By: Carona S.B. No. 699 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. A BILL TO BE ENTITLED AN ACT 1-1 relating to residential subdivisions with mandatory membership in 1-2 homeowner associations. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Title 11, Property Code, is amended by adding 1-5 Chapter 207 to read as follows: 1-6 CHAPTER 207. TEXAS PLANNED COMMUNITY ACT 1-7 SUBCHAPTER A. GENERAL PROVISIONS 1-8 Sec. 207.001. SHORT TITLE. This chapter may be cited as the 1-9 Texas Planned Community Act. 1-10 Sec. 207.002. DEFINITIONS. In this chapter: 1-11 (1) "Association" means the property owners' 1-12 association organized under Section 207.012. 1-13 (2) "Board" means the board of directors or the body, 1-14 regardless of name, designated to act on behalf of the association. 1-15 (3) "Builder" means any person or entity in the 1-16 business of constructing a residential dwelling on any lot within a 1-17 residential real estate subdivision for sale to a consumer. 1-18 (4) "Declarant" means the person: 1-19 (A) designated in the restrictions or a 1-20 dedicatory instrument as the declarant; or 1-21 (B) who succeeds to the special rights, 1-22 preferences, or privileges designated in the original restrictions 2-1 or dedicatory instrument as belonging to the signatory. 2-2 (5) "Declaration" means restrictions as defined in 2-3 Subdivision (15) of this section. 2-4 (6) "Dedicatory instrument" means each governing 2-5 instrument covering the establishment, maintenance, and operation 2-6 of a residential subdivision, planned unit development, townhouse 2-7 regime, or any similar planned development. The term includes 2-8 restrictions, declarations, or similar instruments subjecting 2-9 property to restrictive covenants, bylaws, or similar instruments 2-10 governing the administration or operation of a property owners' 2-11 association, to properly adopted rules and regulations of the 2-12 property owners' association, or to all lawful amendments to the 2-13 covenants, bylaws, rules, or regulations. 2-14 (7) "Lienholder" means a person that holds a valid 2-15 vendor's lien or deed of trust lien secured by property within the 2-16 subdivision. 2-17 (8) "Owner" means a person that owns record title to 2-18 property in a subdivision, or the personal representative of an 2-19 individual who owns record title to subdivision property. 2-20 (9) "Petition" means one or more instruments, 2-21 regardless of the designation or title, by which one or more of the 2-22 purposes authorized by this chapter are sought to be accomplished. 2-23 (10) "Property," "real property", "lot," or "tract" 2-24 means a lot or tract in a residential real estate subdivision. 2-25 (11) "Property owners' association" means an 2-26 incorporated or unincorporated association designated as the 3-1 representative of the owners of property in a subdivision and whose 3-2 members consist primarily or the owners of the property covered by 3-3 the dedicatory instrument and through which the owners, or the 3-4 board of directors or similar governing body, manage or regulate 3-5 the residential subdivision, planned unit development, or townhouse 3-6 regime, or similar planned development. 3-7 (12) "Real property records" means the applicable 3-8 records of a county clerk in which conveyances of real property are 3-9 recorded. 3-10 (13) "Regular assessment" means an assessment, charge, 3-11 fee, or dues that each owner of property within a subdivision is 3-12 required to pay to the property owners' association on a regular 3-13 basis and that is to be used by the property owners' association 3-14 for the benefit of the subdivision in accordance with the 3-15 restrictions, as amended or extended. 3-16 (14) "Residential subdivision" or "subdivision" means 3-17 all land that has been divided into two or more parts and that is 3-18 or was burdened by restrictions which (i) limit at least a majority 3-19 of the land area burdened by restrictions, excluding streets and 3-20 public areas, to residential use only, (ii) are recorded in the 3-21 deed or property records of a county, and (iii) require membership 3-22 in a property owners' association which has authority to impose 3-23 regular or special assessments on the lots in the subdivision. 3-24 (15) "Restrictions" means one or more restrictive 3-25 covenants contained or incorporated by reference in a properly 3-26 recorded map, plat, replat, declaration, or other instrument filed 4-1 in the county real property records, map or plat records, or deed 4-2 records. 4-3 (16) "Restrictive covenant" means any covenant, 4-4 condition, or restriction contained in a dedicatory instrument, 4-5 whether mandatory, prohibitive, permissive, or administrative. 4-6 (17) "Special assessment" means an assessment, charge, 4-7 fee, or dues that each owner of property within a subdivision is 4-8 required to pay to the property owners' association, after a vote 4-9 of the membership, for the purpose of defraying, in whole or in 4-10 part, the cost of any construction or reconstruction, unexpected 4-11 repair, or replacement of a capital improvement on common areas 4-12 owned by the property owners' association, including the necessary 4-13 fixtures and personal property related to the common areas, or for 4-14 maintenance and improvement of common areas owned by the property 4-15 owners' association or for carrying out other purposes of the 4-16 property owners' association as stated in its articles of 4-17 incorporation or its dedicatory instrument. A special assessment 4-18 may be assessed before or after the property owners' association 4-19 incurs the costs that require the special assessment. 4-20 Sec. 207.003. APPLICATION. (a) Subject to Subsections (b), 4-21 (c), and (d) of this section, this chapter applies only to a 4-22 residential subdivision that is or was burdened by restrictions or 4-23 provisions in a declaration that: 4-24 (1) limit at least a majority of the land area 4-25 burdened by the dedicatory instruments, excluding streets and 4-26 public areas, to residential use only; 5-1 (2) are recorded in the deed or property records of a 5-2 county; 5-3 (3) require membership in a property owners' 5-4 association for property owners of residential lots in the 5-5 subdivision; and 5-6 (4) grant the property owners' association authority 5-7 to collect regular or special assessments on lots in the 5-8 subdivision. 5-9 (b) This chapter applies only to a property owners' 5-10 association that requires mandatory membership in the association 5-11 for all owners of residential property within the subdivision 5-12 covered by the dedicatory instrument. 5-13 (c) This chapter applies only to a property owners' 5-14 association, as defined by Section 207.002, regardless of whether 5-15 the organization is given a different name, such as "homeowners 5-16 association" or "community association," in the restrictions or 5-17 dedicatory instrument. 5-18 (d) This chapter does not apply to condominium developments 5-19 that are governed by Chapter 82, Property Code. 5-20 (Section 207.004-207.009 reserved for expansion 5-21 SUBCHAPTER B. CONSTRUCTION AND ENFORCEMENT 5-22 OF RESTRICTIVE COVENANTS 5-23 Sec. 207.010. RESTRICTIVE COVENANTS. (a) An express 5-24 designation in a document creating restrictions applicable to a 5-25 residential subdivision that provides for the extension of, 5-26 addition to, or modification of existing restrictions by a 6-1 designated number of owners of property in the subdivision that is 6-2 less than 100% prevails over the provisions of Sections 207.011 (b) 6-3 and (c). 6-4 (b) The provisions of Section 207.011 (b) and (c) prevail 6-5 if: 6-6 (1) an express designation in the document creating 6-7 restrictions applicable to a residential real estate subdivision 6-8 provides for the extension of, addition to, or modification of 6-9 existing restrictions by 100% of the owners of property in the 6-10 subdivision; or 6-11 (2) the document creating restrictions applicable to a 6-12 residential real estate subdivision does not provide for the 6-13 extension of, addition to, or modification of existing 6-14 restrictions. 6-15 Sec. 207.011. AMENDMENT OR EXTENSION OF EXISTING 6-16 RESTRICTIONS. (a) Subject to the limitations in a dedicatory 6-17 instrument applicable during a period of declarant control, and in 6-18 addition to the powers and methods contained in an existing 6-19 dedicatory instrument or the restrictions, a property owners' 6-20 association has authority to circulate and approve a petition 6-21 relating to an amendment or extension of existing restrictions. 6-22 (b) Subject to the limitations in subsection (a), a petition 6-23 to amend or extend existing restrictions circulated and approved by 6-24 a property owners' association is effective if: 6-25 (1) the petition is approved by the owners, excluding 6-26 lienholders, contract purchasers, and the owners of mineral 7-1 interests, of at least 75 percent of the lots or tracts in the 7-2 residential real estate subdivision; 7-3 (2) the petition does not amend or extend a particular 7-4 provision which may not, under the declaration or restrictions, be 7-5 amended or extended until a certain event or events occur; 7-6 (3) the petition is recorded as a dedicatory 7-7 instrument with the county clerk of the county in which the 7-8 subdivision is located; and 7-9 (4) a copy of the recorded dedicatory instrument is 7-10 provided to all owners of lots or tracts in the subdivision. 7-11 (c) If a residential subdivision that consists of multiple 7-12 sections, each with its own restrictions, is represented by a 7-13 single property owners' association, the approval requirement may 7-14 be satisfied by obtaining approval of at least 75 percent of the 7-15 owners of lots or tracts in each section or 75 percent of the total 7-16 number of lots or tracts in the association's jurisdiction. 7-17 (d) If approved, the petition is binding on all lots or 7-18 tracts in the subdivision or section, as applicable. 7-19 (e) A property owners' association that circulates a 7-20 petition must notify all record owners of property in the 7-21 residential real estate subdivision in writing of the proposed 7-22 amendment or extension of the existing restrictions. Notice may be 7-23 hand-delivered to residences within the subdivision or sent by 7-24 regular mail to the owner's last known mailing address as reflected 7-25 in the ownership records maintained by the association. The 7-26 approval of multiple owners of a property may be reflected by the 8-1 signature of a single co-owner. 8-2 (f) An action to challenge the validity of a dedicatory 8-3 instrument adopted by a property owners' association under this 8-4 section must be brought before the first anniversary of the date 8-5 the dedicatory instrument is recorded. 8-6 (g) Any lien recorded before a dedicatory instrument is 8-7 adopted by a property owners' association under this section is 8-8 automatically subject to the dedicatory instrument at the time the 8-9 instrument is recorded in the real property records. 8-10 Sec. 207.012. TEXAS NONPROFIT CORPORATION. If a property 8-11 owners' association is a Texas nonprofit corporation, the 8-12 provisions of the Texas Nonprofit Corporation Act (Article 8-13 1396-1.01 et seq., Vernon's Texas Civil Statutes) shall apply to 8-14 the association, except to the extent the provisions conflict with 8-15 this chapter. 8-16 (Section 207.013-207.019 reserved for expansion 8-17 SUBCHAPTER C. MANAGEMENT OF THE ASSOCIATION 8-18 Sec. 207.020. POWERS OF PROPERTY OWNERS' ASSOCIATION. 8-19 (a) Unless otherwise provided by the declaration, restrictions, 8-20 articles of incorporation, or bylaws of the association, the 8-21 association acting through its board may: 8-22 (1) adopt and amend bylaws; 8-23 (2) adopt and amend budgets for revenues, 8-24 expenditures, and reserves and collect regular assessments or 8-25 special assessments for common expenses from property owners; 8-26 (3) hire and terminate managing agents and other 9-1 employees, agents, and independent contractors; 9-2 (4) institute, defend, intervene in, settle, or 9-3 compromise litigation or administrative proceedings in its own name 9-4 or on behalf of itself or two or more property owners on matters 9-5 affecting the subdivision; 9-6 (5) make contracts and incur liabilities relating to 9-7 the operation of the subdivision and the property owners' 9-8 association; 9-9 (6) regulate the use, maintenance, repair, 9-10 replacement, modification, and appearance of the subdivision; 9-11 (7) adopt and amend rules regulating the use, 9-12 maintenance, repair, modification, and appearance of property, to 9-13 the extent the regulated actions affect other property; 9-14 (8) make additional improvements to the common area of 9-15 the subdivision; 9-16 (9) acquire, hold, encumber, and convey in its own 9-17 name any right, title, or interest to real or personal property; 9-18 (10) grant easements, leases, licenses, and 9-19 concessions through or over common areas; 9-20 (11) impose and receive payments, fees, or charges for 9-21 the use, rental, or operation of common areas and for services 9-22 provided to property owners; 9-23 (12) impose interest and late charges for delinquent 9-24 amounts due the association, returned check charges, and, if notice 9-25 and an opportunity to be heard are given under Subdivision (e), 9-26 reasonable fines for violations of the declaration, bylaws, and 10-1 rules of the association; 10-2 (13) adopt and amend rules regulating the collection 10-3 of delinquent amounts due the association and the application of 10-4 payments; 10-5 (14) impose reasonable charges for preparing, 10-6 recording, or copying declarations, restrictions, amendments, 10-7 resale certificates, statements of delinquent amounts due the 10-8 association, releases, and other association records; 10-9 (15) assign its right to future income, including the 10-10 right to receive regular assessments, after notice of the proposed 10-11 assignment has been mailed to all association members and if at 10-12 least two-thirds of the association members who vote in person or 10-13 by proxy at an association meeting to approve the assignment; 10-14 (16) suspend the voting privileges of and the use of 10-15 common areas by an owner delinquent for more than 30 days in the 10-16 payment of amounts due the association; 10-17 (17) purchase insurance and fidelity bonds, including 10-18 directors' and officers' liability insurance, that it considers 10-19 appropriate or necessary; 10-20 (18) may, subject to the requirements and limitations 10-21 of the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 10-22 Vernon's Texas Civil Statutes) and by majority vote of its board of 10-23 directors, indemnify a director, officer or committee member of the 10-24 property owners' association who was, is, or may be made a named 10-25 defendant or respondent in a proceeding because the person is or 10-26 was a director, officer or committee member; 11-1 (19) may, if the restrictions vest the architectural 11-2 control authority in the property owners' association or if the 11-3 authority is vested in the association under Section 207.022, 11-4 implement written architectural control guidelines regardless of 11-5 whether the guidelines are to be recorded in the real property 11-6 records of the applicable county; and may modify the guidelines as 11-7 the property owners' association finds necessary; 11-8 (20) exercise other powers conferred by the dedicatory 11-9 instruments; 11-10 (21) exercise other powers that may be exercised in 11-11 this state by a corporation of the same type as the property 11-12 owners' association; and 11-13 (22) exercise any other powers necessary and proper 11-14 for operation of the association. 11-15 (b) A dedicatory instrument may not impose limitations on 11-16 the power of the association to deal with the declarant that are 11-17 more restrictive than the limitations imposed on the power of the 11-18 association to deal with other persons. 11-19 (c) To be enforceable, a bylaw or rule of the association 11-20 must not be arbitrary or capricious. 11-21 (d) Before an association may suspend an owner's right to 11-22 use a common area or file a suit against an owner that does not 11-23 seek foreclosure, the association or its agent shall give written 11-24 notice to the owner by hand delivery or certified mail return 11-25 receipt requested to the owner's last known address as shown in the 11-26 association's records, stating that the owner has the right to 12-1 request a hearing before a board-appointed committee, or the board 12-2 itself if there is no committee, to discuss and verify facts and 12-3 attempt a resolution of the matter in issue. The request by the 12-4 owner shall be in writing and delivered to the association no later 12-5 than the 10th day after the association's notice to the owner was 12-6 hand delivered to the owner or deposited in the U.S. mail to the 12-7 owner. If an owner requests the opportunity to have a hearing 12-8 before the board or committee, the hearing shall be no later than 12-9 30 days after the board's receipt of the owner's request for a 12-10 hearing. The owner and the association may audio tape the meeting. 12-11 This subsection shall not apply to the filing of a suit with a 12-12 simultaneous application for a temporary restraining order or a 12-13 suit that includes foreclosure as a cause of action. Suits 12-14 involving foreclosure are subject to requirements of Subchapter E. 12-15 (e) Before an association may charge a property owner for 12-16 property damage or levy a fine for violation of the declaration, 12-17 bylaws, or rules, the association shall give to the owner a written 12-18 notice that: 12-19 (1) describes the violation or property damage and 12-20 states the amount of the proposed fine or damage charge; 12-21 (2) states that not later than the 10th day after (i) 12-22 the date the association's notice was deposited in the U.S. mail if 12-23 the notice is mailed, or (ii) the owner's receipt of the notice if 12-24 the notice is hand delivered, the owner may request a hearing 12-25 before the board to verify facts or contest the fine or damage 12-26 charge; and 13-1 (3) allows the owner a reasonable time, by a specified 13-2 date, to cure the violation and avoid the fine unless the owner was 13-3 given notice and a reasonable opportunity to cure a similar 13-4 violation within the preceding 12 months. 13-5 (f) An association may collect reimbursement of reasonable 13-6 attorney's fees and other reasonable enforcement costs incurred by 13-7 the association relating to collection of amounts due the 13-8 association or violations of the association's declaration, bylaws 13-9 or rules only if the owner has first been furnished a written 13-10 notice that attorney's fees and enforcement costs will be charged 13-11 to the owner in the event the delinquency or violation continues 13-12 after a date certain. Attorney's fees that are in connection with 13-13 the delinquency or violation and that are incurred by the 13-14 association prior to giving the notice to the owner may not be 13-15 charged to the owner. This restriction does not apply to a 13-16 counterclaim of an association in a lawsuit brought against the 13-17 association by a property owner. 13-18 (g) The association may give a copy of the notice required 13-19 by Subsection (d), (e) and (f) to an occupant of the property. The 13-20 association must give notice of a levied fine or damage charge to 13-21 the property owner no later than the 30th day after the date of the 13-22 levy or charge. 13-23 Sec. 207.021. ASSESSMENTS. (a) An association acting 13-24 through its board may impose and increase regular assessments in 13-25 accordance with 13-26 (1) the dedicatory instruments of the association, or 14-1 (2) this section if a dedicatory instrument sets a 14-2 maximum fixed dollar amount, unrelated to value, for regular 14-3 assessments and contains no provision to increase the regular 14-4 assessments over the maximum fixed dollar amount other than by 14-5 amendment of the dedicatory instrument. 14-6 (b) On or after the first day of January immediately 14-7 following the first year that the maximum regular assessment set in 14-8 a dedicatory instrument is levied, a property owners' association 14-9 may adjust the assessment to reflect increases in the Consumer 14-10 Price Index for All Urban Consumers published monthly by the Bureau 14-11 of Labor Statistics, United States Department of Labor (CPI), or 14-12 its successor in function, using the first month of the calendar 14-13 year that ended immediately before the date on which the adjustment 14-14 is to be made as the base amount. The association shall take the 14-15 index numbers from the CPI in accordance with Subsections (c) 14-16 through (e). 14-17 (c) The adjustment in the regular assessment shall be 14-18 determined by multiplying the maximum fixed dollar regular 14-19 assessment by a fraction, the numerator of which is the index 14-20 number for the first month of the calendar year that ended 14-21 immediately before the date on which the adjustment is to be made 14-22 and the denominator of which is the index number for the first 14-23 month of the first year the maximum fixed dollar regular assessment 14-24 is reached. If the product is greater than the maximum fixed 14-25 dollar regular assessment authorized in the dedicatory instrument 14-26 or restrictions, each property owner shall pay the greater amount 15-1 as the regular assessment until the time of the next regular 15-2 assessment adjustment. If the product is less than the maximum 15-3 fixed dollar regular assessment authorized in the dedicatory 15-4 instrument or restrictions, the regular assessment may not be 15-5 adjusted and each property owner shall pay the maximum fixed dollar 15-6 regular assessment authorized in the dedicatory instrument or 15-7 restrictions until the time of the next adjustment. The 15-8 association may not adjust the regular assessment under this 15-9 section more than one time each year. 15-10 (d) If publication of the Consumer Price Index or any 15-11 successor publication is discontinued, the adjustments described in 15-12 Subsection (c) shall be made by using the statistics of the Bureau 15-13 of Labor Statistics, United States Department of Labor, that are 15-14 the most similar to the Consumer Price Index. If the Bureau of 15-15 Labor Statistics, United States Department of Labor, ceases to 15-16 exist or does not publish statistics relating to the purchasing 15-17 power of the consumer dollar, the assessment adjustments described 15-18 by this section shall be made using the most nearly comparable 15-19 statistics published by a recognized financial authority selected 15-20 by the property owners' association. 15-21 (e) If the property owners' association does not increase 15-22 the regular assessment determined by Subsection (c) for a 15-23 particular year, the increase may be accumulated and assessed in 15-24 future years. If a dedicatory instrument contains a maximum 15-25 regular assessment and allows for an increase without a vote of the 15-26 membership, the association may assess the increase annually or 16-1 accumulate and assess the increase after a number of years. 16-2 Sec. 207.022. ARCHITECTURAL CONTROL. (a) This section 16-3 applies to restrictions providing for the creation and operation of 16-4 an architectural control committee with the power to approve or 16-5 deny applications for proposed original construction or 16-6 modification of a building, structure, or improvement. Unless 16-7 otherwise provided by the dedicatory instruments, an association's 16-8 board may serve as an architectural control committee. 16-9 (b) Unless the restrictions applicable to a residential real 16-10 estate subdivision vest the architectural control authority in the 16-11 property owners' association before either of the following events, 16-12 the architectural control authority automatically vests in the 16-13 association if: 16-14 (1) the term of the architectural control committee 16-15 authority expires as prescribed by the restrictions; 16-16 (2) a residence on the last available residential 16-17 building site in the subdivision is completed and sold; 16-18 (3) the person or entity designated as the 16-19 architectural control committee in the restrictions assigns, in 16-20 writing, authority to the association; or 16-21 (4) the declarant, the declarant's designees, or any 16-22 person named in the dedicatory instrument as the architectural 16-23 control committee cease to exercise its authority for more than one 16-24 year under the restrictions or provisions contained in a dedicatory 16-25 instrument relating to the architectural control committee. 16-26 (c) If the architectural control committee authority is 17-1 vested in the property owners' association under Subsection (b), 17-2 the association has that authority until: 17-3 (1) the restrictions are modified to reflect 17-4 otherwise; or 17-5 (2) the restrictions are terminated. 17-6 (d) The declarant, the property owners' association, the 17-7 architectural control committee, or an owner of property subject to 17-8 a dedicatory instrument sought to be enforced may enforce a 17-9 restrictive covenant that relates to architectural control, 17-10 construction on a lot, and use restrictions on a lot contained in 17-11 the dedicatory instrument. 17-12 Sec. 207.023. MEETINGS. (a) A meeting of the association 17-13 must be held at least once each year. Unless a dedicatory 17-14 instrument provides less restrictive requirements, a special 17-15 meeting of the association may be called by the president, a 17-16 majority of the board, or property owners having at least 10 17-17 percent of the votes in the association. 17-18 (b) Meetings of the association and board must be open to 17-19 property owners, subject to the right of the board to adjourn a 17-20 board meeting and reconvene in closed executive session to consider 17-21 actions involving personnel, pending litigation, contract 17-22 negotiations, enforcement actions, matters involving the invasion 17-23 of privacy of individual owners, or matters that are to remain 17-24 confidential by request of the affected parties and agreement of 17-25 the board. The general nature of any business to be considered in 17-26 executive session must first be announced at the open meeting. 18-1 (c) Unless a dedicatory instrument of the association 18-2 provides otherwise: 18-3 (1) a board meeting may be held by any method of 18-4 communication, including electronic and telephonic, if: 18-5 (A) notice of the meeting has been given in 18-6 accordance with Subsection (e); 18-7 (B) each director may hear and be heard by every 18-8 other director; and 18-9 (C) the meeting does not involve voting on a 18-10 fine, damage assessment, appeal from a denial of architectural 18-11 control approval, or suspension of a right of a particular 18-12 association member before the member has an opportunity to attend a 18-13 board meeting to present the member's position, including any 18-14 defense, on the issue; and 18-15 (2) the board may act by unanimous written consent of 18-16 all the directors, without a meeting, if: 18-17 (A) the board action does not involve voting on 18-18 a fine, damage assessment, appeal from a denial of architectural 18-19 control approval, or suspension of a right of a particular 18-20 association member before the member has an opportunity to attend a 18-21 board meeting to present the member's position, including any 18-22 defense, on the issue; and 18-23 (B) a record of the board action is filed with 18-24 the minutes of board meetings. 18-25 (d) Notice of a meeting of the association must be given as 18-26 provided by the bylaws, or, if the bylaws do not provide for 19-1 notice, notice must be given to each owner in the same manner in 19-2 which notice is given to members of a nonprofit corporation under 19-3 Section A, Article 2.11, Texas Non-Profit Corporation Act (Article 19-4 1396-2.11, Vernon's Texas Civil Statutes). 19-5 (e) Notice of a meeting of the board must be given as 19-6 provided by the bylaws, or, if the bylaws do not provide for 19-7 notice, notice must be given to each board member in the same 19-8 manner in which notice is given to members of the board of a 19-9 nonprofit corporation under Section B, Article 2.19, Texas 19-10 Non-Profit Corporation Act (Article 1396-2.19, Vernon's Texas Civil 19-11 Statutes). 19-12 (f) A property owners' association, on the written request 19-13 of a property owner, shall inform the owner of the time and place 19-14 of the next regular or special meeting of the board. If the 19-15 association representative to whom the request is made does not 19-16 know the time and place of the meeting, the association promptly 19-17 shall obtain the information and disclose it to the owner or inform 19-18 the owner where the information may be obtained. 19-19 Sec. 207.024. VOTING AND PROXIES. (a) If a lot is owned by 19-20 more than one person, only one of the lot owners may vote in person 19-21 or by proxy. If more than one of the multiple owners is present, 19-22 the vote or votes allocated to that lot may be cast only in 19-23 accordance with the owners' unanimous agreement unless the 19-24 declaration, bylaws, or articles of incorporation provide 19-25 otherwise. Multiple owners are considered to be in unanimous 19-26 agreement if one of the multiple owners casts the votes allocated 20-1 to a lot and none of the other owners makes prompt protest to the 20-2 person presiding over the meeting. If multiple owners of a lot 20-3 attempt to vote in per person or by proxy on behalf of all the 20-4 owners of the lot, the first lot owner listed in the deed under 20-5 which the owners acquired title shall be the only owner entitled to 20-6 cast the vote for the lot. Any one of multiple owners of a lot may 20-7 register a protest, in person or by proxy, concerning the validity 20-8 of another owner's right to cast a vote for all owners of the lot. 20-9 (b) Votes allocated to a lot may be cast under a written 20-10 proxy duly executed by a lot owner. A lot owner may not revoke a 20-11 proxy given under this section except by giving actual notice of 20-12 revocation to the person presiding over a meeting of the 20-13 association. A proxy is void if it is not dated or if it purports 20-14 to be revocable without notice. A proxy terminates 11 months after 20-15 its date unless it specifies a shorter or longer time. 20-16 (c) Cumulative voting is not allowed. 20-17 Sec. 207.025. ASSOCIATION RECORDS. (a) The association 20-18 shall keep: 20-19 (1) financial records that are sufficiently detailed 20-20 to enable an accountant to prepare financial statements that comply 20-21 with generally accepted accounting principles and to enable the 20-22 association to prepare a resale certificate under Section 207.031; 20-23 (2) information statement prepared under Section 20-24 207.030 and any amendments to the statement; 20-25 (3) the name and mailing address of each property 20-26 owner; 21-1 (4) voting records, proxies, and correspondence 21-2 relating to amendments to the dedicatory instruments for at least 21-3 four years; and 21-4 (5) minutes of meetings of the association and board. 21-5 (b) Upon an owner's written request, the association shall 21-6 furnish to the owner a copy of the declaration, restrictions, 21-7 bylaws and any rules of the association at the owner's expense and 21-8 no later than the 10th day after the request is received by the 21-9 association. 21-10 (c) Upon an owner's written request stating the purpose of 21-11 the request, an owner or the owner's agent (including the owner's 21-12 accountant or attorney) has the right to examine and copy at any 21-13 reasonable time and for any proper purpose, the books and records 21-14 of the association relevant to that purpose at the owner's expense. 21-15 An attorney's files and records relating to the association are not 21-16 records of the association and are not subject to inspection by 21-17 owners or production in a legal proceeding. 21-18 (d) The association shall, as a common expense, obtain the 21-19 accounting services required by this section and by the dedicatory 21-20 instruments. Copies of the reports shall be made available to the 21-21 owners. 21-22 (1) If the subdivision contains 50 or more lots, the 21-23 association shall annually obtain a year-end financial report and 21-24 an audit of the association's financial records, performed by a 21-25 certified public accountant or public accountant, who is 21-26 independent of the association. 22-1 (2) If the subdivision contains less than 50 but more 22-2 than 15 lots, the association shall annually obtain a review or an 22-3 audit of the association's financial records, performed by a 22-4 certified public accountant or public accountant who is independent 22-5 of the association. 22-6 (3) If the subdivision contains 15 or less lots, the 22-7 association annually may waive the requirement of this subsection 22-8 if the waiver is approved by two-thirds of the members voting at a 22-9 meeting of the association. This waiver does not waive the 22-10 requirements of the dedicatory instruments. 22-11 (e) A declarant shall furnish copies to the association of 22-12 the information required by Subsection (a) on the date the first 22-13 lot is sold. 22-14 Sec. 207.026. MANAGEMENT CERTIFICATES. (a) An association 22-15 shall record in each county in which any portion of the subdivision 22-16 is located a certificate, signed and acknowledged by an officer of 22-17 the association, stating: 22-18 (1) the name of the subdivision; 22-19 (2) the name of the association; 22-20 (3) the recording data for the subdivision; 22-21 (4) the recording data for the declaration; 22-22 (5) the mailing address of the association, or the 22-23 name and mailing address of the person or entity managing the 22-24 association; and 22-25 (6) other information the association considers 22-26 appropriate. 23-1 (b) The association shall record a management certificate 23-2 not later than the 30th day after the date the association has 23-3 notice of a change in any information in a recorded certificate 23-4 required by Subdivisions (a) of this section. 23-5 (c) The association and its officers, directors, employees, 23-6 and agents are not subject to liability to any person for delay or 23-7 failure to record a management certificate, unless the delay or 23-8 failure is willful or caused by gross negligence. 23-9 (Sections 207.027-207.030 reserved for expansion 23-10 SUBCHAPTER D. PROTECTION OF PURCHASERS 23-11 Sec. 207.031. RESALE CERTIFICATES. (a) If a property 23-12 owner, including a declarant or builder, intends to sell a lot, the 23-13 owner shall furnish to the purchaser a current copy of the 23-14 declaration, restrictions, bylaws, any association rules, and a 23-15 resale certificate before executing a contract or conveying the 23-16 lot. The resale certificate must have been prepared not earlier 23-17 than three months before the date it is delivered to the purchaser. 23-18 (b) The resale certificate shall be issued by the 23-19 association and must contain: 23-20 (1) a statement of any right of first refusal or other 23-21 restraint contained in the declaration or restrictions that 23-22 restricts the right to transfer a lot; 23-23 (2) the amount of the regular assessment and how often 23-24 it becomes due; 23-25 (3) the amount of any special assessment that is due 23-26 after the preparation date of the resale certificate for the 24-1 owner's lot; 24-2 (4) the total of all amounts due and unpaid to the 24-3 association by the selling lot owner; 24-4 (5) capital expenditures, if any, approved by the 24-5 association for the current fiscal year of the association; 24-6 (6) the amount of reserves, if any, for capital 24-7 expenditures; 24-8 (7) the association's current operating budget and 24-9 balance sheet; 24-10 (8) the total of any unsatisfied judgments against the 24-11 association; 24-12 (9) the style and cause number of any pending lawsuit 24-13 in which the association is a defendant; 24-14 (10) a certificate of insurance showing the 24-15 association's property and liability insurance relating to the 24-16 common areas and common facilities; 24-17 (11) whether the board has actual knowledge that any 24-18 alterations or improvements to the lot violate the dedicatory 24-19 instruments; 24-20 (12) a summary or copy of notices received by the 24-21 association from any governmental authority regarding health or 24-22 housing code violations, existing on the date of the certificate, 24-23 with respect to the lot or the association's common areas or common 24-24 facilities; 24-25 (13) the amount of any administrative transfer fee 24-26 charged by the association upon change of lot ownership; 25-1 (14) the name, mailing address, and telephone number 25-2 of the association's managing agent, if any; 25-3 (c) Not later than the 10th day after the date of receiving 25-4 a written request by a property owner, an association shall furnish 25-5 to the selling owner or the owner's agent a resale certificate 25-6 signed and dated by an officer or authorized agent of the 25-7 association containing the information required by Subsection (b). 25-8 A selling owner or the owner's agent is not liable to the purchaser 25-9 for erroneous information provided by the association in the 25-10 certificate. If an association does not furnish a resale 25-11 certificate or any information required in the certificate within 25-12 the 10-day period, the owner may provide the purchaser with a sworn 25-13 affidavit signed by the owner in lieu of the certificate. An 25-14 affidavit must state that the owner requested information from the 25-15 association concerning its financial condition, as required by this 25-16 section, and that the association did not timely provide a resale 25-17 certificate or the information required in the certificate. If an 25-18 owner has furnished an affidavit to a purchaser, the owner and the 25-19 purchaser may agree in writing to waive the requirement to furnish 25-20 a resale certificate. The association and its agents are not 25-21 liable to a selling owner for delay or failure to furnish a resale 25-22 certificate unless the association or its agent willfully refuses 25-23 to furnish the certificate or is grossly negligent in not 25-24 furnishing the resale certificate. Failure to provide a resale 25-25 certificate does not void a deed to a purchaser. 25-26 (d) If a properly executed resale certificate incorrectly 26-1 states the total of delinquent sums owed by the selling owner to 26-2 the association, the purchaser is not liable for payment of 26-3 additional delinquencies that are unpaid on the date the 26-4 certificate is prepared and that exceed the total sum stated in the 26-5 certificate. An owner or the owner's agent is not liable to a 26-6 purchaser for the failure or delay of the association to provide 26-7 the certificate in a timely manner. 26-8 (e) A resale certificate does not affect: 26-9 (1) an association's right to recover debts or claims 26-10 that arise or become due after the date the certificate is 26-11 prepared; or 26-12 (2) an association's lien on a lot securing payment of 26-13 monies owed to the association after the preparation date of the 26-14 certificate. 26-15 (f) A purchaser, lender, or title insurer who relies on a 26-16 resale certificate is not liable for any debt or claim that is not 26-17 disclosed in the certificate. An association may not deny the 26-18 validity of any statement in the certificate. A selling owner or 26-19 the owner's agent is not liable to the purchaser for erroneous 26-20 information provided by the association in the certificate. 26-21 (g) A property owners' association or its authorized agent 26-22 shall be allowed to charge a reasonable fee for the preparation of 26-23 a resale certificate and any update of the certificate prior to a 26-24 closing of a sale. 26-25 Sec. 207.032. PURCHASER'S RIGHT TO CANCEL. (a) If a 26-26 purchaser of a lot from a property owner has not received from the 27-1 seller the declaration, restrictions, bylaws, and any association 27-2 rules required by Section 207.031 before the purchaser executes a 27-3 contract of sale or if the contract does not contain an underlined 27-4 or bold-print provision acknowledging the purchaser's receipt of 27-5 those documents and recommending that the purchaser read those 27-6 documents before executing the contract, the purchaser may cancel 27-7 the contract before the sixth day after the date the purchaser 27-8 receives those documents. If a purchaser has not received a resale 27-9 certificate before executing a contract of sale, the purchaser may 27-10 cancel the contract before the sixth day after the date the 27-11 purchaser receives the resale certificate or executes a waiver 27-12 under Section 207.031 whichever occurs first. 27-13 (b) If a purchaser elects to cancel a contract under 27-14 Subsection (a), the cancellation must be by hand-delivering written 27-15 notice of cancellation to the declarant or selling lot owner or by 27-16 mailing notice of cancellation by certified United States mail, 27-17 return receipt requested, to the offeror or the offeror's agent for 27-18 service of process within the five-day cancellation period. 27-19 Cancellation is without penalty, and all payments made by the 27-20 purchaser before cancellation must be refunded. 27-21 (c) A selling owner may not require a purchaser to close 27-22 until the purchaser is given the declaration, restrictions, bylaws, 27-23 and rules of the association, to the extent they exist. 27-24 (d) After a sale is consummated, the failure of the seller 27-25 to have furnished a resale certificate to the buyer is not grounds 27-26 for recission of the sale. 28-1 Sec. 207.033. OBLIGATIONS OF PROPERTY OWNERS. (a) In 28-2 addition to the obligations of property owners as provided by the 28-3 declaration, bylaws, rules of the association, or this chapter, a 28-4 property owner: 28-5 (1) shall pay assessments, interest, and other charges 28-6 properly levied by the association against the owner or the owner's 28-7 property, and shall pay regular periodic assessments without demand 28-8 by the association; 28-9 (2) shall comply with the declaration, bylaws, and 28-10 rules of the association, including any amendments; 28-11 (3) shall pay for damage to the common area cause by 28-12 the negligence or willful misconduct of the owner, an occupant of 28-13 the owner's property, or the owner or occupant's family, guests, 28-14 employees, contractors, agents, or invitees; and 28-15 (4) is liable to the association for violations of the 28-16 declaration, bylaws, or rules of the association, including any 28-17 amendments, by the owner, an occupant of the owner's property, or 28-18 the owner or occupant's family, guests, employees, agents, or 28-19 invitees, and for costs incurred by the association to obtain 28-20 compliance, subject to the restriction on attorney's fees in 28-21 Section 207.020(f). 28-22 (b) No later than the 30th day after the date an owner 28-23 acquires an interest in a residential property in a subdivision, 28-24 the owner shall provide the property owners' association with: 28-25 (1) the owner's mailing address and telephone number; 28-26 (2) the name and telephone number of any person 29-1 occupying the residential dwelling on the property other than the 29-2 owner; and 29-3 (3) the name, address and telephone number of any 29-4 person managing the property as agent of the property owner. 29-5 (c) An owner shall notify the property owners' association 29-6 in writing of any change in the information required by this 29-7 section not later than the 30th day after the event causing the 29-8 change in information. The association may charge the owner for 29-9 actual costs and administrative expenses incurred by the 29-10 association in obtaining the information if the owner fails to do 29-11 so within the prescribed time period. 29-12 (Sections 207.034 - 207.040 reserved for expansion 29-13 SUBCHAPTER E. PROPERTY OWNERS' ASSOCIATION LIEN 29-14 FOR ASSESSMENTS 29-15 Sec. 207.041. DEFINITION OF ASSESSMENT. In this subchapter, 29-16 "assessment" means regular and special assessments, fee, charge, 29-17 late fee, fine, collection cost, or attorney's fees, dues, 29-18 interest, or any other amount due to the property owners' 29-19 association from the property owner or levied against the owner's 29-20 property in the subdivision by the property owners' association. 29-21 Sec. 207.042. ESTABLISHMENT OF LIEN. (a) Unless the 29-22 restrictions provide otherwise, an assessment levied by a property 29-23 owners' association against property is a personal obligation of 29-24 the property owner and is secured by a continuing lien on the 29-25 property and on rent and insurance proceeds received by the 29-26 property owner relating to the property. 30-1 (b) If on January 1, 2000, a lot is the homestead of the 30-2 property owner and is subject to restrictions that do not contain a 30-3 valid assessment lien against the property, the lien provided by 30-4 this subchapter does not attach against the property until the lot 30-5 ceases to be the homestead of the person owning the lot on January 30-6 1, 2000. 30-7 Sec. 207.043. PRIORITY OF LIEN. Unless otherwise provided 30-8 in the dedicatory instrument or restrictions, the lien of a 30-9 property owner's association for an assessment has priority over 30-10 any other lien except: 30-11 (1) a valid lien for property taxes and other 30-12 governmental assessments or charges against the property unless 30-13 otherwise provided by statute; 30-14 (2) a valid lien or encumbrance recorded before the 30-15 restrictions or the dedicatory instrument is recorded; and 30-16 (3) a first lien securing the purchase of a lot, 30-17 including the improvements and the initial construction of a 30-18 dwelling on a lot recorded before the date on which the assessment 30-19 sought to be enforced becomes delinquent under the restrictions or 30-20 the dedicatory instrument. 30-21 Sec. 207.044. PERFECTION OF LIEN. The association's lien 30-22 for assessments is perfected by the enactment of this chapter or by 30-23 the recordation of the declaration if the declaration was recorded 30-24 prior to the enactment of this chapter. Unless the declaration 30-25 provides otherwise, no other recordation of a lien or notice of 30-26 lien is required. 31-1 Sec. 207.045. POWER OF SALE. (a) By acquiring property in 31-2 a subdivision governed by a dedicatory instrument, a property owner 31-3 grants to the property owners' association a power of sale in 31-4 connection with the association's lien under this subchapter. 31-5 (b) By written resolution, the property owners' association 31-6 may appoint an officer, agent, trustee, or attorney to exercise the 31-7 power of sale on its behalf under Section 207.047. 31-8 Sec. 207.046. EXCHANGE OF INFORMATION. (a) If a property 31-9 owner is delinquent in paying an assessment to a property owners' 31-10 association, a holder of a lien recorded against the property may 31-11 provide the association, at the association's request, information 31-12 regarding the owner's debt secured by the holder's lien and other 31-13 relevant information. At the request of a lien holder, the 31-14 association may furnish the lien holder with information about the 31-15 property and the property owner's obligations to the association. 31-16 (b) If a property owner defaults in the owner's monetary 31-17 obligations to the property owners' association, the association 31-18 may notify other lienholders of the default and the association's 31-19 intent to foreclose its lien. The association shall notify any 31-20 holder of a recorded lien or perfected mechanic's lien against the 31-21 property who has given the association a written request for notice 31-22 of the property owner's default or the association's intent to 31-23 foreclose. 31-24 Sec. 207.047. FORECLOSURE OF LIEN. (a) A property owners' 31-25 association has the right to foreclose its lien under the power of 31-26 sale created by: 32-1 (1) the restrictions or a dedicatory instrument that 32-2 was recorded at the time of purchase of the lot by the property 32-3 owner whose lot is being foreclosed upon; 32-4 (2) a court order in a suit or countersuit seeking 32-5 judicial foreclosure; or 32-6 (3) a court order in an application for expedited 32-7 foreclosure under a procedure parallel to the foreclosure of a home 32-8 equity lien under Texas Rules of Civil Procedure, Part VII, Section 32-9 1, Procedures Related to Home Equity Loan Foreclosure. The Texas 32-10 Supreme Court shall promulgate the rules of civil procedure no 32-11 later than January 1, 2001. 32-12 (b) Before an association may institute foreclosure 32-13 proceedings against an owner's lot, the association or its agent 32-14 must send the owner a written notice, certified mail return receipt 32-15 requested, containing: 32-16 (1) a statement that the owner has the right to elect 32-17 either expedited foreclosure under Subsection (a)(3), or 32-18 nonjudicial foreclosure under Subsection (a)(1) if nonjudicial 32-19 foreclosure is authorized in a dedicatory instrument; 32-20 (2) a description of the methods of foreclosure in 32-21 Subdivision (1) and the approximate attorneys fees and costs for 32-22 which the owner would be liable under each of those foreclosure 32-23 methods, assuming an uncontested foreclosure; 32-24 (3) a statement that in order to make an election, the 32-25 owner must, within 30 days after the receipt of the association's 32-26 notice to the owner, send a written notice to the association or 33-1 its agent by certified mail return receipt requested to the return 33-2 address indicated in the association's notice, stating the owner's 33-3 election of the method of foreclosure; and 33-4 (4) a statement that unless the owner exercises his 33-5 right to make an election in a timely manner, the association may 33-6 foreclose in any manner available to it under Subsection (a). 33-7 (c) If the property owner notifies the association or its 33-8 agent of an election of manner of foreclosure, the association may 33-9 only foreclose in the manner the owner elected. If notice of 33-10 election is not provided by the owner in a timely manner, the 33-11 association may foreclose in any manner available to it under 33-12 Subsection (a). 33-13 (d) At any time before a foreclosure sale, a property owner 33-14 may avoid foreclosure by paying all amounts due the property 33-15 owners' association, including foreclosure-related costs incurred 33-16 by the association. 33-17 (e) The property owners' association may bid for and 33-18 purchase the property at the foreclosure sale as a common expense. 33-19 Subject to the redemption provisions of Subsection 207.049, the 33-20 association may own, lease, encumber, exchange, sell, or convey the 33-21 property. 33-22 (f) A court may not set aside a sale on petition of a 33-23 property owner solely because the purchase price at the foreclosure 33-24 sale was insufficient to fully satisfy the owner's debt. 33-25 (g) An association may not foreclose a lien for an 33-26 assessment consisting solely of fines. 34-1 (h) This section does not prevent an owner from filing an 34-2 action to enjoin a wrongful foreclosure or an action for damages 34-3 for wrongful foreclosure. 34-4 Sec. 207.048. NOTICE OF FORECLOSURE SALE. (a) A property 34-5 owners' association that conducts a foreclosure sale under Section 34-6 207.047 must send the property owner written notice of the sale and 34-7 of the property owner's right of redemption under Section 207.049 34-8 not later than 14 days after the date of the foreclosure sale. 34-9 (b) The notice shall be mailed to the property owner's last 34-10 known mailing address, certified mail, return receipt requested, 34-11 according to the records of the property owners' association. 34-12 Sec. 207.049. RIGHT OF REDEMPTION. (a) The owner of 34-13 property in a residential subdivision may redeem the property from 34-14 any purchaser at a sale foreclosing a lien of a property owners' 34-15 association not later than the 90th day after the date the 34-16 association mails written notice of the sale to the owner under 34-17 Section 207.048. 34-18 (b) A person who purchases property at a sale foreclosing a 34-19 property owners' association's assessment lien may not transfer 34-20 ownership of the property to a person other than a redeeming owner 34-21 during the redemption period. 34-22 (c) To redeem property purchased by the association at 34-23 foreclosure sale, the owner must pay to the association: 34-24 (1) all amounts due the association at the time of the 34-25 foreclosure sale; 34-26 (2) interest from the date of foreclosure sale to the 35-1 date of redemption on all amounts owed the association at the rate 35-2 stated in the dedicatory instruments for delinquent assessments, or 35-3 if no rate is stated, an interest rate of 10% per annum; 35-4 (3) costs incurred by the association in foreclosing 35-5 the lien and reconveying the property to the owner, including 35-6 reasonable attorney's fees; 35-7 (4) any assessment levied against the property by the 35-8 association after the foreclosure sale; 35-9 (5) any reasonable cost incurred by the association, 35-10 including mortgage payments and costs of repair, maintenance, and 35-11 leasing; and 35-12 (6) the purchase price paid by the association at the 35-13 foreclosure sale less any amounts due the association under 35-14 subdivision (c)(1) that were satisfied out of foreclosure sale 35-15 proceeds. 35-16 (d) To redeem property purchased at the foreclosure sale by 35-17 a person other than the association, the owner: 35-18 (1) must pay to the association: 35-19 (A) all amounts due the association at the time 35-20 of foreclosure sale less the foreclosure sales price received by 35-21 the association from the purchaser. If the foreclosure sales price 35-22 exceeds the amount due to the association, the association must 35-23 refund the excess proceeds to the owner's; 35-24 (B) interest from the date of foreclosure sale 35-25 through the date of redemption on all amounts owed the association 35-26 at the rate stated in the dedicatory instruments for delinquent 36-1 assessments, or if no rate is stated, an interest rate of 10 36-2 percent per annum; 36-3 (C) costs incurred by the association in 36-4 foreclosing the lien and facilitating the reconveyance of the 36-5 property to the owner, including reasonable attorney's fees; 36-6 (D) any unpaid assessments levied against the 36-7 property by the association after the foreclosure sale; and 36-8 (2) must pay to the person who purchased the property 36-9 at the foreclosure sale: 36-10 (A) any assessments levied against the property 36-11 by the association after the foreclosure sale and paid by the 36-12 purchaser; 36-13 (B) the purchase price paid by the purchaser at 36-14 the foreclosure sale; 36-15 (C) interest from the date of foreclosure to the 36-16 date of redemption on the purchase price amount at a rate of 10 36-17 percent per annum; and 36-18 (D) any reasonable cost incurred by the 36-19 purchaser, including costs of repair, maintenance, and leasing. 36-20 (e) If a property owner redeems the property under this 36-21 section, the purchaser of the property at foreclosure shall 36-22 immediately execute and deliver to the owner a deed transferring 36-23 the property to the redeeming property owner. 36-24 (f) If, prior to the expiration of the redemption period, 36-25 the redeeming property owner fails to record the deed from the 36-26 foreclosing purchaser or fails to record an affidavit stating that 37-1 the owner has redeemed the property, the owner's right of 37-2 redemption as against a bona fide purchaser or lender for value 37-3 shall expire after the 90-day redemption period. 37-4 (g) If the association purchases the property at 37-5 foreclosure, all rent and other income collected by the association 37-6 from the date of foreclosure sale to the date of redemption shall 37-7 be credited toward the amount owed the association under Subsection 37-8 (c), and if there are excess proceeds, they shall be refunded to 37-9 the owner. If a person other than the association purchases the 37-10 property at foreclosure, all rent and other income collected by the 37-11 purchaser from the date of foreclosure to the date of redemption 37-12 shall be credited toward the amount owed the purchaser under 37-13 Subsection (d), and if there are excess proceeds, they shall be 37-14 refunded to the owner. 37-15 (h) If a person other than the association is the purchaser 37-16 at the foreclosure sale, prior to executing a deed transferring the 37-17 property to the redeeming owner as provided in Subsection (e), the 37-18 purchaser shall obtain a sworn written statement from the 37-19 association or its authorized agent stating that all amounts owed 37-20 the association under Subsection (d) have been paid. The 37-21 association shall provide the purchaser the statement no later than 37-22 the 10th day after the association receives all amounts owed to the 37-23 association under Subsection (d). 37-24 (i) Property that has been redeemed remains subject to all 37-25 liens and encumbrances on the property before foreclosure. Any 37-26 lease entered into by the purchaser of property at a sale 38-1 foreclosing an assessment lien of a property owners' association 38-2 shall be subject to the right of redemption contained in this 38-3 section and the owner's right to reoccupy the property immediately 38-4 after the redemption. 38-5 Sec. 207.050. OTHER REMEDIES OF ASSOCIATION AND OWNER. This 38-6 subchapter does not prohibit the property owners' association or a 38-7 property owner from exercising other lawful remedies. 38-8 Sec. 207.051. EFFECT OF TAX LIEN FORECLOSURE. Foreclosure 38-9 of a tax lien under Chapter 32, Tax Code, does not discharge a 38-10 property owners' association's lien for an assessment under this 38-11 subchapter or under dedicatory instrument or restrictions for 38-12 amounts that become due to the association after the date of 38-13 foreclosure of the tax lien. 38-14 Sec. 207.052. EFFECT OF VIOLATIONS ON RIGHTS OF ACTION AND 38-15 ATTORNEY'S FEES. (a) If a declarant or any other person subject 38-16 to this chapter violates this chapter, the declaration, or the 38-17 bylaws, any person or class of persons adversely affected by the 38-18 violation has a claim for appropriate relief. 38-19 (b) Subject to Section 207.020(f), the prevailing party in 38-20 litigation to enforce the dedicatory instruments is entitled to 38-21 reasonable attorney's fees and costs of litigation from the 38-22 nonprevailing party. 38-23 (c) If an association's board or managing agent is found by 38-24 a court to have willfully, knowingly, and in bad faith pursued a 38-25 course of action against an owner in violation of the declaration, 38-26 restrictions, bylaws, rules or this chapter to the detriment of the 39-1 owner, the court may assess a civil penalty against the association 39-2 of up to $1,000 for the benefit of the owner. 39-3 SECTION 2. (a) This Act takes effect January 1, 2000. 39-4 (b) The changes in law made by Subchapter E, Chapter 207, 39-5 Property Code, as added by this Act, apply only to property for 39-6 which an assessment becomes due on or after the effective date of 39-7 this Act. Property for which an assessment was due before the 39-8 effective date of this Act is covered by the law in effect when the 39-9 assessment became due, and the former law is continued in effect 39-10 for that purpose. 39-11 SECTION 3. The importance of this legislation and the 39-12 crowded condition of the calendars in both houses create an 39-13 emergency and an imperative public necessity that the 39-14 constitutional rule requiring bills to be read on three several 39-15 days in each house be suspended, and this rule is hereby suspended.