1-1 AN ACT
1-2 relating to requiring disclosure notices for the sale of real
1-3 property governed by a property owners' association and requiring
1-4 the filing of dedicatory instruments governing property owners'
1-5 associations.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Subchapter A, Chapter 5, Property Code, is
1-8 amended by adding Section 5.012 to read as follows:
1-9 Sec. 5.012. NOTICE OF OBLIGATIONS RELATED TO MEMBERSHIP IN
1-10 PROPERTY OWNERS' ASSOCIATION. (a) A seller of residential real
1-11 property that is subject to membership in a property owners'
1-12 association and that comprises not more than one dwelling unit
1-13 located in this state shall give to the purchaser of the property a
1-14 written notice that reads substantially similar to the following:
1-15 NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION
1-16 CONCERNING THE PROPERTY AT (street address)
1-17 (name of residential community)
1-18 As a purchaser of property in the residential community in
1-19 which this property is located, you are obligated to be a member of
1-20 a property owners' association. Restrictive covenants governing
1-21 the use and occupancy of the property and a dedicatory instrument
1-22 governing the establishment, maintenance, and operation of this
1-23 residential community have been or will be recorded in the Real
1-24 Property Records of the county in which the property is located.
2-1 Copies of the restrictive covenants and dedicatory instrument may
2-2 be obtained from the county clerk.
2-3 You are obligated to pay assessments to the property owners'
2-4 association. The amount of the assessments is subject to change.
2-5 Your failure to pay the assessments could result in a lien on and
2-6 the foreclosure of your property.
2-7 Date:__________ _____________________________________________
2-8 Signature of Purchaser
2-9 (b) The seller shall deliver the notice to the purchaser
2-10 before the date the executory contract binds the purchaser to
2-11 purchase the property. The notice may be given separately, as part
2-12 of the contract during negotiations, or as part of any other notice
2-13 the seller delivers to the purchaser. If the notice is included as
2-14 part of the executory contract or another notice, the title of the
2-15 notice prescribed by this section, the references to the street
2-16 address and date in the notice, and the purchaser's signature on
2-17 the notice may be omitted.
2-18 (c) This section does not apply to a transfer:
2-19 (1) under a court order or foreclosure sale;
2-20 (2) by a trustee in bankruptcy;
2-21 (3) to a mortgagee by a mortgagor or successor in
2-22 interest or to a beneficiary of a deed of trust by a trustor or
2-23 successor in interest;
2-24 (4) by a mortgagee or a beneficiary under a deed of
2-25 trust who has acquired the land at a sale conducted under a power
2-26 of sale under a deed of trust or a sale under a court-ordered
2-27 foreclosure or has acquired the land by a deed in lieu of
3-1 foreclosure;
3-2 (5) by a fiduciary in the course of the administration
3-3 of a decedent's estate, guardianship, conservatorship, or trust;
3-4 (6) from one co-owner to another co-owner of an
3-5 undivided interest in the real property;
3-6 (7) to a spouse or a person in the lineal line of
3-7 consanguinity of the seller;
3-8 (8) to or from a governmental entity;
3-9 (9) of only a mineral interest, leasehold interest, or
3-10 security interest; or
3-11 (10) of a real property interest in a condominium.
3-12 (d) If an executory contract is entered into without the
3-13 seller providing the notice required by this section, the purchaser
3-14 may terminate the contract for any reason within the earlier of:
3-15 (1) seven days after the date the purchaser receives
3-16 the notice; or
3-17 (2) the date the transfer occurs as provided by the
3-18 executory contract.
3-19 (e) The purchaser's right to terminate the executory
3-20 contract under Subsection (d) is the purchaser's exclusive remedy
3-21 for the seller's failure to provide the notice required by this
3-22 section.
3-23 SECTION 2. Chapter 202, Property Code, is amended by adding
3-24 Section 202.006 to read as follows:
3-25 Sec. 202.006. PUBLIC RECORDS. A property owners'
3-26 association shall file the dedicatory instrument in the real
3-27 property records of each county in which the property to which the
4-1 dedicatory instrument relates is located.
4-2 SECTION 3. (a) Except as provided by Subsection (b) of this
4-3 section, this Act takes effect September 1, 1999.
4-4 (b) Section 5.012, Property Code, as added by this Act,
4-5 takes effect January 1, 2000, and applies only to an executory
4-6 contract that is binding on a seller and purchaser on or after
4-7 January 1, 2000.
4-8 SECTION 4. Not later than January 1, 2000, each property
4-9 owners' association shall present for recording with the county
4-10 clerk as prescribed by Section 202.006, Property Code, as added by
4-11 this Act, each dedicatory instrument governing the association that
4-12 has not been previously recorded in the real property records of
4-13 the county.
4-14 SECTION 5. The importance of this legislation and the
4-15 crowded condition of the calendars in both houses create an
4-16 emergency and an imperative public necessity that the
4-17 constitutional rule requiring bills to be read on three several
4-18 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2224 was passed by the House on May
4, 1999, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 2224 on May 21, 1999, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 2224 on May 29, 1999, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2224 was passed by the Senate, with
amendments, on May 19, 1999, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 2224 on May 30, 1999,
by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor