By Danburg H.B. No. 1956 76R6304 PAM-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the amendment or termination of restrictive covenants 1-3 affecting real property in certain historic neighborhoods. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. The purpose of this legislation is to assist 1-6 certain historic neighborhoods for which historic neighborhood 1-7 preservation associations exist in promoting a common scheme for 1-8 preservation of historic property by providing protection from the 1-9 piecemeal amendment and termination and establishing procedures for 1-10 the comprehensive amendment and termination of restrictive 1-11 covenants applicable to individual properties located in historic 1-12 neighborhoods. 1-13 SECTION 2. Title 11, Property Code, is amended by adding 1-14 Chapter 207 to read as follows: 1-15 CHAPTER 207. AMENDMENT AND TERMINATION OF RESTRICTIVE COVENANTS 1-16 IN HISTORIC NEIGHBORHOODS 1-17 Sec. 207.001. DEFINITIONS. In this chapter: 1-18 (1) "Owner" and "real property records" have the 1-19 meanings assigned by Section 201.003. 1-20 (2) "Dedicatory instrument," "property owners' 1-21 association," "petition," and "restrictive covenant" have the 1-22 meanings assigned by Section 202.001. 1-23 (3) "Regular assessment" and "special assessment" have 1-24 the meanings assigned by Section 204.001. 2-1 (4) "Apartment complex" has the meaning assigned by 2-2 Section 204.002(c). 2-3 (5) "Historic neighborhood" means: 2-4 (A) an area incorporated as a separate 2-5 municipality before 1900 and subsequently annexed into another 2-6 municipality; 2-7 (B) an area described by a municipal map or 2-8 subdivision plat filed in real property records of the county in 2-9 which the area is located before 1900; or 2-10 (C) an area designated as a historic district or 2-11 similar designation by the municipality in which the area is 2-12 located, the Texas Historical Commission, or the National Register 2-13 of Historic Places. 2-14 Sec. 207.002. APPLICABILITY. (a) This chapter applies only 2-15 to a historic neighborhood that is located in whole or in part in a 2-16 municipality with a population of 1.6 million or more located in a 2-17 county with a population of 2.8 million or more. 2-18 (b) This chapter applies to a restrictive covenant 2-19 regardless of the date on which it was created. 2-20 (c) This chapter applies to property in the area of a 2-21 historic neighborhood that is zoned for or that contains a 2-22 commercial structure, an industrial structure, an apartment 2-23 complex, or a condominium development covered by Title 7 only if 2-24 the owner of the property signed a restrictive covenant that 2-25 includes the property in a common scheme for preservation of 2-26 historic property as described by Section 207.004. 2-27 Sec. 207.003. HISTORIC NEIGHBORHOOD PRESERVATION 3-1 ASSOCIATION. (a) A historic neighborhood preservation association 3-2 must: 3-3 (1) be a Texas nonprofit corporation or limited 3-4 liability company organized, in part, to encourage the preservation 3-5 of property in a historic neighborhood; and 3-6 (2) open its membership to all owners of property in 3-7 the historic neighborhood. 3-8 (b) A historic neighborhood preservation association may be 3-9 composed of only a portion of the owners of property in the 3-10 historic neighborhood. 3-11 (c) A historic neighborhood preservation association may be 3-12 a property owners' association or an organization that is qualified 3-13 as a charitable organization under Section 501(c)(3) of the 3-14 Internal Revenue Code of 1986. 3-15 (d) A statement in the articles of incorporation or 3-16 association, bylaws, regulations, or operating agreement of the 3-17 historic neighborhood preservation association is prima facie 3-18 evidence of compliance with Subsection (a). 3-19 Sec. 207.004. COMMON SCHEME FOR PRESERVATION OF PROPERTY IN 3-20 HISTORIC NEIGHBORHOOD. (a) A common scheme for preservation of 3-21 historic property exists in a historic neighborhood if: 3-22 (1) the restrictive covenants were created by 3-23 individual dedicatory instruments signed by an owner of one or more 3-24 separately owned parcels or tracts in the historic neighborhood; 3-25 and 3-26 (2) the restrictive covenants authorize a historic 3-27 neighborhood preservation association to enforce the restrictive 4-1 covenants. 4-2 (b) A common scheme for preservation of historic property 4-3 does not include property that is not subject to restrictive 4-4 covenants that authorize a historic neighborhood preservation 4-5 association to enforce the restrictive covenants. 4-6 (c) Restrictive covenants included in a common scheme for 4-7 preservation of historic property exist for the benefit of all 4-8 owners of property subject to the common scheme for preservation as 4-9 if each owner were referenced in each dedicatory instrument. 4-10 (d) Each owner of property subject to a common scheme for 4-11 preservation of historic property may enforce restrictive covenants 4-12 on other property included in the common scheme for preservation. 4-13 Sec. 207.005. AMENDMENT OR TERMINATION OF RESTRICTIVE 4-14 COVENANTS UNDER COMMON SCHEME FOR PRESERVATION. (a) A restrictive 4-15 covenant applicable to property that is included in a common scheme 4-16 for preservation of historic property may not be amended or 4-17 terminated except as provided by this section. 4-18 (b) A historic neighborhood preservation association may 4-19 approve and submit to a vote of the owners of property that is 4-20 included in a common scheme for preservation of historic property 4-21 an amendment of the restrictive covenants or the termination of all 4-22 or part of the restrictive covenants included in the common scheme 4-23 for preservation of historic property. 4-24 (c) The amendment or termination of a restrictive covenant 4-25 is effective and applies to each separately owned parcel or tract 4-26 subject to the common scheme for preservation of historic property 4-27 if the owners of at least 75 percent of the parcels or tracts who 5-1 vote on the issue in accordance with Section 207.006 vote in favor 5-2 of the amendment or termination of the restrictive covenant. 5-3 (d) A document certifying that 75 percent of the owners 5-4 voting on the issue approved the amendment or termination of the 5-5 restrictive covenant must be recorded by the historic neighborhood 5-6 preservation association in the real property records of the county 5-7 in which the historic neighborhood is located. The document is 5-8 prima facie evidence that the requisite percentage of votes was 5-9 attained and the required formalities for the action were taken. 5-10 Sec. 207.006. METHOD OF VOTING. (a) An amendment or 5-11 termination of a restrictive covenant must be voted on: 5-12 (1) by a written ballot that states the substance of 5-13 the amendment or termination of the restrictive covenant and 5-14 specifies the date by which the historic neighborhood preservation 5-15 association must receive a ballot for the ballot to be counted; 5-16 (2) at a meeting of the historic neighborhood 5-17 preservation association; 5-18 (3) by circulation of a petition by the historic 5-19 neighborhood preservation association or a person authorized by the 5-20 historic neighborhood preservation association; or 5-21 (4) by any combination of methods described by this 5-22 subsection. 5-23 (b) If the vote occurs at a meeting of the historic 5-24 neighborhood preservation association under Subsection (a)(2), the 5-25 historic neighborhood preservation association shall: 5-26 (1) before the meeting, deliver written notice of the 5-27 meeting stating the purpose of the meeting to each owner of 6-1 property subject to the common scheme for preservation of historic 6-2 property; and 6-3 (2) provide each owner of property subject to the 6-4 common scheme for preservation with the opportunity to appear and 6-5 vote at the meeting. 6-6 (c) The historic neighborhood preservation association shall 6-7 provide for the mailing to each owner, as applicable: 6-8 (1) the ballot under Subsection (a)(1); 6-9 (2) notice of the meeting under Subsection (a)(2); or 6-10 (3) the petition under Subsection (a)(3). 6-11 (d) The vote of multiple owners of a property may be 6-12 reflected by signature or vote of one of the owners. 6-13 (e) The historic neighborhood preservation association shall 6-14 record a copy of the ballot or petition, as applicable, in the real 6-15 property records of the county in which the historic neighborhood 6-16 is located before the vote of the owners. 6-17 Sec. 207.007. REGULAR AND SPECIAL ASSESSMENTS. The 6-18 procedure established by this chapter for the amendment of 6-19 restrictive covenants may not be used to establish a regular or 6-20 special assessment. 6-21 Sec. 207.008. BUILDING LINES. The procedure established by 6-22 this chapter for the amendment of restrictive covenants may not be 6-23 used to modify a building line established by a restrictive 6-24 covenant, municipal map, or subdivision plat. 6-25 Sec. 207.009. DEFENSE TO ENFORCEMENT OF RESTRICTIVE 6-26 COVENANT. An owner may not assert as a defense to the enforcement 6-27 of a restrictive covenant that is part of a common scheme for 7-1 preservation of historic property that the owner or a predecessor 7-2 in title signed a blank signature page or similar procedural defect 7-3 if the signature page was attached to a dedicatory instrument 7-4 adopted by a historic neighborhood preservation association and: 7-5 (1) the dedicatory instrument has been recorded for 7-6 more than two years; or 7-7 (2) the restrictive covenant is referenced in the 7-8 owner's title insurance policy obtained by the owner when the 7-9 property was purchased. 7-10 SECTION 3. The importance of this legislation and the 7-11 crowded condition of the calendars in both houses create an 7-12 emergency and an imperative public necessity that the 7-13 constitutional rule requiring bills to be read on three several 7-14 days in each house be suspended, and this rule is hereby suspended, 7-15 and that this Act take effect and be in force from and after its 7-16 passage, and it is so enacted.