78R7831 QS-D

By:  Edwards                                                      H.B. No. 2789



A BILL TO BE ENTITLED

AN ACT

relating to a limitation on property owners' associations.                    
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 11, Property Code, is amended by adding 
Chapter 210 to read as follows:

CHAPTER 210.  LIMITATION ON PROPERTY OWNERS' ASSOCIATIONS
	Sec. 210.001.  APPLICABILITY.  This chapter applies to all 
residential real estate subdivisions in this state.
	Sec. 210.002.  DEFINITIONS.  In this chapter:                           
		(1)  "Owner" has the meaning assigned by Section 
201.003.            
		(2)  "Petition" has the meaning assigned by Section 
201.003.         
		(3)  "Property owners' association" means an 
association described by Section 204.004.
		(4)  "Residential real estate subdivision" has the 
meaning assigned by Section 201.003.
		(5)  "Restriction" has the meaning assigned by Section 
201.003.      
	Sec. 210.003.  AUTOMATIC EXPIRATION.  Except as provided by 
this chapter, a restriction establishing a property owners' 
association automatically expires on the 15th anniversary of:
		(1)  the date the restriction is filed or incorporated 
in the county real property records, map records, or deed records; 
and
		(2)  if the restriction is renewed under this chapter, 
the last date on which the renewal is effective.
	Sec. 210.004.  PETITION TO RETAIN PROPERTY OWNERS' 
ASSOCIATION.  (a)  Not sooner than one year before the date on which 
a restriction establishing a property owners' association is 
scheduled to expire, the property owners' association may circulate 
a petition to renew the restriction for an additional term of 15 
years.
	(b)  The petition is effective if the petition is:                      
		(1)  approved by the owners, excluding lienholders, 
contract purchasers, and owners of mineral interests, of at least 
60 percent of the real property in the residential real estate 
subdivision; and
		(2)  filed with the county clerk of the county in which 
the subdivision is located.
	(c)  If a subdivision consisting of multiple sections, each 
with its own restrictions, is represented by a single property 
owners' association, the approval requirement may be satisfied by 
obtaining approval of at least 60 percent of the owners on a 
section-by-section basis or of the total number of properties in 
the property owners' association's jurisdiction.
	(d)  If approved, the petition is binding on all properties 
in the subdivision or section, as applicable.
	(e)  A property owners' association that circulates a 
petition must notify all record owners of property in the 
subdivision in writing of the petition.  Notice may be 
hand-delivered to residences in the subdivision or sent by regular 
mail to the owner's last known mailing address as reflected in the 
ownership records maintained by the property owners' association.  
The approval of multiple owners of a property may be reflected by 
the signature of a single co-owner.
	SECTION 2.  The change in law made by this Act applies only 
to a restriction that establishes a property owners' association on 
or after the effective date of this Act.  A restriction that 
established a property owners' association before the effective 
date of this Act is governed by the law in effect on the date the 
property owners' association was established, and the former law is 
continued in effect for that purpose.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.