By Yarbrough H.B. No. 2460
76R8651 PAM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the governance of property owners' associations, to
1-3 certain procedures involving the relationship between property
1-4 owners and property owners' associations, and to property owners'
1-5 association liens for assessments.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Section 27.031, Government Code, is amended to
1-8 read as follows:
1-9 Sec. 27.031. JURISDICTION. (a) In addition to the
1-10 jurisdiction and powers provided by the constitution and other law,
1-11 the justice court has original jurisdiction of:
1-12 (1) civil matters in which exclusive jurisdiction is
1-13 not in the district or county court and in which the amount in
1-14 controversy is not more than $5,000, exclusive of interest;
1-15 (2) cases of forcible entry and detainer; [and]
1-16 (3) foreclosure of mortgages and enforcement of liens
1-17 on personal property in cases in which the amount in controversy is
1-18 otherwise within the justice court's jurisdiction; and
1-19 (4) disputes between property owners and property
1-20 owners' associations, including the enforcement of a lien for
1-21 failure to pay property owners' association dues, in cases in which
1-22 the amount in controversy is otherwise within the justice court's
1-23 jurisdiction.
1-24 (b) A justice court does not have jurisdiction of:
2-1 (1) a suit in behalf of the state to recover a
2-2 penalty, forfeiture, or escheat;
2-3 (2) a suit for divorce;
2-4 (3) a suit to recover damages for slander or
2-5 defamation of character;
2-6 (4) a suit for trial of title to land; or
2-7 (5) except as provided by Subsection (a)(4), a suit
2-8 for the enforcement of a lien on land.
2-9 SECTION 2. Section 41.001, Property Code, is amended by
2-10 adding Subsection (d) to read as follows:
2-11 (d) An obligation to pay property owners' association fees
2-12 for maintenance and ownership of common facilities and services is
2-13 not an encumbrance that may be properly fixed on or executed
2-14 against homestead property. In this subsection, "property owners'
2-15 association" has the meaning assigned by Section 202.001.
2-16 SECTION 3. Chapter 202, Property Code, is amended by adding
2-17 Sections 202.006 and 202.007 to read as follows:
2-18 Sec. 202.006. MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION. A
2-19 dedicatory instrument adopted on or after September 1, 1999, may
2-20 not require an owner of real property located within the area
2-21 covered by the dedicatory instrument to join a property owners'
2-22 association.
2-23 Sec. 202.007. HEARING BEFORE PROPERTY OWNERS' ASSOCIATION.
2-24 (a) A property owners' association shall establish a dispute
2-25 resolution committee to conduct hearings on disputes relating to a
2-26 fine or penalty imposed on a property owner by the association.
2-27 (b) A property owners' association shall adopt rules
3-1 relating to hearings conducted by a dispute resolution committee.
3-2 The rules must:
3-3 (1) provide a property owner with notice of a hearing
3-4 as provided by Rule 21a, Texas Rules of Civil Procedure;
3-5 (2) provide for the recording of a hearing by a court
3-6 reporter or by audio or video recording;
3-7 (3) require the property owners' association to retain
3-8 a record of a hearing for at least two years after the date of
3-9 the final determination of the matter in dispute; and
3-10 (4) allow a property owner to appeal the decision of
3-11 the dispute resolution committee to the entire board of the
3-12 property owners' association before the association may institute
3-13 any legal proceeding, including an alternative dispute resolution
3-14 procedure, relating to the fine or penalty in dispute.
3-15 SECTION 4. Title 11, Property Code, is amended by adding
3-16 Chapter 207 to read as follows:
3-17 CHAPTER 207. DISCLOSURE OF INFORMATION BY PROPERTY OWNERS'
3-18 ASSOCIATIONS
3-19 Sec. 207.001. DEFINITIONS. In this chapter:
3-20 (1) "Restrictions," "subdivision," and "owner" have
3-21 the meanings assigned by Section 201.003.
3-22 (2) "Dedicatory instrument," "property owners'
3-23 association," and "restrictive covenant" have the meanings assigned
3-24 by Section 202.001.
3-25 (3) "Regular assessment" and "special assessment" have
3-26 the meanings assigned by Section 204.001.
3-27 (4) "Resale certificate" means a written statement
4-1 issued, signed, and dated by an officer or authorized agent of a
4-2 property owners' association that contains the information
4-3 specified by Section 207.003(b).
4-4 Sec. 207.002. APPLICABILITY. This chapter applies to a
4-5 subdivision whose property owners' association is entitled to levy
4-6 regular or special assessments that are secured by a continuing
4-7 lien on property in the subdivision.
4-8 Sec. 207.003. DELIVERY OF SUBDIVISION INFORMATION TO OWNER.
4-9 (a) Not later than the 10th day after the date a written request
4-10 for subdivision information is received from an owner, the property
4-11 owners' association shall furnish to the owner:
4-12 (1) a current copy of the restrictive covenants
4-13 applying to the subdivision;
4-14 (2) a current copy of the bylaws and rules of the
4-15 property owners' association; and
4-16 (3) a resale certificate that complies with Subsection
4-17 (b).
4-18 (b) A resale certificate under Subsection (a) must contain
4-19 the current operating budget of the property owners' association
4-20 and must state:
4-21 (1) any right of first refusal or other restraint in
4-22 the restrictive covenants that restricts the owner's right to
4-23 transfer the owner's property;
4-24 (2) the frequency and amount of any regular
4-25 assessment;
4-26 (3) the amount of any unpaid regular or special
4-27 assessment or any other unpaid fees currently due and payable by
5-1 the owner;
5-2 (4) any capital expenditures approved by the property
5-3 owners' association for the next 12 months;
5-4 (5) the amount of any reserves for capital
5-5 expenditures and any portions of those reserves designated by the
5-6 property owners' association for a specified project;
5-7 (6) any unsatisfied judgments against the property
5-8 owners' association;
5-9 (7) the nature of any pending suits against the
5-10 property owners' association;
5-11 (8) any insurance coverage provided for the benefit of
5-12 property owners;
5-13 (9) whether the property owners' association has
5-14 knowledge that any alterations or improvements to the owner's
5-15 property violate the restrictive covenants applying to the
5-16 subdivision or the bylaws or rules of the property owners'
5-17 association;
5-18 (10) whether the property owners' association has
5-19 received notice from a governmental authority concerning violations
5-20 of health or building codes with respect to the owner's property or
5-21 any common areas owned by the association;
5-22 (11) whether the subdivision is built on leased land;
5-23 and
5-24 (12) the name, mailing address, and telephone number
5-25 of the association's managing agent, if any.
5-26 Sec. 207.004. OWNER'S REMEDIES. (a) If a property owners'
5-27 association does not timely furnish information in accordance with
6-1 Section 207.003, the owner may seek:
6-2 (1) a court order directing the property owners'
6-3 association to furnish the required information;
6-4 (2) a judgment against the property owners'
6-5 association for not more than $1,000;
6-6 (3) a judgment against the property owners'
6-7 association for court costs and attorney's fees; or
6-8 (4) a judgment authorizing the owner or the owner's
6-9 assignee to deduct the amount awarded under Subdivision (2) or (3)
6-10 from any future regular or special assessments payable to the
6-11 property owners' association.
6-12 (b) The property owners' association is not liable to an
6-13 owner selling property in the subdivision for delay or failure to
6-14 furnish a resale certificate, and an officer or agent of the
6-15 association is not liable for a delay or failure to furnish a
6-16 certificate.
6-17 (c) A property owners' association may not deny the validity
6-18 of any statement in the certificate.
6-19 (d) A resale certificate does not affect:
6-20 (1) the right of a property owners' association to
6-21 recover debts or claims that arise or become due after the date the
6-22 resale certificate is prepared; or
6-23 (2) a lien on a property securing payment of future
6-24 assessments held by the association.
6-25 (e) A purchaser, lender, or title insurer who relies on a
6-26 resale certificate is not liable for any debt or claim that is not
6-27 disclosed in the certificate.
7-1 SECTION 5. (a) This Act takes effect September 1, 1999.
7-2 (b) The change in law made by this Act to Section 27.031,
7-3 Government Code, applies only to actions filed on or after the
7-4 effective date of this Act. An action filed before the effective
7-5 date of this Act is governed by the law in effect at the time the
7-6 action was filed, and the former law is continued in effect for
7-7 that purpose.
7-8 (c) The change in law made by this Act by the addition of
7-9 Section 41.001(d), Property Code, does not apply to a cause of
7-10 action that accrued before the effective date of this Act. A cause
7-11 of action that accrued before the effective date of this Act is
7-12 governed by the law in effect when the cause of action accrued, and
7-13 the former law is continued in effect for that purpose.
7-14 SECTION 6. The importance of this legislation and the
7-15 crowded condition of the calendars in both houses create an
7-16 emergency and an imperative public necessity that the
7-17 constitutional rule requiring bills to be read on three several
7-18 days in each house be suspended, and this rule is hereby suspended.