By: Ellis, Patterson S.B. No. 1864
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the powers of certain property owners' associations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 204.008, Property Code, is amended to
1-4 read as follows:
1-5 Sec. 204.008. Method of Adoption. An extension, addition
1-6 to, or modification of restrictions proposed by a property owners'
1-7 association may be adopted:
1-8 (1) by a written ballot that states the substance of
1-9 the amendment and specifies the date by which a ballot must be
1-10 received to be counted;
1-11 (2) at a meeting of the members represented by the
1-12 property owners' association if written notice of the meeting
1-13 stating the purpose of the meeting is delivered to each owner of
1-14 property in the subdivision not later than the 10th day before the
1-15 date the meeting is scheduled;
1-16 (3) by door-to-door circulation of a petition by the
1-17 property owners' association or a person authorized by the property
1-18 owners' association;
1-19 (4) by a method permitted by the existing
1-20 restrictions; or
1-21 (5) by a combination of the methods described by this
1-22 section.
1-23 SECTION 2. Section 204.010, Property Code, is amended to
2-1 read as follows:
2-2 Sec. 204.010. Powers of Property Owners' Association.
2-3 (a) Unless otherwise provided by the restrictions or the
2-4 association's articles of incorporation or bylaws, the property
2-5 owners' association, acting through its board of directors or
2-6 trustees, may:
2-7 (1) adopt and amend bylaws;
2-8 (2) adopt and amend budgets for revenues,
2-9 expenditures, and reserves and collect regular assessments or
2-10 special assessments for common expenses from property owners;
2-11 (3) hire and terminate managing agents and other
2-12 employees, agents, and independent contractors;
2-13 (4) institute, defend, intervene in, settle, or
2-14 compromise litigation or administrative proceedings on matters
2-15 affecting the subdivision;
2-16 (5) make contracts and incur liabilities relating to
2-17 the operation of the subdivision and the property owners'
2-18 association;
2-19 (6) regulate the use, maintenance, repair,
2-20 replacement, modification, and appearance of the common areas of
2-21 the subdivision;
2-22 (7) make additional improvements to be included as a
2-23 part of the common area;
2-24 (8) grant easements, leases, licenses, and concessions
2-25 through or over the common area;
3-1 (9) impose and receive reasonable payments, fees, or
3-2 charges for the use, rental, or operation of the common area and
3-3 for services provided to property owners;
3-4 (10) impose and receive reasonable interest, late
3-5 charges, and, if applicable, returned check charges for late
3-6 payments of regular assessments or special assessments;
3-7 (11) [if notice and an opportunity to be heard are
3-8 given,] collect reimbursement of reasonable [actual] attorney's
3-9 fees and other reasonable costs incurred by the property owners'
3-10 association in enforcing [relating to violations of the
3-11 subdivision's] restrictions or the property owners' association's
3-12 bylaws and rules that the owner has allegedly violated if, before
3-13 incurring attorney's fees:
3-14 (A) the association sends to the property owner,
3-15 by certified mail, return receipt requested, at the owner's last
3-16 known address as shown in the association's records, a notice of a
3-17 meeting of the board during which the owner will be given the
3-18 opportunity to be heard on the issue of the alleged violation; and
3-19 (B) the notice is mailed as provided by
3-20 Subsection (c) to the property owner and informs the owner of the
3-21 owner's right to appear and be heard regarding the alleged
3-22 violation;
3-23 (12) charge costs, fees, and other charges authorized
3-24 under this section to an owner's assessment account and collect
3-25 the costs, fees, and other charges in any manner provided in the
4-1 restrictions for the collection of assessments;
4-2 (13) adopt and amend rules regulating the collection
4-3 of delinquent assessments and the application of payments;
4-4 (14) impose reasonable charges for preparing,
4-5 recording, or copying amendments to the restrictions, resale
4-6 certificates, or statements of unpaid assessments;
4-7 (15) purchase insurance and fidelity bonds, including
4-8 directors' and officers' liability insurance, that the board
4-9 considers appropriate or necessary;
4-10 (16) if the restrictions allow for an annual increase
4-11 in the maximum regular assessment without a vote of the membership,
4-12 delay [assess] the increase in annual assessments allowed under the
4-13 restrictions, accumulate the increase, and assess all or part of
4-14 any accumulated increase in a subsequent year subject to the
4-15 approval of a majority of association members who are present in
4-16 person or represented by proxy at an annual or special meeting of
4-17 the association membership [annually or accumulate and assess the
4-18 increase after a number of years];
4-19 (17) subject to the requirements of the Texas
4-20 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
4-21 Texas Civil Statutes) and by majority vote of its board of
4-22 directors, indemnify a director or officer of the property owners'
4-23 association who was, is, or may be made a named defendant or
4-24 respondent in a proceeding because the person is or was a director;
4-25 (18) if the restrictions vest the architectural
5-1 control authority in the property owners' association or if the
5-2 authority is vested in the property owners' association under
5-3 Section 204.011:
5-4 (A) implement written architectural control
5-5 guidelines for its own use or record the guidelines in the real
5-6 property records of the applicable county; and
5-7 (B) modify the guidelines as the needs of the
5-8 subdivision change;
5-9 (19) exercise other powers conferred by the
5-10 restrictions, its articles of incorporation, or its bylaws;
5-11 (20) exercise other powers that may be exercised in
5-12 this state by a corporation of the same type as the property
5-13 owners' association; and
5-14 (21) exercise other powers necessary and proper for
5-15 the governance and operation of the property owners' association.
5-16 (b) Unless otherwise provided by the restrictions or the
5-17 association's articles of incorporation or bylaws, the property
5-18 owners' association, acting through its board of directors or
5-19 trustees, may, under Subsection (a)(9):
5-20 (1) except as provided by Subdivision (2), impose and
5-21 receive reasonable fees or charges for a service only after
5-22 obtaining approval of a majority of those association members who
5-23 are present in person or represented by proxy at an annual or
5-24 special meeting of the association;
5-25 (2) continue to impose and receive reasonable fees or
6-1 charges through January 15, 1998, for a service for which the fees
6-2 or charges were first imposed between August 28, 1995, and
6-3 September 1, 1997; and
6-4 (3) continue to impose and receive fees or charges
6-5 that were first imposed during that time period after January 15,
6-6 1998, if the fees and charges are approved by a majority of those
6-7 association members who are present in person or represented by
6-8 proxy at an annual or special meeting of the association held
6-9 before January 15, 1998.
6-10 (c) Except as provided by this subsection, the notice
6-11 provided by Subsection (a)(11)(B) must be mailed to the property
6-12 owner not later than the 30th day before the date of a scheduled
6-13 board meeting. Notice may be mailed less than 30 days before the
6-14 date of a scheduled board meeting for an alleged violation that
6-15 necessitates immediate judicial action.
6-16 (d) Powers enumerated by this section are in addition to any
6-17 other powers granted to a property owners' association by this
6-18 chapter or other law. This section does not limit a property
6-19 owners' association's rights or powers as stated in the
6-20 restrictions or the association's articles of incorporation or
6-21 bylaws.
6-22 SECTION 3. This Act takes effect September 1, 1997.
6-23 SECTION 4. The importance of this legislation and the
6-24 crowded condition of the calendars in both houses create an
6-25 emergency and an imperative public necessity that the
7-1 constitutional rule requiring bills to be read on three several
7-2 days in each house be suspended, and this rule is hereby suspended.
7-3 COMMITTEE AMENDMENT NO. 1
7-4 Amend S.B. No. 1864 as follows:
7-5 (1) In SECTION 2 of the bill, in amended Section
7-6 204.010(a)(6), Property Code (page 2, line 19, senate engrossed
7-7 version), between "(6)" and "regulate", insert "reasonably".
7-8 (2) In SECTION 2 of the bill, in amended Section
7-9 204.010(a)(6), Property Code (page 2, line 20, senate engrossed
7-10 version), strike "the common areas of".
7-11 75R12278 PAM-D Giddings