By Bailey H.B. No. 1423
77R1337 AJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to mandatory mediation for certain disputes involving a
1-3 property owners' association.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 154.021(a), Civil Practice and Remedies
1-6 Code, is amended to read as follows:
1-7 (a) Except as provided by Chapter 209, Property Code, a [A]
1-8 court may, on its own motion or the motion of a party, refer a
1-9 pending dispute for resolution by an alternative dispute resolution
1-10 procedure including:
1-11 (1) an alternative dispute resolution system
1-12 established under Chapter 152, Civil Practice and Remedies Code
1-13 [26, Acts of the 68th Legislature, Regular Session, 1983 (Article
1-14 2372aa, Vernon's Texas Civil Statutes)];
1-15 (2) a dispute resolution organization; or
1-16 (3) a nonjudicial and informally conducted forum for
1-17 the voluntary settlement of citizens' disputes through the
1-18 intervention of an impartial third party, including those
1-19 alternative dispute resolution procedures described under this
1-20 subchapter.
1-21 SECTION 2. Title 11, Property Code, is amended by adding
1-22 Chapter 209 to read as follows:
1-23 CHAPTER 209. MANDATORY MEDIATION FOR CERTAIN DISPUTES INVOLVING
1-24 PROPERTY OWNERS' ASSOCIATION
2-1 Sec. 209.001. DEFINITIONS. In this chapter:
2-2 (1) "Claimant" has the meaning assigned by Section
2-3 147.001, Civil Practice and Remedies Code.
2-4 (2) "Defendant" has the meaning assigned by Section
2-5 147.001, Civil Practice and Remedies Code.
2-6 (3) "Dispute resolution organization" has the meaning
2-7 assigned by Section 154.001, Civil Practice and Remedies Code.
2-8 (4) "Mediation" has the meaning assigned by Section
2-9 154.023(a), Civil Practice and Remedies Code.
2-10 (5) "Property owners' association" has the meaning
2-11 assigned by Section 202.001.
2-12 (6) "Regular assessment" has the meaning assigned by
2-13 Section 204.001.
2-14 (7) "Restrictions" has the meaning assigned by Section
2-15 201.003.
2-16 (8) "Special assessment" has the meaning assigned by
2-17 Section 204.001.
2-18 (9) "Subdivision" has the meaning assigned by Section
2-19 201.003.
2-20 Sec. 209.002. ACTIONS COVERED BY CHAPTER. (a) This chapter
2-21 applies only to an action:
2-22 (1) in which one of the parties is a property owners'
2-23 association:
2-24 (A) that is authorized to collect regular or
2-25 special assessments on property in the subdivision represented by
2-26 the association; and
2-27 (B) in which membership is mandatory for an
3-1 owner of residential property in the subdivision represented by the
3-2 association; and
3-3 (2) that involves a claim relating to:
3-4 (A) interpretation, application, or enforcement
3-5 of:
3-6 (i) a restriction applicable to
3-7 residential property, including common areas, owned by a party to
3-8 the action; or
3-9 (ii) a bylaw, rule, or regulation adopted
3-10 by the association; or
3-11 (B) procedures used by the association for
3-12 increasing or decreasing assessments or imposing additional
3-13 assessments on residential property.
3-14 (b) This chapter does not apply to:
3-15 (1) an action for injunctive relief in which there is
3-16 an immediate threat of irreparable harm; or
3-17 (2) an action relating to the title to residential
3-18 property.
3-19 Sec. 209.003. MEDIATION REQUIRED. (a) Except as provided by
3-20 Subsection (b), a person may not file an action to which this
3-21 chapter applies unless:
3-22 (1) any dispute resolution procedures authorized or
3-23 prescribed by the subdivision restrictions or the bylaws, rules, or
3-24 regulations of the property owners' association have been
3-25 exhausted; or
3-26 (2) if no dispute resolution procedures are authorized
3-27 or prescribed, the dispute that is the subject of the action has
4-1 been submitted to mediation in compliance with this chapter.
4-2 (b) A person may file an action to which this chapter
4-3 applies if the defendant in the action:
4-4 (1) refuses to participate in mediation under this
4-5 chapter; or
4-6 (2) fails to respond to a notice of claim served on
4-7 the defendant under Section 209.005.
4-8 (c) A court shall dismiss an action to which this chapter
4-9 applies if the action is filed in violation of this chapter.
4-10 Sec. 209.004. SWORN STATEMENT REQUIRED. A complaint filed in
4-11 an action to which this chapter applies must contain an affidavit:
4-12 (1) stating that:
4-13 (A) any dispute resolution procedures authorized
4-14 or prescribed by the subdivision restrictions or the bylaws, rules,
4-15 or regulations of the property owners' association have been
4-16 exhausted; or
4-17 (B) if no dispute resolutions are authorized or
4-18 prescribed, the parties submitted the issues addressed in the
4-19 complaint to mediation in compliance with this chapter and failed
4-20 to reach a written agreement as a result of the mediation; or
4-21 (2) stating that the defendant in the action:
4-22 (A) refuses to participate in mediation under
4-23 this chapter; or
4-24 (B) failed to respond to a notice of claim
4-25 served on the defendant under Section 209.005.
4-26 Sec. 209.005. NOTICE OF CLAIM. (a) A person who makes a
4-27 claim described by Section 209.002(a)(2) shall serve a notice of
5-1 the claim on each person against whom the claim is made in the
5-2 manner required for service of citation under the Texas Rules of
5-3 Civil Procedure.
5-4 (b) The notice of the claim must include:
5-5 (1) the name, address, and telephone number of each
5-6 party to the claim according to the records of the claimant or any
5-7 other source reasonably available to the claimant;
5-8 (2) a specific statement of the nature of the claim;
5-9 and
5-10 (3) a description of the mediation requirements
5-11 prescribed by this chapter.
5-12 Sec. 209.006. SELECTION OF MEDIATOR; SUBMISSION OF CLAIM AND
5-13 RESPONSE. (a) Not later than the 30th day after the date a notice
5-14 of a claim is delivered under Section 209.005, the claimant and the
5-15 recipient of the notice shall select a mediator to conduct
5-16 mediation through the procedure described by Section 209.007.
5-17 (b) If the claimant and the recipient of the notice of the
5-18 claim fail to select a mediator in the time provided under
5-19 Subsection (a), the claimant or the recipient of the notice may
5-20 file a petition in a district court requesting the court to refer
5-21 the dispute to a mediator. The petition must be filed in a court
5-22 in the county in which:
5-23 (1) all or part of the residential property that is
5-24 the subject of the dispute is located; or
5-25 (2) all or part of the subdivision represented by the
5-26 property owners' association involved in the dispute is located, if
5-27 the dispute does not involve specific residential property.
6-1 (c) The court shall refer the dispute before the 31st day
6-2 after the date the petition is filed.
6-3 (d) Not later than the fifth day after the date a mediator
6-4 is selected or appointed under this section:
6-5 (1) the claimant shall submit to the mediator the
6-6 notice of the claim; and
6-7 (2) the recipient may submit to the mediator a written
6-8 response to the notice of the claim.
6-9 Sec. 209.007. FORUM FOR CONDUCTING MEDIATION; QUALIFICATIONS
6-10 OF MEDIATOR. (a) Mediation required by this chapter must be
6-11 conducted through:
6-12 (1) an alternative dispute resolution system
6-13 established under Chapter 152, Civil Practice and Remedies Code;
6-14 (2) a dispute resolution organization; or
6-15 (3) a nonjudicial and informally conducted forum for
6-16 the voluntary settlement of citizens' disputes through the
6-17 intervention of an impartial third party, including the mediation
6-18 procedures described by Subchapter B, Chapter 154, Civil Practice
6-19 and Remedies Code.
6-20 (b) A mediator selected or appointed under this chapter
6-21 must:
6-22 (1) be available to conduct the mediation not more
6-23 than 150 miles from:
6-24 (A) any residential property that is the subject
6-25 of the dispute; or
6-26 (B) the subdivision represented by the property
6-27 owners' association involved in the dispute; and
7-1 (2) have training or experience in mediation and in
7-2 resolution of disputes concerning property owners' associations,
7-3 including the interpretation, application, and enforcement of:
7-4 (A) restrictions relating to residential
7-5 property; and
7-6 (B) articles of incorporation, bylaws, rules,
7-7 and regulations of associations.
7-8 Sec. 209.008. PERIOD FOR COMPLETING MEDIATION. Mediation
7-9 conducted under this chapter must:
7-10 (1) begin not later than the 30th day after the date:
7-11 (A) the mediator receives a copy of the notice
7-12 of the claim required under Section 209.006(d); or
7-13 (B) the dispute is referred by a district court
7-14 under Section 209.006(c); and
7-15 (2) unless otherwise provided by an agreement of the
7-16 parties, be completed not later than the 60th day after the date
7-17 the mediation begins.
7-18 Sec. 209.009. WRITTEN AGREEMENT. (a) Not later than the
7-19 20th day after the date the mediation required by this chapter is
7-20 completed, the mediator shall:
7-21 (1) issue a written statement specifying any agreement
7-22 reached through the mediation; and
7-23 (2) provide a copy of the written agreement to each
7-24 party to the mediation.
7-25 (b) A written agreement issued under Subsection (a) is not
7-26 effective unless all parties to the mediation sign the agreement
7-27 before the seventh day after the date the agreement is issued.
8-1 (c) A written agreement issued and signed under this section
8-2 is enforceable by court order.
8-3 Sec. 209.010. COSTS. A person who makes a claim under this
8-4 chapter shall pay all costs associated with conducting the
8-5 mediation required by this chapter.
8-6 Sec. 209.011. TOLLING OF LIMITATIONS PERIOD. Any
8-7 limitations period applicable to a claim described by Section
8-8 209.002(a)(2) is tolled from the time the notice of the claim is
8-9 served on all other parties to the claim until the later of:
8-10 (1) the date the mediation is completed under Section
8-11 209.008; or
8-12 (2) the date a written agreement is required to be
8-13 delivered to the parties under Section 209.009.
8-14 SECTION 3. This Act takes effect September 1, 2001, and
8-15 applies only to an action filed on or after that date. An action
8-16 filed before September 1, 2001, is governed by the law in effect
8-17 immediately before that date, and that law is continued in effect
8-18 for that purpose.