SRC-JFA S.B. 1336 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1336
By: Ellis
State Affairs
3-24-97
As Filed


DIGEST 

Currently, under the Texas Supreme Court decision of Inwood North
Homeowners' Association v. Charlie Harris, Jr. et al. and Rolando M.
Pamilar, et al., property owner associations have the power to foreclose
on a homestead to collect delinquent assessments.  This bill would permit
an encumbrance to be fixed on homestead property for an obligation to pay
certain property owners' associations fees, but, in turn, would not allow
the forced sale of the homestead by the property owner associations to
collect delinquent assessments arising from such fees.  Additionally, this
bill would be contingent upon a similar change to the Texas Constitution
authorizing an encumbrance to be fixed on homestead property for an
obligation to pay certain property owners' association fees without
permitting the forced sale of the homestead due to delinquent assessments
arising from such fees.    

PURPOSE

As proposed, S.B. 1336 provides that an obligation to pay property owners'
association fees for maintenance and ownership of common facilities and
services is a debt for which an encumbrance may be properly fixed on
homestead property.  Additionally, S.B. 1336 provides that the homestead
property is exempt from seizure for the claims of creditors for such
encumbrances.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 41.001(a) and (b), Property Code, to provide
that a homestead and one or more lots used for a place of burial of the
dead are exempt from seizure for the claims of creditors except for
encumbrances described by Subsection (b), rather than encumbrances
properly fixed on homestead property.  Provides that a homestead is not
exempt from seizure as provided by Subsection (a) for encumbrances that
are properly fixed on homestead property for certain items. Deletes text
authorizing encumbrances to be properly fixed on homestead property for
certain items. 

SECTION 2. Amends Chapter 41A, Property Code, by adding Section 41.0011,
as follows: 

Sec. 41.0011.  CERTAIN ENCUMBRANCES FIXED ON HOMESTEAD EXEMPT FROM
SEIZURE.  Provides that an obligation to pay property owners' association
fees for maintenance and ownership of common facilities and services is a
debt for which an encumbrance may be properly fixed on homestead property.
Provides that homestead property is exempt from seizure for the claims of
creditors for an encumbrance described by Subsection (a).  Authorizes a
property owners' association to collect on an encumbrance described by
Subsection (a) properly fixed on homestead property at the time the
homestead property is transferred.  Provides that Section 41.001(c) does
not apply to a claim of a property owners' association under this section.
Defines "property owners' association." 

SECTION 3. Effective date:  January 1, 1998, pending voter approval.  

SECTION 4. Emergency clause.