By Dutton                                              H.B. No. 879
         77R2085 PAM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to requiring arbitration to establish a property owners'
 1-3     association lien for assessments.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 202, Property Code, is amended by adding
 1-6     Section 202.007 to read as follows:
 1-7           Sec. 202.007.  ARBITRATION REQUIRED TO ESTABLISH LIEN FOR
 1-8     ASSESSMENTS.  (a)  Except as provided by Subsection (b), a property
 1-9     owners' association may not file a lien on real property for an
1-10     assessment levied by the property owners' association against the
1-11     real property unless the association submits to binding arbitration
1-12     to establish the existence and amount of the debt owed.
1-13           (b)  The property owners' association must provide written
1-14     notice by certified mail, return receipt requested, to the property
1-15     owner's last known mailing address, as reflected in the ownership
1-16     records maintained by the property owners' association, of its
1-17     intention to initiate arbitration proceedings.  Not later than the
1-18     10th day after the date the property owner receives the notice, the
1-19     property owner shall notify the property owners' association as to
1-20     whether the property owner intends to or refuses to participate in
1-21     the arbitration proceedings.  If the property owner refuses to
1-22     participate in the arbitration proceedings or fails to provide the
1-23     notice to the property owners' association within the 10-day
1-24     period, the property owners' association is not required to comply
 2-1     with this section.
 2-2           (c)  The property owners' association and the property owner
 2-3     may agree on the appointment of an arbitrator.  If the parties fail
 2-4     to reach an agreement before the 30th day after the date the
 2-5     property owners' association notifies the property owner of its
 2-6     intention to initiate arbitration proceedings, either party may
 2-7     file a petition in a district court in the county in which all or
 2-8     part of the property is located requesting the court to appoint a
 2-9     qualified person to serve as arbitrator.  The court shall appoint
2-10     an arbitrator before the 31st day after the date the petition is
2-11     filed.
2-12           (d)  The cost of arbitration shall be paid as provided by the
2-13     arbitrator.
2-14           SECTION 2.  This Act takes effect September 1, 2001.