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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 209.005, Property Code, is amended to |
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read as follows: |
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Sec. 209.005. ASSOCIATION RECORDS. (a) Except as provided |
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by Subsection (b), this section applies to all property owners' |
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associations and controls over other law not specifically |
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applicable to a property owners' association. |
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(b) This section does not apply to a property owners' |
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association that is subject to Chapter 552, Government Code, by |
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application of Section 552.0036, Government Code. |
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(c) Notwithstanding a provision in a dedicatory instrument, |
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a [A] property owners' association shall make the books and records |
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of the association, including financial records, open to and |
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reasonably available for examination by [to] an owner, or an |
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owner's attorney or certified public accountant, in accordance with |
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this section. An owner is entitled to obtain from the association |
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copies of information contained in the books and records [Section
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B, Article 2.23, Texas Non Profit Corporation Act (Article 1396
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2.23, Vernon's Texas Civil Statutes)]. |
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(d) [(a-1)] A property owners' association described by |
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Section 552.0036(2), Government Code, shall make the books and |
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records of the association, including financial records, |
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reasonably available to any person requesting access to the books |
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or records in accordance with Chapter 552, Government Code[.
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Subsection (a) does not apply to a property owners'
association to
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which this subsection applies]. |
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(e) [(b)] An attorney's files and records relating to the |
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association, excluding invoices requested by an owner under Section |
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209.008(d), are not: |
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(1) records of the association; |
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(2) subject to inspection by the owner; or |
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(3) subject to production in a legal proceeding. |
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(f) An owner or the owner's attorney or certified public |
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accountant must submit a written request for access or information |
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under Subsection (c) by certified mail, with sufficient |
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particularity detailing the association's books and records |
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requested, to the mailing address of the association or authorized |
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representative as reflected on the most current management |
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certificate filed under Section 209.004. The request must contain |
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an election either to inspect the books and records before |
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obtaining copies or to have the property owners' association |
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forward copies of the requested books and records and: |
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(1) if an inspection is requested, the association, on |
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or before the 10th business day after the date the association |
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receives the request, shall send written notice of dates during |
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normal business hours that the owner may inspect the requested |
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books and records to the extent those books and records are required |
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to be retained by the association; or |
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(2) if copies of identified books and records are |
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requested, the association shall, to the extent those books and |
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records are required to be retained by the association, produce the |
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requested books and records for the requesting party on or before |
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the 10th business day after the date the association receives the |
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request, except as otherwise provided by this section. |
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(g) If the property owners' association is unable to produce |
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the books or records requested under Subsection (f) on or before the |
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10th business day after the date the association receives the |
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request, the association must provide to the requestor written |
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notice that: |
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(1) informs the requestor that the association is |
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unable to produce the information on or before the 10th business day |
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after the date the association received the request; and |
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(2) states a date by which the information will be sent |
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or made available for inspection to the requesting party that is not |
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later than the 30th business day after the date notice under this |
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subsection is given. |
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(h) If an inspection is requested or required, the |
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inspection shall take place at a mutually agreed on time during |
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normal business hours, and the requesting party shall identify the |
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books and records for the association to copy and forward to the |
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requesting party. |
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(i) A property owners' association may produce books and |
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records requested under this section in hard copy, electronic, or |
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other format reasonably available to the association. |
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(j) An owner is responsible for costs related to compilation |
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and reproduction of the requested information in an amount that |
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reasonably includes all costs related to compilation and |
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reproduction of the information, including costs of materials, |
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labor, and overhead. The association may require advance payment |
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of the estimated costs of compilation and reproduction. If the |
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estimated costs are lesser or greater than actual costs, the |
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association shall submit a final invoice to the owner on or before |
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the 30th business day after the date the information is delivered to |
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the requestor. If the final invoice includes additional amounts |
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due from the owner, the additional amounts, if not reimbursed to the |
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association before the 30th business day after the date the invoice |
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is sent to the owner, may be added to the owner's account as an |
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assessment. If the estimated costs exceeded the final invoice |
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amount, the owner is entitled to a refund, and the refund shall be |
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issued to the owner not later than the 30th business day after the |
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date the invoice is sent to the owner. |
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(k) Except as provided in Subsection (l), the association is |
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not required, other than in meeting minutes, to release or allow |
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inspection of any books or records that identify the dedicatory |
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instrument violation history of an individual owner of an |
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association, an owner's personal financial information, including |
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records of payment or nonpayment of amounts due the association, an |
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owner's contact information, other than the owner's address, or |
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information related to an employee of the association, including |
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personnel files. Information may be released in an aggregate or |
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summary manner that would not identify an individual property |
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owner. |
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(l) The books and records described by Subsection (k) shall |
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be released or made available for inspection if: |
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(1) the express written approval of the owner whose |
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records are the subject of the request for inspection is provided to |
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the association; or |
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(2) a court orders the release of the books and records |
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or orders that the books and records be made available for |
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inspection. |
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(m) A property owners' association may adopt a document |
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retention policy that supersedes this subsection. In the absence |
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of the adoption of a document retention policy, a property owners' |
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association shall retain books and records as follows: |
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(1) certificates of formation, bylaws, restrictive |
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covenants, and all amendments to the certificates of formation, |
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bylaws, and covenants shall be retained permanently; |
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(2) financial books and records shall be retained for |
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seven years; |
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(3) account records of current owners shall be |
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retained for five years; |
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(4) contracts with a term of one year or more shall be |
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retained for four years after the expiration of the contract term; |
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(5) minutes of meetings of the owners and the board |
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shall be retained for seven years; and |
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(6) tax returns and audit records shall be retained |
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for seven years. |
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(n) Subsection (m) does not apply to a property owners' |
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association that is composed of 12 or less lots. |
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SECTION 2. Chapter 209, Property Code, is amended by adding |
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Section 209.0051 to read as follows: |
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Sec. 209.0051. OPEN BOARD MEETINGS. (a) Meetings of the |
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board must be open to owners, subject to the right of the board to |
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adjourn a board meeting and reconvene in closed executive session |
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to consider actions involving personnel, pending or threatened |
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litigation, contract negotiations, enforcement actions, |
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confidential communications with the association's attorney, |
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matters involving the invasion of privacy of individual owners, or |
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matters that are to remain confidential by request of the affected |
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parties and agreement of the board. The general nature of any |
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business to be considered in executive session must first be |
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announced at the open meeting. |
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(b) Unless the declaration, bylaws, or certificate of |
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formation of the association provide otherwise: |
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(1) a meeting of the board may be held by any method of |
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communication, including electronic and telephonic, if: |
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(A) notice of the meeting has been given as |
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required by law; |
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(B) each director may hear and be heard by every |
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other director; and |
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(C) the meeting does not involve voting on a |
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fine, damage assessment, appeal from a denial of architectural |
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control approval, or suspension of a right of a particular owner |
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before the owner has an opportunity to attend a board meeting to |
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present the owner's position, including any defense, on the issue; |
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and |
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(2) the board may act by unanimous written consent of |
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all the directors, without a meeting, if: |
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(A) the board action does not involve voting on a |
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fine, damage assessment, appeal from a denial of architectural |
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control approval, or suspension of a right of a particular owner |
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before the owner has an opportunity to attend a board meeting to |
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present the owner's position, including any defense, on the issue; |
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and |
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(B) a record of the board action is filed with the |
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minutes of board meetings. |
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(c) An association, on the written request of an owner, |
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shall inform the owner of the time and place of the next regular or |
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special meeting of the board. If the association representative to |
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whom the request is made does not know the time and place of the |
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meeting, the association promptly shall obtain the information and |
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disclose it to the owner or inform the owner where the information |
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may be obtained. |
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(d) This section does not apply to meetings of the board |
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during a development period, as defined by Section 209.0041. |
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SECTION 3. (a) 209.005, Property Code, as amended by this |
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Act, applies only to a request for information received by a |
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property owners' association on or after the effective date of this |
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Act. A request for information received by a property owners' |
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association before the effective date of this Act is governed by the |
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law in effect immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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(b) Section 209.005(m), Property Code, as added by this Act, |
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applies only with respect to books and records generated on or after |
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the effective date of this Act. Books and records generated before |
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the effective date of this Act are governed by the law in effect |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 4. This Act takes effect January 1, 2012. |