By Brown S.B. No. 434
76R4900 PAM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the disclosure of certain information by a property
1-3 owners' association.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 11, Property Code, is amended by adding
1-6 Chapter 207 to read as follows:
1-7 CHAPTER 207. DISCLOSURE OF INFORMATION BY PROPERTY OWNERS'
1-8 ASSOCIATIONS
1-9 Sec. 207.001. DEFINITIONS. In this chapter:
1-10 (1) "Restrictions," "subdivision," and "owner" have
1-11 the meanings assigned by Section 201.003.
1-12 (2) "Dedicatory instrument," "property owners'
1-13 association," and "restrictive covenant" have the meanings assigned
1-14 by Section 202.001.
1-15 (3) "Regular assessment" and "special assessment" have
1-16 the meanings assigned by Section 204.001.
1-17 (4) "Resale certificate" means a written statement
1-18 issued, signed, and dated by an officer or authorized agent of a
1-19 property owners' association that contains the information
1-20 specified by Section 207.003(b).
1-21 Sec. 207.002. APPLICABILITY. This chapter applies to a
1-22 subdivision whose property owners' association is entitled to levy
1-23 regular or special assessments that are secured by a continuing
1-24 lien on property in the subdivision.
2-1 Sec. 207.003. DELIVERY OF SUBDIVISION INFORMATION TO OWNER.
2-2 (a) Not later than the 10th day after the date a written request
2-3 for subdivision information is received from an owner, the property
2-4 owners' association shall furnish to the owner:
2-5 (1) a current copy of the restrictive covenants
2-6 applying to the subdivision;
2-7 (2) a current copy of the bylaws and rules of the
2-8 property owners' association; and
2-9 (3) a resale certificate that complies with Subsection
2-10 (b).
2-11 (b) A resale certificate under Subsection (a) must contain
2-12 the current operating budget of the property owners' association
2-13 and must state:
2-14 (1) any right of first refusal or other restraint in
2-15 the restrictive covenants that restricts the owner's right to
2-16 transfer the owner's property;
2-17 (2) the frequency and amount of any regular
2-18 assessment;
2-19 (3) the amount of any unpaid regular or special
2-20 assessment or any other unpaid fees currently due and payable by
2-21 the owner;
2-22 (4) any capital expenditures approved by the property
2-23 owners' association for the next 12 months;
2-24 (5) the amount of any reserves for capital
2-25 expenditures and any portions of those reserves designated by the
2-26 property owners' association for a specified project;
2-27 (6) any unsatisfied judgments against the property
3-1 owners' association;
3-2 (7) the nature of any pending suits against the
3-3 property owners' association;
3-4 (8) any insurance coverage provided for the benefit of
3-5 property owners;
3-6 (9) whether the property owners' association has
3-7 knowledge that any alterations or improvements to the owner's
3-8 property violate the restrictive covenants applying to the
3-9 subdivision or the bylaws or rules of the property owners'
3-10 association;
3-11 (10) whether the property owners' association has
3-12 received notice from a governmental authority concerning violations
3-13 of health or building codes with respect to the owner's property or
3-14 any common areas owned by the association;
3-15 (11) whether the subdivision is built on leased land;
3-16 and
3-17 (12) the name, mailing address, and telephone number
3-18 of the association's managing agent, if any.
3-19 Sec. 207.004. OWNER'S REMEDIES. (a) If a property owners'
3-20 association does not timely furnish information in accordance with
3-21 Section 207.003, the owner may seek:
3-22 (1) a court order directing the property owners'
3-23 association to furnish the required information;
3-24 (2) a judgment against the property owners'
3-25 association for not more than $1,000;
3-26 (3) a judgment against the property owners'
3-27 association for court costs and attorney's fees; or
4-1 (4) a judgment authorizing the owner or the owner's
4-2 assignee to deduct the amount awarded under Subdivision (2) or (3)
4-3 from any future regular or special assessments payable to the
4-4 property owners' association.
4-5 (b) The property owners' association is not liable to an
4-6 owner selling property in the subdivision for delay or failure to
4-7 furnish a resale certificate, and an officer or agent of the
4-8 association is not liable for a delay or failure to furnish a
4-9 certificate.
4-10 (c) A property owners' association may not deny the validity
4-11 of any statement in the certificate.
4-12 (d) A resale certificate does not affect:
4-13 (1) the right of a property owners' association to
4-14 recover debts or claims that arise or become due after the date the
4-15 resale certificate is prepared; or
4-16 (2) a lien on a property securing payment of future
4-17 assessments held by the association.
4-18 (e) A purchaser, lender, or title insurer who relies on a
4-19 resale certificate is not liable for any debt or claim that is not
4-20 disclosed in the certificate.
4-21 SECTION 2. This Act takes effect September 1, 1999.
4-22 SECTION 3. The importance of this legislation and the
4-23 crowded condition of the calendars in both houses create an
4-24 emergency and an imperative public necessity that the
4-25 constitutional rule requiring bills to be read on three several
4-26 days in each house be suspended, and this rule is hereby suspended.