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


Senate Research CenterC.S.H.B. 2224
By: Solomons (Shapiro)
State Affairs
5/12/1999
Committee Report (Substituted)


DIGEST 

Currently, the purchaser of a home may not be aware that the seller is a
member of a  property owners' association and 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, C.S.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 a property owners' association to
file the dedicatory instrument governing the property owners association 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 each property owners' association to present for
recording each dedicatory instrument governing the association that has not
been previously recorded in the real property records of the county, not
later than January 1, 2000. 

SECTION 5. Emergency clause.



SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 5.012, Property Code, to revise the text of the notice
required by this section. 

SECTION 2.

Amends Section 202.006, Property Code, to delete proposed Subsection (a)
regarding records to be named "Property Owners' Association Records." 

SECTION 4.

Deletes proposed Subsection (a) requiring the county clerk of each county
to establish the "Property Owners' Association Records" on or before
December 1, 1999.