By: Eckels H.B. No. 156
73R965 LJD-F
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 plat records in books maintained for that purpose, as a
11-15 declarant may request. The book for the condominium plat records
11-16 shall be the same size and type as the book for recording
11-17 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 common elements;
12-8 (3) subject to Subdivision (2), the spaces, interior
12-9 partitions, and other fixtures and improvements within the
12-10 boundaries of a unit are a part of the unit; and
12-11 (4) shutters, awnings, window boxes, doorsteps,
12-12 stoops, porches, balconies, patios, and exterior doors and windows
12-13 or other fixtures designed to serve a single unit, but located
12-14 outside the unit's boundaries, are limited common elements
12-15 allocated exclusively to that unit.
12-16 Sec. 82.053. CONSTRUCTION AND VALIDITY OF DECLARATION AND
12-17 BYLAWS. (a) The provisions of the declaration and bylaws are
12-18 severable.
12-19 (b) The rule against perpetuities may not be applied to
12-20 defeat any provision of the declaration, bylaws, or rules of the
12-21 association.
12-22 (c) If there is a conflict between the provisions of the
12-23 declaration and the bylaws, the declaration prevails except to the
12-24 extent the declaration is inconsistent with this chapter.
12-25 (d) Title to a unit and common elements is not made
12-26 unmarketable or otherwise affected by a provision of unrecorded
12-27 bylaws or by reason of an insubstantial failure of the declaration
13-1 to comply with this chapter. Whether a substantial failure impairs
13-2 marketability is not affected by this chapter.
13-3 Sec. 82.054. DESCRIPTION OF UNITS. A description of a unit
13-4 is a sufficient legal description of the unit and all rights,
13-5 obligations, and interests appurtenant to the unit that were
13-6 created by the declaration or bylaws if the description contains:
13-7 (1) the name of the condominium;
13-8 (2) the recording data for the declaration, including
13-9 any amendments, plats, and plans;
13-10 (3) the county in which the condominium is located;
13-11 and
13-12 (4) the identifying number of the unit.
13-13 Sec. 82.055. CONTENTS OF DECLARATION FOR ALL CONDOMINIUMS.
13-14 The declaration for a condominium must contain:
13-15 (1) the name of the condominium, which must include
13-16 the word "condominium" or be followed by the words "a condominium"
13-17 or a phrase that includes the word "condominium," and the name of
13-18 the association;
13-19 (2) the name of each county in which any part of the
13-20 condominium is located;
13-21 (3) a legally sufficient description of the real
13-22 property included in the condominium;
13-23 (4) a description of the boundaries of each unit
13-24 created by the declaration, including the unit's identifying
13-25 number;
13-26 (5) a statement of the maximum number of units that
13-27 the declarant reserves the right to create;
14-1 (6) a description of the limited common elements other
14-2 than those listed in Sections 82.052(2) and (4);
14-3 (7) a description of any real property, except real
14-4 property subject to development rights, that may be allocated
14-5 subsequently as limited common elements, together with a statement
14-6 that the property may be so allocated;
14-7 (8) an allocation to each unit of its allocated
14-8 interests;
14-9 (9) any restrictions on use, occupancy, or alienation
14-10 of the units;
14-11 (10) a description of and the recording data for
14-12 recorded easements and licenses appurtenant to or included in the
14-13 condominium or to which any portion of the condominium is or may
14-14 become subject by reservation in the declaration;
14-15 (11) the method of amending the declaration;
14-16 (12) a plat or plan or the recording data of a plat or
14-17 plan that has been recorded in the condominium plat records;
14-18 (13) a statement of the association's obligation under
14-19 Section 82.111(i) to rebuild or repair any part of the condominium
14-20 after a casualty or any other disposition of the proceeds of a
14-21 casualty insurance policy;
14-22 (14) a description of any development rights and other
14-23 special declarant rights reserved by the declarant, together with a
14-24 legally sufficient description of the real property to which each
14-25 of those rights applies, and a time limit within which each of
14-26 those rights must be exercised;
14-27 (15) if any development right may be exercised with
15-1 respect to different parcels of real property at different times, a
15-2 statement to that effect, together with:
15-3 (A) either a statement fixing the boundaries of
15-4 those portions and regulating the order in which those portions may
15-5 be subjected to the exercise of each development right, or a
15-6 statement that no assurances are made in those regards; and
15-7 (B) a statement as to whether, if any
15-8 development right is exercised in any portion of the real property
15-9 subject to that development right, that development right must be
15-10 exercised in all or in any other portion of the remainder of that
15-11 real property;
15-12 (16) all matters required by this chapter to be stated
15-13 in the declaration; and
15-14 (17) any other matters the declarant considers
15-15 appropriate.
15-16 Sec. 82.056. LEASEHOLD CONDOMINIUMS. (a) Any lease the
15-17 expiration or termination of which may terminate the condominium or
15-18 reduce its size must be recorded. The lessor shall sign the
15-19 declaration, and the declaration must state:
15-20 (1) the recording data for the lease;
15-21 (2) the date on which the lease is scheduled to
15-22 expire;
15-23 (3) a legally sufficient description of the real
15-24 property subject to the lease;
15-25 (4) any right of the unit owners to redeem the
15-26 reversion and the manner in which the unit owners may exercise that
15-27 right, or a statement that the unit owners do not have that right;
16-1 (5) any right of the unit owners to remove
16-2 improvements within a reasonable time after the expiration or
16-3 termination of the lease, or a statement that the unit owners do
16-4 not have that right; and
16-5 (6) any right of the unit owners to renew the lease
16-6 and the conditions of renewal, or a statement that the unit owners
16-7 do not have that right.
16-8 (b) After the declaration for a leasehold condominium is
16-9 recorded, neither the lessor nor the lessor's successor in interest
16-10 may terminate the leasehold interest of a unit owner who makes
16-11 timely payment of the unit owner's share of the rent and otherwise
16-12 complies with all covenants that, if violated, would entitle the
16-13 lessor to terminate the lease. A unit owner's leasehold interest
16-14 is not affected by failure of any other person to pay rent or
16-15 fulfill any other covenant.
16-16 (c) Acquisition of the leasehold interest of a unit owner by
16-17 the owner of the reversion or remainder does not merge the
16-18 leasehold and fee simple interests unless the leasehold interests
16-19 of all unit owners subject to that reversion or remainder are
16-20 acquired.
16-21 (d) If the expiration or termination of a lease decreases
16-22 the number of units in a condominium, the allocated interests shall
16-23 be reallocated as though those units had been taken by condemnation
16-24 unless otherwise provided by the declaration. Reallocation shall
16-25 be confirmed by an amendment to the declaration prepared, executed,
16-26 and recorded by the association.
16-27 Sec. 82.057. ALLOCATION OF COMMON ELEMENT INTERESTS, VOTES,
17-1 AND COMMON EXPENSE LIABILITIES. (a) The declaration shall
17-2 allocate a fraction or percentage of undivided interests in the
17-3 common elements and in the common expenses of the association, and
17-4 a portion of the votes in the association, to each unit and state
17-5 the formulas used to establish those allocations. These
17-6 allocations may not discriminate in favor of units owned by a
17-7 declarant.
17-8 (b) If units may be added to or withdrawn from the
17-9 condominium, the declaration must state the formulas to be used to
17-10 reallocate the allocated interests among all units included in the
17-11 condominium after the addition or withdrawal.
17-12 (c) The declaration may provide:
17-13 (1) that different allocations of votes must be made
17-14 to the units on particular matters specified in the declaration;
17-15 (2) for cumulative voting only for the purposes of
17-16 electing members of the board; and
17-17 (3) for class voting on specified issues affecting the
17-18 class if necessary to protect valid interests of the class.
17-19 (d) A declarant may not use cumulative or class voting to
17-20 evade any limitation imposed on declarants by this chapter. Units
17-21 may not constitute a class because the units are owned by a
17-22 declarant.
17-23 (e) Except for minor variations due to rounding, the sums of
17-24 the undivided interests in the common elements and of the common
17-25 expense liabilities allocated at any time to all the units shall
17-26 each equal one if stated as fractions or 100 percent if stated as
17-27 percentages. If a discrepancy exists between an allocated interest
18-1 and the result derived from application of the pertinent formula,
18-2 the allocated interest prevails.
18-3 (f) The common elements are not subject to partition. Any
18-4 purported conveyance, judicial sale, or other voluntary or
18-5 involuntary transfer of an undivided interest in the common
18-6 elements without the unit to which that interest is allocated is
18-7 void.
18-8 Sec. 82.058. LIMITED COMMON ELEMENTS. (a) The limited
18-9 common elements and the provisions of the declaration relating to
18-10 the right to use the limited common elements may not be altered
18-11 without the consent of each affected unit owner and the owner's
18-12 first lien mortgagee.
18-13 (b) Except as otherwise provided by the declaration, a
18-14 limited common element may be reallocated by an amendment to the
18-15 declaration, executed by the unit owners between or among whose
18-16 units the reallocation is made. The persons executing the
18-17 amendment shall deliver it to the association, which shall record
18-18 it at the expense of the reallocating unit owners.
18-19 (c) A common element not previously allocated as a limited
18-20 common element may not be allocated except pursuant to the
18-21 declaration made in accordance with Section 82.055(7). The
18-22 allocation shall be made by amendment to the declaration.
18-23 Sec. 82.059. PLATS AND PLANS. (a) Plats and plans are a
18-24 part of the declaration and may be recorded as a part of the
18-25 declaration or separately. Each plat or plan must be legible and
18-26 contain a certification that the plat or plan contains all
18-27 information required by this section.
19-1 (b) Each plat must show:
19-2 (1) the name and a survey or general schematic map of
19-3 the entire condominium;
19-4 (2) the location and dimensions of all real property
19-5 not subject to development rights, or subject only to the
19-6 development right to withdraw, and the location and dimensions of
19-7 all existing improvements within that real property;
19-8 (3) a legally sufficient description of any real
19-9 property subject to development rights, labeled to identify the
19-10 rights applicable to each parcel;
19-11 (4) the extent of any encroachments by or on any
19-12 portion of the condominium;
19-13 (5) to the extent feasible, a legally sufficient
19-14 description of all easements serving or burdening any portion of
19-15 the condominium, and the location of any underground utility line
19-16 that is actually known by the declarant at the time of filing the
19-17 declaration to have been constructed outside a recorded easement;
19-18 (6) the location and dimensions of any vertical unit
19-19 boundaries not shown or projected on recorded plans and the unit's
19-20 identifying number;
19-21 (7) the location, with reference to established data,
19-22 of any horizontal unit boundaries not shown or projected on
19-23 recorded plans and the unit's identifying number;
19-24 (8) a legally sufficient description of any real
19-25 property in which the unit owners will own only an estate for
19-26 years, labeled as "leasehold real property";
19-27 (9) the distance between noncontiguous parcels of real
20-1 property constituting the condominium;
20-2 (10) the location and dimensions of limited common
20-3 elements, other than those described by Sections 82.052(2) and (4);
20-4 (11) in the case of real property not subject to
20-5 development rights, all other matters required by law on land
20-6 surveys; and
20-7 (12) the distance and bearings locating each building
20-8 from all other buildings and from at least one boundary line of the
20-9 real property constituting the condominium.
20-10 (c) A plat may also show the intended location and
20-11 dimensions of a contemplated improvement to be constructed anywhere
20-12 within the condominium, which must be labeled either "MUST BE
20-13 BUILT" or "NEED NOT BE BUILT."
20-14 (d) To the extent not shown on the plats, plans must show:
20-15 (1) the location and dimensions of the vertical
20-16 boundaries of each unit, and the unit's identifying number;
20-17 (2) the horizontal unit boundaries, with reference to
20-18 established data, and the unit's identifying number; and
20-19 (3) any units, appropriately identified, in which the
20-20 declarant has reserved the right to create additional units or
20-21 common elements.
20-22 (e) Unless the declaration provides otherwise, the
20-23 horizontal boundaries of part of a unit located outside a building
20-24 have the same elevation as the horizontal boundaries of the inside
20-25 part and need not be depicted on the plats and plans. Interior
20-26 walls and partitions within a unit need not be included in the
20-27 plats or plans.
21-1 (f) On exercising any development right, the declarant shall
21-2 record either new plats and plans necessary to conform to the
21-3 requirements of this section or new certifications of plats and
21-4 plans previously recorded if those plats and plans otherwise
21-5 conform to the requirements of this section.
21-6 (g) An independent licensed surveyor or engineer shall
21-7 certify at least one plat, whether contained in one or more pages,
21-8 showing all perimeter land boundaries of the condominium, except
21-9 for additional real property, and showing the locations on the
21-10 ground of all buildings labeled "MUST BE BUILT" in relation to land
21-11 boundaries. Certification of any other plat or plan required by
21-12 this chapter shall be made by an independent licensed architect,
21-13 surveyor, or engineer.
21-14 Sec. 82.060. EXERCISE OF DEVELOPMENT RIGHT. (a) To
21-15 exercise a development right, the declarant must prepare, execute,
21-16 and record an amendment to the declaration and record new plats and
21-17 plans for that real property. The declarant is the unit owner of
21-18 any units created. The amendment to the declaration must assign an
21-19 identifying number to each new unit created and, except for
21-20 subdivision or conversion of units described by Subsection (b),
21-21 reallocate the allocated interest among all units. The amendment
21-22 must describe any limited common elements created, designating the
21-23 unit to which each is allocated.
21-24 (b) Development rights may be reserved within any real
21-25 property added to the condominium if the amendment adding the real
21-26 property includes the information required by Section 82.055 or
21-27 82.056, as appropriate, and the plats and plans include the
22-1 information required by Section 82.059(b). This provision does not
22-2 extend the time limit on the exercise of development rights imposed
22-3 by the declaration. Real property to be added is not part of a
22-4 condominium or subject to a declaration until the declaration is
22-5 amended to make the additional real property part of the
22-6 condominium.
22-7 (c) Whenever a declarant exercises a development right to
22-8 subdivide or convert a unit previously created into additional
22-9 units, common elements, or both:
22-10 (1) if the declarant converts the unit entirely to
22-11 common elements, the amendment to the declaration must reallocate
22-12 all the allocated interests of the unit among the other units as if
22-13 the unit had been taken by condemnation; and
22-14 (2) if the declarant subdivides the unit into two or
22-15 more units, whether or not any part of the unit is converted into
22-16 common elements, the amendment to the declaration must reallocate
22-17 all the allocated interests of the unit among the units created by
22-18 the subdivision in any reasonable manner prescribed by the
22-19 declarant.
22-20 (d) If the declaration provides that all or a portion of the
22-21 real property is subject to the development right of withdrawal:
22-22 (1) if all the real property is subject to withdrawal,
22-23 and the declaration does not describe separate portions of real
22-24 property subject to that right, none of the real property may be
22-25 withdrawn after a unit has been conveyed to a purchaser; and
22-26 (2) if a portion or portions are subject to
22-27 withdrawal, no portion may be withdrawn after a unit in that
23-1 portion has been conveyed to a purchaser.
23-2 Sec. 82.061. ALTERATIONS OF UNITS. (a) Subject to the
23-3 provisions of the declaration and other provisions of law, a unit
23-4 owner:
23-5 (1) may make improvements or alterations to the
23-6 owner's unit that do not impair the structural integrity or
23-7 mechanical systems or lessen the support of any portion of the
23-8 condominium;
23-9 (2) may not change the appearance of the common
23-10 elements or the exterior appearance of a unit or any other portion
23-11 of the condominium without prior written permission of the
23-12 association; and
23-13 (3) after acquiring an adjoining unit or an adjoining
23-14 part of an adjoining unit, with the prior written approval of the
23-15 association, may remove, alter, and create apertures in an
23-16 intervening partition, even if the partition in whole or in part is
23-17 a common element, if those acts do not impair the structural
23-18 integrity or mechanical systems or lessen the support of any
23-19 portion of the condominium.
23-20 (b) Removal of partitions or creation of apertures under
23-21 Subsection (a)(3) is not an alteration of boundaries.
23-22 Sec. 82.062. RELOCATION OF BOUNDARIES BETWEEN ADJOINING
23-23 UNITS. Subject to the declaration, the boundaries between
23-24 adjoining units may be relocated by an amendment to the declaration
23-25 on written application to the association by the owners of those
23-26 units. If the owners of the adjoining units have specified a
23-27 reallocation between their units of their allocated interests, the
24-1 application must state the proposed reallocations. Unless the
24-2 board determines not later than the 30th day after the date the
24-3 application is received that the reallocation is unreasonable, the
24-4 association shall prepare an amendment that identifies the units
24-5 involved, states the reallocation, is executed by the applying unit
24-6 owners, and contains words of conveyance between them. At the
24-7 expense of the applying unit owners, the association shall prepare
24-8 and record the amendment and plats or plans necessary to show the
24-9 altered boundaries between adjoining units, and the units'
24-10 dimensions and identifying numbers.
24-11 Sec. 82.063. SUBDIVISION OF UNITS. (a) If the declaration
24-12 expressly permits, a unit may be subdivided into two or more units.
24-13 Subject to the declaration, on written application of a unit owner
24-14 to subdivide a unit and after payment by the unit owner of the cost
24-15 of preparing and recording amendments and plats, the association
24-16 shall prepare, execute, and record an amendment to the declaration,
24-17 including the plats and plans, subdividing the unit.
24-18 (b) The amendment to the declaration must be executed by the
24-19 owner of the unit to be subdivided, assign an identifying number to
24-20 each unit created, and reallocate the allocated interests formerly
24-21 allocated to the subdivided unit to the new units in any reasonable
24-22 manner prescribed by the owner of the subdivided unit.
24-23 Sec. 82.064. EASEMENT FOR ENCROACHMENTS. To the extent that
24-24 a unit or common element encroaches on another unit or common
24-25 element, a valid easement for the encroachment exists. The
24-26 easement does not relieve a unit owner of liability in case of the
24-27 owner's wilful misconduct nor relieve a declarant or any other
25-1 person of liability for failure to adhere to the plats and plans.
25-2 Sec. 82.065. USE FOR SALES PURPOSES. The declaration may
25-3 permit a declarant to maintain sales, leasing, or management
25-4 offices and models in units or on common elements in the
25-5 condominium if the declaration specifies the rights of a declarant
25-6 with regard to the number, size, location, and relocation of the
25-7 offices and models. If the declaration fails to expressly permit
25-8 an office or model, a declarant may maintain no more than one unit
25-9 as a model and no more than one unit as an office for sales,
25-10 leasing, and management purposes at any one time. A sales,
25-11 leasing, or management office or model not designated as a unit by
25-12 the declaration is a common element and is subject to the exclusive
25-13 use of a declarant until the declarant ceases to be a unit owner or
25-14 until the declarant no longer uses the office or model for such
25-15 purposes, whichever occurs earlier. A declarant may modify the
25-16 exterior of a sales, leasing, or management office to conform to
25-17 the aesthetic exterior plan of the condominium. A declarant who
25-18 ceases to be a unit owner ceases to have any rights with regard to
25-19 an office or model unless it is removed within a reasonable time
25-20 from the condominium in accordance with a right to remove reserved
25-21 in the declaration. Subject to limitations in the declaration, a
25-22 declarant may maintain signs on the common elements that advertise
25-23 the condominium for sale or lease. This section is subject to
25-24 local ordinances and other state law.
25-25 Sec. 82.066. EASEMENT RIGHTS. Subject to the declaration, a
25-26 declarant has an easement through the common elements as may be
25-27 reasonably necessary for discharging the declarant's obligations or
26-1 exercising special declarant rights whether arising under this
26-2 chapter or reserved by the declaration.
26-3 Sec. 82.067. AMENDMENT OF DECLARATION. (a) Except as
26-4 provided by Subsection (b), a declaration, including the plats and
26-5 plans, may be amended only by vote or agreement of unit owners to
26-6 which at least 67 percent of the votes in the association are
26-7 allocated, or any larger majority the declaration specifies. A
26-8 declaration may specify a smaller number only if all of the units
26-9 are restricted exclusively to nonresidential use. An amendment to
26-10 a declaration may be adopted:
26-11 (1) by written ballot that states the exact wording or
26-12 substance of the amendment and that specifies the date by which a
26-13 ballot must be received to be counted;
26-14 (2) at a meeting of the members of the association
26-15 after written notice of the meeting has been delivered to an owner
26-16 of each unit stating that a purpose of the meeting is to consider
26-17 an amendment to the declaration; or
26-18 (3) by any method permitted by the declaration.
26-19 (b) The amendment procedures of this section do not apply to
26-20 amendments that may be executed by:
26-21 (1) a declarant under Section 82.051(c), 82.059(f), or
26-22 82.060 or Subsection (f);
26-23 (2) the association under Section 82.007, 82.056(d),
26-24 82.058(c), 82.062, or 82.063 or Subsection (f); or
26-25 (3) certain unit owners under Section 82.058(b),
26-26 82.062, 82.063(b), or 82.068(b).
26-27 (c) An action to challenge the validity of an amendment
27-1 adopted by the association under this section must be brought
27-2 before the first anniversary of the date the amendment is recorded.
27-3 (d) To be effective, an amendment to the declaration must be
27-4 recorded in each county in which any portion of the condominium is
27-5 located.
27-6 (e) Except as permitted or required by this chapter, an
27-7 amendment may not create or increase special declarant rights,
27-8 increase the number of units, change the boundaries of a unit,
27-9 alter or destroy a unit or limited common element, change a unit's
27-10 allocated interest, or change the use restrictions on a unit unless
27-11 the amendment is approved by 100 percent of the votes in the
27-12 association. Except as agreed to by the declarant, an amendment
27-13 may not increase or otherwise modify the obligations imposed by a
27-14 declaration on a declarant, or reduce or otherwise modify the
27-15 rights granted by a declaration to a declarant, including special
27-16 declarant rights.
27-17 (f) If permitted by the declaration, the board or the
27-18 declarant, if the declarant owns a unit that has never been
27-19 occupied, may without a vote of the unit owners or approval of the
27-20 association amend the declaration in any manner necessary to meet
27-21 the requirements of the Federal National Mortgage Association, the
27-22 Federal Home Loan Mortgage Corporation, the Federal Housing
27-23 Administration, or the Veterans Administration.
27-24 (g) Amendments to the declaration required by this chapter
27-25 to be recorded by the association must be prepared, executed,
27-26 recorded, and certified by an officer of the association designated
27-27 for that purpose or, in the absence of designation, by the
28-1 president of the association.
28-2 (h) An association may amend the declaration to authorize
28-3 the board:
28-4 (1) to bring an action to evict a tenant of a unit
28-5 owner for the tenant's violation of the declaration, bylaws, or
28-6 rules of the association;
28-7 (2) to bring an action to evict a tenant of a unit
28-8 owner who fails to pay the association for the cost of repairs to
28-9 common elements damaged substantially by the owner's tenant; or
28-10 (3) to collect rents from a tenant of a unit owner who
28-11 is at least 60 days' delinquent in the payment of any amount due to
28-12 the association.
28-13 Sec. 82.068. TERMINATION OF CONDOMINIUM. (a) Unless the
28-14 declaration provides otherwise and except for a taking of all the
28-15 units by condemnation, a condominium may be terminated only by the
28-16 agreement of 100 percent of the votes in the association and each
28-17 holder of a deed of trust or vendor's lien on a unit. The
28-18 declaration may not allow a termination by less than 80 percent of
28-19 the votes in the association if any unit is restricted exclusively
28-20 to residential uses.
28-21 (b) An agreement of unit owners to terminate a condominium
28-22 must be evidenced by the execution or ratification of a termination
28-23 agreement by the requisite number of unit owners. If, pursuant to
28-24 a termination agreement, the real property constituting the
28-25 condominium is to be sold following termination, the termination
28-26 agreement must set forth the terms of the sale. To be effective,
28-27 a termination agreement and all ratifications of the agreement must
29-1 be recorded in each county in which a portion of the condominium is
29-2 located.
29-3 (c) The association, on behalf of the unit owners, may
29-4 contract for the sale of real property in the condominium, but the
29-5 contract is not binding on the unit owners until it is approved
29-6 under Subsections (a) and (b). If the real property constituting
29-7 the condominium is to be sold following termination, on termination
29-8 title to that real property vests in the association as trustee for
29-9 the holders of all interests in the units, and the association has
29-10 all powers necessary and appropriate to effect the sale, including
29-11 the power to convey the interests of nonconsenting owners. Until
29-12 the sale has been concluded and the proceeds distributed, the
29-13 association shall continue to exist and retains the powers it had
29-14 before termination. Proceeds of the sale must be distributed to
29-15 unit owners and lienholders as their interests may appear, in
29-16 proportion to the respective interests of unit owners as provided
29-17 by Subsection (f). Unless the termination agreement specifies
29-18 differently, as long as the association holds title to the real
29-19 property, each unit owner and the owner's successors in interest
29-20 have an exclusive right to occupy the portion of the real property
29-21 that formerly constituted the owner's unit. During that period of
29-22 occupancy a unit owner and the owner's successors in interest
29-23 remain liable for all assessments and other obligations imposed on
29-24 unit owners by this chapter or the declaration.
29-25 (d) If the real property constituting the condominium is not
29-26 to be sold following termination, on termination title to the real
29-27 property vests in the unit owners as tenants in common in
30-1 proportion to their respective interests, and liens on the units
30-2 shift accordingly. While the tenancy in common exists, a unit
30-3 owner and the owner's successors in interest have an exclusive
30-4 right to occupy the portion of the real property that formerly
30-5 constituted the owner's unit.
30-6 (e) Following termination of the condominium, and after
30-7 payment of or provision for the claims of the association's
30-8 creditors, the assets of the association shall be distributed to
30-9 unit owners in proportion to their respective interests. The
30-10 proceeds of sale described by Subsection (c) and held by the
30-11 association as trustee are not assets of the association.
30-12 (f) The interest of a unit owner referred to in Subsections
30-13 (c), (d), and (e) is, except as provided by Subsection (g), the
30-14 fair market value of the owner's unit, limited common elements, and
30-15 common element interest immediately before the termination, as
30-16 determined by one or more independent appraisers selected by the
30-17 association. The decision of the independent appraisers shall be
30-18 distributed to the unit owners and becomes final unless disapproved
30-19 by unit owners of units to which 25 percent of the votes in the
30-20 association are allocated not later than the 30th day after the
30-21 date of distribution. The proportion of a unit owner's interest to
30-22 that of all unit owners is determined by dividing the fair market
30-23 value of the unit owner's unit and common element interest by the
30-24 total fair market values of all the units and common elements.
30-25 (g) If a unit or a limited common element is destroyed to
30-26 the extent that an appraisal of the fair market value before the
30-27 destruction cannot be made, the interest of a unit owner is the
31-1 owner's common element interest immediately before the termination.
31-2 (h) Foreclosure or enforcement of a lien or encumbrance
31-3 against the entire condominium does not of itself terminate the
31-4 condominium, and foreclosure or enforcement of a lien or
31-5 encumbrance against a portion of the condominium does not withdraw
31-6 that portion from the condominium, unless the portion is
31-7 withdrawable real property or unless the mortgage being foreclosed
31-8 was recorded before the date the declaration was recorded and the
31-9 mortgagee did not consent in writing to the declaration.
31-10 (i) By agreement of the same percentage of unit owners that
31-11 is required to terminate the condominium, the unit owners may
31-12 rescind a termination agreement and reinstate the declaration in
31-13 effect immediately before the election to terminate. To be
31-14 effective, the rescission agreement must be in writing, executed by
31-15 the unit owners who desire to rescind, and recorded in each county
31-16 in which any portion of the condominium is located.
31-17 Sec. 82.069. RIGHTS OF SECURED LENDERS. The declaration may
31-18 require that all or a specified number or percentage of the
31-19 mortgagees or beneficiaries of deeds of trust encumbering the units
31-20 approve specified actions of the unit owners or the association as
31-21 a condition to the effectiveness of those actions, but a
31-22 requirement for approval may not operate to:
31-23 (1) deny or delegate control over the general
31-24 administrative affairs of the association by the unit owners or the
31-25 board; or
31-26 (2) prevent the association or the board from:
31-27 (A) commencing, intervening in, or settling any
32-1 litigation or proceeding; or
32-2 (B) receiving and distributing insurance
32-3 proceeds under Section 82.111.
32-4 (Sections 82.070 to 82.100 reserved for expansion
32-5 SUBCHAPTER C. CONDOMINIUM MANAGEMENT
32-6 Sec. 82.101. ORGANIZATION OF UNIT OWNERS' ASSOCIATION. A
32-7 unit owners' association must be organized as a profit or nonprofit
32-8 corporation. The declarant may not convey a unit until the
32-9 secretary of state has issued a certificate of incorporation under
32-10 Article 3.03, Texas Business Corporation Act, or Article 3.03,
32-11 Texas Non-Profit Corporation Act (Article 1396-3.03, Vernon's Texas
32-12 Civil Statutes). The membership of the association at all times
32-13 consists exclusively of all the unit owners or, following
32-14 termination of the condominium, all former unit owners entitled to
32-15 distribution of proceeds, or the owners' heirs, successors, or
32-16 assigns.
32-17 Sec. 82.102. POWERS OF UNIT OWNERS' ASSOCIATION. (a)
32-18 Unless otherwise provided by the declaration, the association,
32-19 acting through its board, may:
32-20 (1) adopt and amend bylaws;
32-21 (2) adopt and amend budgets for revenues,
32-22 expenditures, and reserves, and collect assessments for common
32-23 expenses from unit owners;
32-24 (3) hire and terminate managing agents and other
32-25 employees, agents, and independent contractors;
32-26 (4) institute, defend, intervene in, settle, or
32-27 compromise litigation or administrative proceedings in its own name
33-1 on behalf of itself or two or more unit owners on matters affecting
33-2 the condominium;
33-3 (5) make contracts and incur liabilities relating to
33-4 the operation of the condominium;
33-5 (6) regulate the use, maintenance, repair,
33-6 replacement, modification, and appearance of the condominium;
33-7 (7) adopt and amend rules regulating the use,
33-8 occupancy, leasing or sale, maintenance, repair, modification, and
33-9 appearance of units and common elements, to the extent the
33-10 regulated actions affect common elements or other units;
33-11 (8) cause additional improvements to be made as a part
33-12 of the common elements;
33-13 (9) acquire, hold, encumber, and convey in its own
33-14 name any right, title, or interest to real or personal property,
33-15 except common elements of the condominium;
33-16 (10) grant easements, leases, licenses, and
33-17 concessions through or over the common elements;
33-18 (11) impose and receive payments, fees, or charges for
33-19 the use, rental, or operation of the common elements and for
33-20 services provided to unit owners;
33-21 (12) impose interest and late charges for late
33-22 payments of assessments, returned check charges, and, if notice and
33-23 an opportunity to be heard are given, reasonable fines for
33-24 violations of the declaration, bylaws, and rules of the
33-25 association;
33-26 (13) adopt and amend rules regulating the collection
33-27 of delinquent assessments and the application of payments;
34-1 (14) adopt and amend rules regulating the termination
34-2 of utility service to a unit, the owner of which is delinquent in
34-3 the payment of an assessment that is used, in whole or in part, to
34-4 pay the cost of that utility;
34-5 (15) impose reasonable charges for preparing,
34-6 recording, or copying declaration amendments, resale certificates,
34-7 or statements of unpaid assessments;
34-8 (16) enter a unit for bona fide emergency purposes
34-9 when conditions present an imminent risk of harm or damage to the
34-10 common elements, another unit, or the occupants;
34-11 (17) assign its right to future income, including the
34-12 right to receive common expense assessments, but only to the extent
34-13 the declaration so provides;
34-14 (18) suspend the voting privileges of or the use of
34-15 certain general common elements by an owner delinquent for more
34-16 than 30 days in the payment of assessments;
34-17 (19) purchase insurance and fidelity bonds it
34-18 considers appropriate or necessary;
34-19 (20) exercise any other powers conferred by the
34-20 declaration or bylaws;
34-21 (21) exercise any other powers that may be exercised
34-22 in this state by a corporation of the same type as the association;
34-23 and
34-24 (22) exercise any other powers necessary and proper
34-25 for the government and operation of the association.
34-26 (b) The declaration may not impose limitations on the power
34-27 of the association to deal with the declarant that are more
35-1 restrictive than the limitations imposed on the power of the
35-2 association to deal with other persons.
35-3 (c) To be enforceable, a bylaw or rule of the association
35-4 must not be arbitrary or capricious.
35-5 (d) Before an association may charge the unit owner for
35-6 property damage for which the unit owner is liable or levy a fine
35-7 for violation of the declaration, bylaws, or rules, the association
35-8 shall give to the unit owner a written notice that:
35-9 (1) describes the violation or property damage and
35-10 states the amount of the proposed fine or damage charge;
35-11 (2) states that not later than the 30th day after the
35-12 date of the notice, the unit owner may request a hearing before the
35-13 board to contest the fine or damage charge; and
35-14 (3) allows the unit owner a reasonable time, by
35-15 specified date, to cure the violation and avoid the fine unless the
35-16 unit owner was given notice and a reasonable opportunity to cure a
35-17 similar violation within the preceding twelve months.
35-18 (e) The association may give a copy of the notice required
35-19 by Subsection (d) to an occupant of the unit. The association must
35-20 give notice of a levied fine or damage charge to the unit owner not
35-21 later than the 30th day after the date of levy.
35-22 Sec. 82.103. BOARD MEMBERS AND OFFICERS. (a) Except as
35-23 provided by the declaration, bylaws, or this chapter, the board
35-24 shall act in all instances on behalf of the association if in the
35-25 good-faith judgment of the board the action is reasonable. Each
35-26 officer or member of the board is liable as a fiduciary of the unit
35-27 owners for the officer's or member's acts or omissions. All acts
36-1 of the association must be by and through the board unless
36-2 otherwise provided by the declaration or bylaws or by law.
36-3 (b) The board may not act on behalf of the association to
36-4 amend the declaration except as permitted by this chapter, to
36-5 terminate the condominium, to elect members of the board, or to
36-6 determine the qualifications, powers and duties, or terms of office
36-7 of board members. The board may fill a vacancy in its membership
36-8 for the unexpired portion of a term.
36-9 (c) Subject to Subsection (d), the declaration may provide
36-10 for a period of declarant control of the association during which a
36-11 declarant, or persons designated by the declarant, may appoint and
36-12 remove the officers and members of the board. Regardless of the
36-13 period provided by the declaration, a period of declarant control
36-14 terminates not later than the 120th day after conveyance of 75
36-15 percent of the units that may be created to unit owners other than
36-16 a declarant. Transfer of special declarant rights does not
36-17 terminate the period of declarant control. A declarant may
36-18 voluntarily surrender the right to appoint and remove officers and
36-19 members of the board before termination of the period, but in that
36-20 event the declarant may require, for the duration of the period
36-21 that the declarant would otherwise control, that specified actions
36-22 of the association or board be approved by the declarant before
36-23 they become effective.
36-24 (d) Not later than the 120th day after conveyance of 50
36-25 percent of the units that may be created to unit owners other than
36-26 a declarant, not less than one-third of the members of the board
36-27 must be elected by unit owners other than the declarant.
37-1 (e) Not later than the termination of a period of declarant
37-2 control, the unit owners shall elect a board of at least three
37-3 members who need not be unit owners. The board shall elect the
37-4 officers before the 31st day after the date declarant control
37-5 terminates. The persons elected shall take office on election.
37-6 (f) An officer or director of the association is not liable
37-7 to the association or any unit owner for monetary damages for an
37-8 act or omission occurring in the person's capacity as an officer or
37-9 director unless:
37-10 (1) the officer or director breached a fiduciary duty
37-11 to the association or a unit owner;
37-12 (2) the officer or director received an improper
37-13 benefit; or
37-14 (3) the act or omission was in bad faith, involved
37-15 intentional misconduct, or was one for which liability is expressly
37-16 provided by statute.
37-17 (g) Subsection (f) does not diminish a limitation of
37-18 liability provided an officer or director of the association by the
37-19 declaration, bylaws, articles of incorporation of the association,
37-20 or other laws.
37-21 Sec. 82.104. TRANSFER OF SPECIAL DECLARANT RIGHTS. (a)
37-22 Special declarant rights created or reserved under this chapter may
37-23 not be transferred except by an instrument evidencing the transfer
37-24 recorded in each county in which any portion of the condominium is
37-25 located. The instrument is not effective unless executed by the
37-26 transferee.
37-27 (b) On transfer of any special declarant right, a transferor
38-1 is not relieved of an obligation or liability arising before the
38-2 transfer. A transferor is not liable for an act or omission or a
38-3 breach of an obligation arising from the exercise of a special
38-4 declarant right by a successor declarant who is not an affiliate of
38-5 the transferor.
38-6 (c) Unless otherwise provided by a mortgage instrument or
38-7 deed of trust, in case of foreclosure of a mortgage, tax sale,
38-8 judicial sale, sale by a trustee under a deed of trust, or sale
38-9 under Bankruptcy Code or receivership proceedings, of a unit owned
38-10 by a declarant or of real property in a condominium subject to
38-11 development rights, a person acquiring title to all the real
38-12 property being foreclosed or sold may request to succeed to all
38-13 special declarant rights or only to rights reserved by the
38-14 declaration to maintain models, offices, and signs. The judgment
38-15 or instrument conveying title may provide for transfer of only the
38-16 special declarant rights requested.
38-17 (d) On foreclosure, tax sale, judicial sale, sale by a
38-18 trustee under a deed of trust, or sale under Bankruptcy Code or
38-19 receivership proceedings of all units and other real property in a
38-20 condominium owned by a declarant:
38-21 (1) the declarant ceases to have any special declarant
38-22 rights; and
38-23 (2) the period of declarant control terminates unless
38-24 the judgment or instrument conveying title provides for transfer of
38-25 all special declarant rights held by that declarant to a successor
38-26 declarant.
38-27 (e) The liabilities and obligations of a person who succeeds
39-1 to special declarant rights are as follows:
39-2 (1) a successor to a special declarant right who is an
39-3 affiliate of a declarant is subject to all obligations and
39-4 liabilities imposed on the transferor by this chapter or by the
39-5 declaration;
39-6 (2) a successor to a special declarant right, other
39-7 than a successor described by Subdivision (3) or (4), who is not an
39-8 affiliate of a declarant, is subject to all obligations and
39-9 liabilities imposed on the transferor by this chapter or by the
39-10 declaration;
39-11 (3) a successor to only a right reserved by the
39-12 declaration to maintain models, offices, and signs, who is not an
39-13 affiliate of a declarant, may not exercise any other special
39-14 declarant right, and is not subject to any liability or obligation
39-15 as a declarant, except the obligation to provide a condominium
39-16 information statement and any liability arising as a result; and
39-17 (4) a successor to all special declarant rights held
39-18 by the successor's transferor who is not an affiliate of that
39-19 declarant and who succeeded to those rights pursuant to a deed in
39-20 lieu of foreclosure or a judgment or instrument conveying title to
39-21 units under Subsection (c) may declare the person's intention in a
39-22 recorded instrument to hold those rights solely for transfer to
39-23 another person; thereafter, until all special declarant rights are
39-24 transferred to a person acquiring title to any unit owned by the
39-25 successor, or until an instrument permitting exercise of all those
39-26 rights is recorded, the successor may not exercise any of those
39-27 rights other than any right held by the successor's transferor to
40-1 control the board as provided by Section 82.103(c) for the duration
40-2 of the period of declarant control, and an attempt to exercise
40-3 those rights is void; so long as a successor declarant may not
40-4 exercise special declarant rights under this subdivision, the
40-5 successor is not subject to any liability or obligation as a
40-6 declarant other than liability for acts and omissions under Section
40-7 82.103(a).
40-8 (f) This section does not subject a successor to a special
40-9 declarant right to any claims against or other obligations of a
40-10 transferor declarant, other than claims and obligations arising
40-11 under this chapter or the declaration.
40-12 Sec. 82.105. TERMINATION OF CONTRACTS AND LEASES OF
40-13 DECLARANT. An association in a residential or recreational
40-14 condominium may terminate, without penalty, contracts or leases
40-15 between the association and a declarant or an affiliate of a
40-16 declarant if:
40-17 (1) the contract is entered into by the association
40-18 while controlled by the declarant;
40-19 (2) the association terminates the contract or lease
40-20 before the first anniversary of the date a board elected by the
40-21 unit owners takes office; and
40-22 (3) the association gives at least 90 days' notice of
40-23 its intent to terminate the contract or lease to the other party.
40-24 Sec. 82.106. BYLAWS. (a) The administration and operation
40-25 of the condominium are governed by the bylaws, which must provide
40-26 for:
40-27 (1) the number of members on the board and the titles
41-1 of the officers of the association;
41-2 (2) election by the board of a president, treasurer,
41-3 secretary, and any other officers the bylaws specify;
41-4 (3) the qualifications, powers and duties, terms of
41-5 office, and the manner of electing and removing a board member or
41-6 officer and filling vacancies;
41-7 (4) the powers, if any, that the board or an officer
41-8 may delegate to other persons or to a managing agent;
41-9 (5) the designation of officers who are authorized to
41-10 prepare, execute, certify, and record amendments to the declaration
41-11 on behalf of the association;
41-12 (6) the method of amending the bylaws; and
41-13 (7) the manner of notice of meetings of the
41-14 association.
41-15 (b) Subject to the declaration, the bylaws may provide for
41-16 other matters the association considers desirable, necessary, or
41-17 appropriate.
41-18 Sec. 82.107. UPKEEP OF CONDOMINIUM. (a) Except as provided
41-19 by the declaration or Subsections (b) and (c), the association is
41-20 responsible for maintenance, repair, and replacement of the common
41-21 elements, and each unit owner is responsible for maintenance,
41-22 repair, and replacement of the owner's unit. Each unit owner shall
41-23 afford to the association and the other unit owners, and to their
41-24 agents or employees, access through the owner's unit reasonably
41-25 necessary for those purposes. If damage is inflicted on the common
41-26 elements or on any unit through which access is taken, the unit
41-27 owner responsible for the damage, or the association if it is
42-1 responsible, is liable for the prompt repair of the damage.
42-2 (b) Except as provided by the declaration, each unit owner
42-3 is responsible for the cost of maintenance, repair, and replacement
42-4 of any utility installation or equipment serving only the owner's
42-5 unit, without regard to whether the installation or equipment is
42-6 located wholly or partially outside the designated boundaries of
42-7 the unit. For purposes of this subsection, utility installations
42-8 and equipment include electricity, water, sewage, gas, water
42-9 heaters, heating and air conditioning equipment, and television
42-10 antennas.
42-11 (c) Except as provided by the declaration, each unit owner
42-12 is responsible for the cost of maintenance, repair, and replacement
42-13 of windows and doors serving only the owner's unit.
42-14 (d) Unless otherwise provided by the declaration, the
42-15 association may enter a unit, after giving notice to the owner and
42-16 occupant of the unit, to:
42-17 (1) prevent or terminate waste of water purchased by
42-18 the association as a common expense; or
42-19 (2) perform maintenance and repairs of the condominium
42-20 that, if not performed, may result in increased damage by water to
42-21 components of the condominium that the association maintains.
42-22 Sec. 82.108. MEETINGS. (a) Meetings of the association
42-23 must be held at least once each year. Unless the declaration
42-24 provides otherwise, special meetings of the association may be
42-25 called by the president, a majority of the board, or unit owners
42-26 having at least 20 percent of the votes in the association. Notice
42-27 of a meeting shall be given in accordance with the bylaws.
43-1 (b) Meetings of the association and board must be open to
43-2 unit owners, subject to the right of the board to adjourn a meeting
43-3 of the board and reconvene in closed executive session to consider
43-4 actions involving personnel, pending litigation, contract
43-5 negotiations, enforcement actions, matters involving the invasion
43-6 of privacy of individual unit owners, or matters that are to remain
43-7 confidential by request of the affected parties and agreement of
43-8 the board. The general nature of any business to be considered in
43-9 executive session must first be announced at the open meeting.
43-10 (c) Unless the declaration, bylaws, or articles of
43-11 incorporation of the association provide otherwise:
43-12 (1) a meeting of the board may be held by any method
43-13 of communication, including electronic and telephonic, by which
43-14 each director may hear and be heard by every other director; and
43-15 (2) in lieu of a meeting, the board may act by
43-16 unanimous written consents of directors, to be filed with the
43-17 minutes of board meetings.
43-18 Sec. 82.109. QUORUMS. (a) Unless the bylaws provide
43-19 otherwise, a quorum is present throughout any meeting of the
43-20 association if persons entitled to cast at least 20 percent of the
43-21 votes that may be cast for election of the board are present in
43-22 person or by proxy at the beginning of the meeting. The bylaws may
43-23 not reduce the standard for a quorum to less than 10 percent.
43-24 (b) Unless the bylaws specify a larger percentage, a quorum
43-25 is present throughout a meeting of the board if persons entitled to
43-26 cast at least 50 percent of the votes on the board are present at
43-27 the beginning of the meeting.
44-1 Sec. 82.110. VOTING AND PROXIES. (a) If only one of the
44-2 multiple owners of a unit is present at a meeting of the
44-3 association, that person may cast the vote or votes allocated to
44-4 that unit. If more than one of the multiple owners is present, the
44-5 vote or votes allocated to that unit may be cast only in accordance
44-6 with the owners' unanimous agreement unless the declaration
44-7 provides otherwise. Multiple owners are in unanimous agreement if
44-8 one of the multiple owners casts the votes allocated to a unit and
44-9 none of the other owners makes prompt protest to the person
44-10 presiding over the meeting.
44-11 (b) Votes allocated to a unit may be cast under a written
44-12 proxy duly executed by a unit owner. If a unit is owned by more
44-13 than one person, each owner of the unit may vote or register
44-14 protest to the casting of votes by the other owners of the unit
44-15 through a proxy duly executed by the unit owner. A unit owner may
44-16 not revoke a proxy given under this section except by giving actual
44-17 notice of revocation to the person presiding over a meeting of the
44-18 association. A proxy is void if it is not dated or if it purports
44-19 to be revocable without notice. A proxy terminates one year after
44-20 its date unless it specifies a shorter time.
44-21 (c) Cumulative voting is not allowed.
44-22 Sec. 82.111. INSURANCE. (a) Beginning not later than the
44-23 time of the first conveyance of a unit to a person other than a
44-24 declarant, the association shall maintain, to the extent reasonably
44-25 available:
44-26 (1) property insurance on the insurable common
44-27 elements insuring against all risks of direct physical loss
45-1 commonly insured against, including fire and extended coverage, in
45-2 a total amount of at least 80 percent of the replacement cost or
45-3 actual cash value of the insured property as of the effective date
45-4 and at each renewal date of the policy; and
45-5 (2) commercial general liability insurance, including
45-6 medical payments insurance, in an amount determined by the board
45-7 but not less than any amount specified by the declaration covering
45-8 all occurrences commonly insured against for death, bodily injury,
45-9 and property damage arising out of or in connection with the use,
45-10 ownership, or maintenance of the common elements.
45-11 (b) If a building contains units having horizontal
45-12 boundaries described in the declaration, the insurance maintained
45-13 under Subsection (a)(1), to the extent reasonably available, must
45-14 include the units, but need not include improvements and
45-15 betterments installed by unit owners.
45-16 (c) If the insurance described by Subsections (a) and (b) is
45-17 not reasonably available, the association shall cause notice of
45-18 that fact to be delivered or mailed to all unit owners and
45-19 lienholders. The declaration may require the association to carry
45-20 any other insurance, and the association in any event may carry any
45-21 other insurance the board considers appropriate to protect the
45-22 condominium, the association, or the unit owners. This section
45-23 does not affect the right of a holder of a mortgage on a unit to
45-24 require a unit owner to acquire insurance in addition to that
45-25 provided by the association.
45-26 (d) Insurance policies carried under Subsection (a) must
45-27 provide that:
46-1 (1) each unit owner is an insured person under the
46-2 policy with respect to liability arising out of the person's
46-3 ownership of an undivided interest in the common elements or
46-4 membership in the association;
46-5 (2) the insurer waives its right to subrogation under
46-6 the policy against a unit owner;
46-7 (3) no action or omission of a unit owner, unless
46-8 within the scope of the unit owner's authority on behalf of the
46-9 association, will void the policy or be a condition to recovery
46-10 under the policy; and
46-11 (4) if, at the time of a loss under the policy, there
46-12 is other insurance in the name of a unit owner covering the same
46-13 property covered by the policy, the association's policy provides
46-14 primary insurance.
46-15 (e) A claim for any loss covered by the policy under
46-16 Subsection (a)(1) must be submitted by and adjusted with the
46-17 association. The insurance proceeds for that loss shall be payable
46-18 to an insurance trustee designated by the association for that
46-19 purpose, if the designation of an insurance trustee is considered
46-20 by the board to be necessary or desirable, or otherwise to the
46-21 association, and not to any unit owner or lienholder.
46-22 (f) The insurance trustee or the association shall hold
46-23 insurance proceeds in trust for unit owners and lienholders as
46-24 their interests may appear. Subject to Subsection (i), the
46-25 proceeds paid under a policy must be disbursed first for the repair
46-26 or restoration of the damaged common elements and units, and unit
46-27 owners and lienholders are not entitled to receive payment of any
47-1 portion of the proceeds unless there is a surplus of proceeds after
47-2 the property has been completely repaired or restored, or the
47-3 condominium is terminated.
47-4 (g) An insurance policy issued to the association does not
47-5 prevent a unit owner from obtaining insurance for the owner's own
47-6 benefit.
47-7 (h) The insurer issuing the policy may not cancel or refuse
47-8 to renew it less than 30 days after written notice of the proposed
47-9 cancellation or nonrenewal has been mailed to the association.
47-10 (i) Any portion of the condominium for which insurance is
47-11 required that is damaged or destroyed shall be promptly repaired or
47-12 replaced by the association unless the condominium is terminated,
47-13 repair or replacement would be illegal under any state or local
47-14 health or safety statute or ordinance, or at least 80 percent of
47-15 the unit owners, including each owner of a unit or assigned limited
47-16 common element that will not be rebuilt or repaired, vote to not
47-17 rebuild. A vote to not rebuild does not increase an insurer's
47-18 liability to loss payment obligation under a policy, and the vote
47-19 does not cause a presumption of total loss. The cost of repair or
47-20 replacement in excess of the insurance proceeds and reserves is a
47-21 common expense. If the entire condominium is not repaired or
47-22 replaced, any insurance proceeds attributable to the damaged common
47-23 elements shall be used to restore the damaged area to a condition
47-24 compatible with the remainder of the condominium, the insurance
47-25 proceeds attributable to units and limited common elements that are
47-26 not rebuilt shall be distributed to the owners of those units and
47-27 the owners of the units to which those limited common elements were
48-1 assigned, or to their mortgagees, as their interests may appear,
48-2 and the remainder of the proceeds shall be distributed to all the
48-3 unit owners as their interests may appear. If the unit owners vote
48-4 to not rebuild any unit, that unit's allocated interests shall be
48-5 automatically reallocated on the vote as if the unit had been
48-6 condemned, and the association shall prepare, execute, and record
48-7 an amendment to the declaration reflecting the reallocation.
48-8 Section 82.068 governs the distribution of insurance proceeds if
48-9 the condominium is terminated.
48-10 (j) The provisions of this section may be varied or waived
48-11 if all the units in a condominium are restricted to nonresidential
48-12 use.
48-13 Sec. 82.112. ASSESSMENTS FOR COMMON EXPENSES. (a) Until an
48-14 association makes a common expense assessment, a declarant shall
48-15 pay all the expenses of the condominium as the expenses accrue.
48-16 After an initial assessment by an association, assessments must be
48-17 made at least annually and must be based on a budget adopted at
48-18 least annually by the association. The association's reserves and
48-19 the unit owners' working capital contributions may not be used to
48-20 pay operational expenses until the declarant control terminates.
48-21 (b) From the date of the initial assessment until declarant
48-22 control terminates, or three years from a declarant's first
48-23 conveyance of a unit, whichever is earlier, the declarant shall
48-24 periodically pay to the association:
48-25 (1) an amount equal to all operational expenses of the
48-26 association, less the operational expense portion of the
48-27 assessments paid by unit owners other than declarant; or
49-1 (2) the common expense liability allocated to each
49-2 unit owned by the declarant.
49-3 (c) Common expenses shall be assessed against all units
49-4 conveyed, rented, or used as models or offices by the declarant and
49-5 against all units owned by a declarant after termination of a
49-6 declarant's control or three years from a declarant's first
49-7 conveyance of a unit, whichever is earlier, in accordance with the
49-8 common expense liability allocated to each unit. A past due
49-9 assessment or installment of an assessment may bear interest at a
49-10 lawful rate established by the association.
49-11 (d) Except as provided by the declaration and Section
49-12 82.107, a common expense for the maintenance, repair, or
49-13 replacement of a limited common element shall be assessed against
49-14 all the units as if it were for a general common element.
49-15 (e) If common expense liabilities are reallocated, common
49-16 expense assessments and an assessment installment not yet due shall
49-17 be recomputed in accordance with the reallocated common expense
49-18 liabilities.
49-19 (f) A declaration may allow the accumulation of reserve
49-20 funds for an unspecified period to provide for any anticipated
49-21 expense of the condominium.
49-22 (g) This section does not prevent a declarant from
49-23 collecting from a purchaser at closing the prorated amount of any
49-24 expenses, such as insurance or taxes, that the declarant has
49-25 prepaid to the association or directly to others on behalf of the
49-26 unit that is being purchased.
49-27 Sec. 82.113. ASSOCIATION'S LIEN FOR ASSESSMENTS. (a) An
50-1 assessment levied by the association against a unit or unit owner
50-2 is a personal obligation of the unit owner and is secured by a
50-3 continuing lien on the unit and on rents and insurance proceeds
50-4 received by the unit owner and relating to the owner's unit. In
50-5 this section, "assessments" means regular and special assessments,
50-6 dues, fees, charges, interest, late fees, fines, collection costs,
50-7 attorney's fees, and any other amount due to the association by the
50-8 unit owner or levied against the unit by the association, all of
50-9 which are enforceable as assessments under this section unless the
50-10 declaration provides otherwise.
50-11 (b) The association's lien for assessments has priority over
50-12 any other lien except:
50-13 (1) a lien for real property taxes and other
50-14 governmental assessments or charges against the unit;
50-15 (2) a lien or encumbrance recorded before the
50-16 declaration is recorded;
50-17 (3) a first vendor's lien or first deed of trust lien
50-18 recorded before the date on which the assessment sought to be
50-19 enforced becomes delinquent under the declaration, bylaws, or
50-20 rules; and
50-21 (4) unless the declaration provides otherwise, a lien
50-22 for construction of improvements to the unit or an assignment of
50-23 the right to insurance proceeds on the unit if the lien or
50-24 assignment is recorded or duly perfected before the date on which
50-25 the assessment sought to be enforced becomes delinquent under the
50-26 declaration, bylaws, or rules.
50-27 (c) The association's lien for assessments is created by
51-1 recordation of the declaration, which constitutes record notice and
51-2 perfection of the lien. Unless the declaration provides otherwise,
51-3 no other recordation of a lien or notice of lien is required.
51-4 (d) By acquiring a unit, a unit owner grants to the
51-5 association a power of sale in connection with the association's
51-6 lien. By written resolution, a board may appoint, from time to
51-7 time, an officer, agent, trustee, or attorney of the association to
51-8 exercise the power of sale on behalf of the association. Except as
51-9 provided by the declaration, an association shall exercise its
51-10 power of sale pursuant to Section 51.002.
51-11 (e) The association has the right to foreclose its lien
51-12 judicially or by nonjudicial foreclosure pursuant to the power of
51-13 sale created by this chapter or the declaration, except that the
51-14 association may not foreclose a lien for assessments consisting
51-15 solely of fines. Costs of foreclosure may be added to the amount
51-16 owed by the unit owner to the association. A unit owner may not
51-17 petition a court to set aside a sale solely because the purchase
51-18 price at the foreclosure sale was insufficient to fully satisfy the
51-19 owner's debt.
51-20 (f) The association may bid for and purchase the unit at
51-21 foreclosure sale as a common expense. The association may own,
51-22 lease, encumber, exchange, sell, or convey a unit.
51-23 (g) The owner of a unit used for residential purposes and
51-24 purchased by an association at a foreclosure sale of the
51-25 association's lien for assessments may redeem the unit not later
51-26 than the 90th day after the date of the foreclosure sale. To
51-27 redeem the unit, the owner must pay to the association all amounts
52-1 due the association at the time of the foreclosure sale, interest
52-2 from the date of foreclosure sale to the date of redemption at the
52-3 rate provided by the declaration for delinquent assessments,
52-4 reasonable attorney's fees and costs incurred by the association in
52-5 foreclosing the lien, any assessment levied against the unit by the
52-6 association after the foreclosure sale, and any reasonable cost
52-7 incurred by the association as owner of the unit, including costs
52-8 of maintenance and leasing. On redemption, the association shall
52-9 execute a deed to the redeeming unit owner. The exercise of the
52-10 right of redemption is not effective against a subsequent purchaser
52-11 or lender for value without notice of the redemption after the
52-12 redemption period expires unless the redeeming unit owner records
52-13 the deed from the association or an affidavit stating that the
52-14 owner has exercised the right of redemption. A unit that has been
52-15 redeemed remains subject to all liens and encumbrances on the unit
52-16 before foreclosure. All rents and other income collected from the
52-17 unit by the association from the date of foreclosure sale to the
52-18 date of redemption belong to the association, but the rents and
52-19 income shall be credited against the redemption amount. An
52-20 association purchasing a unit at a sale foreclosing its lien may
52-21 not transfer ownership of the unit during the redemption period to
52-22 a person other than a redeeming owner.
52-23 (h) If a unit owner defaults in the owner's monetary
52-24 obligations to the association, the association may notify other
52-25 lienholders of the default and the association's intent to
52-26 foreclose its lien. The association shall notify any holder of a
52-27 recorded lien or duly perfected mechanic's lien against a unit who
53-1 has given the association a written request for notification of the
53-2 unit owner's monetary default or the association's intent to
53-3 foreclose its lien.
53-4 (i) This section does not prohibit the association from
53-5 taking a deed in lieu of foreclosure or from filing suit to recover
53-6 a money judgment for sums that may be secured by the lien.
53-7 (j) At any time before a nonjudicial foreclosure sale, a
53-8 unit owner may avoid foreclosure by paying all amounts due the
53-9 association.
53-10 (k) If, on January 1, 1994, a unit is the homestead of the
53-11 unit owner and is subject to a declaration that does not contain a
53-12 valid assessment lien against the unit, the lien provided by this
53-13 section does not attach against the unit until the unit ceases to
53-14 be the homestead of the person owning it on January 1, 1994.
53-15 (l) Foreclosure of a tax lien attaching against a unit under
53-16 Chapter 32, Tax Code, does not discharge the association's lien for
53-17 assessments under this section or under a declaration for amounts
53-18 becoming due to the association after the date of foreclosure of
53-19 the tax lien.
53-20 (m) If a unit owner is delinquent in payment of assessments
53-21 to an association, at the request of the association a holder of a
53-22 recorded lien against the unit may provide the association with
53-23 information about the unit owner's debt secured by the holder's
53-24 lien against the unit and other relevant information. At the
53-25 request of a lien holder, the association may furnish the lien
53-26 holder with information about the condominium and the unit owner's
53-27 obligations to the association.
54-1 Sec. 82.114. ASSOCIATION RECORDS. (a) The association
54-2 shall keep:
54-3 (1) detailed financial records that comply with
54-4 generally accepted accounting principles and that are sufficiently
54-5 detailed to enable the association to prepare a resale certificate
54-6 under Section 82.157;
54-7 (2) the plans and specifications used to construct the
54-8 condominium except for buildings originally constructed before
54-9 January 1, 1994;
54-10 (3) the condominium information statement prepared
54-11 under Section 82.152 and any amendments;
54-12 (4) the name and mailing address of each unit owner;
54-13 (5) voting records, proxies, and correspondence
54-14 relating to amendments to the declaration; and
54-15 (6) minutes of meetings of the association and board.
54-16 (b) All financial and other records of the association shall
54-17 be reasonably available at its registered office or its principal
54-18 office in this state for examination by a unit owner and the
54-19 owner's agents. An attorney's files and records relating to the
54-20 association are not records of the association and are not subject
54-21 to inspection by unit owners or production in a legal proceeding.
54-22 (c) The association shall, as a common expense, annually
54-23 obtain an independent audit of the records. Copies of the audit
54-24 must be made available to the unit owners.
54-25 (d) A declarant shall furnish copies to the association of
54-26 the information required by Subsection (a) on the date the first
54-27 unit is sold.
55-1 (e) Not later than the 30th day after the date of acquiring
55-2 an interest in a unit, the unit owner shall provide the association
55-3 with:
55-4 (1) the unit owner's mailing address, telephone
55-5 number, and driver's license number, if any;
55-6 (2) the name and address of the holder of any lien
55-7 against the unit, and any loan number;
55-8 (3) the name and telephone number of any person
55-9 occupying the unit other than the unit owner; and
55-10 (4) the name, address, and telephone number of any
55-11 person managing the unit as agent of the unit owner.
55-12 (f) A unit owner shall notify the association not later than
55-13 the 30th day after the date the owner has notice of a change in any
55-14 information required by Subsection (e), and shall provide the
55-15 information on request by the association from time to time.
55-16 Sec. 82.115. ASSOCIATION AS TRUSTEE. A third person dealing
55-17 with an association in the association's capacity as a trustee may
55-18 assume without inquiry the existence of trust powers and their
55-19 proper exercise by the association. A third person who lacks
55-20 actual knowledge that an association is exceeding or improperly
55-21 exercising its powers is fully protected in dealing with the
55-22 association as if the association possessed and properly exercised
55-23 the powers it purports to exercise. A third person is not bound to
55-24 ensure the proper application of trust assets paid or delivered to
55-25 an association in its capacity as trustee.
55-26 Sec. 82.116. MANAGEMENT CERTIFICATE. (a) An association
55-27 shall record in each county in which any portion of the condominium
56-1 is located a certificate, signed and acknowledged by an officer of
56-2 the association, stating:
56-3 (1) the name of the condominium;
56-4 (2) the name of the association;
56-5 (3) the location of the condominium;
56-6 (4) the volume and page at which the declaration is
56-7 recorded;
56-8 (5) the mailing address of the association, or the
56-9 name and mailing address of the person or entity managing the
56-10 association; and
56-11 (6) other information the association considers
56-12 appropriate.
56-13 (b) The association shall record a management certificate
56-14 not later than the 30th day after the date the association has
56-15 notice of a change in any information in a recorded certificate
56-16 required by Subdivisions (a)(1)-(5).
56-17 (c) The association and its officers, directors, employees,
56-18 and agents are not subject to liability to any person for delay or
56-19 failure to record a management certificate, unless the delay or
56-20 failure is wilful or caused by gross negligence.
56-21 Sec. 82.117. OBLIGATIONS OF UNIT OWNERS. Without limiting
56-22 the obligations of the unit owners and except as provided by the
56-23 declaration, bylaws, rules of the association, or this chapter, the
56-24 unit owner:
56-25 (1) shall pay assessments, interest, and other charges
56-26 properly levied by the association against the owner or the owner's
56-27 unit, and shall pay regular periodic assessments without demand by
57-1 the association;
57-2 (2) shall comply with the declaration, bylaws, and
57-3 rules of the association, including any amendments;
57-4 (3) shall pay for damage to the condominium caused by
57-5 the negligence or wilful misconduct of the owner, an occupant of
57-6 the owner's unit, or the owner or occupant's family, guests,
57-7 employees, contractors, agents, or invitees; and
57-8 (4) is liable to the association for violations of the
57-9 declaration, bylaws, or rules of the association, including any
57-10 amendments, by the owner, an occupant of the owner's unit, or the
57-11 owner or occupant's family, guests, employees, agents, or invitees,
57-12 and for costs incurred by the association to obtain compliance,
57-13 including attorney's fees whether or not suit is filed.
57-14 (Sections 82.118 to 82.150 reserved for expansion
57-15 SUBCHAPTER D. PROTECTION OF PURCHASERS
57-16 Sec. 82.151. APPLICABILITY. (a) This subchapter applies to
57-17 each unit subject to this chapter, except as provided by Subsection
57-18 (b) or as modified or waived by the agreement of a purchaser of a
57-19 unit in a condominium in which all units are restricted to
57-20 nonresidential use.
57-21 (b) A condominium information statement or resale
57-22 certificate need not be prepared or delivered in the case of:
57-23 (1) a gratuitous disposition of a unit;
57-24 (2) a disposition pursuant to court order;
57-25 (3) a disposition by a government or governmental
57-26 agency;
57-27 (4) a disposition by foreclosure or deed in lieu of
58-1 foreclosure; or
58-2 (5) a disposition that may be canceled at any time,
58-3 for any reason, and without penalty.
58-4 Sec. 82.152. LIABILITY FOR CONDOMINIUM INFORMATION
58-5 STATEMENT. (a) Except as provided by Subsection (b), a declarant
58-6 shall prepare a condominium information statement before offering
58-7 to the public any interest in a unit.
58-8 (b) A declarant may transfer responsibility for preparation
58-9 of all or a part of the condominium information statement to a
58-10 successor declarant or to a person in the business of selling real
58-11 property who intends to offer units in the condominium for the
58-12 person's own account. On such transfer, the transferor shall
58-13 provide the transferee with any information necessary to enable the
58-14 transferee to prepare a condominium information statement.
58-15 (c) A declarant or other person in the business of selling
58-16 real property who offers a unit for the person's own account to a
58-17 purchaser shall provide a purchaser of a unit with a copy of the
58-18 condominium information statement, as amended, before conveyance of
58-19 the unit or the date of a contract of sale, whichever is earlier.
58-20 (d) The person preparing all or part of the condominium
58-21 information statement is liable for any false or misleading
58-22 statement or for any omission of material fact in the portion of
58-23 the condominium information statement that the person prepared. If
58-24 a declarant did not prepare any part of a condominium information
58-25 statement that the declarant delivers, the declarant is not liable
58-26 for any false or misleading statement or any omission of material
58-27 fact unless the declarant actually knew or should have known of the
59-1 statement or omission.
59-2 Sec. 82.153. CONDOMINIUM INFORMATION STATEMENTS IN GENERAL.
59-3 (a) A condominium information statement must contain or accurately
59-4 disclose:
59-5 (1) the name and principal address of the declarant
59-6 and of the condominium;
59-7 (2) a general description of the condominium that
59-8 includes the types of units and the maximum number of units;
59-9 (3) the minimum and maximum number of additional
59-10 units, if any, that may be included in the condominium;
59-11 (4) a brief narrative description of any development
59-12 rights reserved by a declarant and of any conditions relating to or
59-13 limitations upon the exercise of development rights;
59-14 (5) copies of the declaration, articles of
59-15 incorporation of the association, the bylaws, any rules of the
59-16 association, and amendments to any of them, and copies of leases
59-17 and contracts, other than loan documents, that are required by the
59-18 the declarant to be signed by purchasers at closing;
59-19 (6) a projected or pro forma budget for the
59-20 association that complies with Subsection (b) for the first fiscal
59-21 year of the association following the date of the first conveyance
59-22 to a purchaser, identification of the person who prepared the
59-23 budget, and a statement of the budget's assumptions concerning
59-24 occupancy and inflation factors;
59-25 (7) a general description of each lien, lease, or
59-26 encumbrance on or affecting the title to the condominium after
59-27 conveyance by the declarant;
60-1 (8) a copy of each written warranty provided by the
60-2 declarant;
60-3 (9) a description of any unsatisfied judgments against
60-4 the association and any pending suits to which the association is a
60-5 party or which are material to the land title and construction of
60-6 the condominium of which a declarant has actual knowledge;
60-7 (10) a general description of the insurance coverage
60-8 provided for the benefit of unit owners; and
60-9 (11) current or expected fees or charges to be paid by
60-10 unit owners for the use of the common elements and other facilities
60-11 related to the condominium.
60-12 (b) A budget under Subsection (a)(6) must be prepared in
60-13 accordance with generally accepted accounting principles and a
60-14 consideration of the physical condition of the condominium and be
60-15 based on assumptions that, to the best of the declarant's knowledge
60-16 and belief, are reasonable. The budget must include:
60-17 (1) a statement of the amount included, or a statement
60-18 that no amount is included, in the budget as a reserve; and
60-19 (2) the projected monthly common expense assessment
60-20 for each type of unit.
60-21 (c) A declarant shall promptly amend the condominium
60-22 information statement to reflect a material and substantial change
60-23 in its contents. If the change may adversely affect a prospective
60-24 purchaser who has received a condominium information statement, the
60-25 declarant shall furnish a copy of the amendment to the prospective
60-26 purchaser before closing.
60-27 Sec. 82.154. CONDOMINIUMS WITH CONVERSION BUILDINGS. If a
61-1 building contains units that may be occupied for residential use,
61-2 the condominium information statement of a condominium containing
61-3 any conversion building must additionally contain:
61-4 (1) a dated statement by the declarant, based on a
61-5 report by an independent architect or engineer, describing the
61-6 present condition of all structural components and mechanical and
61-7 electrical installations material to the use and enjoyment of the
61-8 building;
61-9 (2) a dated statement by the declarant of the expected
61-10 useful life of each item reported in Subdivision (1) or a statement
61-11 that no representations are made in that regard; and
61-12 (3) a list of violations of building code or other
61-13 governmental regulations of which the declarant has received notice
61-14 and that have not been cured, together with the estimated cost of
61-15 curing those violations.
61-16 Sec. 82.155. CONDOMINIUM SECURITIES. A declarant satisfies
61-17 all requirements relating to preparation of a condominium
61-18 information statement if an interest in the condominium is
61-19 currently registered with the Securities and Exchange Commission of
61-20 the United States and if the declarant delivers to the purchaser a
61-21 copy of the public offering statement filed with the commission.
61-22 Sec. 82.156. PURCHASER'S RIGHT TO CANCEL. (a) If a
61-23 purchaser of a unit from a unit owner other than a declarant has
61-24 not received from the seller the declaration, bylaws, and
61-25 association rules required by Section 82.157 before the purchaser
61-26 executes a contract of sale or if the contract does not contain an
61-27 underlined or bold-print provision acknowledging the purchaser's
62-1 receipt of those documents and recommending that the purchaser read
62-2 those documents before executing the contract, the purchaser may
62-3 cancel the contract before the sixth day after the date the
62-4 purchaser receives those documents. If a purchaser has not
62-5 received a resale certificate before executing a contract of sale,
62-6 the purchaser may cancel the contract before the sixth day after
62-7 the date the purchaser receives the resale certificate or executes
62-8 a waiver under Section 82.157, whichever occurs first.
62-9 (b) If a purchaser from a declarant has not received the
62-10 condominium information statement before the purchaser executes a
62-11 contract of sale or if a contract does not contain an underlined or
62-12 bold-print provision acknowledging the purchaser's receipt of the
62-13 condominium information statement and recommending that the
62-14 purchaser read the condominium information statement before
62-15 executing the contract, the purchaser may cancel the contract
62-16 before the sixth day after the date the purchaser receives the
62-17 condominium information statement.
62-18 (c) If a purchaser elects to cancel a contract under
62-19 Subsection (a) or (b), the cancellation must be by hand-delivering
62-20 written notice of cancellation to the declarant or selling unit
62-21 owner or by mailing notice of cancellation by certified United
62-22 States mail, return receipt requested, to the offeror or the
62-23 offeror's agent for service of process within the five-day
62-24 cancellation period. Cancellation is without penalty, and all
62-25 payments made by the purchaser before cancellation must be
62-26 refunded.
62-27 (d) A selling unit owner may not require a purchaser to
63-1 close until the purchaser is given the declaration, bylaws, and any
63-2 association rules. A declarant may not require a purchaser to
63-3 close until a condominium information statement has been furnished
63-4 to the purchaser.
63-5 Sec. 82.157. RESALE OF UNIT. (a) Except as provided by
63-6 Subsection (c), if a unit owner other than a declarant intends to
63-7 sell a unit, before executing a contract or conveying the unit, the
63-8 unit owner must furnish to the purchaser a current copy of the
63-9 declaration, bylaws, any association rules, and a resale
63-10 certificate that must have been prepared not earlier than three
63-11 months before the date it is delivered to the purchaser. The
63-12 resale certificate must be issued by the association and must
63-13 contain the current operating budget of the association and
63-14 statements of:
63-15 (1) any right of first refusal or other restraint
63-16 contained in the declaration that restricts the right to transfer a
63-17 unit;
63-18 (2) the amount of the periodic common expense
63-19 assessment and the unpaid common expenses or special assessments
63-20 currently due and payable from the selling unit owner;
63-21 (3) other unpaid fees or amounts payable to the
63-22 association by the selling unit owner;
63-23 (4) capital expenditures, if any, approved by the
63-24 association for the next 12 months;
63-25 (5) the amount of reserves, if any, for capital
63-26 expenditures and of portions of those reserves designated by the
63-27 association for a specified project;
64-1 (6) any unsatisfied judgments against the association;
64-2 (7) the nature of any pending suits against the
64-3 association;
64-4 (8) insurance coverage provided for the benefit of
64-5 unit owners;
64-6 (9) whether the board has knowledge that any
64-7 alterations or improvements to the unit or to the limited common
64-8 elements assigned to that unit violate the declaration, bylaws, or
64-9 association rules;
64-10 (10) whether the board has received notice from a
64-11 governmental authority concerning violations of health or building
64-12 codes with respect to the unit, the limited common elements
64-13 assigned to that unit, or any other portion of the condominium;
64-14 (11) the remaining term of any leasehold estate that
64-15 affects the condominium and the provisions governing an extension
64-16 or renewal of the lease; and
64-17 (12) the name, mailing address, and telephone number
64-18 of the association's managing agent, if any.
64-19 (b) Not later than the 10th day after the date of receiving
64-20 a written request by a unit owner, an association shall furnish to
64-21 the selling unit owner or the owner's agent a resale certificate
64-22 signed and dated by an officer or authorized agent of the
64-23 association containing the information required by Subsection (a).
64-24 A selling unit owner or the owner's agent is not liable to the
64-25 purchaser for erroneous information provided by the association in
64-26 the certificate. If an association does not furnish a resale
64-27 certificate or any information required in the certificate within
65-1 the 10-day period, the unit owner may provide the purchaser with a
65-2 sworn affidavit signed by the unit owner in lieu of the
65-3 certificate. An affidavit must state that the unit owner requested
65-4 information from the association concerning its financial
65-5 condition, as required by this section, and that the association
65-6 did not timely provide a resale certificate or the information
65-7 required in the certificate. If a unit owner has furnished an
65-8 affidavit to a purchaser, the unit owner and the purchaser may
65-9 agree in writing to waive the requirement to furnish a resale
65-10 certificate. The association is not liable to a selling unit owner
65-11 for delay or failure to furnish a resale certificate, and an
65-12 officer or agent of the association is not liable for a delay or
65-13 failure to furnish a certificate unless the officer or agent
65-14 wilfully refuses to furnish the certificate or is grossly negligent
65-15 in not furnishing the resale certificate. Failure to provide a
65-16 resale certificate does not void a deed to a purchaser.
65-17 (c) If a properly executed resale certificate incorrectly
65-18 states the total of delinquent sums owed by the selling unit owner
65-19 to the association, the purchaser is not liable for payment of
65-20 additional delinquencies that are unpaid on the date the
65-21 certificate is prepared and that exceed the total sum stated in the
65-22 certificate. A unit owner or the owner's agent is not liable to a
65-23 purchaser for the failure or delay of the association to provide
65-24 the certificate in a timely manner.
65-25 (d) A resale certificate does not affect:
65-26 (1) an association's right to recover debts or claims
65-27 that arise or become due after the date the certificate is
66-1 prepared; or
66-2 (2) an association's lien on a unit securing payment
66-3 of future assessments.
66-4 (e) A purchaser, lender, or title insurer who relies on a
66-5 resale certificate is not liable for any debt or claim that is not
66-6 disclosed in the certificate. An association may not deny the
66-7 validity of any statement in the certificate.
66-8 Sec. 82.158. ESCROW OF DEPOSITS. A deposit made in
66-9 connection with the purchase or reservation of a unit from a
66-10 declarant shall be placed in escrow and held in this state in an
66-11 account designated for that purpose by a real estate broker, an
66-12 attorney, a title insurance company licensed in this state, an
66-13 independent bonded escrow company, or an institution whose accounts
66-14 are insured by a governmental agency or instrumentality until
66-15 delivered to the declarant at closing, delivered to the declarant
66-16 because of the purchaser's default under a contract to purchase the
66-17 unit, or refunded to the purchaser. Escrow deposits may be placed
66-18 in interest-bearing accounts, and the interest is payable as may be
66-19 agreed in writing between the declarant and the purchaser.
66-20 Sec. 82.159. RELEASE OF LIENS. Before conveying real
66-21 property to an association, a declarant shall have that real
66-22 property released from all liens the foreclosure of which would
66-23 deprive unit owners of any right of access to or easement of
66-24 support of the owners' units, and all other liens on that real
66-25 property unless the condominium information statement describes
66-26 certain real property that may be conveyed subject to liens in
66-27 specified amounts.
67-1 Sec. 82.160. CONVERSION BUILDINGS. (a) A declarant of a
67-2 condominium containing a conversion building shall give each
67-3 residential tenant or subtenant in possession of a portion of a
67-4 conversion building notice of the conversion at least 60 days
67-5 before the date the declarant will require the tenant or subtenant
67-6 in possession to vacate. The notice must state generally the
67-7 rights of tenants and subtenants under this section and shall be
67-8 hand-delivered to the unit or mailed by certified United States
67-9 mail, return receipt requested, to the tenant or subtenant at the
67-10 address of the unit or any other mailing address provided by the
67-11 tenant or subtenant. The declarant may not require a tenant or
67-12 subtenant to vacate on less than 60 days' notice, except for
67-13 nonpayment of rent, waste, or conduct that violates the rental
67-14 agreement or is illegal, and the terms of a tenancy may not be
67-15 altered during that period. Failure of a declarant to give notice
67-16 as required by this section is a defense to an action for
67-17 possession.
67-18 (b) If a notice of conversion specifies a date by which a
67-19 unit or proposed unit must be vacated and otherwise complies with
67-20 Section 24.005, the notice also constitutes legal notice to vacate
67-21 on that date for purposes of Section 24.005. A declarant may not
67-22 terminate a lease in violation of its terms.
67-23 (c) Unless expressly authorized by a rental agreement, a
67-24 declarant may not make substantial alterations to the interior of a
67-25 leased premises for purposes of a condominium conversion.
67-26 Sec. 82.161. EFFECT OF VIOLATIONS ON RIGHTS OF ACTION AND
67-27 ATTORNEY'S FEES. (a) If a declarant or any other person subject
68-1 to this chapter violates this chapter, the declaration, or the
68-2 bylaws, any person or class of persons adversely affected by the
68-3 violation has a claim for appropriate relief.
68-4 (b) The prevailing party in an action to enforce the
68-5 declaration, bylaws, or rules is entitled to reasonable attorney's
68-6 fees and costs of litigation from the nonprevailing party.
68-7 Sec. 82.162. LABELING OF PROMOTIONAL MATERIAL. If any
68-8 improvement contemplated in a condominium is labeled "NEED NOT BE
68-9 BUILT" on a plat or plan or is to be located within a portion of a
68-10 condominium with respect to which the declarant has reserved a
68-11 development right, no promotional material that describes or
68-12 depicts the improvement may be displayed or delivered to
68-13 prospective purchasers unless the description or depiction of the
68-14 improvement is conspicuously labeled or identified as "NEED NOT BE
68-15 BUILT."
68-16 Sec. 82.163. DECLARANT'S OBLIGATION TO COMPLETE AND RESTORE.
68-17 The declarant shall complete all improvements labeled "MUST BE
68-18 BUILT" on plats or plans. The declarant is subject to liability
68-19 for the prompt repair and restoration, to a condition compatible
68-20 with the remainder of the condominium, of any portion of the
68-21 condominium affected by the exercise of rights reserved pursuant to
68-22 or created under this chapter.
68-23 Sec. 82.164. LOANS AS ELIGIBLE INVESTMENTS. (a) A loan on
68-24 a condominium unit and the undivided interest in the common
68-25 elements is an eligible investment for a bank, savings and loan
68-26 association, trust company, life insurance company, or other
68-27 lending institution that is authorized to make real property loans,
69-1 and for an administrator, guardian, executor, trustee, individual,
69-2 partnership, corporation, or other fiduciary that is authorized to
69-3 make real property loans. In determining eligibility, the
69-4 existence of a prior lien for taxes, assessments, or other similar
69-5 charges not yet delinquent may not be considered in determining
69-6 whether a mortgage or deed of trust on the security is a first
69-7 lien. This section does not change any provision of law that would
69-8 otherwise be applicable that limits mortgage investments based on a
69-9 special fraction or percentage of the value of the mortgaged
69-10 property.
69-11 (b) An association's lien for assessments, although
69-12 subordinate to a purchase money lien, does not make a condominium
69-13 unit ineligible for loans for which the unit would otherwise
69-14 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.