78R6266 AJA-D
By: Bailey H.B. No. 1641
A BILL TO BE ENTITLED
AN ACT
relating to the operation of property owners' associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 209.006, Property Code, is amended to
read as follows:
Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION.
(a) Before a property owners' association may suspend an owner's
right to use a common area, file a suit against an owner [other than
a suit to collect a regular or special assessment or foreclose under
an association's lien], charge an owner for property damage, or
levy a fine for a violation of the restrictions, [or] bylaws, or
rules of the association, the association or its agent must give
written notice to the owner in English and Spanish by certified
mail, return receipt requested.
(b) The notice must:
(1) describe the violation or property damage that is
the basis for the suspension, suit, action, charge, or fine and
state any amount due the association from the owner; and
(2) inform the owner:
(A) that the owner:
(i) [(A)] is entitled to a reasonable
period to cure the violation and avoid the suspension, suit,
action, charge, or fine [or suspension] unless the owner was given
notice and a reasonable opportunity to cure a similar violation
within the preceding six months; and
(ii) [(B)] may request a hearing under
Section 209.007 on or before the 30th day after the date the owner
receives the notice; and
(B) if the violation involves an overdue regular
or special assessment, that failure to pay the assessment may
result in foreclosure.
SECTION 2. Chapter 209, Property Code, is amended by adding
Section 209.0071 to read as follows:
Sec. 209.0071. PAYMENT OF CERTAIN ASSESSMENTS. A property
owners' association shall adopt guidelines under which an owner who
is unable to pay a delinquent regular or special assessment in full
may, at the owner's request, make partial payments of the
delinquent assessments until the delinquency is cured.
SECTION 3. Section 209.008(b), Property Code, is amended to
read as follows:
(b) An owner is not liable for attorney's fees incurred by
the association relating to a matter described by the notice under
Section 209.006 if the attorney's fees are incurred before the
conclusion of the hearing under Section 209.007 or, if the owner
does not request a hearing under that section, before the date by
which the owner must request a hearing. The owner's presence is not
required to hold a hearing under Section 209.007. An owner is not
liable for attorney's fees incurred by the association relating to
overdue assessments if the attorney's fees are incurred before the
owner is offered a payment plan under Section 209.0071.
SECTION 4. Section 209.009, Property Code, is amended to
read as follows:
Sec. 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN
CIRCUMSTANCES. A property owners' association may not foreclose a
property owners' association's assessment lien unless:
(1) [if] the debt for which the lien secures payment
includes a mandatory regular or special assessment; and
(2) the owner has had an opportunity for a hearing
under Section 209.007 [securing the lien consists solely of:
[(1) fines assessed by the association; or
[(2) attorney's fees incurred by the association
solely associated with fines assessed by the association].
SECTION 5. Chapter 209, Property Code, is amended by adding
Section 209.0091 to read as follows:
Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. Except as
provided by a restriction created before September 1, 2003, a
property owners' association may not foreclose a property owners'
association's assessment lien unless the association first obtains
a court judgment foreclosing the lien and providing for issuance of
an order of sale.
SECTION 6. Section 209.011(b), Property Code, is amended to
read as follows:
(b) The owner of property in a residential subdivision may
redeem the property from any purchaser at a sale foreclosing a
property owners' association's assessment lien not later than the
second anniversary of [180th day after] the date the association
mails written notice of the sale to the owner under Section 209.010.
SECTION 7. Section 551.0015(a), Government Code, is amended
to read as follows:
(a) A property owners' association is subject to this
chapter in the same manner as a governmental body if:
(1) membership in the property owners' association is
mandatory for owners or for a defined class of owners of private
real property in a defined geographic area [in a county with a
population of 2.8 million or more or in a county adjacent to a
county with a population of 2.8 million or more]; and
(2) the property owners' association has the power to
make mandatory special assessments for capital improvements or
mandatory regular assessments [; and
[(3) the amount of the mandatory special or regular
assessments is or has ever been based in whole or in part on the
value at which the state or a local governmental body assesses the
property for purposes of ad valorem taxation under Section 20,
Article VIII, Texas Constitution].
SECTION 8. Section 552.0036, Government Code, is amended to
read as follows:
Sec. 552.0036. CERTAIN PROPERTY OWNERS' ASSOCIATIONS
SUBJECT TO LAW. A property owners' association is subject to this
chapter in the same manner as a governmental body if:
(1) membership in the property owners' association is
mandatory for owners or for a defined class of owners of private
real property in a defined geographic area [in a county with a
population of 2.8 million or more or in a county adjacent to a
county with a population of 2.8 million or more]; and
(2) the property owners' association has the power to
make mandatory special assessments for capital improvements or
mandatory regular assessments [; and
[(3) the amount of the mandatory special or regular
assessments is or has ever been based in whole or in part on the
value at which the state or a local governmental body assesses the
property for purposes of ad valorem taxation under Section 20,
Article VIII, Texas Constitution].
SECTION 9. (a) Section 209.006, Property Code, as amended
by this Act, applies only to an enforcement action taken by a
property owners' association on or after the effective date of this
Act. An enforcement action taken before the effective date of this
Act is governed by the law in effect immediately before that date,
and that law is continued in effect for that purpose.
(b) Section 209.0071, Property Code, as added by this Act,
applies only to an assessment that becomes due on or after the
effective date of this Act. An assessment that becomes due before
the effective date of this Act is governed by the law in effect
immediately before that date, and that law is continued in effect
for that purpose.
(c) Section 209.008(b), Property Code, as amended by this
Act, applies only to a violation that occurs or arrearage that
accrues on or after the effective date of this Act. A violation
that occurred or arrearage that accrued before the effective date
of this Act is governed by the law in effect immediately before that
date, and that law is continued in effect for that purpose.
(d) Sections 209.009 and 209.011(b), Property Code, as
amended by this Act, and Section 209.0091, Property Code, as added
by this Act, apply only to foreclosure of a lien that attaches on or
after the effective date of this Act. Foreclosure of a lien that
attaches before the effective date of this Act is governed by the
law in effect immediately before that date, and that law is
continued in effect for that purpose.
SECTION 10. This Act takes effect September 1, 2003.