By Solomons H.B. No. 2224 76R6815 PAM-D A BILL TO BE ENTITLED 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 1-14 before the transfer of the property a written notice as prescribed 1-15 by this section. 1-16 (b) The notice must be conspicuous and printed in 14-point 1-17 bold-faced type and read substantially similar to the following: 1-18 NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION 1-19 CONCERNING THE PROPERTY AT (street address) 1-20 (name of residential community) 1-21 As a purchaser of property in this residential community, you 1-22 are obligated to be a member of (name of property owners' 1-23 association). 1-24 Restrictive covenants governing the use and occupancy of 2-1 property located in this residential community and a dedicatory 2-2 instrument governing the establishment, maintenance, and operation 2-3 of this residential community have been or will be recorded in the 2-4 Real Property Records of (name of county). Copies of the 2-5 restrictive covenants and dedicatory instrument may be obtained 2-6 from the county clerk. 2-7 You are obligated to pay assessments to the property owners' 2-8 association. The amount of the assessments is subject to change. 2-9 Your failure to pay the assessments could result in a lien on and 2-10 the foreclosure of your property. 2-11 THE STATEMENTS CONTAINED IN THIS NOTICE ARE SUMMARY IN 2-12 NATURE. AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE 2-13 RESTRICTIVE COVENANTS AND THE DEDICATORY INSTRUMENT FOR FURTHER 2-14 DETAIL. 2-15 I UNDERSTAND MY OBLIGATIONS RELATING TO MEMBERSHIP IN THE 2-16 PROPERTY OWNERS' ASSOCIATION AS STATED ABOVE. 2-17 Date:__________ _____________________________________________ 2-18 Signature of Purchaser 2-19 Print Name:__________________________________ 2-20 Property Address:____________________________ 2-21 (c) The seller's failure to provide the notice required by 2-22 this section entitles the purchaser to cancel and rescind the 2-23 purchase contract and receive a full refund of any purchase payment 2-24 made to the seller. 2-25 SECTION 2. Chapter 202, Property Code, is amended by adding 2-26 Section 202.006 to read as follows: 2-27 Sec. 202.006. PUBLIC RECORDS. (a) Each county clerk shall 3-1 maintain suitable records called "Property Owners' Association 3-2 Records" in which the clerk shall record dedicatory instruments 3-3 governing property owners' associations. 3-4 (b) A property owners' association shall file the dedicatory 3-5 instrument in the real property records of each county in which the 3-6 property to which the dedicatory instrument relates is located. 3-7 SECTION 3. (a) Except as provided by Subsection (b) of this 3-8 section, this Act takes effect September 1, 1999. 3-9 (b) Section 5.012, Property Code, as added by this Act, 3-10 takes effect January 1, 2000, and applies only to a real property 3-11 transaction described by that section in which the transfer of the 3-12 property occurs on or after January 1, 2000. 3-13 SECTION 4. (a) On or before December 1, 1999, the county 3-14 clerk of each county shall establish the "Property Owners' 3-15 Association Records" for the county as prescribed by Section 3-16 202.006, Property Code, as added by this Act. 3-17 (b) Not later than January 1, 2000, each property owners' 3-18 association shall present for recording with the county clerk as 3-19 prescribed by Section 202.006, Property Code, as added by this Act, 3-20 each dedicatory instrument governing the association that has not 3-21 been previously recorded in the real property records of the 3-22 county. 3-23 SECTION 5. The importance of this legislation and the 3-24 crowded condition of the calendars in both houses create an 3-25 emergency and an imperative public necessity that the 3-26 constitutional rule requiring bills to be read on three several 3-27 days in each house be suspended, and this rule is hereby suspended.