By:  Lindsay                                          S.B. No. 1834
         2001S1412/1                            
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to reimbursements to property owners following foreclosure
 1-3     sales by property owners' associations.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 51, Property Code, is amended by adding
 1-6     Section 51.008 to read as follows:
 1-7           Sec. 51.008.  REIMBURSEMENT FOLLOWING FORECLOSURE OF LIEN FOR
 1-8     NONPAYMENT OF ASSESSMENTS.  (a)  In this section:
 1-9                 (1)  "Assessment" means a regular assessment or special
1-10     assessment as defined by Section 204.001.
1-11                 (2)  "Property owners' association" means an
1-12     incorporated or unincorporated association that:
1-13                       (A)  is designated as the representative of the
1-14     owners of property in a residential subdivision;
1-15                       (B)  has a membership primarily consisting of the
1-16     owners of the property covered by the dedicatory instrument for the
1-17     residential subdivision; and
1-18                       (C)  manages or regulates the residential
1-19     subdivision for the benefit of the owners of property in the
1-20     residential subdivision.
1-21           (b)  This section applies to a property owners' association
1-22     that forecloses a lien on real property to secure payment of
1-23     assessments due the association by the property owner.
1-24           (c)  If a property owners' association authorizes the sale of
1-25     property for a price less than the value of the property according
 2-1     to the most recent appraisal by the local appraisal district, the
 2-2     property owners' association shall reimburse the property owner for
 2-3     the difference between the sale price and the value determined by
 2-4     the appraisal district.
 2-5           SECTION 2.  This Act applies to a foreclosure sale conducted
 2-6     on or after January 1, 2001.
 2-7           SECTION 3.  This Act takes effect immediately if it receives
 2-8     a vote of two-thirds of all the members elected to each house, as
 2-9     provided by Section 39, Article III, Texas Constitution.  If this
2-10     Act does not receive the vote necessary for immediate effect, this
2-11     Act takes effect September 1, 2001.