By: Carona S.B. No. 1160
99S0716/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the Texas Uniform Condominium Act.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 82.001, Property Code, is amended to read
1-4 as follows:
1-5 Sec. 82.001. SHORT TITLE. This chapter may be cited as the
1-6 Texas Uniform Condominium Act.
1-7 SECTION 2. Subsection (c), Section 82.002, Property Code, is
1-8 amended to read as follows:
1-9 (c) This section and the following sections apply to a
1-10 condominium in this state for which the declaration was recorded
1-11 before January 1, 1994: Sections 82.005, 82.006, 82.007, 82.008,
1-12 82.053, 82.054, 82.058, 82.067, 82.102(a)(1)-(7) and (12)-(22),
1-13 82.107, 82.108, 82.111, 82.113, 82.114, 82.116, 82.117, 82.151(b),
1-14 82.156(a), (c), and (d), 82.157, and 82.161. The definitions
1-15 prescribed by Section 82.003 apply to a condominium in this state
1-16 for which the declaration was recorded before January 1, 1994, to
1-17 the extent the definitions do not conflict with the declaration.
1-18 The sections listed in this subsection apply only with respect to
1-19 events and circumstances occurring on or after January 1, 1994, and
1-20 do not invalidate existing provisions of the declaration, bylaws,
1-21 or plats or plans of a condominium for which the declaration was
1-22 recorded before January 1, 1994. If a conflict exists between
1-23 Chapter 81 and a provision of this chapter applicable to a
1-24 condominium for which the declaration was recorded before January
2-1 1, 1994, this chapter prevails.
2-2 SECTION 3. Subdivisions (5), (10), (11), (12), (13), and
2-3 (18) through (24), Subsection (a), Section 82.003, Property Code,
2-4 are amended to read as follows:
2-5 (5) "Common elements" means all portions of a
2-6 condominium other than the units and includes both general and
2-7 limited common elements and any other interest in real estate for
2-8 the benefit of unit owners who are subject to the declaration.
2-9 (10) "Conveyance" means a voluntary transfer to a
2-10 purchaser of a legal or equitable interest in a unit. The term
2-11 does not include a transfer or release of a security interest.
2-12 (11) "Declarant" means a person, or group of persons
2-13 acting in concert, who:
2-14 (A) as part of a common promotional plan, offers
2-15 to dispose of the person's interest in a unit not previously
2-16 disposed of; or
2-17 (B) reserves or succeeds to any special
2-18 declarant right.
2-19 (12) [(11)] "Declaration" means a recorded instrument,
2-20 however denominated, that creates a condominium, and any recorded
2-21 amendment to that instrument.
2-22 (13) [(12)] "Development rights" means a right or
2-23 combination of rights reserved by a declarant in the declaration
2-24 to:
2-25 (A) add real property to a condominium;
2-26 (B) create units, common elements, or limited
3-1 common elements within a condominium;
3-2 (C) subdivide units or convert units into common
3-3 elements; or
3-4 (D) withdraw real property from a condominium.
3-5 [(13) "Disposition" means a voluntary transfer to a
3-6 purchaser of any legal or equitable interest in a unit but does not
3-7 include the transfer or release of a security interest.]
3-8 (18) "Mortgagee" or "secured lender" means the holder
3-9 of a recorded vendor's lien or deed of trust on a unit.
3-10 (19) "Plan" means a dimensional drawing that is
3-11 recordable in the real property records or the condominium plat
3-12 records and that horizontally and vertically identifies or
3-13 describes units and common elements that are contained in
3-14 buildings.
3-15 (20) [(19)] "Plat" means a survey recordable in the
3-16 real property records or the condominium plat records and
3-17 containing the information required by Section 82.059. As used in
3-18 this chapter, "plat" does not have the same meaning as "plat" in
3-19 Chapter 212 or 232, Local Government Code, or other statutes
3-20 dealing with municipal or county regulation of property
3-21 development.
3-22 (21) [(20)] "Purchaser" means a person, other than a
3-23 declarant, who by means of a voluntary transfer acquires a legal or
3-24 equitable interest in a unit other than a leasehold interest or as
3-25 security for an obligation.
3-26 (22) [(21)] "Residential purposes" means recreational
4-1 or dwelling purposes, or both.
4-2 (23) [(22)] "Special declarant rights" means rights
4-3 reserved for the benefit of a declarant to:
4-4 (A) complete improvements indicated on plats and
4-5 plans [filed with the declaration];
4-6 (B) exercise any development right;
4-7 (C) make the condominium part of a larger
4-8 condominium or a planned community;
4-9 (D) maintain sales, management, and leasing
4-10 offices, signs advertising the condominium, and models;
4-11 (E) use easements through the common elements
4-12 for the purpose of making improvements within the condominium or
4-13 within real property that may be added to the condominium; or
4-14 (F) appoint or remove any officer or board
4-15 member of the association during any period of declarant control.
4-16 (24) [(23)] "Unit" means a physical portion of the
4-17 condominium designated for separate ownership or occupancy, the
4-18 boundaries of which are described by the declaration.
4-19 (25) [(24)] "Unit owner" means a declarant or other
4-20 person who owns a unit, or a lessee of a unit in a leasehold
4-21 condominium whose lease expires simultaneously with any lease the
4-22 expiration or termination of which will remove the unit from the
4-23 condominium, but does not include a person having an interest in a
4-24 unit solely as security for an obligation.
4-25 SECTION 4. Section 82.007, Property Code, is amended by
4-26 amending Subsections (a) and (c) and adding Subsection (e) to read
5-1 as follows:
5-2 (a) If a unit is acquired by condemnation, or if part of a
5-3 unit is acquired by condemnation leaving the unit owner with a
5-4 remnant that may not practically or lawfully be used for any
5-5 purpose permitted by the declaration, the condemnation award must
5-6 compensate the unit owner for the unit and its common element
5-7 interest, whether or not any common element interest is acquired.
5-8 On acquisition, unless the decree provides otherwise, the condemned
5-9 unit's entire allocated interests are automatically reallocated to
5-10 the remaining units in proportion to the respective allocated
5-11 interests of those units before the taking[, and the association
5-12 shall promptly prepare, execute, and record an amendment to the
5-13 declaration reflecting the reallocations]. A remnant of a unit
5-14 remaining after part of a unit is taken under this subsection is a
5-15 common element.
5-16 (c) If [part of the] common elements are [is] acquired by
5-17 condemnation, the award must be paid to the association, as trustee
5-18 for the unit owners, and to persons holding liens on the condemned
5-19 property, as their interests may appear. The association shall
5-20 divide any portion of the award not used for replacement of the
5-21 common elements or for any restoration or repair of the remaining
5-22 common elements among the unit owners in proportion to their
5-23 respective common element interests before the taking. To the
5-24 extent an award for limited common elements is not used for
5-25 replacement of the limited common element, [but] the portion of the
5-26 award attributable to the acquisition of a limited common element
6-1 must be equally divided among the owners of the units to which that
6-2 limited common element was allocated at the time of acquisition, or
6-3 in any manner the declaration provides.
6-4 (e) On acquisition by condemnation of a unit or common
6-5 element, the association shall promptly prepare, execute, and
6-6 record an amendment to:
6-7 (1) the plat, showing the changes in location,
6-8 dimensions, distances, boundaries, and descriptions of units and
6-9 common elements; and
6-10 (2) the declaration, reflecting the reallocations of a
6-11 condemned unit's allocated interests.
6-12 SECTION 5. Section 82.054, Property Code, is amended to read
6-13 as follows:
6-14 Sec. 82.054. DESCRIPTION OF UNITS. A description of a unit
6-15 is a sufficient legal description of the unit and all rights,
6-16 obligations, and interests appurtenant to the unit that were
6-17 created by the declaration or bylaws if the description contains:
6-18 (1) the name of the condominium;
6-19 (2) the recording data for the declaration[, including
6-20 any amendments, plats, and plans];
6-21 (3) the county in which the condominium is located;
6-22 and
6-23 (4) the identifying number of the unit.
6-24 SECTION 6. Subsection (b), Section 82.058, Property Code, is
6-25 amended to read as follows:
6-26 (b) Unless prohibited [Except as otherwise provided] by the
7-1 declaration, a limited common element may be reallocated by an
7-2 amendment to the declaration, executed by the unit owners between
7-3 or among whose units the reallocation is made. The persons
7-4 executing the amendment shall deliver it to the association, which
7-5 shall record it at the expense of the reallocating unit owners.
7-6 SECTION 7. Subsection (b), Section 82.059, Property Code, is
7-7 amended to read as follows:
7-8 (b) Each plat must show:
7-9 (1) the name and a survey or general schematic map of
7-10 the entire condominium;
7-11 (2) the location and dimensions of all real property
7-12 not subject to development rights, or subject only to the
7-13 development right to withdraw, and the location and dimensions of
7-14 all existing improvements within that real property;
7-15 (3) a legally sufficient description of any real
7-16 property subject to development rights, labeled to identify the
7-17 rights applicable to each parcel;
7-18 (4) the extent of any encroachments by or on any
7-19 portion of the condominium;
7-20 (5) to the extent feasible, a legally sufficient
7-21 description of all easements serving or burdening any portion of
7-22 the condominium, and the location of any underground utility line
7-23 that is actually known by the declarant at the time of filing the
7-24 declaration to have been constructed outside a recorded easement;
7-25 (6) the location and dimensions of any vertical unit
7-26 boundaries not shown or projected on recorded plans and the unit's
8-1 identifying number;
8-2 (7) the location, with reference to established data,
8-3 of any horizontal unit boundaries not shown or projected on
8-4 recorded plans and the unit's identifying number;
8-5 (8) a legally sufficient description of any real
8-6 property in which the unit owners will own only an estate for
8-7 years, labeled as "leasehold real property";
8-8 (9) the distance between noncontiguous parcels of real
8-9 property constituting the condominium;
8-10 (10) the location and dimensions of limited common
8-11 elements, other than those described by Sections 82.052(2) and (4);
8-12 (11) in the case of real property not subject to
8-13 development rights, all other matters required by law on land
8-14 surveys; and
8-15 (12) the distance and bearings locating each building
8-16 from adjacent [all other] buildings and from at least one boundary
8-17 line of the real property constituting the condominium.
8-18 SECTION 8. Subsections (a) and (e), Section 82.067, Property
8-19 Code, are amended to read as follows:
8-20 (a) Except as provided by Subsection (b), a declaration,
8-21 including the plats and plans, may be amended only by vote or
8-22 agreement of unit owners to which at least 67 percent of the votes
8-23 in the association are allocated, or any larger majority the
8-24 declaration specifies. A declaration may specify a smaller number
8-25 only if all of the units are restricted exclusively to
8-26 nonresidential use. An amendment to a declaration may be adopted:
9-1 (1) by written ballot that states the exact wording or
9-2 substance of the amendment and that specifies the date by which a
9-3 ballot must be received to be counted;
9-4 (2) at a meeting of the members of the association
9-5 after written notice of the meeting has been delivered to an owner
9-6 of each unit stating that a purpose of the meeting is to consider
9-7 an amendment to the declaration; [or]
9-8 (3) by any method permitted by the declaration; or
9-9 (4) by a combination of the methods permitted by this
9-10 subsection.
9-11 (e) Except as permitted or required by this chapter, an
9-12 amendment may not create or increase special declarant rights,
9-13 increase the number of units, change the boundaries of a unit,
9-14 alter or destroy a unit or limited common element, change a unit's
9-15 allocated interest, or change the use restrictions on a unit unless
9-16 the amendment is approved by 100 percent of the votes in the
9-17 association. For purposes of this subsection, an amendment to the
9-18 declaration changing the permitted use of a unit from residential
9-19 to commercial use or from single-family to multifamily use is
9-20 considered a change in the use restrictions on a unit. Except as
9-21 agreed to by the declarant, an amendment may not increase or
9-22 otherwise modify the obligations imposed by a declaration on a
9-23 declarant, or reduce or otherwise modify the rights granted by a
9-24 declaration to a declarant, including special declarant rights.
9-25 This subsection does not prohibit the adoption of an amendment to
9-26 the declaration consistent with the intended use of the property
10-1 under the declaration.
10-2 SECTION 9. Section 82.069, Property Code, is amended to read
10-3 as follows:
10-4 Sec. 82.069. RIGHTS OF SECURED LENDERS. (a) The
10-5 declaration may require that all or a specified number or
10-6 percentage of the mortgagees or beneficiaries of deeds of trust
10-7 encumbering the units approve specified actions of the unit owners
10-8 or the association as a condition to the effectiveness of those
10-9 actions, but a requirement for approval may not operate to:
10-10 (1) deny or delegate control over the general
10-11 administrative affairs of the association by the unit owners or the
10-12 board; or
10-13 (2) prevent the association or the board from:
10-14 (A) commencing, intervening in, or settling any
10-15 litigation or proceeding; or
10-16 (B) receiving and distributing insurance
10-17 proceeds under Section 82.111.
10-18 (b) A proposed declaration amendment or other association
10-19 action is considered approved by a mortgagee of a unit if:
10-20 (1) the amendment or other action does not adversely
10-21 affect the mortgagee's security interest in the unit;
10-22 (2) the association mails notice of the proposed
10-23 amendment or other action to the mortgagee by certified mail,
10-24 return receipt requested;
10-25 (3) the notice informs the mortgagee that the proposed
10-26 amendment or other action will be considered approved by the
11-1 mortgagee unless the mortgagee responds in writing not later than:
11-2 (A) the 60th day after the date the association
11-3 mails the notice; or
11-4 (B) an earlier date provided by the declaration;
11-5 and
11-6 (4) the mortgagee fails to respond in writing to the
11-7 association on or before the date required under Subdivision (3).
11-8 SECTION 10. Section 82.102, Property Code, is amended to
11-9 read as follows:
11-10 Sec. 82.102. POWERS OF UNIT OWNERS' ASSOCIATION.
11-11 (a) Unless otherwise provided by the declaration, the association,
11-12 acting through its board, may:
11-13 (1) adopt and amend bylaws;
11-14 (2) adopt and amend budgets for revenues,
11-15 expenditures, and reserves, and collect assessments for common
11-16 expenses from unit owners;
11-17 (3) hire and terminate managing agents and other
11-18 employees, agents, and independent contractors;
11-19 (4) institute, defend, intervene in, settle, or
11-20 compromise litigation or administrative proceedings in its own name
11-21 on behalf of itself or two or more unit owners on matters affecting
11-22 the condominium;
11-23 (5) make contracts and incur liabilities relating to
11-24 the operation of the condominium;
11-25 (6) regulate the use, maintenance, repair,
11-26 replacement, modification, and appearance of the condominium;
12-1 (7) adopt and amend rules regulating the use,
12-2 occupancy, leasing or sale, maintenance, repair, modification, and
12-3 appearance of units and common elements, to the extent the
12-4 regulated actions affect common elements or other units;
12-5 (8) cause additional improvements to be made as a part
12-6 of the common elements;
12-7 (9) acquire, hold, encumber, and convey in its own
12-8 name any right, title, or interest to real or personal property,
12-9 except common elements of the condominium;
12-10 (10) grant easements, leases, licenses, and
12-11 concessions through or over the common elements;
12-12 (11) impose and receive payments, fees, or charges for
12-13 the use, rental, or operation of the common elements and for
12-14 services provided to unit owners;
12-15 (12) impose interest and late charges for delinquent
12-16 amounts owed to the association [late payments of assessments],
12-17 returned check charges, and, if notice and an opportunity to be
12-18 heard are given, reasonable fines for violations of the
12-19 declaration, bylaws, and rules of the association;
12-20 (13) adopt and amend rules regulating the collection
12-21 of delinquent amounts owed to the association [assessments] and the
12-22 application of payments;
12-23 (14) adopt and amend rules regulating the termination
12-24 of utility service to a unit, the owner of which is delinquent in
12-25 the payment of an amount owed to the association [assessment] that
12-26 is used, in whole or in part, to pay the cost of that utility;
13-1 (15) impose reasonable charges for preparing,
13-2 recording, or copying the declaration, declaration amendments,
13-3 resale certificates, [or] statements of delinquent amounts owed to
13-4 the association, releases, or other association records [unpaid
13-5 assessments];
13-6 (16) enter a unit for bona fide emergency purposes
13-7 when conditions present an imminent risk of harm or damage to the
13-8 common elements, another unit, or the occupants;
13-9 (17) assign its right to future income, including the
13-10 right to receive common expense assessments, if after notice of the
13-11 proposed assignment is mailed to all association members, at least
13-12 two-thirds of the association members voting in person or by proxy
13-13 at an association meeting vote in favor of the assignment[, but
13-14 only to the extent the declaration so provides];
13-15 (18) suspend the voting privileges of or the use of
13-16 certain general common elements by an owner delinquent for more
13-17 than 30 days in the payment of amounts owed to the association
13-18 [assessments];
13-19 (19) purchase insurance and fidelity bonds, including
13-20 liability insurance for directors and officers, that it considers
13-21 appropriate or necessary;
13-22 (20) subject to the Texas Non-Profit Corporation Act
13-23 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) and by
13-24 majority vote of the board, indemnify an association director,
13-25 officer, or committee member named a defendant or respondent in a
13-26 proceeding on the basis of the person's service as director,
14-1 officer, or committee member;
14-2 (21) implement and modify architectural control
14-3 guidelines, regardless of whether the guidelines are to be recorded
14-4 in the real property records of the county in which the condominium
14-5 is located;
14-6 (22) exercise any other powers conferred by the
14-7 declaration or bylaws;
14-8 (23) [(21)] exercise any other powers that may be
14-9 exercised in this state by a corporation of the same type as the
14-10 association; and
14-11 (24) [(22)] exercise any other powers necessary and
14-12 proper for the [government and] operation of the association.
14-13 (b) If a declaration contains a maximum regular assessment
14-14 and allows for an increase in the assessment without a vote of the
14-15 membership, the association may:
14-16 (1) assess the amount of the increase annually; or
14-17 (2) accumulate the amount of increases and impose the
14-18 accumulated amount after a number of years.
14-19 (c) The declaration may not impose limitations on the power
14-20 of the association to deal with the declarant that are more
14-21 restrictive than the limitations imposed on the power of the
14-22 association to deal with other persons.
14-23 (d) [(c)] To be enforceable, a bylaw or rule of the
14-24 association must not be arbitrary or capricious.
14-25 (e) [(d)] Before an association may charge the unit owner
14-26 for property damage for which the unit owner is liable or levy a
15-1 fine for violation of the declaration, bylaws, or rules, the
15-2 association shall give to the unit owner a written notice that:
15-3 (1) describes the violation or property damage and
15-4 states the amount of the proposed fine or damage charge;
15-5 (2) states that not later than the 30th day after the
15-6 date of the notice, the unit owner may request a hearing before the
15-7 board to contest the fine or damage charge; and
15-8 (3) allows the unit owner a reasonable time, by a
15-9 specified date, to cure the violation and avoid the fine unless the
15-10 unit owner was given notice and a reasonable opportunity to cure a
15-11 similar violation within the preceding 12 months.
15-12 (f) [(e)] The association may give a copy of the notice
15-13 required by Subsection (e) or (g) [(d)] to an occupant of the unit.
15-14 The association must give notice of a levied fine or damage charge
15-15 to the unit owner not later than the 30th day after the date of
15-16 levy.
15-17 (g) An association may collect reimbursement for reasonable
15-18 attorney's fees or other reasonable enforcement costs relating to
15-19 the collection of money owed to the association or to a violation
15-20 of the association's declaration, bylaws, or rules only if the
15-21 association, before incurring the costs, provides the unit owner
15-22 with written notice that the association will charge the costs to
15-23 the unit owner if the delinquency or violation, as applicable,
15-24 continues after a date specified in the notice.
15-25 SECTION 11. Subsection (a), Section 82.103, Property Code,
15-26 is amended to read as follows:
16-1 (a) Except as provided by the declaration or[,] bylaws[, or
16-2 this chapter], the board shall manage the affairs of the
16-3 association in good faith, with ordinary care, in the manner the
16-4 board reasonably believes to be in the best interest of the
16-5 association. A board member who complies with this section is not
16-6 liable to the association, any member of the association, or any
16-7 other person for the board member's action or failure to act [in
16-8 all instances on behalf of the association if in the good-faith
16-9 judgment of the board the action is reasonable. Each officer or
16-10 member of the board is liable as a fiduciary of the unit owners for
16-11 the officer's or member's acts or omissions. All acts of the
16-12 association must be by and through the board unless otherwise
16-13 provided by the declaration or bylaws or by law].
16-14 SECTION 12. Subsection (a), Section 82.106, Property Code,
16-15 is amended to read as follows:
16-16 (a) The administration and operation of the association
16-17 [condominium] are governed by the bylaws, which must provide for:
16-18 (1) the number of members on the board and the titles
16-19 of the officers of the association;
16-20 (2) election by the board of a president, treasurer,
16-21 secretary, and any other officers the bylaws specify;
16-22 (3) the qualifications, powers and duties, terms of
16-23 office, and the manner of electing and removing a board member or
16-24 officer and filling vacancies;
16-25 (4) the powers, if any, that the board or an officer
16-26 may delegate to other persons or to a managing agent;
17-1 (5) the designation of officers who are authorized to
17-2 prepare, execute, certify, and record amendments to the declaration
17-3 on behalf of the association;
17-4 (6) the method of amending the bylaws; and
17-5 (7) the manner of notice of meetings of the
17-6 association.
17-7 SECTION 13. Section 82.107, Property Code, is amended by
17-8 amending Subsection (d) and adding Subsection (e) to read as
17-9 follows:
17-10 (d) Unless prohibited or limited [otherwise provided] by the
17-11 declaration, the association may enter a unit, after giving notice
17-12 to the owner and occupant of the unit, to:
17-13 (1) prevent or terminate waste of water purchased by
17-14 the association as a common expense; or
17-15 (2) perform maintenance and repairs of the condominium
17-16 that, if not performed, may result in increased damage by water to
17-17 components of the condominium that the association maintains.
17-18 (e) A unit owner is not exempted from the unit owner's
17-19 obligations under this section by waiving the use of the common
17-20 elements or abandoning the unit.
17-21 SECTION 14. Subsection (a), Section 82.108, Property Code,
17-22 is amended to read as follows:
17-23 (a) Meetings of the association must be held at least once
17-24 each year. Unless the declaration, bylaws, or articles of
17-25 incorporation provide for less restrictive requirements [provides
17-26 otherwise], special meetings of the association may be called by
18-1 the president, a majority of the board, or unit owners having at
18-2 least 10 [20] percent of the votes in the association.
18-3 SECTION 15. Section 82.109, Property Code, is amended to
18-4 read as follows:
18-5 Sec. 82.109. QUORUMS. (a) Unless the declaration, bylaws,
18-6 or articles of incorporation provide otherwise, a quorum is present
18-7 throughout any meeting of the association if persons entitled to
18-8 cast at least 20 percent of the votes that may be cast for election
18-9 of the board are present in person or by proxy at the beginning of
18-10 the meeting. The bylaws may not reduce the standard for a quorum
18-11 to less than 10 percent.
18-12 (b) Unless the declaration, bylaws, or articles of
18-13 incorporation specify a larger percentage, a quorum is present
18-14 throughout a meeting of the board if persons entitled to cast at
18-15 least 50 percent of the votes on the board are present at the
18-16 beginning of the meeting.
18-17 SECTION 16. Subsections (a) and (b), Section 82.110,
18-18 Property Code, are amended to read as follows:
18-19 (a) Only one unit owner of a unit owned by multiple persons
18-20 may vote in person or by proxy [If only one of the multiple owners
18-21 of a unit is present at a meeting of the association, that person
18-22 may cast the vote or votes allocated to that unit]. If more than
18-23 one of the multiple owners is present at a meeting of the
18-24 association, the vote or votes allocated to that unit may be cast
18-25 only in accordance with the owners' unanimous agreement unless the
18-26 declaration, bylaws, or articles of incorporation provide
19-1 [provides] otherwise. Multiple owners are considered to be in
19-2 unanimous agreement if one of the multiple owners casts the votes
19-3 allocated to a unit and none of the other owners makes prompt
19-4 protest to the person presiding over the meeting. If multiple
19-5 owners of a unit attempt to vote in person or by proxy on behalf of
19-6 all of the owners of the unit, the first owner listed on the deed
19-7 under which the owners acquired title to the unit is the only owner
19-8 entitled to cast the vote for the unit. Any one of the multiple
19-9 owners may register a protest, in person or by proxy, concerning
19-10 the validity of another owner's right to vote for all unit owners.
19-11 (b) Votes allocated to a unit may be cast under a written
19-12 proxy duly executed by a unit owner. If a unit is owned by more
19-13 than one person, each owner of the unit may vote or register
19-14 protest to the casting of votes by the other owners of the unit
19-15 through a proxy duly executed by the unit owner. A unit owner may
19-16 not revoke a proxy given under this section except by giving actual
19-17 notice of revocation to the person presiding over a meeting of the
19-18 association. A proxy is void if it is not dated or if it purports
19-19 to be revocable without notice. A proxy terminates on the 11-month
19-20 anniversary of [one year after] its date unless it specifies a
19-21 shorter or longer time.
19-22 SECTION 17. Subsections (c) and (d), Section 82.113,
19-23 Property Code, are amended to read as follows:
19-24 (c) [The association's lien for assessments is created by
19-25 recordation of the declaration, which constitutes record notice and
19-26 perfection of the lien.] Unless the declaration provides
20-1 otherwise, no [other] recordation of a lien or notice of lien is
20-2 required to perfect the association's lien for assessments.
20-3 (d) By acquiring a unit, a unit owner grants to the
20-4 association a power of sale in connection with the association's
20-5 lien. By written resolution, a board may appoint, from time to
20-6 time, an officer, agent, trustee, or attorney of the association to
20-7 exercise the power of sale on behalf of the association. An
20-8 [Except as provided by the declaration, an] association shall
20-9 exercise its power of sale pursuant to Section 51.002 and any
20-10 additional requirements of the declaration.
20-11 SECTION 18. Subsections (a), (b), (c), (e), and (f), Section
20-12 82.114, Property Code, are amended to read as follows:
20-13 (a) The association shall keep:
20-14 (1) [detailed] financial records that are sufficiently
20-15 detailed to enable:
20-16 (A) an accountant to prepare financial
20-17 statements that comply with generally accepted accounting
20-18 principles; and
20-19 (B) [that are sufficiently detailed to enable]
20-20 the association to prepare a resale certificate under Section
20-21 82.157;
20-22 (2) the plans and specifications used to construct the
20-23 condominium except for buildings originally constructed before
20-24 January 1, 1994;
20-25 (3) the condominium information statement prepared
20-26 under Section 82.152 and any amendments;
21-1 (4) the name and mailing address of each unit owner;
21-2 (5) voting records, proxies, and correspondence
21-3 relating to amendments to the declaration for at least four years;
21-4 and
21-5 (6) minutes of meetings of the association and board.
21-6 (b) At a unit owner's written request stating the purpose of
21-7 the request and at the unit owner's expense, a unit owner or the
21-8 unit owner's agent, including the unit owner's accountant or
21-9 attorney, may, at a reasonable time and for a proper purpose,
21-10 examine and copy the association's books and records relevant to
21-11 that purpose. At a unit owner's written request and at the unit
21-12 owner's expense, the association shall furnish to the unit owner a
21-13 copy of the declaration, restrictions, bylaws, and any rules of the
21-14 association not later than the 10th day after the date the
21-15 association receives the request [All financial and other records
21-16 of the association shall be reasonably available at its registered
21-17 office or its principal office in this state for examination by a
21-18 unit owner and the owner's agents]. An attorney's files and
21-19 records relating to the association are not records of the
21-20 association and are not subject to inspection by unit owners or
21-21 production in a legal proceeding.
21-22 (c) The association shall, as a common expense, [annually]
21-23 obtain the accounting services required by this section or by the
21-24 declaration or bylaws [an independent audit of the records].
21-25 Copies of each report required under this subsection [the audit]
21-26 must be made available to the unit owners. If the condominium
22-1 contains 50 or more units, the association shall annually obtain a
22-2 year-end financial report and an audit of the association's
22-3 financial records [An audit required by this subsection shall be]
22-4 performed by a public accountant or certified public accountant who
22-5 is independent of the association. If the condominium contains
22-6 fewer than 50 units but more than 15 units, the association shall
22-7 annually obtain a review or an audit of the association's financial
22-8 records performed by a public accountant or certified public
22-9 accountant who is independent of the association. If the
22-10 condominium contains 15 units or fewer, the association may
22-11 annually waive the audit or review requirement on approval of the
22-12 waiver by at least two-thirds of the members [if required by the
22-13 bylaws or a vote of the board of directors or a majority vote of
22-14 the members of the association] voting at a meeting of the
22-15 association. The waiver is not effective to waive a requirement of
22-16 the declaration or bylaws.
22-17 (e) Not later than the 30th day after the date of acquiring
22-18 an interest in a unit, the unit owner shall provide the association
22-19 with:
22-20 (1) the unit owner's mailing address, telephone
22-21 number, and driver's license number, if any;
22-22 (2) [the name and address of the holder of any lien
22-23 against the unit, and any loan number;]
22-24 [(3)] the name and telephone number of any person
22-25 occupying the unit other than the unit owner; and
22-26 (3) [(4)] the name, address, and telephone number of
23-1 any person managing the unit as agent of the unit owner.
23-2 (f) A unit owner shall notify the association not later than
23-3 the 30th day after the date the owner has notice of a change in any
23-4 information required by Subsection (e), and shall provide the
23-5 information on request by the association from time to time. The
23-6 association may charge the unit owner for the actual cost and
23-7 administrative expense the association incurs in obtaining the
23-8 information if the unit owner fails to notify the association as
23-9 prescribed by this subsection.
23-10 SECTION 19. Subsection (b), Section 82.116, Property Code,
23-11 is amended to read as follows:
23-12 (b) The association shall record a management certificate
23-13 not later than the 30th day after the date the association has
23-14 notice of a change in any information in a recorded certificate
23-15 required under Subsection (a) [by Subdivisions (a)(1)-(5)].
23-16 SECTION 20. Section 82.117, Property Code, is amended to
23-17 read as follows:
23-18 Sec. 82.117. OBLIGATIONS OF UNIT OWNERS. (a) In addition
23-19 to [Without limiting] the obligations of the unit owners [and
23-20 except] as provided by the declaration, bylaws, rules of the
23-21 association, or other provisions of this chapter, the unit owner:
23-22 (1) shall pay assessments, interest, and other charges
23-23 properly levied by the association against the owner or the owner's
23-24 unit, and shall pay regular periodic assessments without demand by
23-25 the association;
23-26 (2) shall comply with the declaration, bylaws, and
24-1 rules of the association, including any amendments;
24-2 (3) shall pay for damage to the condominium caused by
24-3 the negligence or wilful misconduct of the owner, an occupant of
24-4 the owner's unit, or the owner or occupant's family, guests,
24-5 employees, contractors, agents, or invitees; and
24-6 (4) is liable to the association for violations of the
24-7 declaration, bylaws, or rules of the association, including any
24-8 amendments, by the owner, an occupant of the owner's unit, or the
24-9 owner or occupant's family, guests, employees, agents, or invitees,
24-10 and for costs incurred by the association to obtain compliance,
24-11 including attorney's fees whether or not suit is filed.
24-12 (b) The association is entitled to recover attorney's fees
24-13 only if the association provides prior notice in accordance with
24-14 Section 82.102(g).
24-15 SECTION 21. Subsection (b), Section 82.151, Property Code,
24-16 is amended to read as follows:
24-17 (b) A condominium information statement or resale
24-18 certificate need not be prepared or delivered in the case of:
24-19 (1) a gratuitous conveyance [disposition] of a unit;
24-20 (2) a conveyance [disposition] pursuant to court
24-21 order;
24-22 (3) a conveyance [disposition] by a government or
24-23 governmental agency;
24-24 (4) a conveyance [disposition] by foreclosure or deed
24-25 in lieu of foreclosure; or
24-26 (5) a contract of sale or conveyance [disposition]
25-1 that may be canceled by the purchaser at any time, for any reason,
25-2 and without penalty.
25-3 SECTION 22. Section 82.153, Property Code, is amended to
25-4 read as follows:
25-5 Sec. 82.153. CONDOMINIUM INFORMATION STATEMENTS IN GENERAL.
25-6 (a) A condominium information statement must contain or accurately
25-7 disclose:
25-8 (1) the name and principal address of the declarant
25-9 and of the condominium;
25-10 (2) a general description of the condominium that
25-11 includes the types of units and the maximum number of units;
25-12 (3) the minimum and maximum number of additional
25-13 units, if any, that may be included in the condominium;
25-14 (4) a brief narrative description of any development
25-15 rights reserved by a declarant and of any conditions relating to or
25-16 limitations upon the exercise of development rights;
25-17 (5) copies of the declaration, articles of
25-18 incorporation of the association, the bylaws, any rules of the
25-19 association, and amendments to any of them, and copies of leases
25-20 and contracts, other than loan documents, that are required by the
25-21 declarant to be signed by purchasers at closing;
25-22 (6) a projected or pro forma budget for the
25-23 association [that complies with Subsection (b)] for the first
25-24 fiscal year of the association following the date of the first
25-25 conveyance to a purchaser and thereafter the current budget of the
25-26 association, identification of the person who prepared the budget,
26-1 and a statement of the budget's assumptions concerning occupancy
26-2 and inflation factors;
26-3 (7) a general description of each lien, lease, or
26-4 encumbrance on or affecting the title to the condominium after
26-5 conveyance by the declarant;
26-6 (8) a copy of each written warranty provided by the
26-7 declarant;
26-8 (9) a description of any unsatisfied judgments against
26-9 the association and any pending suits to which the association is a
26-10 party or which are material to the land title and construction of
26-11 the condominium of which a declarant has actual knowledge;
26-12 (10) a general description of the insurance coverage
26-13 provided for the benefit of unit owners; and
26-14 (11) current or expected fees or charges to be paid by
26-15 unit owners for the use of the common elements and other facilities
26-16 related to the condominium.
26-17 (b) A budget under Subsection (a)(6) must reflect
26-18 anticipated income, expenses, and reserves [be prepared in
26-19 accordance with generally accepted accounting principles] and a
26-20 consideration of the physical condition of the condominium and must
26-21 be based on assumptions that, to the best of the declarant's
26-22 knowledge and belief, are reasonable. The budget must include:
26-23 (1) a statement of the amount included, or a statement
26-24 that no amount is included, in the budget as a reserve; and
26-25 (2) the projected monthly common expense assessment
26-26 for each type of unit.
27-1 (c) A declarant, before closing, shall promptly amend the
27-2 condominium information statement to reflect a material and
27-3 substantial change in its contents. If the change may adversely
27-4 affect a prospective purchaser who has received a condominium
27-5 information statement, the declarant shall furnish a copy of the
27-6 amendment to the prospective purchaser before closing.
27-7 SECTION 23. Section 82.156, Property Code, is amended by
27-8 amending Subsection (d) and adding Subsection (e) to read as
27-9 follows:
27-10 (d) A selling unit owner may not require a purchaser to
27-11 close until the purchaser is given the declaration, bylaws, and, if
27-12 any, the association rules. A declarant may not require a
27-13 purchaser to close until a condominium information statement has
27-14 been furnished to the purchaser.
27-15 (e) After a sale is completed, the seller's failure to have
27-16 furnished the buyer with a condominium information statement or
27-17 resale certificate is not grounds for rescission of the sale.
27-18 SECTION 24. Subsections (a), (d), and (e), Section 82.157,
27-19 Property Code, are amended to read as follows:
27-20 (a) Except as provided by Section 82.151(b) [Subsection
27-21 (c)], if a unit owner other than a declarant intends to sell a
27-22 unit, before executing a contract or conveying the unit, the unit
27-23 owner must furnish to the purchaser a current copy of the
27-24 declaration, bylaws, any association rules, and a resale
27-25 certificate. The resale certificate [that] must have been prepared
27-26 not earlier than three months before the date it is delivered to
28-1 the purchaser,[. The resale certificate must] be issued by the
28-2 association, and [must] contain [the current operating budget of
28-3 the association and statements of]:
28-4 (1) a statement of any right of first refusal or other
28-5 restraint contained in the declaration that restricts the right to
28-6 transfer a unit;
28-7 (2) the amount of the regular assessment and how often
28-8 it becomes due [periodic common expense assessment and the unpaid
28-9 common expenses or special assessments currently due and payable
28-10 from the selling unit owner];
28-11 (3) the amount of any special assessment owed for the
28-12 owner's unit after the preparation date of the resale certificate
28-13 and the total of all amounts unpaid and owed to the association by
28-14 the unit owner selling the unit [other unpaid fees or amounts
28-15 payable to the association by the selling unit owner];
28-16 (4) capital expenditures, if any, approved by the
28-17 association for the next 12 months;
28-18 (5) the amount of reserves, if any, for capital
28-19 expenditures and [of] portions of those reserves designated by the
28-20 association for a specified project;
28-21 (6) the total amount of any unsatisfied judgments
28-22 against the association;
28-23 (7) the style and case number [nature] of any pending
28-24 suits against the association;
28-25 (8) a summary of the association's property and
28-26 liability insurance coverage relating to the common elements and
29-1 common facilities [provided for the benefit of unit owners];
29-2 (9) whether the board has knowledge that any
29-3 alterations or improvements to the unit or to the limited common
29-4 elements assigned to that unit violate the declaration, bylaws, or
29-5 association rules;
29-6 (10) a summary or copy of each notice the association
29-7 has received [whether the board has received notice] from a
29-8 governmental authority concerning violations of health or housing
29-9 [building] codes existing on the date the certificate is prepared
29-10 with respect to the unit, the limited common elements assigned to
29-11 that unit, or the common areas or facilities [any other portion of
29-12 the condominium];
29-13 (11) the remaining term of any leasehold estate that
29-14 affects the condominium and the provisions governing an extension
29-15 or renewal of the lease; [and]
29-16 (12) the name, mailing address, and telephone number
29-17 of the association's managing agent, if any;
29-18 (13) the association's current operating budget and
29-19 balance sheet; and
29-20 (14) the amount of any administrative transfer fee the
29-21 association charges on change of unit ownership.
29-22 (d) A resale certificate does not affect:
29-23 (1) an association's right to recover debts or claims
29-24 that arise or become due after the date the certificate is
29-25 prepared; or
29-26 (2) an association's lien on a unit securing payment
30-1 of money owed to the association in the future [assessments].
30-2 (e) A purchaser, lender, or title insurer who relies on a
30-3 resale certificate is not liable for any debt or claim that is not
30-4 disclosed in the certificate. An association may not deny the
30-5 validity of any statement in the certificate. A unit owner who is
30-6 selling a unit, or the unit owner's agent, is not liable to the
30-7 purchaser for erroneous information that the association provides
30-8 for inclusion in the certificate.
30-9 SECTION 25. Subsection (b), Section 82.161, Property Code,
30-10 is amended to read as follows:
30-11 (b) Subject to Section 82.102(g), the [The] prevailing party
30-12 in litigation [an action] to enforce the declaration, bylaws, or
30-13 rules is entitled to reasonable attorney's fees and costs of
30-14 litigation from the nonprevailing party.
30-15 SECTION 26. Sections 81.111 and 81.204, Property Code, are
30-16 repealed.
30-17 SECTION 27. (a) This Act takes effect January 1, 2000.
30-18 (b) Chapter 82, Property Code, as amended by this Act,
30-19 applies only with respect to an event or circumstance occurring on
30-20 or after January 1, 2000, and except as provided by Subsection (c)
30-21 of this section, the changes to that chapter by this Act do not
30-22 invalidate existing provisions of a declaration, bylaws, or plats
30-23 or plans of a condominium for which the declaration was recorded
30-24 before January 1, 2000.
30-25 (c) The changes to Subsection (c), Section 82.002, Property
30-26 Code, by this Act do not invalidate existing provisions of a
31-1 declaration, bylaws, or plats or plans of a condominium for which
31-2 the declaration was recorded before January 1, 1994.
31-3 SECTION 28. The importance of this legislation and the
31-4 crowded condition of the calendars in both houses create an
31-5 emergency and an imperative public necessity that the
31-6 constitutional rule requiring bills to be read on three several
31-7 days in each house be suspended, and this rule is hereby suspended.