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A BILL TO BE ENTITLED
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AN ACT
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relating to the operation of property owners' associations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 5.006, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (a-1) to read as |
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follows: |
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(a) In an action based on breach of a restrictive covenant |
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pertaining to real property or a statute pertaining to real |
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property subject to a restrictive covenant or to restrictive |
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covenants to which real property is subject, the court may [shall] |
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allow to a prevailing party [who asserted the action] reasonable |
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attorney's fees in addition to the party's costs and claim. |
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(a-1) In an action based on a breach of the dedicatory |
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instruments pertaining to an election of a property owners' |
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association board or a meeting of a property owners' association |
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board, the court may allow the prevailing party reasonable |
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attorney's fees in addition to the party's costs and claim. |
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SECTION 2. Section 5.012, Property Code, is amended by |
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amending Subsection (a) and adding Subsections (f) and (g) to read |
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as follows: |
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(a) A seller of residential real property that is subject to |
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membership in a property owners' association and that comprises not |
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more than one dwelling unit located in this state shall give to the |
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purchaser of the property a written notice that reads substantially |
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similar to the following: |
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NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE |
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PROPERTY AT (street address) (name of residential community) |
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As a purchaser of property in the residential community in |
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which this property is located, you are obligated to be a member of |
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a property owners' association. Restrictive covenants governing |
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the use and occupancy of the property and all [a] dedicatory |
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instruments [instrument] governing the establishment, maintenance, |
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or [and] operation of this residential community have been or will |
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be recorded in the Real Property Records of the county in which the |
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property is located. Copies of the restrictive covenants and |
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dedicatory instruments [instrument] may be obtained from the county |
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clerk. |
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You are obligated to pay assessments to the property owners' |
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association. The amount of the assessments is subject to change. |
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Your failure to pay the assessments could result in a lien on and |
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the foreclosure of your property. |
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Section 207.003, Property Code, entitles an owner to receive |
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copies of any document that governs the establishment, maintenance, |
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or operation of a subdivision, including, but not limited to, |
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restrictions, bylaws, rules and regulations, and a resale |
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certificate from a property owners' association. A resale |
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certificate contains information including, but not limited to, |
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statements specifying the amount and frequency of regular |
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assessments and the style and cause number of lawsuits to which the |
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property owners' association is a party. These documents must be |
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made available to you by the seller on your request. |
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Date: ____________________________________________ |
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Signature of Purchaser |
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(f) On the purchaser's request for a resale certificate from |
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the seller, the seller shall: |
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(1) promptly deliver a copy of a current resale |
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certificate if one has been issued for the property under Chapter |
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207; or |
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(2) if the seller does not have a current resale |
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certificate: |
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(A) request the property owners' association or |
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its agent to issue a resale certificate under Chapter 207; and |
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(B) promptly deliver a copy of the resale |
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certificate to the purchaser on receipt of the resale certificate |
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from the property owners' association or its agent. |
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(g) The seller or the purchaser, as agreed to by the |
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parties, shall pay the fee to the property owners' association or |
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its agent for issuing the resale certificate. The property owners' |
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association may not require payment for a resale certificate |
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requested under Chapter 207 until the certificate is available for |
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delivery. The association may not charge a fee if the certificate |
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is not provided in the time prescribed by Section 207.003(a). |
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SECTION 3. Section 82.102, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (f) to read as |
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follows: |
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(a) Unless otherwise provided by the declaration, the |
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association, acting through its board, may: |
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(1) adopt and amend bylaws; |
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(2) adopt and amend budgets for revenues, |
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expenditures, and reserves, and collect assessments for common |
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expenses from unit owners; |
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(3) hire and terminate managing agents and other |
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employees, agents, and independent contractors; |
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(4) institute, defend, intervene in, settle, or |
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compromise litigation or administrative proceedings in its own name |
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on behalf of itself or two or more unit owners on matters affecting |
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the condominium; |
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(5) make contracts and incur liabilities relating to |
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the operation of the condominium; |
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(6) regulate the use, maintenance, repair, |
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replacement, modification, and appearance of the condominium; |
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(7) adopt and amend rules regulating the use, |
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occupancy, leasing or sale, maintenance, repair, modification, and |
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appearance of units and common elements, to the extent the |
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regulated actions affect common elements or other units; |
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(8) cause additional improvements to be made as a part |
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of the common elements; |
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(9) acquire, hold, encumber, and convey in its own |
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name any right, title, or interest to real or personal property, |
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except common elements of the condominium; |
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(10) grant easements, leases, licenses, and |
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concessions through or over the common elements; |
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(11) impose and receive payments, fees, or charges for |
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the use, rental, or operation of the common elements and for |
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services provided to unit owners; |
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(12) impose interest and late charges for late |
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payments of assessments, returned check charges, and, if notice and |
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an opportunity to be heard are given in accordance with Subsection |
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(d), reasonable fines for violations of the declaration, bylaws, |
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and rules of the association; |
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(13) adopt and amend rules regulating the collection |
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of delinquent assessments and the application of payments; |
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(14) adopt and amend rules regulating the termination |
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of utility service to a unit, the owner of which is delinquent in |
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the payment of an assessment that is used, in whole or in part, to |
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pay the cost of that utility; |
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(15) impose reasonable charges for preparing, |
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recording, or copying declaration amendments, resale certificates, |
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or statements of unpaid assessments; |
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(16) enter a unit for bona fide emergency purposes |
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when conditions present an imminent risk of harm or damage to the |
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common elements, another unit, or the occupants; |
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(17) [assign its right to future income, including the
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right to receive common expense assessments, but only to the extent
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the declaration so provides;
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[(18)] suspend the voting privileges of or the use of |
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certain general common elements by an owner delinquent for more |
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than 30 days in the payment of assessments; |
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(18) [(19)] purchase insurance and fidelity bonds it |
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considers appropriate or necessary; |
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(19) [(20)] exercise any other powers conferred by the |
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declaration or bylaws; |
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(20) [(21)] exercise any other powers that may be |
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exercised in this state by a corporation of the same type as the |
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association; and |
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(21) [(22)] exercise any other powers necessary and |
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proper for the government and operation of the association. |
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(f) The association by resolution of the board of directors |
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may borrow money unless prohibited by the declaration, articles of |
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incorporation, bylaws, rules, or other restrictions. If the board |
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of directors issues a resolution under this subsection, the |
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association may assign the association's right to future income, |
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including the right to receive common expense assessments and |
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assign the association's lien rights, as collateral for the loan |
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authorized by the resolution. The association shall comply with |
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any member approval requirement in the association's declaration, |
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articles of incorporation, bylaws, rules, or other restrictions for |
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borrowing money, except that not more than 67 percent of all |
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outstanding votes are required to approve an authorization to |
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borrow money. |
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SECTION 4. Sections 82.111(c) and (i), Property Code, are |
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amended to read as follows: |
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(c) If the insurance described by Subsections (a) and (b) is |
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not reasonably available, the association shall cause notice of |
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that fact to be delivered or mailed to all unit owners and |
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lienholders. The declaration may require the association to carry |
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any other insurance, and the association in any event may carry any |
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other insurance the board considers appropriate to protect the |
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condominium, the association, or the unit owners. Insurance |
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policies carried under Subsection (a) may provide for commercially |
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reasonable deductibles as the board considers appropriate or |
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necessary. This section does not affect the right of a holder of |
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a mortgage on a unit to require a unit owner to acquire insurance in |
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addition to that provided by the association. |
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(i) Any portion of the condominium for which insurance is |
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required that is damaged or destroyed shall be promptly repaired or |
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replaced by the association unless the condominium is terminated, |
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repair or replacement would be illegal under any state or local |
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health or safety statute or ordinance, or at least 80 percent of the |
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unit owners, including each owner of a unit or assigned limited |
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common element that will not be rebuilt or repaired, vote to not |
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rebuild. A vote to not rebuild does not increase an insurer's |
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liability to loss payment obligation under a policy, and the vote |
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does not cause a presumption of total loss. The cost of repair or |
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replacement in excess of the insurance proceeds and reserves is a |
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common expense. Costs of repair or replacement incurred before any |
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insurance proceeds are available, or that are within the |
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association's deductible, shall be paid as determined by resolution |
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of the board of directors of the association, or, if the board does |
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not approve a resolution, the costs are a common expense. A |
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resolution regarding payment of costs under this subsection is |
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considered a dedicatory instrument and must be recorded in each |
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location in which the declaration is recorded. If the entire |
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condominium is not repaired or replaced, any insurance proceeds |
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attributable to the damaged common elements shall be used to |
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restore the damaged area to a condition compatible with the |
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remainder of the condominium, the insurance proceeds attributable |
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to units and limited common elements that are not rebuilt shall be |
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distributed to the owners of those units and the owners of the units |
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to which those limited common elements were assigned, or to their |
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mortgagees, as their interests may appear, and the remainder of the |
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proceeds shall be distributed to all the unit owners as their |
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interests may appear. If the unit owners vote to not rebuild any |
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unit, that unit's allocated interests shall be automatically |
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reallocated on the vote as if the unit had been condemned, and the |
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association shall prepare, execute, and record an amendment to the |
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declaration reflecting the reallocation. Section 82.068 governs |
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the distribution of insurance proceeds if the condominium is |
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terminated. |
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SECTION 5. Section 82.113(g), Property Code, is amended to |
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read as follows: |
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(g) The owner of a unit [used for residential purposes and] |
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purchased [by an association] at a foreclosure sale of the |
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association's lien for assessments may redeem the unit not later |
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than the 90th day after the date of the foreclosure sale. If the |
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association is the purchaser [To redeem the unit], the owner must |
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pay to the association to redeem the unit all amounts due the |
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association at the time of the foreclosure sale, interest from the |
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date of foreclosure sale to the date of redemption at the rate |
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provided by the declaration for delinquent assessments, reasonable |
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attorney's fees and costs incurred by the association in |
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foreclosing the lien, any assessment levied against the unit by the |
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association after the foreclosure sale, and any reasonable cost |
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incurred by the association as owner of the unit, including costs of |
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maintenance and leasing. If a party other than the association is |
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the purchaser, the redeeming owner must pay to the purchaser of the |
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unit at the foreclosure sale an amount equal to the amount bid at |
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the sale, interest on the bid amount computed from the date of the |
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foreclosure sale to the date of redemption at the rate of six |
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percent, any assessment paid by the purchaser after the date of |
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foreclosure, and any reasonable costs incurred by the purchaser as |
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the owner of the unit, including costs of maintenance and leasing. |
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The redeeming owner must also pay to the association all |
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assessments that are due as of the date of the redemption and |
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reasonable attorney's fees and costs incurred by the association in |
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foreclosing the lien. On redemption, the purchaser of the unit at |
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the foreclosure sale [association] shall execute a deed with no |
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warranty to the redeeming unit owner. The exercise of the right of |
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redemption is not effective against a subsequent purchaser or |
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lender for value without notice of the redemption after the |
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redemption period expires unless the redeeming unit owner records |
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the deed from the purchaser of the unit at the foreclosure sale |
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[association] or an affidavit stating that the owner has exercised |
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the right of redemption. A unit that has been redeemed remains |
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subject to all liens and encumbrances on the unit before |
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foreclosure. All rents and other income collected from the unit by |
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the purchaser of the unit at the foreclosure sale [association] |
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from the date of foreclosure sale to the date of redemption belong |
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to the purchaser of the unit at the foreclosure sale [association], |
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but the rents and income shall be credited against the redemption |
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amount. The purchaser of [An association purchasing] a unit at a |
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sale foreclosing an association's assessment [its] lien may not |
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transfer ownership of the unit during the redemption period to a |
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person other than a redeeming owner. |
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SECTION 6. Section 202.001(1), Property Code, is amended to |
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read as follows: |
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(1) "Dedicatory instrument" means each document |
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governing [instrument covering] the establishment, maintenance, or |
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[and] operation of a residential subdivision, planned unit |
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development, condominium or townhouse regime, or any similar |
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planned development. The term includes: |
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(A) a declaration or similar instrument |
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subjecting real property to: |
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(i) restrictive covenants, bylaws, or |
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similar instruments governing the administration or operation of a |
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property owners' association; |
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(ii)[, to] properly adopted rules and |
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regulations of the property owners' association; or |
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(iii)[, or to] all lawful amendments to the |
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covenants, bylaws, instruments, rules, or regulations; and |
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(B) bylaws, rules, regulations, or guidelines |
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adopted by a property owners' association under an instrument |
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described by Paragraph (A). |
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SECTION 7. Section 202.004, Property Code, is amended by |
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adding Subsections (d) and (e) to read as follows: |
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(d) In evaluating an alleged or potential violation of a |
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restrictive covenant, the property owners' association or other |
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representative designated by an owner of real property may, |
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notwithstanding any provision in a dedicatory instrument, grant a |
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variance and in doing so not enforce the restrictive covenant if the |
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property owners' association board, in the board's reasonable |
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judgment, determines: |
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(1) the property owners' association's position is not |
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sufficiently strong to justify taking any action or further action; |
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(2) the provision alleged to have been violated may be |
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inconsistent with applicable law; |
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(3) the alleged violation is not of such a material or |
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visible nature as to be objectionable to a reasonable person or to |
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justify expending the property owners' association's resources; |
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(4) enforcement of the provision is not in the |
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association's best interests, based on hardship, expense, or other |
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reasonable criteria; or |
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(5) the facts of the particular circumstances, such as |
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topography of the owner's land or unforeseen circumstances unique |
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to the particular owner, justify the variance. |
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(e) A determination by the property owners' association |
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board to grant a variance under Subsection (d) may not be considered |
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a waiver of the association's ability to enforce any dedicatory |
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instrument provision in the future. |
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SECTION 8. Section 202.006, Property Code, is amended to |
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read as follows: |
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Sec. 202.006. PUBLIC RECORDS. (a) A property owners' |
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association shall file all [the] dedicatory instruments |
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[instrument] in the real property records of each county in which |
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the property to which the dedicatory instruments relate [instrument
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relates] is located. |
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(b) A dedicatory instrument that is not filed in accordance |
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with this section has no effect until filed. |
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SECTION 9. Chapter 202, Property Code, is amended by adding |
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Sections 202.008, 202.010, 202.011, 202.012, 202.013, 202.014, and |
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202.015 to read as follows: |
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Sec. 202.008. ASSOCIATION'S RIGHT OF ENTRY. (a) Except as |
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provided by this section, a provision in a dedicatory instrument |
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that provides a property owners' association the right or authority |
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to enter onto an owner's private property to enforce or abate an |
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alleged violation of a restrictive covenant is void as against |
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public policy except for entry: |
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(1) to cure a violation that involves an immediate |
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threat to persons or property; |
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(2) after 10 days' written notice, to: |
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(A) perform a forced mow; or |
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(B) remove trash or debris; |
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(3) in circumstances in which it is reasonably |
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determined the property has been abandoned and not maintained for |
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at least 30 days; or |
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(4) during a development period, as defined by Section |
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202.011, to remove a sign that is prohibited by a dedicatory |
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instrument. |
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(b) This section does not prohibit a provision in a |
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dedicatory instrument allowing a property owners' association a |
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right of entry on the property of an owner that is limited to a |
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dedicated access or other easement contained in a final plat or an |
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easement filed of record. |
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(c) This section does not apply to: |
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(1) an association regulated under Title 7; or |
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(2) a property owners' association that funds through |
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assessments: |
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(A) insurance on residences; |
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(B) one or more utility payments for residences; |
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or |
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(C) exterior maintenance of residences. |
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Sec. 202.010. CERTAIN PARKING RESTRICTIONS PROHIBITED. (a) |
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A provision in a dedicatory instrument that restricts or prohibits |
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an owner from parking an operable, noncommercial, and personal |
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automobile or truck on a public street is void as against public |
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policy. |
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(b) A provision in a dedicatory instrument that restricts or |
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prohibits an owner from parking the owner's operable, |
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noncommercial, and personal automobile or truck in the owner's |
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driveway is void as against public policy. |
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(c) For the purposes of this section, "noncommercial |
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automobile" means a motor vehicle that may be legally driven on |
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public roads under state law and that exhibits no commercial |
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advertising other than standard dealer or manufacturer |
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advertising. |
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(d) For the purposes of this section, a recreational |
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vehicle, motor home, camper, all-terrain vehicle, trailer, or |
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watercraft, a tow truck, cement mixer, or other similar commercial |
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vehicle, or a vehicle that is more than 30 feet long is not |
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considered to be a personal automobile or truck. |
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(e) This section does not apply to: |
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(1) an association regulated under Title 7; or |
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(2) a property owners' association that funds through |
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assessments: |
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(A) insurance on residences; |
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(B) one or more utility payments for residences; |
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or |
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(C) exterior maintenance of residences. |
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Sec. 202.011. RIGHT OF FIRST REFUSAL PROHIBITED. (a) In |
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this section, "development period" means a period stated in a |
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declaration during which a declarant reserves: |
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(1) a right to facilitate the development, |
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construction, and marketing of the subdivision; and |
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(2) a right to direct the size, shape, and composition |
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of the subdivision. |
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(b) To the extent a restrictive covenant provides a right of |
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first refusal for the sale or lease of a residential unit or |
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residential lot in favor of the property owners' association or the |
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association's members, the covenant is void. |
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(c) This section does not apply to a restrictive covenant |
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that provides a right of first refusal in favor of a developer or |
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builder during the development period. |
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Sec. 202.012. REGULATION OF SOLAR ENERGY DEVICES. (a) In |
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this section, "solar energy device" has the meaning assigned by |
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Section 171.107, Tax Code. |
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(b) Except as otherwise provided by this section, a property |
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owners' association may not include or enforce a provision in a |
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dedicatory instrument that prohibits or restricts a property owner |
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from installing a solar energy device. |
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(c) A provision that violates Subsection (b) is void. |
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(d) This section does not prohibit the inclusion or |
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enforcement of a provision in a dedicatory instrument that |
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prohibits a solar energy device that: |
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(1) as adjudicated by a court: |
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(A) threatens the public health or safety; or |
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(B) violates a law; |
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(2) is located on property owned or maintained by the |
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property owners' association; |
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(3) is located on property owned in common by the |
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members of the property owners' association; or |
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(4) is located in an area on the property owner's |
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property other than: |
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(A) on the roof of the home; or |
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(B) in a fenced yard or patio maintained by the |
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property owner. |
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Sec. 202.013. RENTAL RESTRICTIONS. (a) Except as provided |
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by Subsection (b), a property owners' association may not amend a |
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dedicatory instrument to prohibit or restrict the rental of |
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property subject to the dedicatory instrument without the consent |
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of 51 percent or more of the total votes allocated to property |
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owners subject to the dedicatory instrument. |
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(b) An amendment to a dedicatory instrument may require: |
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(1) an owner to: |
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(A) exercise due diligence in not leasing to an |
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occupant who is a registered sex offender or who has a history of |
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violent crime; or |
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(B) terminate the possessory right of any tenant |
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or occupant who is a registered sex offender or who has a history of |
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violent crime; |
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(2) all leases to be subject to the dedicatory |
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instruments of the property owners' association; or |
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(3) a minimum lease term of not more than six months. |
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(c) This section does not apply to a dedicatory instrument |
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or to the amendment of a dedicatory instrument during a development |
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period, as defined by Section 202.011. |
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Sec. 202.014. RESTRICTIONS REQUIRING CAPITAL IMPROVEMENTS. |
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(a) A dedicatory instrument may not be amended to retroactively |
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require a person who owns property subject to the dedicatory |
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instrument at the time the amendment is adopted to make a capital |
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improvement to the owner's property that is not required before the |
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amendment. A provision of a dedicatory instrument requiring an |
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owner to make a capital improvement to the owner's property may only |
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be adopted by a vote of 67 percent or more of the total votes |
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allocated to property owners subject to the dedicatory instrument |
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and may be applicable only to owners purchasing property subject to |
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the dedicatory instrument after the provision is adopted. |
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(b) For the purposes of this section, "capital improvement" |
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means items such as additional tree plantings, additional sodding, |
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fence construction, hardscape installation, new construction, or |
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any similar capital improvement. The term does not include repair |
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or maintenance of existing improvements or the removal of |
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conditions that are in violation of a dedicatory instrument. |
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(c) This section does not apply to a dedicatory instrument |
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or to the amendment of a dedicatory instrument pertaining to a |
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capital improvement on a vacant lot owned by a developer or home |
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builder during a development period, as defined by Section 202.011. |
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Sec. 202.015. INJUNCTION; DAMAGES. (a) If a property |
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owners' association or other representative designated by the |
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property owners' association has violated, is violating, or is |
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threatening to violate this chapter, a member of the property |
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owners' association may bring a civil action against the property |
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owners' association but may not bring an action against an |
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association's officer or board member individually. |
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(b) A member of a property owners' association bringing an |
|
action under this section may seek: |
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(1) injunctive relief; |
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(2) damages in an amount equal to the greater of: |
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(A) actual damages arising from the violation; or |
|
(B) $1,500 for each violation; or |
|
(3) both injunctive relief and damages as provided in |
|
this subsection. |
|
(c) The court may increase an award under Subsection (b)(2) |
|
to an amount not to exceed three times the amount awarded under |
|
Subsection (b)(2) if the court finds that violations have occurred |
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with a frequency that constitutes a pattern or practice. |
|
(d) Each day a violation continues is not considered a |
|
separate violation for purposes of an assessment of damages. |
|
(e) The court may award damages to a property owners' |
|
association for a suit brought by a member of the property owners' |
|
association that the court finds frivolous or groundless in an |
|
amount that is not more than the greater of: |
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(1) three times the association's actual damages; or |
|
(2) $4,500. |
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(f) On or before the 30th day before the date a person files |
|
a suit under this section, the person must provide notice to the |
|
other party of the person's intent to file suit under this section. |
|
The notice must be sent certified mail, return receipt requested, |
|
or delivered by the United States Postal Service with signature |
|
confirmation service. |
|
SECTION 10. Chapter 202, Property Code, is amended by |
|
adding Section 202.018 to read as follows: |
|
Sec. 202.018. REGULATION OF DISPLAY OF CERTAIN RELIGIOUS |
|
ITEMS. (a) Except as otherwise provided by this section, a |
|
property owners' association may not enforce or adopt a restrictive |
|
covenant that prohibits a property owner or resident from |
|
displaying or affixing on the entry to the owner's or resident's |
|
dwelling one or more religious items that reflect a tenet of the |
|
owner's or resident's religion. |
|
(b) This section does not prohibit the enforcement or |
|
adoption of a covenant that, to the extent allowed by the |
|
constitution of this state and the United States, prohibits the |
|
display or affixing of a religious item on the entry to the owner's |
|
dwelling that: |
|
(1) threatens the public health or safety; |
|
(2) violates a law; |
|
(3) contains language, graphics, or any display that |
|
would be offensive to the ordinary person; |
|
(4) is in a location other than the entry door or door |
|
frame or extends past the outer edge of the door frame of the |
|
owner's or resident's dwelling; or |
|
(5) individually or in combination with each other |
|
religious item displayed or affixed on the entry door or door frame |
|
has a total size of greater than 25 square inches. |
|
(c) Except as otherwise provided by this section, this |
|
section does not authorize an owner or resident to use a material or |
|
color for an entry door or door frame of the owner's or resident's |
|
dwelling or make an alteration to the entry door or door frame that |
|
is not authorized by the restrictive covenants governing the |
|
dwelling. |
|
(d) A property owners' association may remove an item |
|
displayed in violation of a restrictive covenant permitted by this |
|
section. |
|
SECTION 11. Section 207.003(b), Property Code, is amended |
|
to read as follows: |
|
(b) A resale certificate under Subsection (a) must contain: |
|
(1) a statement of any right of first refusal, other |
|
than a right of first refusal that is prohibited by statute, and any |
|
[or] other restraint contained in the restrictions or restrictive |
|
covenants that restricts the owner's right to transfer the owner's |
|
property; |
|
(2) the frequency and amount of any regular |
|
assessments; |
|
(3) the amount and purpose of any special assessment |
|
that is due after the date the resale certificate is prepared; |
|
(4) the total of all amounts due and unpaid to the |
|
property owners' association that are attributable to the owner's |
|
property; |
|
(5) capital expenditures, if any, approved by the |
|
property owners' association for the property owners' association's |
|
current fiscal year; |
|
(6) the amount of reserves, if any, for capital |
|
expenditures; |
|
(7) the property owners' association's current |
|
operating budget and balance sheet; |
|
(8) the total of any unsatisfied judgments against the |
|
property owners' association; |
|
(9) the style and cause number of any pending lawsuit |
|
in which the property owners' association is a party, other than a |
|
lawsuit relating to unpaid property taxes of an individual member |
|
of the association [defendant]; |
|
(10) a copy of a certificate of insurance showing the |
|
property owners' association's property and liability insurance |
|
relating to the common areas and common facilities; |
|
(11) a description of any conditions on the owner's |
|
property that the property owners' association board has actual |
|
knowledge are in violation of the restrictions applying to the |
|
subdivision or the bylaws or rules of the property owners' |
|
association; |
|
(12) a summary or copy of notices received by the |
|
property owners' association from any governmental authority |
|
regarding health or housing code violations existing on the |
|
preparation date of the certificate relating to the owner's |
|
property or any common areas or common facilities owned or leased by |
|
the property owners' association; |
|
(13) the amount of any administrative transfer fee |
|
charged by the property owners' association for a change of |
|
ownership of property in the subdivision; |
|
(14) the name, mailing address, and telephone number |
|
of the property owners' association's managing agent, if any; [and] |
|
(15) a statement indicating whether the restrictions |
|
allow foreclosure of a property owners' association's lien on the |
|
owner's property for failure to pay assessments; and |
|
(16) a statement of all fees associated with the |
|
transfer of ownership, including a description of each fee, to whom |
|
each fee is paid, and the amount of each fee. |
|
SECTION 12. Chapter 209, Property Code, is amended by |
|
adding Sections 209.0035 and 209.0041 to read as follows: |
|
Sec. 209.0035. INJUNCTION; DAMAGES. (a) If a property |
|
owners' association or other representative designated by the |
|
property owners' association has violated, is violating, or is |
|
threatening to violate this chapter, a member of the property |
|
owners' association may bring a civil action against the property |
|
owners' association but may not bring an action against an |
|
association's officer or board member individually. |
|
(b) A member of a property owners' association bringing an |
|
action under this section may seek: |
|
(1) injunctive relief; |
|
(2) damages in an amount equal to the greater of: |
|
(A) actual damages arising from the violation; or |
|
(B) $1,500 for each violation; or |
|
(3) both injunctive relief and damages as provided in |
|
this subsection. |
|
(c) The court may increase an award under Subsection (b)(2) |
|
to an amount not to exceed three times the amount awarded under |
|
Subsection (b)(2) if the court finds that violations have occurred |
|
with a frequency that constitutes a pattern or practice. |
|
(d) Each day a violation continues is not considered a |
|
separate violation for purposes of assessment of damages. |
|
(e) The court may award damages to a property owners' |
|
association for a suit brought by a member of the property owners' |
|
association that the court finds frivolous or groundless in an |
|
amount that is not more than the greater of: |
|
(1) three times the association's actual damages; or |
|
(2) $4,500. |
|
(f) On or before the 30th day before the date a person files |
|
a suit under this section, the person must provide notice to the |
|
other party of the person's intent to file suit under this section. |
|
The notice must be sent certified mail, return receipt requested, |
|
or delivered by the United States Postal Service with signature |
|
confirmation service. |
|
Sec. 209.0041. AMENDMENT OF DEDICATORY INSTRUMENTS. (a) |
|
This section applies to a residential subdivision in which property |
|
owners are subject to mandatory membership in a property owners' |
|
association. |
|
(b) This section applies to all dedicatory instruments |
|
regardless of the date on which the dedicatory instruments were |
|
created. |
|
(c) This section does not apply to the amendment of a |
|
dedicatory instrument during a development period, as defined by |
|
Section 202.011. |
|
(d) To the extent of any conflict with another provision of |
|
this title, this section prevails. |
|
(e) Except as provided by Subsection (f), a dedicatory |
|
instrument may be amended only by a vote of 51 percent or more of the |
|
total votes allocated to property owners in the property owners' |
|
association, in addition to any governmental approval required by |
|
law. |
|
(f) A rule or guideline that affects land owned, leased, |
|
maintained, or otherwise controlled by the property owners' |
|
association may be adopted or amended by majority vote of the |
|
association board. A rule or guideline that impacts the use and |
|
enjoyment of personal or real property owned exclusively by the |
|
owner or that may result in a fine or loss of privilege of a member |
|
of the association may be adopted or amended only by a vote of 51 |
|
percent or more of the total votes allocated to property owners who |
|
cast votes by any permissible method in an association-wide vote. |
|
(g) A property owners' association board by majority vote |
|
may adopt ministerial, office-related procedural policies, such as |
|
payment plan guidelines under Section 209.0062, a collections |
|
policy, an enforcement policy, or other similar ministerial, |
|
office-related procedural policies. The policy may outline |
|
circumstances under which or the manner by which enforcement |
|
remedies may be carried out but may not otherwise impact the use and |
|
enjoyment of personal or real property owned exclusively by the |
|
owner. The policy may not: |
|
(1) create a power to: |
|
(A) levy a fine; or |
|
(B) impose a loss of a privilege on a member of |
|
the association; or |
|
(2) expand the association's powers beyond the powers |
|
granted by any other dedicatory instrument. |
|
(h) All ballots cast in a vote that results in an amendment |
|
to a restrictive covenant, bylaw, or rule are records of the |
|
association subject to inspection under Section 209.005. |
|
(i) This section supersedes any contrary requirement in a |
|
dedicatory instrument. |
|
(j) This section does not apply to a property owners' |
|
association that is subject to Chapter 552, Government Code, by |
|
application of Section 552.0036, Government Code. |
|
SECTION 13. Section 209.005, Property Code, is amended to |
|
read as follows: |
|
Sec. 209.005. ASSOCIATION RECORDS. (a) This section does |
|
not apply to a property owners' association that is subject to |
|
Chapter 552, Government Code, by application of Section 552.0036. |
|
(b) Notwithstanding a provision in a dedicatory instrument, |
|
a [A] property owners' association shall make the books and records |
|
of the association, including financial records, open to and |
|
reasonably available for examination by [to] an owner [in
|
|
accordance with Section B, Article 2.23, Texas Non-Profit
|
|
Corporation Act (Article 1396-2.23, Vernon's Texas Civil
|
|
Statutes)]. An owner is entitled to obtain from the association |
|
copies of information contained in the books and records. |
|
(c) [(a-1)
A property owners' association described by
|
|
Section 552.0036(2), Government Code, shall make the books and
|
|
records of the association, including financial records,
|
|
reasonably available to any person requesting access to the books
|
|
or records in accordance with Chapter 552, Government
|
|
Code.
Subsection (a) does not apply to a property owners'
|
|
association to which this subsection applies.
|
|
[(b)] An attorney's files and records relating to the |
|
association, excluding invoices requested by an owner under Section |
|
209.008(d), are not: |
|
(1) records of the association; |
|
(2) subject to inspection by the owner; or |
|
(3) subject to production in a legal proceeding. |
|
(d) In addition to the requirements of Subsection (b), a |
|
property owners' association shall make the association's books and |
|
records, including financial records and invoices, available in a |
|
building: |
|
(1) in which the books and records are appropriately |
|
stored; and |
|
(2) that is: |
|
(A) staffed during normal business hours; |
|
(B) accessible to members of the association |
|
during normal business hours; and |
|
(C) located on property commonly owned by the |
|
association within the boundaries of the subdivision governed by |
|
the association. |
|
(e) If a building described by Subsection (d) does not exist |
|
on property described by Subsection (d), the property owners' |
|
association shall make the books and records available in |
|
accordance with Subsections (g) and (h). |
|
(f) A party requesting association books or records shall |
|
submit the request in writing: |
|
(1) in person by hand delivery to a current board |
|
member; |
|
(2) to the mailing address of the association or |
|
authorized representative as provided on the most current |
|
management certificate filed under Section 209.004; or |
|
(3) in person to a managing agent as reflected on the |
|
most current management certificate filed under Section 209.004. |
|
(g) A property owners' association shall make books and |
|
records requested under Subsection (b) available to the requesting |
|
party within a reasonable time of the property owners' |
|
association's receipt of the request. |
|
(h) A reasonable time for providing information requested |
|
under Subsection (b) is considered to be 10 business days after the |
|
date the property owners' association receives a request, except as |
|
otherwise provided by this section. |
|
(i) If the property owners' association is unable to produce |
|
a requested book or record on or before the 10th business day after |
|
the date the request is received, the property owners' association |
|
must provide to the requestor written notice that: |
|
(1) informs the requestor that the property owners' |
|
association is unable to produce the information on or before the |
|
10th business day after the date of the receipt of the request; and |
|
(2) states a date by which the information will be |
|
available for inspection that occurs not later than the 30th day |
|
after the date notice under this subsection is given. |
|
(j) A property owners' association shall make books and |
|
records requested under this section available to the requestor in |
|
one or more of the following formats, as specified by the requestor: |
|
(1) an electronic format: |
|
(A) delivered to an electronic mail address |
|
provided by the requestor; or |
|
(B) delivered in a disc or other standard |
|
electronic format: |
|
(i) to the mailing address of the |
|
requestor; or |
|
(ii) if the requesting party does not |
|
provide a mailing address, to the address of the requestor's |
|
property in the subdivision; or |
|
(2) a hard-copy format: |
|
(A) delivered to the mailing address of the |
|
requestor; or |
|
(B) if the requesting party does not provide a |
|
mailing address: |
|
(i) mailed to the address of the requestor's |
|
property in the subdivision; or |
|
(ii) made available at a location not more |
|
than 25 miles from the boundary of the subdivision governed by the |
|
association. |
|
(k) This section does not require a property owners' |
|
association to staff a building described by Subsection (d). |
|
(l) A property owners' association may charge an owner for |
|
copies of the requested information in an amount that reasonably |
|
includes all costs related to reproducing the information, |
|
including costs of materials, labor, and overhead. |
|
(m) Any information maintained by the association that is |
|
released under this section may not identify an individual member |
|
of an association or an individual's personal financial |
|
information. Information may be released in an aggregate manner |
|
that would not identify an individual property owner. |
|
(n) All ballots cast in an election that results in an |
|
amendment to a dedicatory instrument, as required by Section |
|
209.0041, are records of the property owners' association subject |
|
to inspection under this section. |
|
(o) All ballots cast in an election of property owners' |
|
association board members are considered records of the association |
|
but may not be made available for inspection under this section |
|
except for the purposes of a recount under Section 209.0057(e) or |
|
without a court order or subpoena. The association shall take |
|
reasonable measures to safeguard the security and privacy of those |
|
ballots. |
|
(p) A property owners' association shall: |
|
(1) keep all records as to changes to the dedicatory |
|
instruments in perpetuity; |
|
(2) maintain and secure all ballots in |
|
association-wide elections for four years; and |
|
(3) maintain records related to financial matters of |
|
the association, including assessments, fines, foreclosures, and |
|
enforcement actions, for at least seven years. |
|
(q) A member of a property owners' association who is denied |
|
access to or copies of association books or records to which the |
|
member is entitled under this section may file a petition with the |
|
justice of the peace of a justice precinct in which all or part of |
|
the property that is governed by the association is located, |
|
requesting relief in accordance with this subsection. If the |
|
justice of the peace finds that the member is entitled to access to |
|
or copies of the records, the justice of the peace may grant one or |
|
more of the following remedies: |
|
(1) a judgment against the property owners' |
|
association for a penalty of not more than $1,500; |
|
(2) a judgment against the property owners' |
|
association for court costs and attorney's fees incurred in |
|
connection with seeking a remedy under this section; or |
|
(3) a judgment authorizing the owner or the owner's |
|
assignee to deduct the amounts awarded under Subdivisions (1) and |
|
(2) from any future regular or special assessments payable to the |
|
property owners' association. |
|
(r) For the purposes of this section, "business day" means a |
|
day other than Saturday, Sunday, or a state or federal holiday. |
|
(s) On or before the 10th day before the date a person files |
|
a suit under this section, the person must provide notice to the |
|
other party of the person's intent to file suit under this section. |
|
The notice must be sent certified mail, return receipt requested, |
|
or delivered by the United States Postal Service with signature |
|
confirmation service. |
|
SECTION 14. Chapter 209, Property Code, is amended by |
|
adding Sections 209.0051, 209.0056, 209.0057, 209.0058, 209.0059, |
|
209.00591, 209.00592, and 209.00593 to read as follows: |
|
Sec. 209.0051. OPEN BOARD MEETINGS. (a) This section does |
|
not apply to a property owners' association that is subject to |
|
Chapter 551, Government Code, by application of Section 551.0015. |
|
(b) In this section, "board meeting" means a deliberation |
|
between a quorum of the voting board of the property owners' |
|
association, or between a quorum of the voting board and another |
|
person, during which property owners' association business or |
|
policy over which the board has responsibility is discussed or |
|
considered, or during which the board takes formal action. The term |
|
does not include the gathering of a quorum of the board at a social |
|
function unrelated to the business of the association, or the |
|
attendance by a quorum of the board at a regional, state, or |
|
national convention, workshop, ceremonial event, or press |
|
conference, if formal action is not taken and any discussion of |
|
association business is incidental to the social function, |
|
convention, workshop, ceremonial event, or press conference. |
|
(c) Except as provided by this section, a meeting of the |
|
property owners' association board or a committee or subcommittee |
|
of the board is open to members of the property owners' association |
|
and shall be held in a county in which all or part of the property |
|
governed by the association is located or a county adjacent to that |
|
county. |
|
(d) The board shall keep a record of each regular, |
|
emergency, or special board meeting in the form of written minutes |
|
or an audio recording of the meeting. A record of a meeting must |
|
state the subject of each motion or inquiry, regardless of whether |
|
the board takes action on the motion or inquiry, and indicate each |
|
vote, order, decision, or other action taken by the board. The |
|
board shall make meeting records, including approved minutes, |
|
available to a member for inspection and copying on the member's |
|
written request to the board or the board's representative. The |
|
board shall approve the minutes of a board meeting not later than |
|
the next regular board meeting. |
|
(e) The board shall give members notice of the date, hour, |
|
place, and subject of a regular or special board meeting, including |
|
a general description of any matters to be brought up for |
|
deliberation in executive session. The notice shall be mailed to |
|
each member or posted: |
|
(1) at least 72 hours before the start of the meeting; |
|
and |
|
(2) in a conspicuous manner reasonably designed to |
|
provide notice to association members: |
|
(A) in a place located on: |
|
(i) the association's common property; or |
|
(ii) other conspicuously located property |
|
within the association, with the property owner's consent; and |
|
(B) on any Internet website maintained by the |
|
association. |
|
(f) If the board recesses a regular or special board meeting |
|
to continue the following regular business day, the board is not |
|
required to post notice of the continued meeting if the recess is |
|
taken in good faith and not to circumvent this section. If a |
|
regular or special board meeting is continued to the following |
|
regular business day, and on that following day the board continues |
|
the meeting to another day, the board shall give notice as required |
|
by this section of the meeting continued to that other day. |
|
(g) If at a regular, emergency, administrative, or special |
|
meeting, a member makes an inquiry regarding a subject for which |
|
notice has not been given as required by this section, the notice |
|
provisions of this section do not apply to: |
|
(1) a statement by the board of specific factual |
|
information given in response to the inquiry; or |
|
(2) a recitation of existing policy in response to the |
|
inquiry. |
|
(h) Any deliberation of or decision relating to the subject |
|
of an inquiry made under Subsection (g) shall be limited to a |
|
proposal to place the subject on the agenda for a subsequent board |
|
meeting. |
|
(i) In the event of a reasonably unforeseen emergency or |
|
urgent necessity that requires immediate board action, the board |
|
may meet in an emergency board meeting. Notice for an emergency |
|
board meeting may be given in at least one manner prescribed by |
|
Subsection (e)(2) at least two hours before the emergency session |
|
is convened and must clearly identify the emergency or urgent |
|
necessity for which the notice is given. A board in an emergency |
|
meeting may not consider fines, foreclosures, enforcement actions, |
|
increases in assessments, or any other foreseeable business or |
|
policy over which the board has responsibility. Any action taken in |
|
an emergency board meeting must be summarized orally, including an |
|
explanation of any known actual or estimated expenditures approved |
|
at the meeting, and documented in the minutes or tape recording of |
|
the next regular or special board meeting. |
|
(j) A property owners' association board may hold an |
|
administrative session, and that session is not subject to the |
|
notice requirements of this section. In any administrative session, |
|
the board may not take action regarding issuance of fines, |
|
commencement of foreclosure proceedings, levying of a special |
|
assessment, increases in assessments, or approval of items not |
|
previously approved in the association's budget. |
|
(k) Before the board calls an executive session, the board |
|
shall convene in a regular or special board meeting for which notice |
|
has been given as provided by this section. During that board |
|
meeting, the presiding board member may call an executive session |
|
by announcing that an executive session will be held to deliberate a |
|
matter described by Subsection (l) and identifying the specific |
|
subdivision of Subsection (l) under which the executive session |
|
will be held. A vote or other action item may not be taken in |
|
executive session. |
|
(l) A board of a property owners' association may meet in |
|
executive session, to which the members do not have access, to |
|
deliberate: |
|
(1) anticipated or pending litigation, settlement |
|
offers, or interpretations of the law with the association's legal |
|
counsel; |
|
(2) complaints or charges against or issues regarding |
|
a board member, or agent, employee, contractor, or other |
|
representative of the property owners' association; |
|
(3) a payment plan under Section 209.0062; |
|
(4) a foreclosure of a lien; |
|
(5) an enforcement action against a member of the |
|
association, including for nonpayment of amounts due; |
|
(6) the purchase, exchange, lease, or value of real |
|
property, if the board determines in good faith that deliberation |
|
in an open board meeting may have a detrimental effect on the |
|
association; |
|
(7) business and financial issues relating to the |
|
negotiation of a contract, if the board determines in good faith |
|
that deliberation in an open board meeting may have a detrimental |
|
effect on the position of the association; or |
|
(8) matters involving the invasion of privacy of an |
|
individual owner. |
|
Sec. 209.0056. NOTICE OF ELECTION OR ASSOCIATION VOTE. (a) |
|
On or before the 30th day before the date an election or vote is held |
|
by a property owners' association, the association shall give each |
|
owner of property in the property owners' association written |
|
notice of the election or vote. |
|
(b) This section supersedes any contrary requirement in a |
|
dedicatory instrument. |
|
(c) This section does not apply to a property owners' |
|
association that is subject to Chapter 552, Government Code, by |
|
application of Section 552.0036, Government Code. |
|
Sec. 209.0057. TABULATION OF VOTES. (a) This section does |
|
not apply to a property owners' association that is subject to |
|
Chapter 552, Government Code, by application of Section 552.0036, |
|
Government Code. |
|
(b) On the written petition of owners having at least 10 |
|
percent of all voting interests in a property owners' association |
|
for a vote tabulation under this subsection, received by the |
|
association at least 15 days before the first date that votes may be |
|
cast, to tabulate the votes in any matter subject to a vote of the |
|
members of a mandatory property owners' association, the |
|
association shall enter into a contract for the services of a person |
|
who is not a member of the association or related to a member of the |
|
association board within the third degree by consanguinity or |
|
affinity, as determined under Chapter 573, Government Code, and who |
|
is a current or former: |
|
(1) county judge; |
|
(2) county elections administrator; |
|
(3) justice of the peace; or |
|
(4) county voter registrar. |
|
(c) The name of each person tabulating votes of the members |
|
of a property owners' association and the results of the tabulation |
|
must be reflected in the minutes of the association. |
|
(d) Any owner may, not later than the fifth day after the |
|
date of the initial tabulation of votes, require a recount of the |
|
votes. A demand for a recount must be submitted in writing either: |
|
(1) in person to a property owners' association board |
|
member; |
|
(2) by certified mail, return receipt requested, or by |
|
delivery by the United States Postal Service with signature |
|
confirmation service to the association's mailing address on the |
|
latest management certificate filed under Section 209.004; or |
|
(3) in person to the association's managing agent as |
|
reflected on the latest management certificate filed under Section |
|
209.004. |
|
(e) The property owners' association shall, at the expense |
|
of the owner requesting the recount, retain for the purpose of |
|
performing the recount, the services of a person who is not a member |
|
of the association or related to a member of the association board |
|
within the third degree by consanguinity or affinity, as determined |
|
under Chapter 573, Government Code, and who is a current or former: |
|
(1) county judge; |
|
(2) county elections administrator; |
|
(3) justice of the peace; or |
|
(4) county voter registrar. |
|
(f) Any recount under Subsection (d) must be performed on or |
|
before the 30th day after the date of receipt of a request for and |
|
payment for a recount in accordance with Subsections (d) and (e). |
|
If the recount changes the results of the election, the association |
|
shall reimburse the requesting owner for the cost of the recount. |
|
Any action taken by the board in the period between the initial |
|
election vote tally and the completion of the recount may not be |
|
affected by any recount. |
|
Sec. 209.0058. BALLOTS. (a) Any vote cast in an election |
|
or vote by a member of a property owners' association must be in |
|
writing and signed by the member. |
|
(b) Electronic votes cast under Section 209.00593 |
|
constitute written and signed ballots. |
|
(c) In an association-wide election, written and signed |
|
ballots are not required for uncontested races. |
|
Sec. 209.0059. RIGHT TO VOTE. (a) A provision in a |
|
dedicatory instrument that would disqualify a property owner from |
|
voting in an association election of board members or on any matter |
|
concerning the rights or responsibilities of the owner is void. |
|
(b) This section does not apply to a property owners' |
|
association that is subject to Chapter 552, Government Code, by |
|
application of Section 552.0036, Government Code. |
|
Sec. 209.00591. PROXY VOTING. A provision in any |
|
dedicatory instrument that provides for a proxy vote in any matter |
|
subject to a vote of the members of the property owners' association |
|
is void. |
|
Sec. 209.00592. BOARD MEMBERSHIP. (a) Except as provided |
|
by Subsection (b), a provision in a dedicatory instrument that |
|
restricts a property owner's right to run for a position on the |
|
board of the property owners' association is void. |
|
(b) If a board is presented with written, documented |
|
evidence from a database or other record maintained by a |
|
governmental law enforcement authority that a board member has been |
|
convicted of a felony or crime involving moral turpitude, the board |
|
member is immediately ineligible to serve on the board of the |
|
property owners' association, automatically considered removed |
|
from the board, and prohibited from future service on the board. |
|
(c) This section does not apply during a period stated in a |
|
declaration during which a declarant reserves a right to appoint |
|
and remove officers and directors of the property owners' |
|
association. |
|
Sec. 209.00593. VOTING; QUORUM. (a) The voting rights of |
|
an owner may be cast or given: |
|
(1) in person at a meeting of the property owners' |
|
association; |
|
(2) by absentee ballot in accordance with this |
|
section; or |
|
(3) by electronic ballot in accordance with this |
|
section. |
|
(b) An absentee or electronic ballot: |
|
(1) may be counted as an owner present and voting for |
|
the purpose of establishing a quorum only for items appearing on the |
|
ballot; |
|
(2) may not be counted, even if properly delivered, if |
|
the owner attends any meeting to vote in person, so that any vote |
|
cast at a meeting by a property owner supersedes any vote submitted |
|
by absentee or electronic ballot previously submitted for that |
|
proposal; and |
|
(3) may not be counted on the final vote of a proposal |
|
if the motion was amended at the meeting to be different from the |
|
exact language on the absentee or electronic ballot. |
|
(c) A solicitation for votes by absentee ballot must |
|
include: |
|
(1) an absentee ballot that contains each proposed |
|
action and provides an opportunity to vote for or against each |
|
proposed action; |
|
(2) instructions for delivery of the completed |
|
absentee ballot, including the delivery location; and |
|
(3) the following language: "By casting your vote via |
|
absentee ballot you will forgo the opportunity to consider and vote |
|
on any action from the floor on these proposals, if a meeting is |
|
held. This means that if there are amendments to these proposals |
|
your votes will not be counted on the final vote on these measures. |
|
If you desire to retain this ability, please attend any meeting in |
|
person. You may submit an absentee ballot and later choose to |
|
attend any meeting in person, in which case any in-person vote will |
|
prevail." |
|
(d) For the purposes of this section, "electronic ballot" |
|
means a ballot: |
|
(1) given by: |
|
(A) electronic mail; |
|
(B) facsimile; or |
|
(C) posting on an Internet website; |
|
(2) for which the identity of the property owner |
|
submitting the ballot can be confirmed; and |
|
(3) for which the property owner may receive a receipt |
|
of the electronic transmission and receipt of the owner's ballot. |
|
(e) If an electronic ballot is posted on an Internet |
|
website, a notice of the posting shall be sent to each owner that |
|
contains instructions on obtaining access to the posting on the |
|
website. |
|
(f) This section supersedes any contrary provision in a |
|
dedicatory instrument. |
|
(g) This section does not apply to a property owners' |
|
association that is subject to Chapter 552, Government Code, by |
|
application of Section 552.0036, Government Code. |
|
SECTION 15. Section 209.006, Property Code, is amended by |
|
amending Subsection (b) and adding Subsections (c), (d), (e), and |
|
(f) to read as follows: |
|
(b) The notice must: |
|
(1) describe the violation or property damage that is |
|
the basis for the suspension action, charge, or fine and state any |
|
amount due the association from the owner; [and] |
|
(2) except as provided by Subsection (d), inform the |
|
owner that the owner: |
|
(A) is entitled to a reasonable period to cure |
|
the violation and avoid the fine [or suspension unless the owner was
|
|
given notice and a reasonable opportunity to cure a similar
|
|
violation within the preceding six months]; and |
|
(B) may request a hearing under Section 209.007 |
|
on or before the 30th day after the date notice was delivered to the |
|
owner; |
|
(3) specify the date by which the owner must cure the |
|
violation if the violation is of a curable nature and does not pose |
|
a threat to public health or safety; |
|
(4) specify the dollar amount of any fine the |
|
association seeks to levy; |
|
(5) specify each provision of the dedicatory |
|
instrument the owner is alleged to have violated; and |
|
(6) be sent by certified mail, return receipt |
|
requested, or delivered by the United States Postal Service with |
|
signature confirmation service to the owner at the owner's last |
|
known address as shown on the association's records [receives the
|
|
notice]. |
|
(c) The date specified in the notice under Subsection (b)(3) |
|
must provide a reasonable period of at least 30 days for the owner |
|
to cure the violation if the violation is of a curable nature and |
|
does not pose a threat to public health or safety. |
|
(d) Subsections (a) and (b) do not apply to a violation for |
|
which the owner has been previously given notice under this section |
|
and the opportunity to exercise any rights available under this |
|
section in the preceding six months. |
|
(e) If the property owner does not cure the violation in the |
|
time provided under Subsection (c) and does not request a hearing |
|
under Subsection (b)(2)(B), the property owners' association may |
|
assess the fine and shall provide notice of the assessment to the |
|
owner. If the property owner cures the violation before the |
|
expiration period for cure specified under Subsection (c), any fine |
|
assessed for the violation is void. |
|
(f) For purposes of this section, a violation is considered |
|
a threat to public health or safety if the violation could |
|
materially affect the physical health or safety of an ordinary |
|
resident. |
|
SECTION 16. Chapter 209, Property Code, is amended by |
|
adding Sections 209.0061, 209.0062, 209.0063, 209.0064, and |
|
209.0065 to read as follows: |
|
Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed by |
|
the property owners' association must be reasonable in the context |
|
of the nature and frequency of the violation and the effect of the |
|
violation on the subdivision as a whole. If the association allows |
|
fines for a continuing violation to accumulate against a lot or an |
|
owner, the association must establish a reasonable maximum fine |
|
amount for a continuing violation at which point the total fine |
|
amount is capped. |
|
(b) If a lot occupant other than the owner violates a |
|
provision of the dedicatory instrument, the property owners' |
|
association, in addition to exercising any of the association's |
|
powers against the owner, may assess a fine directly against the |
|
nonowner occupant in the same manner as provided for an owner but |
|
may not require payment from both the owner and a nonowner occupant |
|
for the same violation. |
|
(c) If the property owners' association assesses a fine |
|
against a nonowner occupant under this section, the notice |
|
provisions of Section 209.006 and the hearing provisions of Section |
|
209.007 apply to the nonowner occupant in the same manner as those |
|
provisions apply to an owner. |
|
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN |
|
ASSESSMENTS. (a) A property owners' association shall adopt |
|
reasonable guidelines to establish an alternative payment schedule |
|
by which an owner may make partial payments to the property owners' |
|
association for delinquent regular or special assessments or any |
|
other amount owed to the association without accruing additional |
|
monetary penalties. For purposes of this section, monetary |
|
penalties do not include reasonable costs associated with |
|
administering the payment plan or interest. |
|
(b) For any approved special assessment in an amount greater |
|
than the equivalent of the sum of all regular assessments payable in |
|
the year the special assessment is approved, a property owners' |
|
association shall allow partial payments of the special assessment |
|
for 12 months unless the property owner requests a shorter payment |
|
period in writing at the time the property owner requests an |
|
alternative payment plan. A property owners' association may offer |
|
a reasonable discount for an owner making a one-time lump sum |
|
payment of the special assessment. |
|
(c) For any approved special assessment in an amount greater |
|
than the equivalent of one-half the sum of all regular assessments |
|
payable in the year the special assessment is approved, a property |
|
owners' association shall allow partial payments of the special |
|
assessment for six months unless the property owner requests a |
|
shorter payment period in writing at the time the property owner |
|
requests an alternative payment plan. A property owners' |
|
association may offer a reasonable discount to an owner making a |
|
one-time lump sum payment of the special assessment. |
|
(d) A property owners' association is not required to allow |
|
a payment plan for any amount that extends more than 12 months from |
|
the date of the owner's request for a payment plan or to enter into a |
|
payment plan with an owner who failed to honor the terms of a |
|
previous payment plan during the five years following an owner's |
|
default under a previous payment plan. |
|
(e) A property owners' association shall file the |
|
association's guidelines under this section in the real property |
|
records of each county in which the subdivision is located. |
|
(f) A property owners' association's failure to file as |
|
required by this section the association's guidelines in the real |
|
property records of each county in which the subdivision is located |
|
does not prohibit a property owner from receiving an alternative |
|
payment schedule by which the owner may make partial payments to the |
|
property owners' association for delinquent regular or special |
|
assessments or any other amount owed to the association without |
|
accruing additional monetary penalties, as defined by Subsection |
|
(a). |
|
Sec. 209.0063. PRIORITY OF PAYMENTS. Unless otherwise |
|
provided in writing by the property owner at the time payment is |
|
made, a payment received by a property owners' association from the |
|
owner shall be applied to the owner's debt in the following order of |
|
priority: |
|
(1) any delinquent assessment; |
|
(2) any current assessment; |
|
(3) any attorney's fees incurred by the association |
|
associated solely with assessments or any other charge that could |
|
provide the basis for foreclosure; |
|
(4) any fines assessed by the association; |
|
(5) any attorney's fees incurred by the association |
|
that are not subject to Subdivision (3); and |
|
(6) any other amount owed to the association. |
|
Sec. 209.0064. COLLECTIONS. A property owners' association |
|
must bring suit or otherwise initiate against an owner a collection |
|
action authorized by the dedicatory instruments or other law on or |
|
before the 10th anniversary of the date on which the cause of action |
|
for collection of the debt accrues. Section 16.004, Civil Practice |
|
and Remedies Code, does not apply to the collection of a debt owed |
|
by an owner to a property owners' association. |
|
Sec. 209.0065. REGULATION OF CERTAIN ROOFING MATERIALS. A |
|
property owners' association may not include or enforce a provision |
|
in a dedicatory instrument that prohibits or restricts a property |
|
owner who is otherwise authorized to install shingles on the roof of |
|
the owner's property from installing shingles primarily designed to |
|
be wind and hail resistant and provide heating and cooling |
|
efficiencies greater than customary composite shingles if the |
|
installed shingles: |
|
(1) resemble the shingles used or otherwise authorized |
|
for use on property in the subdivision; |
|
(2) are more durable and of equal or superior quality |
|
to the shingles described by Subdivision (1); and |
|
(3) match the aesthetics of the property surrounding |
|
the owner's property. |
|
SECTION 17. Section 209.007, Property Code, is amended by |
|
amending Subsection (a) and adding Subsections (f), (g), (h), (i), |
|
and (j) to read as follows: |
|
(a) If the owner is entitled to an opportunity to cure the |
|
violation, the owner has the right to submit a written request for a |
|
hearing to discuss and verify facts and resolve the matter in issue |
|
before a committee appointed by the board of the property owners' |
|
association or before the board if the board does not appoint a |
|
committee. The written request must contain a statement of the |
|
grounds on which the owner believes the owner is not in violation |
|
and citations of the dedicatory instrument for each violation |
|
alleged. |
|
(f) If the parties fail to reach agreement in or after the |
|
hearing described by this section, the property owners' association |
|
must file suit to uphold and enforce any fine sought to be assessed. |
|
The suit must be filed in a justice court or small claims court not |
|
later than the 180th day after the date of the hearing described by |
|
this section or an appeal under Subsection (b), whichever is later. |
|
The complaint must list each violation and be accompanied by |
|
citation of the dedicatory instrument for each violation. If the |
|
property owners' association does not file suit within the time |
|
prescribed by this subsection, the association's right to collect |
|
the fine is considered waived. |
|
(g) Not later than the 30th day after the date a suit is |
|
filed under Subsection (f), the court shall hold an evidentiary |
|
hearing on the matter. The parties are not entitled to any |
|
discovery. |
|
(h) At the evidentiary hearing, the property owners' |
|
association has the burden of proving by a preponderance of the |
|
evidence that the property owner has violated a restrictive |
|
covenant. |
|
(i) The court shall determine whether a violation has |
|
occurred and, if so, whether the fine for the violation is |
|
reasonable considering the type, duration, and severity of the |
|
violation. |
|
(j) If the court finds that the position taken by either |
|
party is groundless or is taken in bad faith, the court may award |
|
the prevailing party's attorney's fees. |
|
SECTION 18. Chapter 209, Property Code, is amended by |
|
adding Section 209.0091 to read as follows: |
|
Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except |
|
as provided by Subsection (c), a property owners' association may |
|
not foreclose a property owners' association assessment lien unless |
|
the association first obtains a court order in an application for |
|
expedited foreclosure under the rules adopted by the supreme court |
|
under Subsection (b). A property owners' association may use the |
|
procedure described by this subsection to foreclose any lien |
|
described by the association's dedicatory instruments. |
|
(b) The supreme court, as an exercise of the court's |
|
authority under Section 74.024, Government Code, shall adopt rules |
|
establishing expedited foreclosure proceedings for use by a |
|
property owners' association in foreclosing an assessment lien of |
|
the association. The rules adopted under this subsection must be |
|
substantially similar to the rules adopted by the supreme court |
|
under Section 50(r), Article XVI, Texas Constitution. |
|
(c) Expedited foreclosure is not required under this |
|
section if the owner of the property that is subject to foreclosure |
|
agrees in writing at the time the foreclosure is sought to waive |
|
expedited foreclosure under this section. A waiver under this |
|
subsection may not be required as a condition of the transfer of |
|
title to real property. |
|
(d) A provision granting a right to foreclose a lien on real |
|
property for unpaid amounts due to a property owners' association |
|
may be removed from a dedicatory instrument or adopted in a |
|
dedicatory instrument by a vote of 51 percent or more of the total |
|
votes allocated to property owners in the property owners' |
|
association. Owners holding at least 10 percent of all voting |
|
interests in the property owners' association may petition the |
|
association and require a special meeting to be called for the |
|
purposes of taking a vote for the purposes of this section. |
|
SECTION 19. Section 209.010(a), Property Code, is amended |
|
to read as follows: |
|
(a) A property owners' association that conducts a |
|
foreclosure sale of an owner's lot must send to the lot owner not |
|
later than the 30th day after the date of the foreclosure sale: |
|
(1) a written notice stating the date and time the sale |
|
occurred and informing the lot owner of the owner's right to redeem |
|
the property under Section 209.011; and |
|
(2) a copy of Section 209.011. |
|
SECTION 20. Chapter 209, Property Code, is amended by |
|
adding Section 209.014 to read as follows: |
|
Sec. 209.014. RESTRICTIONS ON OWNERSHIP VOID. A property |
|
owners' association may not prohibit an owner from owning multiple |
|
properties governed by the property owners' association if the |
|
cumulative voting rights of all of that owner's properties are 25 |
|
percent or less of all voting interests in the property owners' |
|
association. This section does not apply during a development |
|
period as defined by Section 202.011. |
|
SECTION 21. Section 211.002(a), Property Code, is amended |
|
to read as follows: |
|
(a) This chapter applies only to a residential real estate |
|
subdivision or any unit or parcel of a subdivision to which another |
|
chapter in this title that provides a procedure under which a |
|
subdivision's restrictions may be amended does not apply [located
|
|
in whole or in part within an unincorporated area of a county if the
|
|
county has a population of less than 65,000]. |
|
SECTION 22. (a) Section 171.1011, Tax Code, is amended by |
|
adding Subsection (g-7) to read as follows: |
|
(g-7) A taxable entity that is a property owners' |
|
association shall exclude from its total revenue, to the extent |
|
included under Subsection (c)(1)(A), (c)(2)(A), or (c)(3), |
|
assessments received by the association and used for the benefit of |
|
the residential subdivision. In this subsection, "assessment," |
|
"property owners' association," and "residential subdivision" have |
|
the meanings assigned by Section 209.002, Property Code. |
|
(b) This section applies only to a report originally due on |
|
or after the effective date of this section. |
|
(c) This section takes effect January 1, 2010. |
|
SECTION 23. Section 202.004(c), Property Code, is repealed. |
|
SECTION 24. (a) Section 82.111(i), Property Code, as |
|
amended by this Act, applies only to payment of costs incurred on or |
|
after the effective date of this Act. Payment of costs incurred |
|
before the effective date of this Act are governed by the law in |
|
effect immediately before the effective date of this Act, and that |
|
law is continued in effect for that purpose. |
|
(b) Section 82.113(g), Property Code, as amended by this |
|
Act, applies only to a condominium unit sold at a foreclosure sale |
|
on or after the effective date of this Act. A unit sold at a |
|
foreclosure sale before the effective date of this Act 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 25. (a) Section 5.006(a), Property Code, as |
|
amended by this Act, and the repeal by this Act of Section |
|
202.004(c), Property Code, apply only to an action filed on or after |
|
the effective date of this Act. An action filed before the |
|
effective date of this Act 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. |
|
(b) Section 5.012, Property Code, as amended by this Act, |
|
applies only to a sale of property that occurs on or after the |
|
effective date of this Act. For the purposes of this section, a |
|
sale of property occurs before the effective date of this Act if the |
|
executory contract binding the purchaser to purchase the property |
|
is executed before that date. A sale of property that occurs 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) Sections 202.015 and 209.0035, Property Code, as added |
|
by this Act, apply only to a cause of action that accrues on or after |
|
the effective date of this Act. A cause of action that accrues |
|
before the effective date of this Act 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. |
|
(d) Section 202.006, Property Code, as amended by this Act, |
|
and Sections 202.008, 202.010, 202.011, 202.012, 202.014, |
|
209.0059, 209.00591, 209.00592(a), 209.0065, and 209.014, Property |
|
Code, as added by this Act, apply to a provision in a dedicatory |
|
instrument or a restrictive covenant enacted before, on, or after |
|
the effective date of this Act, except that any action taken before |
|
the effective date of this Act based on an unfiled dedicatory |
|
instrument is not invalidated by Section 202.006, Property Code, as |
|
amended by this Act. |
|
(e) Section 209.005, Property Code, as amended by this Act, |
|
applies only to a request for information received by a property |
|
owners' association on or after the effective date of this Act. A |
|
request for information received by a property owners' association |
|
before the effective date of this Act 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. |
|
(f) Sections 209.0061, 209.0062, and 209.0064, Property |
|
Code, as added by this Act, apply only to an assessment or other |
|
debt that becomes due on or after the effective date of this Act. An |
|
assessment or other debt that becomes due before the effective date |
|
of this Act 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. |
|
(g) Section 209.0063, Property Code, as added by this Act, |
|
applies only to a payment received by a property owners' |
|
association on or after the effective date of this Act. A payment |
|
received by a property owners' association before the effective |
|
date of this Act 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. |
|
(h) Section 209.0091, Property Code, as added by this Act, |
|
applies only to a foreclosure sale that occurs after January 1, |
|
2010. A foreclosure sale that occurs on or before January 1, 2010, |
|
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. |
|
(i) Section 209.010(a), Property Code, as amended by this |
|
Act, applies only to a foreclosure sale conducted on or after the |
|
effective date of this Act. A foreclosure sale conducted before the |
|
effective date of this Act 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 26. Not later than January 1, 2010, each property |
|
owners' association shall present for recording with the county |
|
clerk as prescribed by Section 202.006, Property Code, as amended |
|
by this Act, each dedicatory instrument governing the association |
|
that has not been previously recorded in the real property records |
|
of the county. |
|
SECTION 27. Not later than January 1, 2010, the Supreme |
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Court of Texas shall adopt rules of civil procedure under Section |
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209.0091, Property Code, as added by this Act. |
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SECTION 28. The changes in law provided for in this Act do |
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not apply to mixed use master associations founded before January |
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1, 1974, and that do not have governing documents that allow for the |
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imposition of fines. |
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SECTION 29. This Act takes effect January 1, 2010. |