SRC-DPW H.B. 2224 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2224
By: Solomons (Shapiro)
State Affairs
5/10/1999
Engrossed


DIGEST 

Currently, the purchaser of a home may not be aware that the seller is a
member of a  property owners' association is not required to provide the
purchaser of the home with notice of the purchaser's required membership in
the  property owners' association.  This bill would require a seller of a
residential real property that is subject to membership in a property
owners' association to give to the purchaser a written notice that informs
the purchaser of the restrictions and obligations associated with a
purchase of this kind of home. 

PURPOSE

As proposed, H.B. 2224 requires the provision of disclosure notices for the
sale of real property governed by a property owners' association, and
requires the filing of dedicatory instruments governing property owners'
associations.   

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 Chapter 5A, Property Code, by adding Section 5.012, as
follows: 

Sec. 5.012. NOTICE OF OBLIGATIONS RELATED TO MEMBERSHIP IN PROPERTY OWNERS'
ASSOCIATION. Requires a seller of residential real property (seller) that
is subject to membership in a property owners' association and that
comprises not more than one dwelling unit located in this state to give a
notice of membership in a property owners' association (notice) to the
purchaser of the property (purchaser).  Sets forth the required text and
format of the notice.  Requires the seller to deliver the notice to the
purchaser before the date the executory contract binds the purchaser to
purchase the property.  Authorizes the notice to be given separately, as
part of the contract during negotiations, or as part of any other notice
the seller delivers to the purchaser.  Authorizes references to a street
address and date in a notice, and the purchaser's signature on the notice,
to be omitted if the notice is included as part of the executory contract
or other notice.  Provides that this section does not apply to certain
specified transfers.  Authorizes the purchaser to terminate an executory
contract for any reason, if an executory contract is entered into without
the seller providing the notice, within the earlier of seven days after the
date the purchaser receives the notice or the date the transfer occurs as
provided by the executory contract.  Provides that the purchaser's right to
terminate the executory contract under Subsection (d) is the purchaser's
exclusive remedy for the seller's failure to provide the required notice.   

SECTION 2. Amends Chapter 202, Property Code, by adding Section 202.006, as
follows: 

Sec. 202.006. PUBLIC RECORDS. Requires each county clerk to maintain
records called "Property Owners' Association Records" in which the clerk is
required to record dedicatory instruments governing property owners'
associations.  Requires a property owners' association to file the
dedicatory instrument in the real property records of each county in which
the property to which the dedicatory instrument relates is located. 

SECTION 3. Effective date: September 1, 1999, except for Section 5.012,
Property Code, which takes effect January 1, 2000 and applies only to an
executory contract that is binding on a seller and purchaser  on or after
that date. 

SECTION 4. Requires the county clerk of each county to establish the
"Property Owners' Association Records" on or before December 1, 1999, and
requires each property owners' association to present each dedicatory
instrument governing the association for filing, not later than January 1,
2000. 

SECTION 5. Emergency clause.