80R8517 EJI-F

By: Olivo H.B. No. 3232

A BILL TO BE ENTITLED

AN ACT

relating to common areas in certain residential subdivisions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 212, Local Government Code, is amended by adding Section 212.0155 to read as follows:

Sec. 212.0155. ADDITIONAL REQUIREMENTS FOR CERTAIN REPLATS AFFECTING COMMON AREAS. (a) This section applies to land located wholly or partly in the corporate boundaries or the extraterritorial jurisdiction of a municipality if the municipality:

(1) has a population of more than 50,000; and

(2) is located wholly or partly in a county:

(A) with a population of more than three million; or

(B) with a population of more than 275,000 that is adjacent to a county with a population of more than three million.

(b) In this section:

(1) "Common area" means:

(A) an area that is or was zoned, restricted by covenants, or designated on a recorded plat as a common area, joint use area, or other shared community use area, including an area having a use or designation as a golf course, country club, amenity, open space, common area, sports field, green space, landscaping, buffer, park, lake, trail, or pathway, or a similar use or designation;

(B) an area adjacent to single-family residential lots that:

(i) was used for at least 10 years as a common area; and

(ii) for which the use as a common area was not terminated more than five years before the date of the application for a platting approval;

(C) an area benefited by restrictive covenants that limit the development of adjacent residential single-family lots in consideration of the existence of a common area, including special setback lines, architectural restrictions, prohibition of fences, or disclosures, waivers, or releases regarding the liability of being adjacent to the common area; or

(D) an area determined by a court, by declaratory judgment or otherwise, to be an area that:

(i) was represented to residential single-family home owners, by the developer of the lots or a successor developer or by the original builder of houses on the lots, to be available for common use by the homeowners;

(ii) was included in any sales materials by the original developer of the lots or a successor developer or the original builder of houses on the lots to purchasers of residential single-family lots or houses as an amenity, without a prominent disclaimer that the amenity could be removed without the consent of the lot owners;

(iii) generated tax benefits by being valued for ad valorem tax purposes based on a special use that resulted in a valuation less than the highest and best use if unrestricted;

(iv) was an integral part of a common scheme of development for a predominantly residential single-family development project; or

(v) was a community amenity that increased the initial sales price of residential lots, without which the adjacent single-family residential area would be materially adversely affected by future value reductions that would not occur if the common area, considered as a whole unit, if appropriate, remained.

(2) "Dedicatory instrument," "property owners' association," and "restrictive covenant" have the meanings assigned by Section 202.001, Property Code.

(3) "Management certificate" means a certificate described by Section 209.004, Property Code.

(4) "Restrictions," "residential real estate subdivision" or "subdivision," "owner," and "real property records" have the meanings assigned by Section 201.003, Property Code.

(c) For the purposes of a particular neighborhood, the common areas may be considered collectively or separately, as appropriate under the circumstances in the judgment of the plat approving authority, notwithstanding that the common area is not contiguous, is not adjacent to, or is in separately platted or owned parcels.

(d) For the purpose of Subsection (b)(1)(D), the court may consider the reasonable consumer expectations of the residential single-family home or lot owners whose lots are adjacent to or benefit from the common area and accept expert testimony as to the valuation effect of the loss of the common area on the adjacent residential single-family lots. The value of proposed new development in the common area is irrelevant to the effect on the adjacent single-family residential area benefited by the common area.

(e) In addition to any other requirement of this chapter, a development plat, replat, amending plat, or vacating plat must conform to the requirements of this section if any of the area subject to the development plat, replat, amending plat, or vacating plat is a common area. The exception in Section 212.004(a) excluding divisions of land into parts greater than five acres for platting requirements does not apply to a common area.

(f) A development plat, replat, amending plat, or vacating plat may not be approved until each municipal authority reviewing the development plat, replat, amending plat, or vacating plat conducts a public hearing on the matter at which the parties in interest and citizens have an adequate opportunity to be heard, present evidence, and submit statements or petitions for consideration by the municipal authority. The number, location, and procedure for the public hearings may be designated by the municipal authority for a particular hearing. The municipal authority may abate, continue, or reschedule, as the municipal authority considers appropriate, any public hearing in order to receive a full and complete record on which to make a decision. If the development plat, replat, amending plat, or vacating plat would otherwise be administratively approved, the municipal planning commission is the approving body for the purposes of this section.

(g) The municipal authority may not approve a development plat, replat, amending plat, or vacating plat without adequate consideration of testimony and the record from the public hearings and making the findings required by Subsection (m). Sections 212.009(a) and (b) do not apply to the approval of plats under this section.

(h) Notice of the initial hearing required by Subsection (f) shall be given before the 15th day before the date of the hearing by:

(1) publishing notice in an official newspaper or a newspaper of general circulation in the county in which the municipality is located;

(2) providing written notice, with a copy of this section attached, by the municipal authority responsible for approving plats to:

(A) each property owners' association for each neighborhood benefited by the common area, as indicated in the most recently filed management certificates; and

(B) the owners of lots that are within 200 feet of the area subject to the development plat, replat, vacating plat, or amending plat, as indicated:

(i) on the most recently approved municipal tax roll or, in the case of a subdivision within the extraterritorial jurisdiction of a municipality, on the most recently approved county tax roll of the property on which the replat is requested; and

(ii) in the most recent online records of the central appraisal district of the county in which the lots are located; and

(3) any other manner determined by the municipal authority to be necessary to ensure that full and fair notice is provided to all owners of residential single-family lots in the general vicinity of the area subject to the development plat, replat, amending plat, or vacating plat benefited by the common area.

(i) The written notice required by Subsection (h)(2) may be delivered by depositing the notice, properly addressed with postage prepaid, in the United States mail.

(j) The cost of providing the notices under Subsection (h) shall be paid by the plat applicant.

(k) If written instruments protesting the proposed development plat, replat, amending plat, or vacating plat are signed by the owners of at least 20 percent of the area of the lots or land immediately adjacent to the area covered by a proposed development plat, replat, amending plat, or vacating plat and extending 200 feet from that area and are filed with the municipal planning commission or the municipality's governing body before the conclusion of the public hearings, the proposed development plat, replat, amending plat, or vacating plat must receive, to be approved, the affirmative vote of at least three-fourths of the members of the municipal planning commission or governing body.

(l) In computing the percentage of land area under Subsection (k), the area of streets and alleys is included.

(m) The municipal planning commission or the municipality's governing body may not approve a development plat, replat, amending plat, or vacating plat under this section unless it determines that:

(1) there is adequate public infrastructure to support the future development of the common area;

(2) the development of the common area will not have a materially adverse effect on traffic, parking, drainage, crime, the environment, or other health, safety, or public welfare concerns;

(3) the development of the common area will not have a materially adverse effect on existing single-family neighborhood values;

(4) the development plat, replat, amending plat, or vacating plat is consistent with all applicable land use regulations and restrictive covenants and the municipality's land use policies as described by the municipality's comprehensive plan or other appropriate public policy documents; and

(5) if any portion of a previous plat reflected a restriction on the common area:

(A) that restriction is not an implied covenant or easement benefiting adjacent residential properties; or

(B) if the restriction is an implied covenant or easement benefiting adjacent residential properties, the covenant or easement is legally released.

(n) For the purpose of the findings required by Subsection (m), the municipal authority may assume as the municipal authority determines to be appropriate the development of the common area will be for:

(1) any currently permitted use under applicable zoning or restrictive covenants; or

(2) residential single-family development consistent with the residential single-family development in the neighborhood benefited by the common area.

(o) The application for a development plat, replat, amending plat, or vacating plat under this section is not complete and may not be submitted for review for administrative completeness unless the tax certificates required by Section 12.002(e), Property Code, are attached, notwithstanding that the application is for a type of plat other than a plat specified in that section.

(p) A plan for development or plat application for a common area is not considered to provide fair notice of the project and nature of the permit sought unless it contains the following information, complete in all material respects:

(1) street layout;

(2) lot and block layout;

(3) number of residential units;

(4) square footage of nonresidential development, by type of development;

(5) drainage, detention, and retention plans;

(6) screening plan for adjacent residential properties, including landscaping or fencing; and

(7) an analysis of the effect of the project on values in the adjacent residential neighborhoods.

(q) The municipal authority with authority over platting may adopt rules requiring more detailed information for plans for development or plat applications for a common area than the information required by Subsection (p).

(r) A municipal authority with authority over platting may require as a condition for approval of a plat for a common area that:

(1) the area be platted as a restricted reserve for the proposed use; and

(2) the plat be incorporated into the plat for any adjacent residential lots.

SECTION 2. Subchapter A, Chapter 232, Local Government Code, is amended by adding Section 232.0033 to read as follows:

Sec. 232.0033. ADDITIONAL REQUIREMENTS FOR CERTAIN REPLATS AFFECTING COMMON AREAS. (a) This section applies to land located wholly or partly:

(1) in the extraterritorial jurisdiction of a municipality that:

(A) has a population of more than 50,000; and

(B) is located wholly or partly in a county:

(i) with a population of more than three million; or

(ii) with a population of more than 275,000 that is adjacent to a county with a population of more than three million; or

(2) in the unincorporated area of a county described by Subdivision (1)(B).

(b) In this section:

(1) "Common area" means:

(A) an area that is or was zoned, restricted by covenants, or designated on a recorded plat as a common area, joint use area, or other shared community use area, including an area having a use or designation as a golf course, country club, amenity, open space, common area, sports field, green space, landscaping, buffer, park, lake, trail, or pathway, or a similar use or designation;

(B) an area adjacent to single-family residential lots that:

(i) was used for at least 10 years as a common area; and

(ii) for which the use as a common area was not terminated more than five years before the date of the application for a platting approval;

(C) an area benefited by restrictive covenants that limit the development of adjacent residential single-family lots in consideration of the existence of a common area, including special setback lines, architectural restrictions, prohibition of fences, or disclosures, waivers, or releases regarding the liability of being adjacent to the common area; or

(D) an area determined by a court, by declaratory judgment or otherwise, to be an area that:

(i) was represented to residential single-family home owners, by the developer of the lots or a successor developer or by the original builder of houses on the lots, to be available for common use by the homeowners;

(ii) was included in any sales materials by the original developer of the lots or a successor developer or the original builder of houses on the lots to purchasers of residential single-family lots or houses as an amenity, without a prominent disclaimer that the amenity could be removed without the consent of the lot owners;

(iii) generated tax benefits by being valued for ad valorem tax purposes based on a special use that resulted in a valuation less than the highest and best use if unrestricted;

(iv) was an integral part of a common scheme of development for a predominantly residential single-family development project; or

(v) was a community amenity that increased the initial sales price of residential lots, without which the adjacent single-family residential area would be materially adversely affected by future value reductions that would not occur if the common area, considered as a whole unit, if appropriate, remained.

(2) "Dedicatory instrument," "property owners' association," and "restrictive covenant" have the meanings assigned by Section 202.001, Property Code.

(3) "Management certificate" means a certificate described by Section 209.004, Property Code.

(4) "Restrictions," "residential real estate subdivision" or "subdivision," "owner," and "real property records" have the meanings assigned by Section 201.003, Property Code.

(c) For the purposes of a particular neighborhood, the common areas may be considered collectively or separately, as appropriate under the circumstances in the judgment of the commissioners court, notwithstanding that the common area is not contiguous, is not adjacent to, or is in separately platted or owned parcels.

(d) For the purpose of Subsection (b)(1)(D), the court may consider the reasonable consumer expectations of the residential single-family home or lot owners whose lots are adjacent to or benefit from the common area and accept expert testimony as to the valuation effect of the loss of the common area on the adjacent residential single-family lots. The value of proposed new development in the common area is irrelevant to the effect on the adjacent single-family residential area benefited by the common area.

(e) In addition to any other requirement of this chapter, a plat, replat, plat revision, amending plat, or vacating or cancellation plat must conform to the requirements of this section if any of the area subject to the plat, replat, plat revision, amending plat, or vacating or cancellation plat is a common area. The exceptions in Sections 232.0015(e), (f), (g), (j), and (k) do not apply to a common area. Section 232.007 does not apply to a common area.

(f) The plat, replat, plat revision, amending plat, or vacating or cancellation plat may not be approved until the commissioners court conducts a public hearing on the matter at which the parties in interest and citizens have an adequate opportunity to be heard, present evidence, and submit statements or petitions for consideration by the commissioners court. The number, location, and procedure for the public hearings may be designated by the commissioners court for a particular hearing. The commissioners court may abate, continue, or reschedule, as the commissioners court considers appropriate, any public hearing in order to receive a full and complete record on which to make a decision.

(g) The commissioners court may not approve a plat, replat, plat revision, amending plat, or vacating or cancellation plat without adequate consideration of testimony and the record from the public hearings and making the findings required by Subsection (m). Sections 232.0025(b), (d), (f), (g), (h), and (i) do not apply to this section.

(h) Notice of the initial hearing required by Subsection (f) shall be given before the 15th day before the date of the hearing by:

(1) publishing notice in an official newspaper or a newspaper of general circulation in the county;

(2) providing written notice, with a copy of this section attached, by the commissioners court to:

(A) each property owners' association for each neighborhood benefited by the common area, as indicated in the most recently filed management certificates; and

(B) the owners of lots that are within 200 feet of the area subject to the plat, replat, plat revision, amending plat, or vacating or cancellation plat, as indicated:

(i) on the most recently approved county tax roll; or

(ii) in the most recent online records of the central appraisal district of the county in which the lots are located; and

(3) any other manner determined by the commissioners court to be necessary to ensure that full and fair notice is provided to all owners of residential single-family lots in the general vicinity of the area subject to the plat, replat, plat revision, amending plat, or vacating or cancellation plat benefited by the common area.

(i) The written notice required by Subsection (h)(2) may be delivered by depositing the notice, properly addressed with postage prepaid, in the United States mail.

(j) The cost of providing the notices under Subsection (h) shall be paid by the plat applicant.

(k) If written instruments protesting the proposed plat, replat, plat revision, amending plat, or vacating or cancellation plat are signed by the owners of at least 20 percent of the area of the lots or land immediately adjacent to the area covered by a proposed plat, replat, plat revision, amending plat, or vacating or cancellation plat and extending 200 feet from that area and are filed with the commissioners court before the conclusion of the public hearings, the proposed plat, replat, plat revision, amending plat, or vacating or cancellation plat must receive, to be approved, the affirmative vote of at least three-fourths of the members of the commissioners court.

(l) In computing the percentage of land area under Subsection (k), the area of streets and alleys is included.

(m) The commissioners court may not approve a plat, replat, plat revision, amending plat, or vacating or cancellation plat under this section unless it determines that:

(1) there is adequate public infrastructure to support the future development of the common area;

(2) the development of the common area will not have a materially adverse effect on traffic, parking, drainage, crime, the environment, or other health, safety, or public welfare concerns;

(3) the development of the common area will not have a materially adverse effect on existing single-family neighborhood values;

(4) the plat, replat, plat revision, amending plat, or vacating or cancellation plat is consistent with all applicable land use regulations and restrictive covenants and, if applicable, the county's land use policies as described by the county's comprehensive plan or other appropriate public policy documents; and

(5) if any portion of a previous plat reflected a restriction on the common area:

(A) that restriction is not an implied covenant or easement benefiting adjacent residential properties; or

(B) if the restriction is an implied covenant or easement benefiting adjacent residential properties, the covenant or easement is legally released.

(n) For the purpose of the findings required by Subsection (m), the commissioners court may assume the development of the common area will be for:

(1) any currently permitted use under applicable zoning or restrictive covenants; or

(2) residential single-family development consistent with the residential single-family development in the neighborhood benefited by the common area.

(o) The application for a plat, replat, plat revision, amending plat, or vacating or cancellation plat under this section is not complete and may not be submitted for review for administrative completeness unless the tax certificates required by Section 12.002(e), Property Code, are attached, notwithstanding that the application is for a type of plat other than a plat specified in that section.

(p) A plan for development or plat application for a common area is not considered to provide fair notice of the project and nature of the permit sought unless it contains the following information, complete in all material respects:

(1) street layout;

(2) lot and block layout;

(3) number of residential units;

(4) square footage of nonresidential development, by type of development;

(5) drainage, detention, and retention plans;

(6) screening plan for adjacent residential properties, including landscaping or fencing; and

(7) an analysis of the effect of the project on values in the adjacent residential neighborhoods.

(q) The commissioners court may adopt rules requiring more detailed information for plans for development or plat applications for a common area than the information required by Subsection (p).

(r) The commissioners court may require as a condition for approval of a plat for a common area that:

(1) the area be platted as a restricted reserve for the proposed use; and

(2) the plat be incorporated into the plat for any adjacent residential lots.

SECTION 3. Subchapter A, Chapter 5, Property Code, is amended by adding Section 5.016 to read as follows:

Sec. 5.016. SELLER'S DISCLOSURE OF POSSIBLE COMMON AREA TERMINATION. (a) An initial seller of residential real property or unimproved real property to be used for residential purposes that is adjacent to any common area, as defined by Section 212.0155(b) or 232.0033(b), Local Government Code, shall give to the initial purchaser of the property a written notice substantially similar to the following: NOTICE OF POSSIBLE COMMON AREA TERMINATION: PROPERTY LOCATED AT [STREET ADDRESS AND CITY]

You are purchasing property located adjacent to a common area intended for general use within this residential community. Although you may be paying a premium for your property because of the existence of the common area, the common area may be terminated in the future. Even if the common area is not terminated, any amenity provided on the common area is not required to be continued. SELLER DISCLOSES THE FOLLOWING INFORMATION ABOUT THE COMMON AREA: RESTRICTIVE COVENANTS:

THE COMMON AREA [IS/IS NOT] RESTRICTED.

THE RESTRICTIVE COVENANTS ARE LOCATED AT [INSERT RECORDING REFERENCE].

A COMPLETE COPY OF THESE RESTRICTIVE COVENANTS HAS BEEN PROVIDED TO YOU.

THE RESTRICTIVE COVENANTS TERMINATE [INSERT DATE] AND [DO/DO NOT] AUTOMATICALLY RENEW FOR PERIODS OF [INSERT TIME PERIODS].

THE RESTRICTIVE COVENANTS MAY BE TERMINATED [WITH/WITHOUT] YOUR CONSENT.

THE RESTRICTIVE COVENANTS MAY BE MODIFIED [WITH/WITHOUT] YOUR CONSENT. PLAT:

THE PLAT FOR THE COMMON AREA [DOES/DOES NOT] IDENTIFY THE COMMON AREA USE ON THE FACE OF THE PLAT.

THE PLAT FOR THE COMMON AREA IS LOCATED AT [INSERT RECORDING REFERENCE].

A COMPLETE COPY OF THIS PLAT HAS BEEN PROVIDED TO YOU. The termination of the common area may have a material, adverse impact on the value of your property. Date: ________________________ ____________________________ Signature of Seller Date: ______________________ ____________________________ Signature of Purchaser

[acknowledgements of Seller and Purchaser signatures]

[legal description of the property purchased]

(b) The notice must be signed by the seller and must state that the information provided in the notice is to the best of the seller's knowledge and belief accurate as of the date the notice is provided. If the information required to be disclosed is not known to the seller, the seller shall indicate that fact in the notice when initially provided and shall update the notice when the information is available.

(c) The notice must be delivered by the seller to the purchaser on or before the effective date of an executory contract binding the purchaser to purchase the property. If a contract is entered into without the seller providing the notice as required by this section, the purchaser may terminate the contract for any reason before the transfer of the property occurs and receive a refund of all earnest money and all expenses directly incurred by the purchaser in reliance on the purchase contract before the date the notice is provided.

(d) The notice must be signed by the purchaser and recorded in the real property records of the county in which the property is located at the closing of the purchase of the property.

(e) If the initial seller has not provided the required notice and a subsequent seller becomes aware that there is no recorded notice regarding the property, the subsequent seller shall provide the notice and cause the notice to be recorded on the transfer of the property. The subsequent seller is not subject to the penalties of Subsection (c).

SECTION 4. Section 82.051, Property Code, is amended by adding Subsection (f) to read as follows:

(f) This chapter does not permit development of a common area, as defined by Section 212.0155(b) or 232.0033(b), Local Government Code, without a plat if the plat is otherwise required by applicable law. A municipality or county may require as a condition to the development of a previously platted or unplatted common area that the common area be platted or replatted.

SECTION 5. Subchapter F, Chapter 23, Tax Code, is amended by adding Section 23.88 to read as follows:

Sec. 23.88. CHANGE OF USE AS COMMON AREA. (a) If land that has been appraised under this chapter based on its use as a common area, as defined by Section 212.0155(b) or 232.0033(b), Local Government Code, is diverted to a different use, an additional tax is imposed on the land equal to the difference between the taxes imposed on the land for each of the five years preceding the year in which the change of use occurs and the tax that would have been imposed had the land not been used as a common area in each of those years, plus interest at an annual rate of seven percent calculated from the dates on which the differences would have become due.

(b) A tax lien attaches to the land on the date the change of use occurs to secure payment of the additional tax and interest imposed by this section and any penalties incurred. The lien exists in favor of all taxing units for which the additional tax is imposed.

(c) The additional tax imposed by this section does not apply to a year for which the tax has already been imposed.

(d) If the change of use applies to only part of a parcel that has been appraised as provided by this chapter, the additional tax applies only to that part of the parcel and equals the difference between the taxes imposed on that part of the parcel and the taxes that would have been imposed had that part not been used as a common area.

(e) A determination that a change in use of the land has occurred is made by the chief appraiser. The chief appraiser shall deliver a notice of the determination to the owner of the land as soon as possible after making the determination and shall include in the notice an explanation of the owner's right to protest the determination. If the owner does not file a timely protest or if the final determination of the protest is that the additional taxes are due, the assessor for each taxing unit shall prepare and deliver a bill for the additional taxes plus interest as soon as practicable. The taxes and interest are due and become delinquent and incur penalties and interest as provided by law for ad valorem taxes imposed by the taxing unit if not paid before the next February 1 that is at least 20 days after the date the bill is delivered to the owner of the land.

(f) The sanctions provided by Subsection (a) do not apply if the change of use occurs as a result of a sale for right-of-way, a condemnation, or a transfer of the property to the state or a political subdivision of the state for use for a public purpose.

(g) The sanctions provided by Subsection (a) only apply to a change in the use of land if the land is located:

(1) in a municipality or the extraterritorial jurisdiction of a municipality that:

(A) has a population of more than 50,000; and

(B) is located wholly or partly in a county:

(i) with a population of more than three million; or

(ii) with a population of more than 275,000 that is adjacent to a county with a population of more than three million; or

(2) in the unincorporated area of a county described by Subdivision (1)(B).

SECTION 6. The change in law made by Sections 212.0155 and 232.0033, Local Government Code, as added by this Act, applies only to approval of a plat filed on or after the effective date of this Act. A plat filed 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 7. The change in law made by Section 5.016, Property Code, as added by this Act, applies only to an executory contract that binds a purchaser to purchase real property on or after January 1, 2008. An executory contract that binds a purchaser to purchase real property before that date is subject to the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 8. Section 23.88, Tax Code, as added by this Act, applies only to a change in the use of real property that occurs on or after January 1, 2008. A change in the use of real property that occurs before that date is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 9. 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, 2007.