1 (A) as part of a common promotional plan, offers
5-2 to dispose of the person's interest in a unit not previously
5-3 disposed of; or
5-4 (B) reserves or succeeds to any special
5-5 declarant right.
5-6 (11) "Declaration" means a recorded instrument,
5-7 however denominated, that creates a condominium, and any recorded
5-8 amendment to that instrument.
5-9 (12) "Development rights" means a right or combination
5-10 of rights reserved by a declarant in the declaration to:
5-11 (A) add real property to a condominium;
5-12 (B) create units, common elements, or limited
5-13 common elements within a condominium;
5-14 (C) subdivide units or convert units into common
5-15 elements; or
5-16 (D) withdraw real property from a condominium.
5-17 (13) "Disposition" means a voluntary transfer to a
5-18 purchaser of any legal or equitable interest in a unit but does not
5-19 include the transfer or release of a security interest.
5-20 (14) "General common elements" means common elements
5-21 that are not limited common elements.
5-22 (15) "Identifying number" means a symbol or address
5-23 that identifies only one unit in a condominium.
5-24 (16) "Leasehold condominium" means a condominium in
5-25 which all or a portion of the real property is subject to a lease
5-26 the expiration or termination of which will terminate the
5-27 condominium or reduce its size.
6-1 (17) "Limited common element" means a portion of the
6-2 common elements allocated by the declaration or by operation of
6-3 Section 82.052 for the exclusive use of one or more but less than
6-4 all of the units.
6-5 (18) "Plan" means a dimensional drawing that is
6-6 recordable in the real property records or the condominium plat
6-7 records and that horizontally and vertically identifies or
6-8 describes units and common elements that are contained in
6-9 buildings.
6-10 (19) "Plat" means a survey recordable in the real
6-11 property records or the condominium plat records and containing the
6-12 information required by Section 82.059. As used in this chapter,
6-13 "plat" does not have the same meaning as "plat" in Chapter 212 or
6-14 232, Local Government Code, or other statutes dealing with
6-15 municipal or county regulation of property development.
6-16 (20) "Purchaser" means a person, other than a
6-17 declarant, who by means of a voluntary transfer acquires a legal or
6-18 equitable interest in a unit other than a leasehold interest or as
6-19 security for an obligation.
6-20 (21) "Residential purposes" means recreational or
6-21 dwelling purposes, or both.
6-22 (22) "Special declarant rights" means rights reserved
6-23 for the benefit of a declarant to:
6-24 (A) complete improvements indicated on plats and
6-25 plans filed with the declaration;
6-26 (B) exercise any development right;
6-27 (C) make the condominium part of a larger
7-1 condominium or a planned community;
7-2 (D) maintain sales, management, and leasing
7-3 offices, signs advertising the condominium, and models;
7-4 (E) use easements through the common elements
7-5 for the purpose of making improvements within the condominium or
7-6 within real property that may be added to the condominium; or
7-7 (F) appoint or remove any officer or board
7-8 member of the association during any period of declarant control.
7-9 (23) "Unit" means a physical portion of the
7-10 condominium designated for separate ownership or occupancy, the
7-11 boundaries of which are described by the declaration.
7-12 (24) "Unit owner" means a declarant or other person
7-13 who owns a unit, or a lessee of a unit in a leasehold condominium
7-14 whose lease expires simultaneously with any lease the expiration or
7-15 termination of which will remove the unit from the condominium, but
7-16 does not include a person having an interest in a unit solely as
7-17 security for an obligation.
7-18 (b) Unless otherwise provided by the declaration or bylaws,
7-19 a term defined by Subsection (a) has the same meaning if used in a
7-20 declaration or bylaws.
7-21 Sec. 82.004. VARIATION BY AGREEMENT. Except as expressly
7-22 provided by this chapter, provisions of this chapter may not be
7-23 varied by agreement, and rights conferred by this chapter may not
7-24 be waived. A person may not act under a power of attorney or use
7-25 any other device to evade the limitations or prohibitions of this
7-26 chapter or the declaration.
7-27 Sec. 82.005. SEPARATE TITLES AND TAXATION. (a) If there is
8-1 a unit owner other than a declarant, each unit that has been
8-2 created, together with its interest in the common elements,
8-3 constitutes for all purposes a separate parcel of real property.
8-4 (b) If there is a unit owner other than a declarant, each
8-5 unit must be separately taxed and assessed, and no separate tax or
8-6 assessment may be rendered against common elements for which a
8-7 declarant has not reserved development rights. Any portion of the
8-8 common elements for which a declarant has reserved any development
8-9 right must be separately taxed and assessed against the declarant,
8-10 and the declarant alone is liable for payment of those taxes.
8-11 (c) If there is no unit owner other than a declarant, the
8-12 real property constituting the condominium may be taxed and
8-13 assessed in any manner provided by law.
8-14 (d) The laws relating to homestead exemptions from property
8-15 taxes apply to condominium units, which are entitled to homestead
8-16 exemptions in those cases in which the owner of a single family
8-17 dwelling would qualify.
8-18 Sec. 82.006. APPLICABILITY OF LOCAL ORDINANCES, REGULATIONS,
8-19 AND BUILDING CODES. A zoning, subdivision, building code, or other
8-20 real property use law, ordinance, or regulation may not prohibit
8-21 the condominium form of ownership or impose any requirement on a
8-22 condominium that it would not impose on a physically identical
8-23 development under a different form of ownership. Otherwise, this
8-24 chapter does not invalidate or modify any provision of any zoning,
8-25 subdivision, building code, or other real property use law,
8-26 ordinance, or regulation.
8-27 Sec. 82.007. CONDEMNATION. (a) If a unit is acquired by
9-1 condemnation, or if part of a unit is acquired by condemnation
9-2 leaving the unit owner with a remnant that may not practically or
9-3 lawfully be used for any purpose permitted by the declaration, the
9-4 condemnation award must compensate the unit owner for the unit and
9-5 its common element interest, whether or not any common element
9-6 interest is acquired. On acquisition, unless the decree provides
9-7 otherwise, the condemned unit's entire allocated interests are
9-8 automatically reallocated to the remaining units in proportion to
9-9 the respective allocated interests of those units before the
9-10 taking, and the association shall promptly prepare, execute, and
9-11 record an amendment to the declaration reflecting the
9-12 reallocations. A remnant of a unit remaining after part of a unit
9-13 is taken under this subsection is a common element.
9-14 (b) Except as provided by Subsection (a), if part of a unit
9-15 is acquired by condemnation, the award must compensate the unit
9-16 owner for the reduction in value of the unit and its common element
9-17 interest. On acquisition, the condemned unit's allocated interests
9-18 are reduced in proportion to the reduction in the size of the unit,
9-19 or on any other basis specified by the declaration, and the portion
9-20 of the allocated interests divested from the partially acquired
9-21 unit are automatically reallocated to that unit and the remaining
9-22 units in proportion to the respective allocated interests of those
9-23 units before the taking, with the partially acquired unit
9-24 participating in the reallocation on the basis of its reduced
9-25 allocated interests.
9-26 (c) If part of the common elements is acquired by
9-27 condemnation, the award must be paid to the association, as trustee
10-1 for the unit owners, and to persons holding liens on the condemned
10-2 property, as their interests may appear. The association shall
10-3 divide any portion of the award not used for any restoration or
10-4 repair of the remaining common elements among the unit owners in
10-5 proportion to their respective common element interests before the
10-6 taking, but the portion of the award attributable to the
10-7 acquisition of a limited common element must be equally divided
10-8 among the owners of the units to which that limited common element
10-9 was allocated at the time of acquisition, or in any manner the
10-10 declaration provides.
10-11 (d) The court decree shall be recorded in each county in
10-12 which any portion of the condominium is located.
10-13 Sec. 82.008. VENUE. Venue for an action to enforce a right
10-14 or obligation arising under the declaration, bylaws, or rules of
10-15 the association is in each county in which any part of the
10-16 condominium is located.
10-17 (Sections 82.009 to 82.050 reserved for expansion
10-18 SUBCHAPTER B. CREATION, ALTERATION, AND TERMINATION
10-19 OF CONDOMINIUMS
10-20 Sec. 82.051. CREATION OF CONDOMINIUM. (a) A condominium
10-21 may be created under this chapter only by recording a declaration
10-22 executed in the same manner as a deed by all persons who have an
10-23 interest in the real property that will be conveyed to unit owners
10-24 and by every lessor of a lease the expiration or termination of
10-25 which will terminate the condominium or reduce its size. The
10-26 declaration shall be recorded in each county in which any portion
10-27 of the condominium is located.
11-1 (b) A declarant may not convey an interest in a unit until
11-2 each holder of a mortgage on the unit immediately before conveyance
11-3 has executed a consent to declaration, and the consent has been
11-4 recorded, or is recorded concurrently with the conveyance, as part
11-5 of the declaration or an amendment to the declaration.
11-6 (c) If a recorded declaration is not properly executed, that
11-7 defect may be cured by a subsequent execution conforming to
11-8 Subsection (a). After an execution defect is cured by authority of
11-9 this subsection, the declaration is retroactively effective on the
11-10 date it was first recorded.
11-11 (d) A county clerk shall, without prior approval from any
11-12 other authority, record declarations and amendments to declarations
11-13 in the real property records, and a county clerk shall record
11-14 condominium plats or plans in the real property records or in books
11-15 maintained for that purpose, as a declarant may request. The book
11-16 for the condominium plat records shall be the same size and type as
11-17 the book for recording subdivision plats.
11-18 (e) This chapter does not affect or diminish the rights of
11-19 municipalities and counties to approve plats of subdivisions and
11-20 enforce building codes as may be authorized or required by law.
11-21 Sec. 82.052. UNIT BOUNDARIES. Except as otherwise provided
11-22 by the declaration or plat:
11-23 (1) if walls, floors, or ceilings are designated as
11-24 boundaries of a unit, then all lath, furring, wallboard,
11-25 plasterboard, plaster, paneling, tiles, wallpaper, paint, finished
11-26 flooring, and any other materials constituting part of the finished
11-27 surfaces are a part of the unit, and all other portions of the
12-1 walls, floors, or ceilings are a part of the common elements;
12-2 (2) if any chute, flue, duct, wire, conduit, bearing
12-3 wall, bearing column, or any other fixture is partially within and
12-4 partially outside the designated boundaries of a unit, then the
12-5 portion serving only that unit is a limited common element
12-6 allocated solely to that unit, and the portion serving more than
12-7 one unit or the common elements is a part of the general common
12-8 elements;
12-9 (3) subject to Subdivision (2), the spaces, interior
12-10 partitions, and other fixtures and improvements within the
12-11 boundaries of a unit are a part of the unit; and
12-12 (4) shutters, awnings, window boxes, doorsteps,
12-13 stoops, porches, balconies, patios, and exterior doors and windows
12-14 or other fixtures designed to serve a single unit, but located
12-15 outside the unit's boundaries, are limited common elements
12-16 allocated exclusively to that unit.
12-17 Sec. 82.053. CONSTRUCTION AND VALIDITY OF DECLARATION AND
12-18 BYLAWS. (a) The provisions of the declaration and bylaws are
12-19 severable.
12-20 (b) The rule against perpetuities may not be applied to
12-21 defeat any provision of the declaration, bylaws, or rules of the
12-22 association.
12-23 (c) If there is a conflict between the provisions of the
12-24 declaration and the bylaws, the declaration prevails except to the
12-25 extent the declaration is inconsistent with this chapter.
12-26 (d) Title to a unit and common elements is not made
12-27 unmarketable or otherwise affected by a provision of unrecorded
13-1 bylaws or by reason of an insubstantial failure of the declaration
13-2 to comply with this chapter. Whether a substantial failure impairs
13-3 marketability is not affected by this chapter.
13-4 Sec. 82.054. DESCRIPTION OF UNITS. A description of a unit
13-5 is a sufficient legal description of the unit and all rights,
13-6 obligations, and interests appurtenant to the unit that were
13-7 created by the declaration or bylaws if the description contains:
13-8 (1) the name of the condominium;
13-9 (2) the recording data for the declaration, including
13-10 any amendments, plats, and plans;
13-11 (3) the county in which the condominium is located;
13-12 and
13-13 (4) the identifying number of the unit.
13-14 Sec. 82.055. CONTENTS OF DECLARATION FOR ALL CONDOMINIUMS.
13-15 The declaration for a condominium must contain:
13-16 (1) the name of the condominium, which must include
13-17 the word "condominium" or be followed by the words "a condominium"
13-18 or a phrase that includes the word "condominium," and the name of
13-19 the association;
13-20 (2) the name of each county in which any part of the
13-21 condominium is located;
13-22 (3) a legally sufficient description of the real
13-23 property included in the condominium;
13-24 (4) a description of the boundaries of each unit
13-25 created by the declaration, including the unit's identifying
13-26 number;
13-27 (5) a statement of the maximum number of units that
14-1 the declarant reserves the right to create;
14-2 (6) a description of the limited common elements other
14-3 than those listed in Sections 82.052(2) and (4);
14-4 (7) a description of any real property, except real
14-5 property subject to development rights, that may be allocated
14-6 subsequently as limited common elements, together with a statement
14-7 that the property may be so allocated;
14-8 (8) an allocation to each unit of its allocated
14-9 interests;
14-10 (9) any restrictions on use, occupancy, or alienation
14-11 of the units;
14-12 (10) a description of and the recording data for
14-13 recorded easements and licenses appurtenant to or included in the
14-14 condominium or to which any portion of the condominium is or may
14-15 become subject by reservation in the declaration;
14-16 (11) the method of amending the declaration;
14-17 (12) a plat or plan or the recording data of a plat or
14-18 plan that has been recorded in the real property or condominium
14-19 plat records;
14-20 (13) a statement of the association's obligation under
14-21 Section 82.111(i) to rebuild or repair any part of the condominium
14-22 after a casualty or any other disposition of the proceeds of a
14-23 casualty insurance policy;
14-24 (14) a description of any development rights and other
14-25 special declarant rights reserved by the declarant, together with a
14-26 legally sufficient description of the real property to which each
14-27 of those rights applies, and a time limit within which each of
15-1 those rights must be exercised;
15-2 (15) if any development right may be exercised with
15-3 respect to different parcels of real property at different times, a
15-4 statement to that effect, together with:
15-5 (A) either a statement fixing the boundaries of
15-6 those portions and regulating the order in which those portions may
15-7 be subjected to the exercise of each development right, or a
15-8 statement that no assurances are made in those regards; and
15-9 (B) a statement as to whether, if any
15-10 development right is exercised in any portion of the real property
15-11 subject to that development right, that development right must be
15-12 exercised in all or in any other portion of the remainder of that
15-13 real property;
15-14 (16) all matters required by this chapter to be stated
15-15 in the declaration; and
15-16 (17) any other matters the declarant considers
15-17 appropriate.
15-18 Sec. 82.056. LEASEHOLD CONDOMINIUMS. (a) Any lease the
15-19 expiration or termination of which may terminate the condominium or
15-20 reduce its size must be recorded. The lessor shall sign the
15-21 declaration, and the declaration must state:
15-22 (1) the recording data for the lease;
15-23 (2) the date on which the lease is scheduled to
15-24 expire;
15-25 (3) a legally sufficient description of the real
15-26 property subject to the lease;
15-27 (4) any right of the unit owners to redeem the
16-1 reversion and the manner in which the unit owners may exercise that
16-2 right, or a statement that the unit owners do not have that right;
16-3 (5) any right of the unit owners to remove
16-4 improvements within a reasonable time after the expiration or
16-5 termination of the lease, or a statement that the unit owners do
16-6 not have that right; and
16-7 (6) any right of the unit owners to renew the lease
16-8 and the conditions of renewal, or a statement that the unit owners
16-9 do not have that right.
16-10 (b) After the declaration for a leasehold condominium is
16-11 recorded, neither the lessor nor the lessor's successor in interest
16-12 may terminate the leasehold interest of a unit owner who makes
16-13 timely payment of the unit owner's share of the rent and otherwise
16-14 complies with all covenants that, if violated, would entitle the
16-15 lessor to terminate the lease. A unit owner's leasehold interest
16-16 is not affected by failure of any other person to pay rent or
16-17 fulfill any other covenant.
16-18 (c) Acquisition of the leasehold interest of a unit owner by
16-19 the owner of the reversion or remainder does not merge the
16-20 leasehold and fee simple interests unless the leasehold interests
16-21 of all unit owners subject to that reversion or remainder are
16-22 acquired.
16-23 (d) If the expiration or termination of a lease decreases
16-24 the number of units in a condominium, the allocated interests shall
16-25 be reallocated as though those units had been taken by condemnation
16-26 unless otherwise provided by the declaration. Reallocation shall
16-27 be confirmed by an amendment to the declaration prepared, executed,
17-1 and recorded by the association.
17-2 Sec. 82.057. ALLOCATION OF COMMON ELEMENT INTERESTS, VOTES,
17-3 AND COMMON EXPENSE LIABILITIES. (a) The declaration shall
17-4 allocate a fraction or percentage of undivided interests in the
17-5 common elements and in the common expenses of the association, and
17-6 a portion of the votes in the association, to each unit and state
17-7 the formulas used to establish those allocations. These
17-8 allocations may not discriminate in favor of units owned by a
17-9 declarant.
17-10 (b) If units may be added to or withdrawn from the
17-11 condominium, the declaration must state the formulas to be used to
17-12 reallocate the allocated interests among all units included in the
17-13 condominium after the addition or withdrawal.
17-14 (c) The declaration may provide:
17-15 (1) that different allocations of votes must be made
17-16 to the units on particular matters specified in the declaration;
17-17 and
17-18 (2) for class voting on specified issues affecting the
17-19 class if necessary to protect valid interests of the class.
17-20 (d) A declarant may not use cumulative or class voting to
17-21 evade any limitation imposed on declarants by this chapter. Units
17-22 may not constitute a class because the units are owned by a
17-23 declarant.
17-24 (e) Except for minor variations due to rounding, the sums of
17-25 the undivided interests in the common elements and of the common
17-26 expense liabilities allocated at any time to all the units shall
17-27 each equal one if stated as fractions or 100 percent if stated as
18-1 percentages. If a discrepancy exists between an allocated interest
18-2 and the result derived from application of the pertinent formula,
18-3 the allocated interest prevails.
18-4 (f) The common elements are not subject to partition. Any
18-5 purported conveyance, judicial sale, or other voluntary or
18-6 involuntary transfer of an undivided interest in the common
18-7 elements without the unit to which that interest is allocated is
18-8 void.
18-9 Sec. 82.058. LIMITED COMMON ELEMENTS. (a) The limited
18-10 common elements and the provisions of the declaration relating to
18-11 the right to use the limited common elements may not be altered
18-12 without the consent of each affected unit owner and the owner's
18-13 first lien mortgagee.
18-14 (b) Except as otherwise provided by the declaration, a
18-15 limited common element may be reallocated by an amendment to the
18-16 declaration, executed by the unit owners between or among whose
18-17 units the reallocation is made. The persons executing the
18-18 amendment shall deliver it to the association, which shall record
18-19 it at the expense of the reallocating unit owners.
18-20 (c) A common element not previously allocated as a limited
18-21 common element may not be allocated except pursuant to the
18-22 declaration made in accordance with Section 82.055(7). The
18-23 allocation shall be made by amendment to the declaration.
18-24 Sec. 82.059. PLATS AND PLANS. (a) Plats and plans are a
18-25 part of the declaration and may be recorded as a part of the
18-26 declaration or separately. Each plat or plan must be legible and
18-27 contain a certification that the plat or plan contains all
19-1 information required by this section.
19-2 (b) Each plat must show:
19-3 (1) the name and a survey or general schematic map of
19-4 the entire condominium;
19-5 (2) the location and dimensions of all real property
19-6 not subject to development rights, or subject only to the
19-7 development right to withdraw, and the location and dimensions of
19-8 all existing improvements within that real property;
19-9 (3) a legally sufficient description of any real
19-10 property subject to development rights, labeled to identify the
19-11 rights applicable to each parcel;
19-12 (4) the extent of any encroachments by or on any
19-13 portion of the condominium;
19-14 (5) to the extent feasible, a legally sufficient
19-15 description of all easements serving or burdening any portion of
19-16 the condominium, and the location of any underground utility line
19-17 that is actually known by the declarant at the time of filing the
19-18 declaration to have been constructed outside a recorded easement;
19-19 (6) the location and dimensions of any vertical unit
19-20 boundaries not shown or projected on recorded plans and the unit's
19-21 identifying number;
19-22 (7) the location, with reference to established data,
19-23 of any horizontal unit boundaries not shown or projected on
19-24 recorded plans and the unit's identifying number;
19-25 (8) a legally sufficient description of any real
19-26 property in which the unit owners will own only an estate for
19-27 years, labeled as "leasehold real property";
20-1 (9) the distance between noncontiguous parcels of real
20-2 property constituting the condominium;
20-3 (10) the location and dimensions of limited common
20-4 elements, other than those described by Sections 82.052(2) and (4);
20-5 (11) in the case of real property not subject to
20-6 development rights, all other matters required by law on land
20-7 surveys; and
20-8 (12) the distance and bearings locating each building
20-9 from all other buildings and from at least one boundary line of the
20-10 real property constituting the condominium.
20-11 (c) A plat may also show the intended location and
20-12 dimensions of a contemplated improvement to be constructed anywhere
20-13 within the condominium, which must be labeled either "MUST BE
20-14 BUILT" or "NEED NOT BE BUILT."
20-15 (d) To the extent not shown on the plats, plans must show:
20-16 (1) the location and dimensions of the vertical
20-17 boundaries of each unit, and the unit's identifying number;
20-18 (2) the horizontal unit boundaries, with reference to
20-19 established data, and the unit's identifying number; and
20-20 (3) any units, appropriately identified, in which the
20-21 declarant has reserved the right to create additional units or
20-22 common elements.
20-23 (e) Unless the declaration provides otherwise, the
20-24 horizontal boundaries of part of a unit located outside a building
20-25 have the same elevation as the horizontal boundaries of the inside
20-26 part and need not be depicted on the plats and plans. Interior
20-27 walls and partitions within a unit need not be included in the
21-1 plats or plans.
21-2 (f) On exercising any development right, the declarant shall
21-3 record either new plats and plans necessary to conform to the
21-4 requirements of this section or new certifications of plats and
21-5 plans previously recorded if those plats and plans otherwise
21-6 conform to the requirements of this section.
21-7 (g) An independent licensed surveyor or engineer shall
21-8 certify at least one plat, whether contained in one or more pages,
21-9 showing all perimeter land boundaries of the condominium, except
21-10 for additional real property, and showing the locations on the
21-11 ground of all buildings labeled "MUST BE BUILT" in relation to land
21-12 boundaries. Certification of any other plat or plan required by
21-13 this chapter shall be made by an independent licensed architect,
21-14 surveyor, or engineer.
21-15 Sec. 82.060. EXERCISE OF DEVELOPMENT RIGHT. (a) To
21-16 exercise a development right, the declarant must prepare, execute,
21-17 and record an amendment to the declaration and record new plats and
21-18 plans for that real property. The declarant is the unit owner of
21-19 any units created. The amendment to the declaration must assign an
21-20 identifying number to each new unit created and, except for
21-21 subdivision or conversion of units described by Subsection (b),
21-22 reallocate the allocated interest among all units. The amendment
21-23 must describe any limited common elements created, designating the
21-24 unit to which each is allocated.
21-25 (b) Development rights may be reserved within any real
21-26 property added to the condominium if the amendment adding the real
21-27 property includes the information required by Section 82.055 or
22-1 82.056, as appropriate, and the plats and plans include the
22-2 information required by Section 82.059(b). This provision does not
22-3 extend the time limit on the exercise of development rights imposed
22-4 by the declaration. Real property to be added is not part of a
22-5 condominium or subject to a declaration until the declaration is
22-6 amended to make the additional real property part of the
22-7 condominium.
22-8 (c) Whenever a declarant exercises a development right to
22-9 subdivide or convert a unit previously created into additional
22-10 units, common elements, or both:
22-11 (1) if the declarant converts the unit entirely to
22-12 common elements, the amendment to the declaration must reallocate
22-13 all the allocated interests of the unit among the other units as if
22-14 the unit had been taken by condemnation; and
22-15 (2) if the declarant subdivides the unit into two or
22-16 more units, whether or not any part of the unit is converted into
22-17 common elements, the amendment to the declaration must reallocate
22-18 all the allocated interests of the unit among the units created by
22-19 the subdivision in any reasonable manner prescribed by the
22-20 declarant.
22-21 (d) If the declaration provides that all or a portion of the
22-22 real property is subject to the development right of withdrawal:
22-23 (1) if all the real property is subject to withdrawal,
22-24 and the declaration does not describe separate portions of real
22-25 property subject to that right, none of the real property may be
22-26 withdrawn after a unit has been conveyed to a purchaser; and
22-27 (2) if a portion or portions are subject to
23-1 withdrawal, no portion may be withdrawn after a unit in that
23-2 portion has been conveyed to a purchaser.
23-3 Sec. 82.061. ALTERATIONS OF UNITS. (a) Subject to the
23-4 provisions of the declaration and other provisions of law, a unit
23-5 owner:
23-6 (1) may make improvements or alterations to the
23-7 owner's unit that do not impair the structural integrity or
23-8 mechanical systems or lessen the support of any portion of the
23-9 condominium;
23-10 (2) may not change the appearance of the common
23-11 elements or the exterior appearance of a unit or any other portion
23-12 of the condominium without prior written permission of the
23-13 association; and
23-14 (3) after acquiring an adjoining unit or an adjoining
23-15 part of an adjoining unit, with the prior written approval of the
23-16 association, may remove, alter, and create apertures in an
23-17 intervening partition, even if the partition in whole or in part is
23-18 a common element, if those acts do not impair the structural
23-19 integrity or mechanical systems or lessen the support of any
23-20 portion of the condominium.
23-21 (b) Removal of partitions or creation of apertures under
23-22 Subsection (a)(3) is not an alteration of boundaries.
23-23 Sec. 82.062. RELOCATION OF BOUNDARIES BETWEEN ADJOINING
23-24 UNITS. Subject to the declaration, the boundaries between
23-25 adjoining units may be relocated by an amendment to the declaration
23-26 on written application to the association by the owners of those
23-27 units. If the owners of the adjoining units have specified a
24-1 reallocation between their units of their allocated interests, the
24-2 application must state the proposed reallocations. Unless the
24-3 board determines not later than the 30th day after the date the
24-4 application is received that the reallocation is unreasonable, the
24-5 association shall prepare an amendment that identifies the units
24-6 involved, states the reallocation, is executed by the applying unit
24-7 owners, and contains words of conveyance between them. At the
24-8 expense of the applying unit owners, the association shall prepare
24-9 and record the amendment and plats or plans necessary to show the
24-10 altered boundaries between adjoining units, and the units'
24-11 dimensions and identifying numbers.
24-12 Sec. 82.063. SUBDIVISION OF UNITS. (a) If the declaration
24-13 expressly permits, a unit may be subdivided into two or more units.
24-14 Subject to the declaration, on written application of a unit owner
24-15 to subdivide a unit and after payment by the unit owner of the cost
24-16 of preparing and recording amendments and plats, the association
24-17 shall prepare, execute, and record an amendment to the declaration,
24-18 including the plats and plans, subdividing the unit.
24-19 (b) The amendment to the declaration must be executed by the
24-20 owner of the unit to be subdivided, assign an identifying number to
24-21 each unit created, and reallocate the allocated interests formerly
24-22 allocated to the subdivided unit to the new units in any reasonable
24-23 manner prescribed by the owner of the subdivided unit.
24-24 Sec. 82.064. EASEMENT FOR ENCROACHMENTS. To the extent that
24-25 a unit or common element encroaches on another unit or common
24-26 element, a valid easement for the encroachment exists. The
24-27 easement does not relieve a unit owner of liability in case of the
25-1 owner's wilful misconduct nor relieve a declarant or any other
25-2 person of liability for failure to adhere to the plats and plans.
25-3 Sec. 82.065. USE FOR SALES PURPOSES. The declaration may
25-4 permit a declarant to maintain sales, leasing, or management
25-5 offices and models in units or on common elements in the
25-6 condominium if the declaration specifies the rights of a declarant
25-7 with regard to the number, size, location, and relocation of the
25-8 offices and models. If the declaration fails to expressly permit
25-9 an office or model, a declarant may maintain no more than one unit
25-10 as a model and no more than one unit as an office for sales,
25-11 leasing, and management purposes at any one time. A sales,
25-12 leasing, or management office or model not designated as a unit by
25-13 the declaration is a common element and is subject to the exclusive
25-14 use of a declarant until the declarant ceases to be a unit owner or
25-15 until the declarant no longer uses the office or model for such
25-16 purposes, whichever occurs earlier. A declarant may modify the
25-17 exterior of a sales, leasing, or management office to conform to
25-18 the aesthetic exterior plan of the condominium. A declarant who
25-19 ceases to be a unit owner ceases to have any rights with regard to
25-20 an office or model unless it is removed within a reasonable time
25-21 from the condominium in accordance with a right to remove reserved
25-22 in the declaration. Subject to limitations in the declaration, a
25-23 declarant may maintain signs on the common elements that advertise
25-24 the condominium for sale or lease. This section is subject to
25-25 local ordinances and other state law.
25-26 Sec. 82.066. EASEMENT RIGHTS. Subject to the declaration, a
25-27 declarant has an easement through the common elements as may be
26-1 reasonably necessary for discharging the declarant's obligations or
26-2 exercising special declarant rights whether arising under this
26-3 chapter or reserved by the declaration.
26-4 Sec. 82.067. AMENDMENT OF DECLARATION. (a) Except as
26-5 provided by Subsection (b), a declaration, including the plats and
26-6 plans, may be amended only by vote or agreement of unit owners to
26-7 which at least 67 percent of the votes in the association are
26-8 allocated, or any larger majority the declaration specifies. A
26-9 declaration may specify a smaller number only if all of the units
26-10 are restricted exclusively to nonresidential use. An amendment to
26-11 a declaration may be adopted:
26-12 (1) by written ballot that states the exact wording or
26-13 substance of the amendment and that specifies the date by which a
26-14 ballot must be received to be counted;
26-15 (2) at a meeting of the members of the association
26-16 after written notice of the meeting has been delivered to an owner
26-17 of each unit stating that a purpose of the meeting is to consider
26-18 an amendment to the declaration; or
26-19 (3) by any method permitted by the declaration.
26-20 (b) The amendment procedures of this section do not apply to
26-21 amendments that may be executed by:
26-22 (1) a declarant under Section 82.051(c), 82.059(f), or
26-23 82.060 or Subsection (f);
26-24 (2) the association under Section 82.007, 82.056(d),
26-25 82.058(c), 82.062, or 82.063 or Subsection (f); or
26-26 (3) certain unit owners under Section 82.058(b),
26-27 82.062, 82.063(b), or 82.068(b).
27-1 (c) An action to challenge the validity of an amendment
27-2 adopted by the association under this section must be brought
27-3 before the first anniversary of the date the amendment is recorded.
27-4 (d) To be effective, an amendment to the declaration must be
27-5 recorded in each county in which any portion of the condominium is
27-6 located.
27-7 (e) Except as permitted or required by this chapter, an
27-8 amendment may not create or increase special declarant rights,
27-9 increase the number of units, change the boundaries of a unit,
27-10 alter or destroy a unit or limited common element, change a unit's
27-11 allocated interest, or change the use restrictions on a unit unless
27-12 the amendment is approved by 100 percent of the votes in the
27-13 association. Except as agreed to by the declarant, an amendment
27-14 may not increase or otherwise modify the obligations imposed by a
27-15 declaration on a declarant, or reduce or otherwise modify the
27-16 rights granted by a declaration to a declarant, including special
27-17 declarant rights.
27-18 (f) If permitted by the declaration, the board or the
27-19 declarant, if the declarant owns a unit that has never been
27-20 occupied, may without a vote of the unit owners or approval of the
27-21 association amend the declaration in any manner necessary to meet
27-22 the requirements of the Federal National Mortgage Association, the
27-23 Federal Home Loan Mortgage Corporation, the Federal Housing
27-24 Administration, or the Veterans Administration.
27-25 (g) Amendments to the declaration required by this chapter
27-26 to be recorded by the association must be prepared, executed,
27-27 recorded, and certified by an officer of the association designated
28-1 for that purpose or, in the absence of designation, by the
28-2 president of the association.
28-3 (h) An association may amend the declaration to authorize
28-4 the board:
28-5 (1) to bring an action to evict a tenant of a unit
28-6 owner for the tenant's violation of the declaration, bylaws, or
28-7 rules of the association;
28-8 (2) to bring an action to evict a tenant of a unit
28-9 owner who fails to pay the association for the cost of repairs to
28-10 common elements damaged substantially by the owner's tenant; or
28-11 (3) to collect rents from a tenant of a unit owner who
28-12 is at least 60 days' delinquent in the payment of any amount due to
28-13 the association.
28-14 Sec. 82.068. TERMINATION OF CONDOMINIUM. (a) Unless the
28-15 declaration provides otherwise and except for a taking of all the
28-16 units by condemnation, a condominium may be terminated only by the
28-17 agreement of 100 percent of the votes in the association and each
28-18 holder of a deed of trust or vendor's lien on a unit. The
28-19 declaration may not allow a termination by less than 80 percent of
28-20 the votes in the association if any unit is restricted exclusively
28-21 to residential uses.
28-22 (b) An agreement of unit owners to terminate a condominium
28-23 must be evidenced by the execution or ratification of a termination
28-24 agreement by the requisite number of unit owners. If, pursuant to
28-25 a termination agreement, the real property constituting the
28-26 condominium is to be sold following termination, the termination
28-27 agreement must set forth the terms of the sale. To be effective,
29-1 a termination agreement and all ratifications of the agreement must
29-2 be recorded in each county in which a portion of the condominium is
29-3 located.
29-4 (c) The association, on behalf of the unit owners, may
29-5 contract for the sale of real property in the condominium, but the
29-6 contract is not binding on the unit owners until it is approved
29-7 under Subsections (a) and (b). If the real property constituting
29-8 the condominium is to be sold following termination, on termination
29-9 title to that real property vests in the association as trustee for
29-10 the holders of all interests in the units, and the association has
29-11 all powers necessary and appropriate to effect the sale, including
29-12 the power to convey the interests of nonconsenting owners. Until
29-13 the sale has been concluded and the proceeds distributed, the
29-14 association shall continue to exist and retains the powers it had
29-15 before termination. Proceeds of the sale must be distributed to
29-16 unit owners and lienholders as their interests may appear, in
29-17 proportion to the respective interests of unit owners as provided
29-18 by Subsection (f). Unless the termination agreement specifies
29-19 differently, as long as the association holds title to the real
29-20 property, each unit owner and the owner's successors in interest
29-21 have an exclusive right to occupy the portion of the real property
29-22 that formerly constituted the owner's unit. During that period of
29-23 occupancy a unit owner and the owner's successors in interest
29-24 remain liable for all assessments and other obligations imposed on
29-25 unit owners by this chapter or the declaration.
29-26 (d) If the real property constituting the condominium is not
29-27 to be sold following termination, on termination title to the real
30-1 property vests in the unit owners as tenants in common in
30-2 proportion to their respective interests, and liens on the units
30-3 shift accordingly. While the tenancy in common exists, a unit
30-4 owner and the owner's successors in interest have an exclusive
30-5 right to occupy the portion of the real property that formerly
30-6 constituted the owner's unit.
30-7 (e) Following termination of the condominium, and after
30-8 payment of or provision for the claims of the association's
30-9 creditors, the assets of the association shall be distributed to
30-10 unit owners in proportion to their respective interests. The
30-11 proceeds of sale described by Subsection (c) and held by the
30-12 association as trustee are not assets of the association.
30-13 (f) The interest of a unit owner referred to in Subsections
30-14 (c), (d), and (e) is, except as provided by Subsection (g), the
30-15 fair market value of the owner's unit, limited common elements, and
30-16 common element interest immediately before the termination, as
30-17 determined by one or more independent appraisers selected by the
30-18 association. The decision of the independent appraisers shall be
30-19 distributed to the unit owners and becomes final unless disapproved
30-20 by unit owners of units to which 25 percent of the votes in the
30-21 association are allocated not later than the 30th day after the
30-22 date of distribution. The proportion of a unit owner's interest to
30-23 that of all unit owners is determined by dividing the fair market
30-24 value of the unit owner's unit and common element interest by the
30-25 total fair market values of all the units and common elements.
30-26 (g) If a unit or a limited common element is destroyed to
30-27 the extent that an appraisal of the fair market value before the
31-1 destruction cannot be made, the interest of a unit owner is the
31-2 owner's common element interest immediately before the termination.
31-3 (h) Foreclosure or enforcement of a lien or encumbrance
31-4 against the entire condominium does not of itself terminate the
31-5 condominium, and foreclosure or enforcement of a lien or
31-6 encumbrance against a portion of the condominium does not withdraw
31-7 that portion from the condominium, unless the portion is
31-8 withdrawable real property or unless the mortgage being foreclosed
31-9 was recorded before the date the declaration was recorded and the
31-10 mortgagee did not consent in writing to the declaration.
31-11 (i) By agreement of the same percentage of unit owners that
31-12 is required to terminate the condominium, the unit owners may
31-13 rescind a termination agreement and reinstate the declaration in
31-14 effect immediately before the election to terminate. To be
31-15 effective, the rescission agreement must be in writing, executed by
31-16 the unit owners who desire to rescind, and recorded in each county
31-17 in which any portion of the condominium is located.
31-18 Sec. 82.069. RIGHTS OF SECURED LENDERS. The declaration may
31-19 require that all or a specified number or percentage of the
31-20 mortgagees or beneficiaries of deeds of trust encumbering the units
31-21 approve specified actions of the unit owners or the association as
31-22 a condition to the effectiveness of those actions, but a
31-23 requirement for approval may not operate to:
31-24 (1) deny or delegate control over the general
31-25 administrative affairs of the association by the unit owners or the
31-26 board; or
31-27 (2) prevent the association or the board from:
32-1 (A) commencing, intervening in, or settling any
32-2 litigation or proceeding; or
32-3 (B) receiving and distributing insurance
32-4 proceeds under Section 82.111.
32-5 (Sections 82.070 to 82.100 reserved for expansion
32-6 SUBCHAPTER C. CONDOMINIUM MANAGEMENT
32-7 Sec. 82.101. ORGANIZATION OF UNIT OWNERS' ASSOCIATION. A
32-8 unit owners' association must be organized as a profit or nonprofit
32-9 corporation. The declarant may not convey a unit until the
32-10 secretary of state has issued a certificate of incorporation under
32-11 Article 3.03, Texas Business Corporation Act, or Article 3.03,
32-12 Texas Non-Profit Corporation Act (Article 1396-3.03, Vernon's Texas
32-13 Civil Statutes). The membership of the association at all times
32-14 consists exclusively of all the unit owners or, following
32-15 termination of the condominium, all former unit owners entitled to
32-16 distribution of proceeds, or the owners' heirs, successors, or
32-17 assigns.
32-18 Sec. 82.102. POWERS OF UNIT OWNERS' ASSOCIATION. (a)
32-19 Unless otherwise provided by the declaration, the association,
32-20 acting through its board, may:
32-21 (1) adopt and amend bylaws;
32-22 (2) adopt and amend budgets for revenues,
32-23 expenditures, and reserves, and collect assessments for common
32-24 expenses from unit owners;
32-25 (3) hire and terminate managing agents and other
32-26 employees, agents, and independent contractors;
32-27 (4) institute, defend, intervene in, settle, or
33-1 compromise litigation or administrative proceedings in its own name
33-2 on behalf of itself or two or more unit owners on matters affecting
33-3 the condominium;
33-4 (5) make contracts and incur liabilities relating to
33-5 the operation of the condominium;
33-6 (6) regulate the use, maintenance, repair,
33-7 replacement, modification, and appearance of the condominium;
33-8 (7) adopt and amend rules regulating the use,
33-9 occupancy, leasing or sale, maintenance, repair, modification, and
33-10 appearance of units and common elements, to the extent the
33-11 regulated actions affect common elements or other units;
33-12 (8) cause additional improvements to be made as a part
33-13 of the common elements;
33-14 (9) acquire, hold, encumber, and convey in its own
33-15 name any right, title, or interest to real or personal property,
33-16 except common elements of the condominium;
33-17 (10) grant easements, leases, licenses, and
33-18 concessions through or over the common elements;
33-19 (11) impose and receive payments, fees, or charges for
33-20 the use, rental, or operation of the common elements and for
33-21 services provided to unit owners;
33-22 (12) impose interest and late charges for late
33-23 payments of assessments, returned check charges, and, if notice and
33-24 an opportunity to be heard are given, reasonable fines for
33-25 violations of the declaration, bylaws, and rules of the
33-26 association;
33-27 (13) adopt and amend rules regulating the collection
34-1 of delinquent assessments and the application of payments;
34-2 (14) adopt and amend rules regulating the termination
34-3 of utility service to a unit, the owner of which is delinquent in
34-4 the payment of an assessment that is used, in whole or in part, to
34-5 pay the cost of that utility;
34-6 (15) impose reasonable charges for preparing,
34-7 recording, or copying declaration amendments, resale certificates,
34-8 or statements of unpaid assessments;
34-9 (16) enter a unit for bona fide emergency purposes
34-10 when conditions present an imminent risk of harm or damage to the
34-11 common elements, another unit, or the occupants;
34-12 (17) assign its right to future income, including the
34-13 right to receive common expense assessments, but only to the extent
34-14 the declaration so provides;
34-15 (18) suspend the voting privileges of or the use of
34-16 certain general common elements by an owner delinquent for more
34-17 than 30 days in the payment of assessments;
34-18 (19) purchase insurance and fidelity bonds it
34-19 considers appropriate or necessary;
34-20 (20) exercise any other powers conferred by the
34-21 declaration or bylaws;
34-22 (21) exercise any other powers that may be exercised
34-23 in this state by a corporation of the same type as the association;
34-24 and
34-25 (22) exercise any other powers necessary and proper
34-26 for the government and operation of the association.
34-27 (b) The declaration may not impose limitations on the power
35-1 of the association to deal with the declarant that are more
35-2 restrictive than the limitations imposed on the power of the
35-3 association to deal with other persons.
35-4 (c) To be enforceable, a bylaw or rule of the association
35-5 must not be arbitrary or capricious.
35-6 (d) Before an association may charge the unit owner for
35-7 property damage for which the unit owner is liable or levy a fine
35-8 for violation of the declaration, bylaws, or rules, the association
35-9 shall give to the unit owner a written notice that:
35-10 (1) describes the violation or property damage and
35-11 states the amount of the proposed fine or damage charge;
35-12 (2) states that not later than the 30th day after the
35-13 date of the notice, the unit owner may request a hearing before the
35-14 board to contest the fine or damage charge; and
35-15 (3) allows the unit owner a reasonable time, by a
35-16 specified date, to cure the violation and avoid the fine unless the
35-17 unit owner was given notice and a reasonable opportunity to cure a
35-18 similar violation within the preceding twelve months.
35-19 (e) The association may give a copy of the notice required
35-20 by Subsection (d) to an occupant of the unit. The association must
35-21 give notice of a levied fine or damage charge to the unit owner not
35-22 later than the 30th day after the date of levy.
35-23 Sec. 82.103. BOARD MEMBERS AND OFFICERS. (a) Except as
35-24 provided by the declaration, bylaws, or this chapter, the board
35-25 shall act in all instances on behalf of the association if in the
35-26 good-faith judgment of the board the action is reasonable. Each
35-27 officer or member of the board is liable as a fiduciary of the unit
36-1 owners for the officer's or member's acts or omissions. All acts
36-2 of the association must be by and through the board unless
36-3 otherwise provided by the declaration or bylaws or by law.
36-4 (b) The board may not act on behalf of the association to
36-5 amend the declaration except as permitted by this chapter, to
36-6 terminate the condominium, to elect members of the board, or to
36-7 determine the qualifications, powers and duties, or terms of office
36-8 of board members. The board may fill a vacancy in its membership
36-9 for the unexpired portion of a term.
36-10 (c) Subject to Subsection (d), the declaration may provide
36-11 for a period of declarant control of the association during which a
36-12 declarant, or persons designated by the declarant, may appoint and
36-13 remove the officers and members of the board. Regardless of the
36-14 period provided by the declaration, a period of declarant control
36-15 terminates not later than the 120th day after conveyance of 75
36-16 percent of the units that may be created to unit owners other than
36-17 a declarant. Transfer of special declarant rights does not
36-18 terminate the period of declarant control. A declarant may
36-19 voluntarily surrender the right to appoint and remove officers and
36-20 members of the board before termination of the period, but in that
36-21 event the declarant may require, for the duration of the period
36-22 that the declarant would otherwise control, that specified actions
36-23 of the association or board be approved by the declarant before
36-24 they become effective.
36-25 (d) Not later than the 120th day after conveyance of 50
36-26 percent of the units that may be created to unit owners other than
36-27 a declarant, not less than one-third of the members of the board
37-1 must be elected by unit owners other than the declarant.
37-2 (e) Not later than the termination of a period of declarant
37-3 control, the unit owners shall elect a board of at least three
37-4 members who need not be unit owners. The board shall elect the
37-5 officers before the 31st day after the date declarant control
37-6 terminates. The persons elected shall take office on election.
37-7 (f) An officer or director of the association is not liable
37-8 to the association or any unit owner for monetary damages for an
37-9 act or omission occurring in the person's capacity as an officer or
37-10 director unless:
37-11 (1) the officer or director breached a fiduciary duty
37-12 to the association or a unit owner;
37-13 (2) the officer or director received an improper
37-14 benefit; or
37-15 (3) the act or omission was in bad faith, involved
37-16 intentional misconduct, or was one for which liability is expressly
37-17 provided by statute.
37-18 (g) Subsection (f) does not diminish a limitation of
37-19 liability provided an officer or director of the association by the
37-20 declaration, bylaws, articles of incorporation of the association,
37-21 or other laws.
37-22 Sec. 82.104. TRANSFER OF SPECIAL DECLARANT RIGHTS. (a)
37-23 Special declarant rights created or reserved under this chapter may
37-24 not be transferred except by an instrument evidencing the transfer
37-25 recorded in each county in which any portion of the condominium is
37-26 located. The instrument is not effective unless executed by the
37-27 transferee.
38-1 (b) On transfer of any special declarant right, a transferor
38-2 is not relieved of an obligation or liability arising before the
38-3 transfer. A transferor is not liable for an act or omission or a
38-4 breach of an obligation arising from the exercise of a special
38-5 declarant right by a successor declarant who is not an affiliate of
38-6 the transferor.
38-7 (c) Unless otherwise provided by a mortgage instrument or
38-8 deed of trust, in case of foreclosure of a mortgage, tax sale,
38-9 judicial sale, sale by a trustee under a deed of trust, or sale
38-10 under Bankruptcy Code or receivership proceedings, of a unit owned
38-11 by a declarant or of real property in a condominium subject to
38-12 development rights, a person acquiring title to all the real
38-13 property being foreclosed or sold may request to succeed to all
38-14 special declarant rights or only to rights reserved by the
38-15 declaration to maintain models, offices, and signs. The judgment
38-16 or instrument conveying title may provide for transfer of only the
38-17 special declarant rights requested.
38-18 (d) On foreclosure, tax sale, judicial sale, sale by a
38-19 trustee under a deed of trust, or sale under Bankruptcy Code or
38-20 receivership proceedings of all units and other real property in a
38-21 condominium owned by a declarant:
38-22 (1) the declarant ceases to have any special declarant
38-23 rights; and
38-24 (2) the period of declarant control terminates unless
38-25 the judgment or instrument conveying title provides for transfer of
38-26 all special declarant rights held by that declarant to a successor
38-27 declarant.
39-1 (e) The liabilities and obligations of a person who succeeds
39-2 to special declarant rights are as follows:
39-3 (1) a successor to a special declarant right who is an
39-4 affiliate of a declarant is subject to all obligations and
39-5 liabilities imposed on the transferor by this chapter or by the
39-6 declaration;
39-7 (2) a successor to a special declarant right, other
39-8 than a successor described by Subdivision (3) or (4), who is not an
39-9 affiliate of a declarant, is subject to all obligations and
39-10 liabilities imposed on the transferor by this chapter or by the
39-11 declaration;
39-12 (3) a successor to only a right reserved by the
39-13 declaration to maintain models, offices, and signs, who is not an
39-14 affiliate of a declarant, may not exercise any other special
39-15 declarant right, and is not subject to any liability or obligation
39-16 as a declarant, except the obligation to provide a condominium
39-17 information statement and any liability arising as a result; and
39-18 (4) a successor to all special declarant rights held
39-19 by the successor's transferor who is not an affiliate of that
39-20 declarant and who succeeded to those rights pursuant to a deed in
39-21 lieu of foreclosure or a judgment or instrument conveying title to
39-22 units under Subsection (c) may declare the person's intention in a
39-23 recorded instrument to hold those rights solely for transfer to
39-24 another person; thereafter, until all special declarant rights are
39-25 transferred to a person acquiring title to any unit owned by the
39-26 successor, or until an instrument permitting exercise of all those
39-27 rights is recorded, the successor may not exercise any of those
40-1 rights other than any right held by the successor's transferor to
40-2 control the board as provided by Section 82.103(c) for the duration
40-3 of the period of declarant control, and an attempt to exercise
40-4 those rights is void; so long as a successor declarant may not
40-5 exercise special declarant rights under this subdivision, the
40-6 successor is not subject to any liability or obligation as a
40-7 declarant other than liability for acts and omissions under Section
40-8 82.103(a).
40-9 (f) This section does not subject a successor to a special
40-10 declarant right to any claims against or other obligations of a
40-11 transferor declarant, other than claims and obligations arising
40-12 under this chapter or the declaration.
40-13 Sec. 82.105. TERMINATION OF CONTRACTS AND LEASES OF
40-14 DECLARANT. An association in a residential or recreational
40-15 condominium may terminate, without penalty, contracts or leases
40-16 between the association and a declarant or an affiliate of a
40-17 declarant if:
40-18 (1) the contract is entered into by the association
40-19 while controlled by the declarant;
40-20 (2) the association terminates the contract or lease
40-21 before the first anniversary of the date a board elected by the
40-22 unit owners takes office; and
40-23 (3) the association gives at least 90 days' notice of
40-24 its intent to terminate the contract or lease to the other party.
40-25 Sec. 82.106. BYLAWS. (a) The administration and operation
40-26 of the condominium are governed by the bylaws, which must provide
40-27 for:
41-1 (1) the number of members on the board and the titles
41-2 of the officers of the association;
41-3 (2) election by the board of a president, treasurer,
41-4 secretary, and any other officers the bylaws specify;
41-5 (3) the qualifications, powers and duties, terms of
41-6 office, and the manner of electing and removing a board member or
41-7 officer and filling vacancies;
41-8 (4) the powers, if any, that the board or an officer
41-9 may delegate to other persons or to a managing agent;
41-10 (5) the designation of officers who are authorized to
41-11 prepare, execute, certify, and record amendments to the declaration
41-12 on behalf of the association;
41-13 (6) the method of amending the bylaws; and
41-14 (7) the manner of notice of meetings of the
41-15 association.
41-16 (b) Subject to the declaration, the bylaws may provide for
41-17 other matters the association considers desirable, necessary, or
41-18 appropriate.
41-19 Sec. 82.107. UPKEEP OF CONDOMINIUM. (a) Except as provided
41-20 by the declaration or Subsections (b) and (c), the association is
41-21 responsible for maintenance, repair, and replacement of the common
41-22 elements, and each unit owner is responsible for maintenance,
41-23 repair, and replacement of the owner's unit. Each unit owner shall
41-24 afford to the association and the other unit owners, and to their
41-25 agents or employees, access through the owner's unit reasonably
41-26 necessary for those purposes. If damage is inflicted on the common
41-27 elements or on any unit through which access is taken, the unit
42-1 owner responsible for the damage, or the association if it is
42-2 responsible, is liable for the prompt repair of the damage.
42-3 (b) Except as provided by the declaration, each unit owner
42-4 is responsible for the cost of maintenance, repair, and replacement
42-5 of any utility installation or equipment serving only the owner's
42-6 unit, without regard to whether the installation or equipment is
42-7 located wholly or partially outside the designated boundaries of
42-8 the unit. For purposes of this subsection, utility installations
42-9 and equipment include electricity, water, sewage, gas, water
42-10 heaters, heating and air conditioning equipment, and television
42-11 antennas.
42-12 (c) Except as provided by the declaration, each unit owner
42-13 is responsible for the cost of maintenance, repair, and replacement
42-14 of windows and doors serving only the owner's unit.
42-15 (d) Unless otherwise provided by the declaration, the
42-16 association may enter a unit, after giving notice to the owner and
42-17 occupant of the unit, to:
42-18 (1) prevent or terminate waste of water purchased by
42-19 the association as a common expense; or
42-20 (2) perform maintenance and repairs of the condominium
42-21 that, if not performed, may result in increased damage by water to
42-22 components of the condominium that the association maintains.
42-23 Sec. 82.108. MEETINGS. (a) Meetings of the association
42-24 must be held at least once each year. Unless the declaration
42-25 provides otherwise, special meetings of the association may be
42-26 called by the president, a majority of the board, or unit owners
42-27 having at least 20 percent of the votes in the association. Notice
43-1 of a meeting shall be given in accordance with the bylaws.
43-2 (b) Meetings of the association and board must be open to
43-3 unit owners, subject to the right of the board to adjourn a meeting
43-4 of the board and reconvene in closed executive session to consider
43-5 actions involving personnel, pending litigation, contract
43-6 negotiations, enforcement actions, matters involving the invasion
43-7 of privacy of individual unit owners, or matters that are to remain
43-8 confidential by request of the affected parties and agreement of
43-9 the board. The general nature of any business to be considered in
43-10 executive session must first be announced at the open meeting.
43-11 (c) Unless the declaration, bylaws, or articles of
43-12 incorporation of the association provide otherwise:
43-13 (1) a meeting of the board may be held by any method
43-14 of communication, including electronic and telephonic, by which
43-15 each director may hear and be heard by every other director; and
43-16 (2) in lieu of a meeting, the board may act by
43-17 unanimous written consents of directors, to be filed with the
43-18 minutes of board meetings.
43-19 Sec. 82.109. QUORUMS. (a) Unless the bylaws provide
43-20 otherwise, a quorum is present throughout any meeting of the
43-21 association if persons entitled to cast at least 20 percent of the
43-22 votes that may be cast for election of the board are present in
43-23 person or by proxy at the beginning of the meeting. The bylaws may
43-24 not reduce the standard for a quorum to less than 10 percent.
43-25 (b) Unless the bylaws specify a larger percentage, a quorum
43-26 is present throughout a meeting of the board if persons entitled to
43-27 cast at least 50 percent of the votes on the board are present at
44-1 the beginning of the meeting.
44-2 Sec. 82.110. VOTING AND PROXIES. (a) If only one of the
44-3 multiple owners of a unit is present at a meeting of the
44-4 association, that person may cast the vote or votes allocated to
44-5 that unit. If more than one of the multiple owners is present, the
44-6 vote or votes allocated to that unit may be cast only in accordance
44-7 with the owners' unanimous agreement unless the declaration
44-8 provides otherwise. Multiple owners are in unanimous agreement if
44-9 one of the multiple owners casts the votes allocated to a unit and
44-10 none of the other owners makes prompt protest to the person
44-11 presiding over the meeting.
44-12 (b) Votes allocated to a unit may be cast under a written
44-13 proxy duly executed by a unit owner. If a unit is owned by more
44-14 than one person, each owner of the unit may vote or register
44-15 protest to the casting of votes by the other owners of the unit
44-16 through a proxy duly executed by the unit owner. A unit owner may
44-17 not revoke a proxy given under this section except by giving actual
44-18 notice of revocation to the person presiding over a meeting of the
44-19 association. A proxy is void if it is not dated or if it purports
44-20 to be revocable without notice. A proxy terminates one year after
44-21 its date unless it specifies a shorter or longer time.
44-22 (c) Cumulative voting is not allowed.
44-23 Sec. 82.111. INSURANCE. (a) Beginning not later than the
44-24 time of the first conveyance of a unit to a person other than a
44-25 declarant, the association shall maintain, to the extent reasonably
44-26 available:
44-27 (1) property insurance on the insurable common
45-1 elements insuring against all risks of direct physical loss
45-2 commonly insured against, including fire and extended coverage, in
45-3 a total amount of at least 80 percent of the replacement cost or
45-4 actual cash value of the insured property as of the effective date
45-5 and at each renewal date of the policy; and
45-6 (2) commercial general liability insurance, including
45-7 medical payments insurance, in an amount determined by the board
45-8 but not less than any amount specified by the declaration covering
45-9 all occurrences commonly insured against for death, bodily injury,
45-10 and property damage arising out of or in connection with the use,
45-11 ownership, or maintenance of the common elements.
45-12 (b) If a building contains units having horizontal
45-13 boundaries described in the declaration, the insurance maintained
45-14 under Subsection (a)(1), to the extent reasonably available, must
45-15 include the units, but need not include improvements and
45-16 betterments installed by unit owners.
45-17 (c) If the insurance described by Subsections (a) and (b) is
45-18 not reasonably available, the association shall cause notice of
45-19 that fact to be delivered or mailed to all unit owners and
45-20 lienholders. The declaration may require the association to carry
45-21 any other insurance, and the association in any event may carry any
45-22 other insurance the board considers appropriate to protect the
45-23 condominium, the association, or the unit owners. This section
45-24 does not affect the right of a holder of a mortgage on a unit to
45-25 require a unit owner to acquire insurance in addition to that
45-26 provided by the association.
45-27 (d) Insurance policies carried under Subsection (a) must
46-1 provide that:
46-2 (1) each unit owner is an insured person under the
46-3 policy with respect to liability arising out of the person's
46-4 ownership of an undivided interest in the common elements or
46-5 membership in the association;
46-6 (2) the insurer waives its right to subrogation under
46-7 the policy against a unit owner;
46-8 (3) no action or omission of a unit owner, unless
46-9 within the scope of the unit owner's authority on behalf of the
46-10 association, will void the policy or be a condition to recovery
46-11 under the policy; and
46-12 (4) if, at the time of a loss under the policy, there
46-13 is other insurance in the name of a unit owner covering the same
46-14 property covered by the policy, the association's policy provides
46-15 primary insurance.
46-16 (e) A claim for any loss covered by the policy under
46-17 Subsection (a)(1) must be submitted by and adjusted with the
46-18 association. The insurance proceeds for that loss shall be payable
46-19 to an insurance trustee designated by the association for that
46-20 purpose, if the designation of an insurance trustee is considered
46-21 by the board to be necessary or desirable, or otherwise to the
46-22 association, and not to any unit owner or lienholder.
46-23 (f) The insurance trustee or the association shall hold
46-24 insurance proceeds in trust for unit owners and lienholders as
46-25 their interests may appear. Subject to Subsection (i), the
46-26 proceeds paid under a policy must be disbursed first for the repair
46-27 or restoration of the damaged common elements and units, and unit
47-1 owners and lienholders are not entitled to receive payment of any
47-2 portion of the proceeds unless there is a surplus of proceeds after
47-3 the property has been completely repaired or restored, or the
47-4 condominium is terminated.
47-5 (g) An insurance policy issued to the association does not
47-6 prevent a unit owner from obtaining insurance for the owner's own
47-7 benefit.
47-8 (h) The insurer issuing the policy may not cancel or refuse
47-9 to renew it less than 30 days after written notice of the proposed
47-10 cancellation or nonrenewal has been mailed to the association.
47-11 (i) Any portion of the condominium for which insurance is
47-12 required that is damaged or destroyed shall be promptly repaired or
47-13 replaced by the association unless the condominium is terminated,
47-14 repair or replacement would be illegal under any state or local
47-15 health or safety statute or ordinance, or at least 80 percent of
47-16 the unit owners, including each owner of a unit or assigned limited
47-17 common element that will not be rebuilt or repaired, vote to not
47-18 rebuild. A vote to not rebuild does not increase an insurer's
47-19 liability to loss payment obligation under a policy, and the vote
47-20 does not cause a presumption of total loss. The cost of repair or
47-21 replacement in excess of the insurance proceeds and reserves is a
47-22 common expense. If the entire condominium is not repaired or
47-23 replaced, any insurance proceeds attributable to the damaged common
47-24 elements shall be used to restore the damaged area to a condition
47-25 compatible with the remainder of the condominium, the insurance
47-26 proceeds attributable to units and limited common elements that are
47-27 not rebuilt shall be distributed to the owners of those units and
48-1 the owners of the units to which those limited common elements were
48-2 assigned, or to their mortgagees, as their interests may appear,
48-3 and the remainder of the proceeds shall be distributed to all the
48-4 unit owners as their interests may appear. If the unit owners vote
48-5 to not rebuild any unit, that unit's allocated interests shall be
48-6 automatically reallocated on the vote as if the unit had been
48-7 condemned, and the association shall prepare, execute, and record
48-8 an amendment to the declaration reflecting the reallocation.
48-9 Section 82.068 governs the distribution of insurance proceeds if
48-10 the condominium is terminated.
48-11 (j) The provisions of this section may be varied or waived
48-12 if all the units in a condominium are restricted to nonresidential
48-13 use.
48-14 Sec. 82.112. ASSESSMENTS FOR COMMON EXPENSES. (a) Until an
48-15 association makes a common expense assessment, a declarant shall
48-16 pay all the expenses of the condominium as the expenses accrue.
48-17 After an initial assessment by an association, assessments must be
48-18 made at least annually and must be based on a budget adopted at
48-19 least annually by the association. The association's reserves and
48-20 the unit owners' working capital contributions may not be used to
48-21 pay operational expenses until the declarant control terminates.
48-22 (b) From the date of the initial assessment until declarant
48-23 control terminates, or three years from a declarant's first
48-24 conveyance of a unit, whichever is earlier, the declarant shall
48-25 periodically pay to the association:
48-26 (1) an amount equal to all operational expenses of the
48-27 association, less the operational expense portion of the
49-1 assessments paid by unit owners other than declarant; or
49-2 (2) the common expense liability allocated to each
49-3 unit owned by the declarant.
49-4 (c) Common expenses shall be assessed against all units
49-5 conveyed, rented, or used as models or offices by the declarant and
49-6 against all units owned by a declarant after termination of a
49-7 declarant's control or three years from a declarant's first
49-8 conveyance of a unit, whichever is earlier, in accordance with the
49-9 common expense liability allocated to each unit. A past due
49-10 assessment or installment of an assessment may bear interest at a
49-11 lawful rate established by the association.
49-12 (d) Except as provided by the declaration and Section
49-13 82.107, a common expense for the maintenance, repair, or
49-14 replacement of a limited common element shall be assessed against
49-15 all the units as if it were for a general common element.
49-16 (e) If common expense liabilities are reallocated, common
49-17 expense assessments and an assessment installment not yet due shall
49-18 be recomputed in accordance with the reallocated common expense
49-19 liabilities.
49-20 (f) A declaration may allow the accumulation of reserve
49-21 funds for an unspecified period to provide for any anticipated
49-22 expense of the condominium.
49-23 (g) This section does not prevent a declarant from
49-24 collecting from a purchaser at closing the prorated amount of any
49-25 expenses, such as insurance or taxes, that the declarant has
49-26 prepaid to the association or directly to others on behalf of the
49-27 unit that is being purchased.
50-1 Sec. 82.113. ASSOCIATION'S LIEN FOR ASSESSMENTS. (a) An
50-2 assessment levied by the association against a unit or unit owner
50-3 is a personal obligation of the unit owner and is secured by a
50-4 continuing lien on the unit and on rents and insurance proceeds
50-5 received by the unit owner and relating to the owner's unit. In
50-6 this section, "assessments" means regular and special assessments,
50-7 dues, fees, charges, interest, late fees, fines, collection costs,
50-8 attorney's fees, and any other amount due to the association by the
50-9 unit owner or levied against the unit by the association, all of
50-10 which are enforceable as assessments under this section unless the
50-11 declaration provides otherwise.
50-12 (b) The association's lien for assessments has priority over
50-13 any other lien except:
50-14 (1) a lien for real property taxes and other
50-15 governmental assessments or charges against the unit unless
50-16 otherwise provided by Section 32.05, Tax Code;
50-17 (2) a lien or encumbrance recorded before the
50-18 declaration is recorded;
50-19 (3) a first vendor's lien or first deed of trust lien
50-20 recorded before the date on which the assessment sought to be
50-21 enforced becomes delinquent under the declaration, bylaws, or
50-22 rules; and
50-23 (4) unless the declaration provides otherwise, a lien
50-24 for construction of improvements to the unit or an assignment of
50-25 the right to insurance proceeds on the unit if the lien or
50-26 assignment is recorded or duly perfected before the date on which
50-27 the assessment sought to be enforced becomes delinquent under the
51-1 declaration, bylaws, or rules.
51-2 (c) The association's lien for assessments is created by
51-3 recordation of the declaration, which constitutes record notice and
51-4 perfection of the lien. Unless the declaration provides otherwise,
51-5 no other recordation of a lien or notice of lien is required.
51-6 (d) By acquiring a unit, a unit owner grants to the
51-7 association a power of sale in connection with the association's
51-8 lien. By written resolution, a board may appoint, from time to
51-9 time, an officer, agent, trustee, or attorney of the association to
51-10 exercise the power of sale on behalf of the association. Except as
51-11 provided by the declaration, an association shall exercise its
51-12 power of sale pursuant to Section 51.002.
51-13 (e) The association has the right to foreclose its lien
51-14 judicially or by nonjudicial foreclosure pursuant to the power of
51-15 sale created by this chapter or the declaration, except that the
51-16 association may not foreclose a lien for assessments consisting
51-17 solely of fines. Costs of foreclosure may be added to the amount
51-18 owed by the unit owner to the association. A unit owner may not
51-19 petition a court to set aside a sale solely because the purchase
51-20 price at the foreclosure sale was insufficient to fully satisfy the
51-21 owner's debt.
51-22 (f) The association may bid for and purchase the unit at
51-23 foreclosure sale as a common expense. The association may own,
51-24 lease, encumber, exchange, sell, or convey a unit.
51-25 (g) The owner of a unit used for residential purposes and
51-26 purchased by an association at a foreclosure sale of the
51-27 association's lien for assessments may redeem the unit not later
52-1 than the 90th day after the date of the foreclosure sale. To
52-2 redeem the unit, the owner must pay to the association all amounts
52-3 due the association at the time of the foreclosure sale, interest
52-4 from the date of foreclosure sale to the date of redemption at the
52-5 rate provided by the declaration for delinquent assessments,
52-6 reasonable attorney's fees and costs incurred by the association in
52-7 foreclosing the lien, any assessment levied against the unit by the
52-8 association after the foreclosure sale, and any reasonable cost
52-9 incurred by the association as owner of the unit, including costs
52-10 of maintenance and leasing. On redemption, the association shall
52-11 execute a deed to the redeeming unit owner. The exercise of the
52-12 right of redemption is not effective against a subsequent purchaser
52-13 or lender for value without notice of the redemption after the
52-14 redemption period expires unless the redeeming unit owner records
52-15 the deed from the association or an affidavit stating that the
52-16 owner has exercised the right of redemption. A unit that has been
52-17 redeemed remains subject to all liens and encumbrances on the unit
52-18 before foreclosure. All rents and other income collected from the
52-19 unit by the association from the date of foreclosure sale to the
52-20 date of redemption belong to the association, but the rents and
52-21 income shall be credited against the redemption amount. An
52-22 association purchasing a unit at a sale foreclosing its lien may
52-23 not transfer ownership of the unit during the redemption period to
52-24 a person other than a redeeming owner.
52-25 (h) If a unit owner defaults in the owner's monetary
52-26 obligations to the association, the association may notify other
52-27 lien holders of the default and the association's intent to
53-1 foreclose its lien. The association shall notify any holder of a
53-2 recorded lien or duly perfected mechanic's lien against a unit who
53-3 has given the association a written request for notification of the
53-4 unit owner's monetary default or the association's intent to
53-5 foreclose its lien.
53-6 (i) This section does not prohibit the association from
53-7 taking a deed in lieu of foreclosure or from filing suit to recover
53-8 a money judgment for sums that may be secured by the lien.
53-9 (j) At any time before a nonjudicial foreclosure sale, a
53-10 unit owner may avoid foreclosure by paying all amounts due the
53-11 association.
53-12 (k) If, on January 1, 1994, a unit is the homestead of the
53-13 unit owner and is subject to a declaration that does not contain a
53-14 valid assessment lien against the unit, the lien provided by this
53-15 section does not attach against the unit until the unit ceases to
53-16 be the homestead of the person owning it on January 1, 1994.
53-17 (l) Foreclosure of a tax lien attaching against a unit under
53-18 Chapter 32, Tax Code, does not discharge the association's lien for
53-19 assessments under this section or under a declaration for amounts
53-20 becoming due to the association after the date of foreclosure of
53-21 the tax lien.
53-22 (m) If a unit owner is delinquent in payment of assessments
53-23 to an association, at the request of the association a holder of a
53-24 recorded lien against the unit may provide the association with
53-25 information about the unit owner's debt secured by the holder's
53-26 lien against the unit and other relevant information. At the
53-27 request of a lien holder, the association may furnish the lien
54-1 holder with information about the condominium and the unit owner's
54-2 obligations to the association.
54-3 Sec. 82.114. ASSOCIATION RECORDS. (a) The association
54-4 shall keep:
54-5 (1) detailed financial records that comply with
54-6 generally accepted accounting principles and that are sufficiently
54-7 detailed to enable the association to prepare a resale certificate
54-8 under Section 82.157;
54-9 (2) the plans and specifications used to construct the
54-10 condominium except for buildings originally constructed before
54-11 January 1, 1994;
54-12 (3) the condominium information statement prepared
54-13 under Section 82.152 and any amendments;
54-14 (4) the name and mailing address of each unit owner;
54-15 (5) voting records, proxies, and correspondence
54-16 relating to amendments to the declaration; and
54-17 (6) minutes of meetings of the association and board.
54-18 (b) All financial and other records of the association shall
54-19 be reasonably available at its registered office or its principal
54-20 office in this state for examination by a unit owner and the
54-21 owner's agents. An attorney's files and records relating to the
54-22 association are not records of the association and are not subject
54-23 to inspection by unit owners or production in a legal proceeding.
54-24 (c) The association shall, as a common expense, annually
54-25 obtain an independent audit of the records. Copies of the audit
54-26 must be made available to the unit owners.
54-27 (d) A declarant shall furnish copies to the association of
55-1 the information required by Subsection (a) on the date the first
55-2 unit is sold.
55-3 (e) Not later than the 30th day after the date of acquiring
55-4 an interest in a unit, the unit owner shall provide the association
55-5 with:
55-6 (1) the unit owner's mailing address, telephone
55-7 number, and driver's license number, if any;
55-8 (2) the name and address of the holder of any lien
55-9 against the unit, and any loan number;
55-10 (3) the name and telephone number of any person
55-11 occupying the unit other than the unit owner; and
55-12 (4) the name, address, and telephone number of any
55-13 person managing the unit as agent of the unit owner.
55-14 (f) A unit owner shall notify the association not later than
55-15 the 30th day after the date the owner has notice of a change in any
55-16 information required by Subsection (e), and shall provide the
55-17 information on request by the association from time to time.
55-18 Sec. 82.115. ASSOCIATION AS TRUSTEE. A third person dealing
55-19 with an association in the association's capacity as a trustee may
55-20 assume without inquiry the existence of trust powers and their
55-21 proper exercise by the association. A third person who lacks
55-22 actual knowledge that an association is exceeding or improperly
55-23 exercising its powers is fully protected in dealing with the
55-24 association as if the association possessed and properly exercised
55-25 the powers it purports to exercise. A third person is not bound to
55-26 ensure the proper application of trust assets paid or delivered to
55-27 an association in its capacity as trustee.
56-1 Sec. 82.116. MANAGEMENT CERTIFICATE. (a) An association
56-2 shall record in each county in which any portion of the condominium
56-3 is located a certificate, signed and acknowledged by an officer of
56-4 the association, stating:
56-5 (1) the name of the condominium;
56-6 (2) the name of the association;
56-7 (3) the location of the condominium;
56-8 (4) the recording data for the declaration;
56-9 (5) the mailing address of the association, or the
56-10 name and mailing address of the person or entity managing the
56-11 association; and
56-12 (6) other information the association considers
56-13 appropriate.
56-14 (b) The association shall record a management certificate
56-15 not later than the 30th day after the date the association has
56-16 notice of a change in any information in a recorded certificate
56-17 required by Subdivisions (a)(1)-(5).
56-18 (c) The association and its officers, directors, employees,
56-19 and agents are not subject to liability to any person for delay or
56-20 failure to record a management certificate, unless the delay or
56-21 failure is wilful or caused by gross negligence.
56-22 Sec. 82.117. OBLIGATIONS OF UNIT OWNERS. Without limiting
56-23 the obligations of the unit owners and except as provided by the
56-24 declaration, bylaws, rules of the association, or this chapter, the
56-25 unit owner:
56-26 (1) shall pay assessments, interest, and other charges
56-27 properly levied by the association against the owner or the owner's
57-1 unit, and shall pay regular periodic assessments without demand by
57-2 the association;
57-3 (2) shall comply with the declaration, bylaws, and
57-4 rules of the association, including any amendments;
57-5 (3) shall pay for damage to the condominium caused by
57-6 the negligence or wilful misconduct of the owner, an occupant of
57-7 the owner's unit, or the owner or occupant's family, guests,
57-8 employees, contractors, agents, or invitees; and
57-9 (4) is liable to the association for violations of the
57-10 declaration, bylaws, or rules of the association, including any
57-11 amendments, by the owner, an occupant of the owner's unit, or the
57-12 owner or occupant's family, guests, employees, agents, or invitees,
57-13 and for costs incurred by the association to obtain compliance,
57-14 including attorney's fees whether or not suit is filed.
57-15 (Sections 82.118 to 82.150 reserved for expansion
57-16 SUBCHAPTER D. PROTECTION OF PURCHASERS
57-17 Sec. 82.151. APPLICABILITY. (a) This subchapter applies to
57-18 each unit subject to this chapter, except as provided by Subsection
57-19 (b) or as modified or waived by the agreement of a purchaser of a
57-20 unit in a condominium in which all units are restricted to
57-21 nonresidential use.
57-22 (b) A condominium information statement or resale
57-23 certificate need not be prepared or delivered in the case of:
57-24 (1) a gratuitous disposition of a unit;
57-25 (2) a disposition pursuant to court order;
57-26 (3) a disposition by a government or governmental
57-27 agency;
58-1 (4) a disposition by foreclosure or deed in lieu of
58-2 foreclosure; or
58-3 (5) a disposition that may be canceled at any time,
58-4 for any reason, and without penalty.
58-5 Sec. 82.152. LIABILITY FOR CONDOMINIUM INFORMATION
58-6 STATEMENT. (a) Except as provided by Subsection (b), a declarant
58-7 shall prepare a condominium information statement before offering
58-8 to the public any interest in a unit.
58-9 (b) A declarant may transfer responsibility for preparation
58-10 of all or a part of the condominium information statement to a
58-11 successor declarant or to a person in the business of selling real
58-12 property who intends to offer units in the condominium for the
58-13 person's own account. On such transfer, the transferor shall
58-14 provide the transferee with any information necessary to enable the
58-15 transferee to prepare a condominium information statement.
58-16 (c) A declarant or other person in the business of selling
58-17 real property who offers a unit for the person's own account to a
58-18 purchaser shall provide a purchaser of a unit with a copy of the
58-19 condominium information statement, as amended, before conveyance of
58-20 the unit or the date of a contract of sale, whichever is earlier.
58-21 (d) The person preparing all or part of the condominium
58-22 information statement is liable for any false or misleading
58-23 statement or for any omission of material fact in the portion of
58-24 the condominium information statement that the person prepared. If
58-25 a declarant did not prepare any part of a condominium information
58-26 statement that the declarant delivers, the declarant is not liable
58-27 for any false or misleading statement or any omission of material
59-1 fact unless the declarant actually knew or should have known of the
59-2 statement or omission.
59-3 Sec. 82.153. CONDOMINIUM INFORMATION STATEMENTS IN GENERAL.
59-4 (a) A condominium information statement must contain or accurately
59-5 disclose:
59-6 (1) the name and principal address of the declarant
59-7 and of the condominium;
59-8 (2) a general description of the condominium that
59-9 includes the types of units and the maximum number of units;
59-10 (3) the minimum and maximum number of additional
59-11 units, if any, that may be included in the condominium;
59-12 (4) a brief narrative description of any development
59-13 rights reserved by a declarant and of any conditions relating to or
59-14 limitations upon the exercise of development rights;
59-15 (5) copies of the declaration, articles of
59-16 incorporation of the association, the bylaws, any rules of the
59-17 association, and amendments to any of them, and copies of leases
59-18 and contracts, other than loan documents, that are required by the
59-19 declarant to be signed by purchasers at closing;
59-20 (6) a projected or pro forma budget for the
59-21 association that complies with Subsection (b) for the first fiscal
59-22 year of the association following the date of the first conveyance
59-23 to a purchaser, identification of the person who prepared the
59-24 budget, and a statement of the budget's assumptions concerning
59-25 occupancy and inflation factors;
59-26 (7) a general description of each lien, lease, or
59-27 encumbrance on or affecting the title to the condominium after
60-1 conveyance by the declarant;
60-2 (8) a copy of each written warranty provided by the
60-3 declarant;
60-4 (9) a description of any unsatisfied judgments against
60-5 the association and any pending suits to which the association is a
60-6 party or which are material to the land title and construction of
60-7 the condominium of which a declarant has actual knowledge;
60-8 (10) a general description of the insurance coverage
60-9 provided for the benefit of unit owners; and
60-10 (11) current or expected fees or charges to be paid by
60-11 unit owners for the use of the common elements and other facilities
60-12 related to the condominium.
60-13 (b) A budget under Subsection (a)(6) must be prepared in
60-14 accordance with generally accepted accounting principles and a
60-15 consideration of the physical condition of the condominium and be
60-16 based on assumptions that, to the best of the declarant's knowledge
60-17 and belief, are reasonable. The budget must include:
60-18 (1) a statement of the amount included, or a statement
60-19 that no amount is included, in the budget as a reserve; and
60-20 (2) the projected monthly common expense assessment
60-21 for each type of unit.
60-22 (c) A declarant shall promptly amend the condominium
60-23 information statement to reflect a material and substantial change
60-24 in its contents. If the change may adversely affect a prospective
60-25 purchaser who has received a condominium information statement, the
60-26 declarant shall furnish a copy of the amendment to the prospective
60-27 purchaser before closing.
61-1 Sec. 82.154. CONDOMINIUMS WITH CONVERSION BUILDINGS. If a
61-2 building contains units that may be occupied for residential use,
61-3 the condominium information statement of a condominium containing
61-4 any conversion building must additionally contain:
61-5 (1) a dated statement by the declarant, based on a
61-6 report by an independent architect or engineer, describing the
61-7 present condition of all structural components and mechanical and
61-8 electrical installations material to the use and enjoyment of the
61-9 building;
61-10 (2) a dated statement by the declarant of the expected
61-11 useful life of each item reported in Subdivision (1) or a statement
61-12 that no representations are made in that regard; and
61-13 (3) a list of violations of building code or other
61-14 governmental regulations of which the declarant has received notice
61-15 and that have not been cured, together with the estimated cost of
61-16 curing those violations.
61-17 Sec. 82.155. CONDOMINIUM SECURITIES. A declarant satisfies
61-18 all requirements relating to preparation of a condominium
61-19 information statement if an interest in the condominium is
61-20 currently registered with the Securities and Exchange Commission of
61-21 the United States and if the declarant delivers to the purchaser a
61-22 copy of the public offering statement filed with the commission.
61-23 Sec. 82.156. PURCHASER'S RIGHT TO CANCEL. (a) If a
61-24 purchaser of a unit from a unit owner other than a declarant has
61-25 not received from the seller the declaration, bylaws, and
61-26 association rules required by Section 82.157 before the purchaser
61-27 executes a contract of sale or if the contract does not contain an
62-1 underlined or bold-print provision acknowledging the purchaser's
62-2 receipt of those documents and recommending that the purchaser read
62-3 those documents before executing the contract, the purchaser may
62-4 cancel the contract before the sixth day after the date the
62-5 purchaser receives those documents. If a purchaser has not
62-6 received a resale certificate before executing a contract of sale,
62-7 the purchaser may cancel the contract before the sixth day after
62-8 the date the purchaser receives the resale certificate or executes
62-9 a waiver under Section 82.157, whichever occurs first.
62-10 (b) If a purchaser from a declarant has not received the
62-11 condominium information statement before the purchaser executes a
62-12 contract of sale or if a contract does not contain an underlined or
62-13 bold-print provision acknowledging the purchaser's receipt of the
62-14 condominium information statement and recommending that the
62-15 purchaser read the condominium information statement before
62-16 executing the contract, the purchaser may cancel the contract
62-17 before the sixth day after the date the purchaser receives the
62-18 condominium information statement.
62-19 (c) If a purchaser elects to cancel a contract under
62-20 Subsection (a) or (b), the cancellation must be by hand-delivering
62-21 written notice of cancellation to the declarant or selling unit
62-22 owner or by mailing notice of cancellation by certified United
62-23 States mail, return receipt requested, to the offeror or the
62-24 offeror's agent for service of process within the five-day
62-25 cancellation period. Cancellation is without penalty, and all
62-26 payments made by the purchaser before cancellation must be
62-27 refunded.
63-1 (d) A selling unit owner may not require a purchaser to
63-2 close until the purchaser is given the declaration, bylaws, and any
63-3 association rules. A declarant may not require a purchaser to
63-4 close until a condominium information statement has been furnished
63-5 to the purchaser.
63-6 Sec. 82.157. RESALE OF UNIT. (a) Except as provided by
63-7 Subsection (c), if a unit owner other than a declarant intends to
63-8 sell a unit, before executing a contract or conveying the unit, the
63-9 unit owner must furnish to the purchaser a current copy of the
63-10 declaration, bylaws, any association rules, and a resale
63-11 certificate that must have been prepared not earlier than three
63-12 months before the date it is delivered to the purchaser. The
63-13 resale certificate must be issued by the association and must
63-14 contain the current operating budget of the association and
63-15 statements of:
63-16 (1) any right of first refusal or other restraint
63-17 contained in the declaration that restricts the right to transfer a
63-18 unit;
63-19 (2) the amount of the periodic common expense
63-20 assessment and the unpaid common expenses or special assessments
63-21 currently due and payable from the selling unit owner;
63-22 (3) other unpaid fees or amounts payable to the
63-23 association by the selling unit owner;
63-24 (4) capital expenditures, if any, approved by the
63-25 association for the next 12 months;
63-26 (5) the amount of reserves, if any, for capital
63-27 expenditures and of portions of those reserves designated by the
64-1 association for a specified project;
64-2 (6) any unsatisfied judgments against the association;
64-3 (7) the nature of any pending suits against the
64-4 association;
64-5 (8) insurance coverage provided for the benefit of
64-6 unit owners;
64-7 (9) whether the board has knowledge that any
64-8 alterations or improvements to the unit or to the limited common
64-9 elements assigned to that unit violate the declaration, bylaws, or
64-10 association rules;
64-11 (10) whether the board has received notice from a
64-12 governmental authority concerning violations of health or building
64-13 codes with respect to the unit, the limited common elements
64-14 assigned to that unit, or any other portion of the condominium;
64-15 (11) the remaining term of any leasehold estate that
64-16 affects the condominium and the provisions governing an extension
64-17 or renewal of the lease; and
64-18 (12) the name, mailing address, and telephone number
64-19 of the association's managing agent, if any.
64-20 (b) Not later than the 10th day after the date of receiving
64-21 a written request by a unit owner, an association shall furnish to
64-22 the selling unit owner or the owner's agent a resale certificate
64-23 signed and dated by an officer or authorized agent of the
64-24 association containing the information required by Subsection (a).
64-25 A selling unit owner or the owner's agent is not liable to the
64-26 purchaser for erroneous information provided by the association in
64-27 the certificate. If an association does not furnish a resale
65-1 certificate or any information required in the certificate within
65-2 the 10-day period, the unit owner may provide the purchaser with a
65-3 sworn affidavit signed by the unit owner in lieu of the
65-4 certificate. An affidavit must state that the unit owner requested
65-5 information from the association concerning its financial
65-6 condition, as required by this section, and that the association
65-7 did not timely provide a resale certificate or the information
65-8 required in the certificate. If a unit owner has furnished an
65-9 affidavit to a purchaser, the unit owner and the purchaser may
65-10 agree in writing to waive the requirement to furnish a resale
65-11 certificate. The association is not liable to a selling unit owner
65-12 for delay or failure to furnish a resale certificate, and an
65-13 officer or agent of the association is not liable for a delay or
65-14 failure to furnish a certificate unless the officer or agent
65-15 wilfully refuses to furnish the certificate or is grossly negligent
65-16 in not furnishing the resale certificate. Failure to provide a
65-17 resale certificate does not void a deed to a purchaser.
65-18 (c) If a properly executed resale certificate incorrectly
65-19 states the total of delinquent sums owed by the selling unit owner
65-20 to the association, the purchaser is not liable for payment of
65-21 additional delinquencies that are unpaid on the date the
65-22 certificate is prepared and that exceed the total sum stated in the
65-23 certificate. A unit owner or the owner's agent is not liable to a
65-24 purchaser for the failure or delay of the association to provide
65-25 the certificate in a timely manner.
65-26 (d) A resale certificate does not affect:
65-27 (1) an association's right to recover debts or claims
66-1 that arise or become due after the date the certificate is
66-2 prepared; or
66-3 (2) an association's lien on a unit securing payment
66-4 of future assessments.
66-5 (e) A purchaser, lender, or title insurer who relies on a
66-6 resale certificate is not liable for any debt or claim that is not
66-7 disclosed in the certificate. An association may not deny the
66-8 validity of any statement in the certificate.
66-9 Sec. 82.158. ESCROW OF DEPOSITS. A deposit made in
66-10 connection with the purchase or reservation of a unit from a
66-11 declarant shall be placed in escrow and held in this state in an
66-12 account designated for that purpose by a real estate broker, an
66-13 attorney, a title insurance company licensed in this state, an
66-14 independent bonded escrow company, or an institution whose accounts
66-15 are insured by a governmental agency or instrumentality until
66-16 delivered to the declarant at closing, delivered to the declarant
66-17 because of the purchaser's default under a contract to purchase the
66-18 unit, or refunded to the purchaser. Escrow deposits may be placed
66-19 in interest-bearing accounts, and the interest is payable as may be
66-20 agreed in writing between the declarant and the purchaser.
66-21 Sec. 82.159. RELEASE OF LIENS. Before conveying real
66-22 property to an association, a declarant shall have that real
66-23 property released from all liens the foreclosure of which would
66-24 deprive unit owners of any right of access to or easement of
66-25 support of the owners' units, and all other liens on that real
66-26 property unless the condominium information statement describes
66-27 certain real property that may be conveyed subject to liens in
67-1 specified amounts.
67-2 Sec. 82.160. CONVERSION BUILDINGS. (a) A declarant of a
67-3 condominium containing a conversion building shall give each
67-4 residential tenant or subtenant in possession of a portion of a
67-5 conversion building notice of the conversion at least 60 days
67-6 before the date the declarant will require the tenant or subtenant
67-7 in possession to vacate. The notice must state generally the
67-8 rights of tenants and subtenants under this section and shall be
67-9 hand-delivered to the unit or mailed by certified United States
67-10 mail, return receipt requested, to the tenant or subtenant at the
67-11 address of the unit or any other mailing address provided by the
67-12 tenant or subtenant. The declarant may not require a tenant or
67-13 subtenant to vacate on less than 60 days' notice, except for
67-14 nonpayment of rent, waste, or conduct that violates the rental
67-15 agreement or is illegal, and the terms of a tenancy may not be
67-16 altered during that period. Failure of a declarant to give notice
67-17 as required by this section is a defense to an action for
67-18 possession.
67-19 (b) If a notice of conversion specifies a date by which a
67-20 unit or proposed unit must be vacated and otherwise complies with
67-21 Section 24.005, the notice also constitutes legal notice to vacate
67-22 on that date for purposes of Section 24.005. A declarant may not
67-23 terminate a lease in violation of its terms.
67-24 (c) Unless expressly authorized by a rental agreement, a
67-25 declarant may not make substantial alterations to the interior of a
67-26 leased premises for purposes of a condominium conversion.
67-27 Sec. 82.161. EFFECT OF VIOLATIONS ON RIGHTS OF ACTION AND
68-1 ATTORNEY'S FEES. (a) If a declarant or any other person subject
68-2 to this chapter violates this chapter, the declaration, or the
68-3 bylaws, any person or class of persons adversely affected by the
68-4 violation has a claim for appropriate relief.
68-5 (b) The prevailing party in an action to enforce the
68-6 declaration, bylaws, or rules is entitled to reasonable attorney's
68-7 fees and costs of litigation from the nonprevailing party.
68-8 Sec. 82.162. LABELING OF PROMOTIONAL MATERIAL. If any
68-9 improvement contemplated in a condominium is labeled "NEED NOT BE
68-10 BUILT" on a plat or plan or is to be located within a portion of a
68-11 condominium with respect to which the declarant has reserved a
68-12 development right, no promotional material that describes or
68-13 depicts the improvement may be displayed or delivered to
68-14 prospective purchasers unless the description or depiction of the
68-15 improvement is conspicuously labeled or identified as "NEED NOT BE
68-16 BUILT."
68-17 Sec. 82.163. DECLARANT'S OBLIGATION TO COMPLETE AND RESTORE.
68-18 The declarant shall complete all improvements labeled "MUST BE
68-19 BUILT" on plats or plans. The declarant is subject to liability
68-20 for the prompt repair and restoration, to a condition compatible
68-21 with the remainder of the condominium, of any portion of the
68-22 condominium affected by the exercise of rights reserved pursuant to
68-23 or created under this chapter.
68-24 Sec. 82.164. LOANS AS ELIGIBLE INVESTMENTS. (a) A loan on
68-25 a condominium unit and the undivided interest in the common
68-26 elements is an eligible investment for a bank, savings and loan
68-27 association, trust company, life insurance company, or other
69-1 lending institution that is authorized to make real property loans,
69-2 and for an administrator, guardian, executor, trustee, individual,
69-3 partnership, corporation, or other fiduciary that is authorized to
69-4 make real property loans. In determining eligibility, the
69-5 existence of a prior lien for taxes, assessments, or other similar
69-6 charges not yet delinquent may not be considered in determining
69-7 whether a mortgage or deed of trust on the security is a first
69-8 lien. This section does not change any provision of law that would
69-9 otherwise be applicable that limits mortgage investments based on a
69-10 special fraction or percentage of the value of the mortgaged
69-11 property.
69-12 (b) An association's lien for assessments does not make a
69-13 condominium unit ineligible for loans for which the unit would
69-14 otherwise qualify.
69-15 SECTION 2. The heading to Chapter 81, Property Code, is
69-16 amended to read as follows:
69-17 CHAPTER 81. CONDOMINIUMS CREATED
69-18 BEFORE ADOPTION OF UNIFORM CONDOMINIUM ACT
69-19 SECTION 3. Subchapter A, Chapter 81, Property Code, is
69-20 amended by adding Section 81.0011 to read as follows:
69-21 Sec. 81.0011. APPLICABILITY. (a) This chapter applies only
69-22 to a condominium regime created before January 1, 1994. A
69-23 condominium regime created on or after January 1, 1994, is governed
69-24 by Chapter 82.
69-25 (b) A condominium regime created before January 1, 1994, to
69-26 which this chapter applies is also governed by Chapter 82 as
69-27 provided by Section 82.002.
70-1 SECTION 4. This Act takes effect January 1, 1994.
70-2 SECTION 5. The importance of this legislation and the
70-3 crowded condition of the calendars in both houses create an
70-4 emergency and an imperative public necessity that the
70-5 constitutional rule requiring bills to be read on three several
70-6 days in each house be suspended, and this rule is hereby suspended.