By Ellis                                        S.B. No. 1864

      75R5544 PAM-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the powers of certain property owners' associations.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 204.008, Property Code, is amended to

 1-5     read as follows:

 1-6           Sec. 204.008.  METHOD OF ADOPTION.  An extension, addition

 1-7     to, or modification of restrictions proposed by a property owners'

 1-8     association may be adopted:

 1-9                 (1)  by a written ballot that states the substance of

1-10     the amendment and specifies the date by which a ballot must be

1-11     received to be counted;

1-12                 (2)  at a meeting of the members represented by the

1-13     property owners' association if written notice of the meeting

1-14     stating the purpose of the meeting is delivered to each owner of

1-15     property in the subdivision not later than the 10th day before the

1-16     date the meeting is scheduled;

1-17                 (3)  by door-to-door circulation of a petition by the

1-18     property owners' association or a person authorized by the property

1-19     owners' association;

1-20                 (4)  by a method permitted by the existing

1-21     restrictions; or

1-22                 (5)  by a combination of the methods described by this

1-23     section.

1-24           SECTION 2.  Section 204.010(a), Property Code, is amended to

 2-1     read as follows:

 2-2           (a)  Unless otherwise provided by the restrictions or the

 2-3     association's articles of incorporation or bylaws, the property

 2-4     owners' association, acting through its board of directors or

 2-5     trustees, may:

 2-6                 (1)  adopt and amend bylaws;

 2-7                 (2)  adopt and amend budgets for revenues,

 2-8     expenditures, and reserves and collect regular assessments or

 2-9     special assessments for common expenses from property owners;

2-10                 (3)  hire and terminate managing agents and other

2-11     employees, agents, and independent contractors;

2-12                 (4)  institute, defend, intervene in, settle, or

2-13     compromise litigation or administrative proceedings on matters

2-14     affecting the subdivision;

2-15                 (5)  make contracts and incur liabilities relating to

2-16     the operation of the subdivision and the property owners'

2-17     association;

2-18                 (6)  regulate the use, maintenance, repair,

2-19     replacement, modification, and appearance of the common areas of

2-20     the subdivision;

2-21                 (7)  make additional improvements to be included as a

2-22     part of the common area;

2-23                 (8)  grant easements, leases, licenses, and concessions

2-24     through or over the common area;

2-25                 [(9)  impose and receive payments, fees, or charges for

2-26     the use, rental, or operation of the common area and for services

2-27     provided to property owners;]

 3-1                 (9) [(10)]  impose reasonable interest, late charges,

 3-2     and, if applicable, returned check charges for late payments of

 3-3     regular assessments or special assessments;

 3-4                 [(11)  if notice and an opportunity to be heard are

 3-5     given, collect reimbursement of actual attorney's fees and other

 3-6     reasonable costs incurred by the property owners' association

 3-7     relating to violations of the subdivision's restrictions or the

 3-8     property owners' association's bylaws and rules;]

 3-9                 [(12)  charge costs to an owner's assessment account

3-10     and collect the costs in any manner provided in the restrictions

3-11     for the collection of assessments;]

3-12                 (10) [(13)]  adopt and amend rules regulating the

3-13     collection of delinquent assessments and the application of

3-14     payments;

3-15                 (11) [(14)]  impose reasonable charges for preparing,

3-16     recording, or copying amendments to the restrictions, resale

3-17     certificates, or statements of unpaid assessments;

3-18                 (12) [(15)]  purchase insurance and fidelity bonds,

3-19     including directors' and officers' liability insurance, that the

3-20     board considers appropriate or necessary;

3-21                 [(16)  if the restrictions allow for an annual increase

3-22     in the maximum regular assessment without a vote of the membership,

3-23     assess the increase annually or accumulate and assess the increase

3-24     after a number of years;]

3-25                 (13) [(17)]  subject to the requirements of the Texas

3-26     Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's

3-27     Texas  Civil Statutes) and by majority vote of its board of

 4-1     directors, indemnify a director or officer of the property owners'

 4-2     association who was, is, or may be made a named defendant or

 4-3     respondent in a proceeding because the person is or was a director;

 4-4                 (14) [(18)]  if the restrictions vest the architectural

 4-5     control authority in the property owners' association or if the

 4-6     authority is vested in the property owners' association under

 4-7     Section 204.011:

 4-8                       (A)  implement written architectural control

 4-9     guidelines for its own use or record the guidelines in the real

4-10     property records of the applicable county; and

4-11                       (B)  modify the guidelines as the needs of the

4-12     subdivision change;

4-13                 (15) [(19)]  exercise other powers conferred by the

4-14     restrictions, its articles of incorporation, or its bylaws;

4-15                 (16) [(20)]  exercise other powers that may be

4-16     exercised in this state by a corporation of the same type as the

4-17     property owners' association; and

4-18                 (17) [(21)]  exercise other powers necessary and proper

4-19     for the governance and operation of the property owners'

4-20     association.

4-21           SECTION 3.  This Act takes effect September 1, 1997.

4-22           SECTION 4.  The importance of this legislation and the

4-23     crowded condition of the calendars in both houses create an

4-24     emergency and an imperative public necessity that the

4-25     constitutional rule requiring bills to be read on three several

4-26     days in each house be suspended, and this rule is hereby suspended.