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.