|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the operation of property owners' associations. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 82.003(11), Property Code, is amended to |
|
read as follows: |
|
(11) "Declaration" means an [a recorded] instrument, |
|
however denominated, that creates a condominium, and any [recorded] |
|
amendment to that instrument. |
|
SECTION 2. Section 82.102, Property Code, is amended by |
|
amending Subsection (a) and adding Subsection (f) to read as |
|
follows: |
|
(a) Unless otherwise provided by the declaration, the |
|
association, acting through its board, may: |
|
(1) adopt and amend bylaws; |
|
(2) adopt and amend budgets for revenues, |
|
expenditures, and reserves, and collect assessments for common |
|
expenses from unit owners; |
|
(3) hire and terminate managing agents and other |
|
employees, agents, and independent contractors; |
|
(4) institute, defend, intervene in, settle, or |
|
compromise litigation or administrative proceedings in its own name |
|
on behalf of itself or two or more unit owners on matters affecting |
|
the condominium; |
|
(5) make contracts and incur liabilities relating to |
|
the operation of the condominium; |
|
(6) regulate the use, maintenance, repair, |
|
replacement, modification, and appearance of the condominium; |
|
(7) adopt and amend rules regulating the use, |
|
occupancy, leasing or sale, maintenance, repair, modification, and |
|
appearance of units and common elements, to the extent the |
|
regulated actions affect common elements or other units; |
|
(8) cause additional improvements to be made as a part |
|
of the common elements; |
|
(9) acquire, hold, encumber, and convey in its own |
|
name any right, title, or interest to real or personal property, |
|
except common elements of the condominium; |
|
(10) grant easements, leases, licenses, and |
|
concessions through or over the common elements; |
|
(11) impose and receive payments, fees, or charges for |
|
the use, rental, or operation of the common elements and for |
|
services provided to unit owners; |
|
(12) impose interest and late charges for late |
|
payments of assessments, returned check charges, and, if notice and |
|
an opportunity to be heard are given, reasonable fines for |
|
violations of the declaration, bylaws, and rules of the |
|
association; |
|
(13) adopt and amend rules regulating the collection |
|
of delinquent assessments and the application of payments; |
|
(14) adopt and amend rules regulating the termination |
|
of utility service to a unit, the owner of which is delinquent in |
|
the payment of an assessment that is used, in whole or in part, to |
|
pay the cost of that utility; |
|
(15) impose reasonable charges for preparing, |
|
recording, or copying declaration amendments, resale certificates, |
|
or statements of unpaid assessments; |
|
(16) enter a unit for bona fide emergency purposes |
|
when conditions present an imminent risk of harm or damage to the |
|
common elements, another unit, or the occupants; |
|
(17) [assign its right to future income, including the
|
|
right to receive common expense assessments, but only to the extent
|
|
the declaration so provides;
|
|
[(18)] suspend the voting privileges of or the use of |
|
certain general common elements by an owner delinquent for more |
|
than 30 days in the payment of assessments; |
|
(18) [(19)] purchase insurance and fidelity bonds it |
|
considers appropriate or necessary; |
|
(19) [(20)] exercise any other powers conferred by the |
|
declaration or bylaws; |
|
(20) [(21)] exercise any other powers that may be |
|
exercised in this state by a corporation of the same type as the |
|
association; and |
|
(21) [(22)] exercise any other powers necessary and |
|
proper for the government and operation of the association. |
|
(f) The association by resolution of the board of directors |
|
may borrow money unless prohibited by the declaration, certificate |
|
of formation, bylaws, or rules. If the board of directors approves |
|
a resolution under this subsection, the association may assign the |
|
association's right to future income, including the right to |
|
receive common expense assessments and assign the association's |
|
lien rights, as collateral for the loan authorized by the |
|
resolution. The association shall comply with any member approval |
|
requirement in the association's declaration, certificate of |
|
formation, bylaws, or rules for borrowing money, except that not |
|
more than 67 percent of all outstanding votes are required to |
|
approve an authorization to borrow money. |
|
SECTION 3. Sections 82.111(c) and (i), Property Code, are |
|
amended to read as follows: |
|
(c) If the insurance described by Subsections (a) and (b) is |
|
not reasonably available, the association shall cause notice of |
|
that fact to be delivered or mailed to all unit owners and |
|
lienholders. The declaration may require the association to carry |
|
any other insurance, and the association in any event may carry any |
|
other insurance the board considers appropriate to protect the |
|
condominium, the association, or the unit owners. Insurance |
|
policies carried under Subsections (a) and (b) may provide for |
|
deductibles as the board considers appropriate or necessary. This |
|
section does not affect the right of a holder of a mortgage on a unit |
|
to require a unit owner to acquire insurance in addition to that |
|
provided by the association. |
|
(i) Any portion of the condominium for which insurance is |
|
required that is damaged or destroyed shall be promptly repaired or |
|
replaced by the association unless the condominium is terminated, |
|
repair or replacement would be illegal under any state or local |
|
health or safety statute or ordinance, or at least 80 percent of the |
|
unit owners, including each owner of a unit or assigned limited |
|
common element that will not be rebuilt or repaired, vote to not |
|
rebuild. A vote to not rebuild does not increase an insurer's |
|
liability to loss payment obligation under a policy, and the vote |
|
does not cause a presumption of total loss. Costs of repair or |
|
replacement incurred before any insurance proceeds are available |
|
that are within the association's deductible, or that are in excess |
|
of the insurance proceeds and reserves, shall be paid as determined |
|
by resolution of the board of directors of the association, or, if |
|
the board does not approve a resolution, the costs are a common |
|
expense. A resolution regarding payment of costs under this |
|
subsection is considered a dedicatory instrument and must be |
|
recorded in accordance with Section 202.006. [The cost of repair or
|
|
replacement in excess of the insurance proceeds and reserves is a
|
|
common expense.] If the entire condominium is not repaired or |
|
replaced, any insurance proceeds attributable to the damaged common |
|
elements shall be used to restore the damaged area to a condition |
|
compatible with the remainder of the condominium, the insurance |
|
proceeds attributable to units and limited common elements that are |
|
not rebuilt shall be distributed to the owners of those units and |
|
the owners of the units to which those limited common elements were |
|
assigned, or to their mortgagees, as their interests may appear, |
|
and the remainder of the proceeds shall be distributed to all the |
|
unit owners as their interests may appear. If the unit owners vote |
|
to not rebuild any unit, that unit's allocated interests shall be |
|
automatically reallocated on the vote as if the unit had been |
|
condemned, and the association shall prepare, execute, and record |
|
an amendment to the declaration reflecting the reallocation. |
|
Section 82.068 governs the distribution of insurance proceeds if |
|
the condominium is terminated. |
|
SECTION 4. Section 82.113(g), Property Code, is amended to |
|
read as follows: |
|
(g) The owner of a unit [used for residential purposes and] |
|
purchased [by an association] at a foreclosure sale of the |
|
association's lien for assessments may redeem the unit not later |
|
than the 90th day after the date of the foreclosure sale. If the |
|
association is the purchaser [To redeem the unit], the owner must |
|
pay to the association to redeem the unit all amounts due the |
|
association at the time of the foreclosure sale, interest from the |
|
date of foreclosure sale to the date of redemption at the rate |
|
provided by the declaration for delinquent assessments, reasonable |
|
attorney's fees, and all costs incurred by the association in |
|
foreclosing the lien and in connection with the redemption process, |
|
any assessment levied against the unit by the association after the |
|
foreclosure sale, and any reasonable cost incurred by the |
|
association as owner of the unit, including costs of maintenance, |
|
[and] leasing, mortgage payments, taxes, and insurance. If a party |
|
other than the association is the purchaser of the unit at the |
|
foreclosure sale, the redeeming owner must pay to the purchaser an |
|
amount equal to the amount bid at the sale, interest on the bid |
|
amount computed from the date of the foreclosure sale to the date of |
|
redemption at the rate of six percent, any assessment paid by the |
|
purchaser after the date of foreclosure, and any reasonable costs |
|
incurred by the purchaser as the owner of the unit, including costs |
|
of maintenance, leasing, mortgage payments, taxes, and insurance. |
|
The redeeming owner must also pay to the association all |
|
assessments that are due as of the date of the redemption and |
|
reasonable attorney's fees and all costs incurred by the |
|
association in foreclosing the lien. On redemption, the purchaser |
|
of the unit at the foreclosure sale [association] shall execute a |
|
deed with special warranty to the redeeming unit owner. The |
|
exercise of the right of redemption is not effective against a |
|
subsequent purchaser or lender for value without notice of the |
|
redemption after the redemption period expires unless the redeeming |
|
unit owner records the deed from the purchaser of the unit at the |
|
foreclosure sale [association] or an affidavit stating that the |
|
owner has exercised the right of redemption. A unit that has been |
|
redeemed remains subject to all liens and encumbrances on the unit |
|
before foreclosure. All rents and other income collected from the |
|
unit by the purchaser of the unit at the foreclosure sale |
|
[association] from the date of foreclosure sale to the date of |
|
redemption belong to the purchaser of the unit at the foreclosure |
|
sale [association], but the rents and income shall be credited |
|
against the redemption amount. The purchaser of [An association
|
|
purchasing] a unit at a sale foreclosing an association's |
|
assessment [its] lien may not transfer ownership of the unit during |
|
the redemption period to a person other than a redeeming owner. |
|
SECTION 5. Section 202.004, Property Code, is amended by |
|
adding Subsections (d) and (e) to read as follows: |
|
(d) In evaluating an alleged or potential violation of a |
|
restrictive covenant, a property owners' association board or |
|
another person with a right or duty to enforce a dedicatory |
|
instrument may, notwithstanding any provision in a dedicatory |
|
instrument, elect to not enforce the restrictive covenant if the |
|
board or other person, in the board's or other person's reasonable |
|
judgment, determines: |
|
(1) the association's or other person's position is |
|
not sufficiently strong to justify taking any action or further |
|
action; |
|
(2) the provision alleged to have been violated may be |
|
inconsistent with applicable law; |
|
(3) the alleged violation is not of such a material or |
|
visible nature as to be objectionable to a reasonable person or to |
|
justify expending the property owners' association's or other |
|
person's resources; |
|
(4) enforcement of the provision is not in the |
|
association's or other person's best interests, based on hardship, |
|
expense, or other reasonable criteria; or |
|
(5) the facts of the particular circumstances, such as |
|
topography of the owner's land or unforeseen circumstances unique |
|
to the particular owner, justify the election to not enforce the |
|
restrictive covenant. |
|
(e) An election to not enforce a restrictive covenant under |
|
Subsection (d) may not be considered a waiver of authority to |
|
enforce any dedicatory instrument provision in the future. |
|
SECTION 6. Section 207.003, Property Code, is amended by |
|
amending Subsections (a), (b), (c), and (f) and adding Subsection |
|
(a-1) to read as follows: |
|
(a) Not later than the 10th business day after the date a |
|
written request for subdivision information is received from an |
|
owner or an[,] owner's agent, a purchaser of property in a |
|
subdivision or the purchaser's agent, or a title insurance company |
|
or its agent acting on behalf of the owner or purchaser, the |
|
property owners' association shall deliver to the owner or the[,] |
|
owner's agent, the purchaser or the purchaser's agent, or the title |
|
insurance company or its agent: |
|
(1) a current copy of the restrictions applying to the |
|
subdivision; |
|
(2) a current copy of the bylaws and rules of the |
|
property owners' association; and |
|
(3) a resale certificate that complies with Subsection |
|
(b). |
|
(a-1) For a request from a purchaser of property in a |
|
subdivision or the purchaser's agent, the property owners' |
|
association may require the purchaser or purchaser's agent to |
|
provide to the association, before the association delivers the |
|
items listed in Subsection (a), reasonable evidence that the |
|
purchaser has a contractual or other right to acquire property in |
|
the subdivision. |
|
(b) A resale certificate under Subsection (a) must: |
|
(1) be in writing; |
|
(2) be issued, signed, and dated by an officer or |
|
authorized agent of the property owners' association; and |
|
(3) contain: |
|
(A) [(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; |
|
(B) [(2)] the frequency and amount of any regular |
|
assessments; |
|
(C) [(3)] the amount of any special assessment |
|
that has been approved as of [is due after] the date the resale |
|
certificate is prepared; |
|
(D) [(4)] the total of all amounts due and unpaid |
|
to the property owners' association that are attributable to the |
|
owner's property; |
|
(E) [(5)] capital expenditures, if any, approved |
|
by the property owners' association for the property owners' |
|
association's current fiscal year; |
|
(F) [(6)] the amount of reserves, if any, for |
|
capital expenditures; |
|
(G) [(7)] the property owners' association's |
|
current operating budget and balance sheet; |
|
(H) [(8)] the total of any unsatisfied judgments |
|
against the property owners' association; |
|
(I) [(9)] the style and cause number of any |
|
pending lawsuit in which the property owners' association is a |
|
defendant, other than a lawsuit relating to unpaid property taxes |
|
of an individual member of the association; |
|
(J) [(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; |
|
(K) [(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; |
|
(L) [(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; |
|
(M) [(13)] the amount of any administrative |
|
transfer fee charged by the property owners' association for a |
|
change of ownership of property in the subdivision; |
|
(N) [(14)] the name, mailing address, and |
|
telephone number of the property owners' association's managing |
|
agent, if any; [and] |
|
(O) [(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 |
|
(P) 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. |
|
(c) A property owners' association may charge a reasonable |
|
fee to assemble, copy, and deliver the information required by this |
|
section and may charge a reasonable fee to prepare and deliver an |
|
update of a resale certificate under Subsection (f). The person |
|
requesting a resale certificate or an update of a resale |
|
certificate is responsible for the payment of any fee charged for |
|
the resale certificate or the update of the certificate. |
|
(f) Not later than the seventh business day after the date a |
|
written request for an update of [to] a resale certificate |
|
delivered under Subsection (a) is received from a person entitled |
|
to request a resale certificate under Subsection (a) [an owner,
|
|
owner's agent, or title insurance company or its agent acting on
|
|
behalf of the owner], the property owners' association shall |
|
deliver to the requestor [owner, owner's agent, or title insurance
|
|
company or its agent] an updated resale certificate that contains |
|
the following information: |
|
(1) if a right of first refusal or other restraint on |
|
sale is contained in the restrictions, a statement of whether the |
|
property owners' association waives the restraint on sale; |
|
(2) the status of any unpaid special assessments, |
|
dues, or other payments attributable to the owner's property; and |
|
(3) any changes to the information provided in the |
|
resale certificate issued under Subsection (a). |
|
SECTION 7. Section 209.002, Property Code, is amended by |
|
amending Subdivisions (3), (5), and (9) and adding Subdivision |
|
(3-a) to read as follows: |
|
(3) "Declarant" means: |
|
(A) any person or group of persons acting in |
|
concert that: |
|
(i) as part of a common promotional plan, |
|
offers to dispose of the person's or group's interest in a |
|
subdivision; and |
|
(ii) files a declaration; and |
|
(B) one or more successors to a person or group |
|
described by Paragraph (A) to whom the person's or group's rights as |
|
a declarant under the declaration are transferred by a written |
|
instrument evidencing the transfer that is recorded in the real |
|
property records of each county in which the declaration is |
|
recorded. |
|
(3-a) "Declaration" means an instrument filed in the |
|
real property records of a county that creates the original |
|
[includes] restrictive covenants for a [governing a residential] |
|
subdivision, as amended or supplemented. |
|
(5) "Lot" means any designated parcel of land [located
|
|
in a residential subdivision], including any improvements on the |
|
designated parcel. |
|
(9) "Residential subdivision" or "subdivision" means |
|
a subdivision, planned unit development, townhouse regime, or |
|
similar planned development in which all land has been divided into |
|
two or more lots [parts] and is subject to restrictions that: |
|
(A) limit a majority of the land subject to the |
|
dedicatory instruments, excluding streets, common areas, and |
|
public areas, to residential use for single-family homes, |
|
townhomes, or duplexes only; |
|
(B) are recorded in the real property records of |
|
the county in which the residential subdivision is located; and |
|
(C) require membership in a property owners' |
|
association that has authority to impose regular or special |
|
assessments on the property in the subdivision. |
|
SECTION 8. Section 209.003(d), Property Code, is amended to |
|
read as follows: |
|
(d) This chapter does not apply to a condominium development |
|
governed wholly or partly by Chapter 82. |
|
SECTION 9. Chapter 209, Property Code, is amended by adding |
|
Section 209.0041 to read as follows: |
|
Sec. 209.0041. AMENDMENT OF DECLARATION. (a) This section |
|
applies only to a residential subdivision in which property owners |
|
are subject to mandatory regular or special assessments. |
|
(b) This section applies to a declaration regardless of the |
|
date on which the declaration was created. |
|
(c) This section does not apply to the amendment of a |
|
declaration during a development period. For purposes of this |
|
subsection, "development period" means a period stated in a |
|
declaration during which a declarant reserves: |
|
(1) a right to facilitate the development, |
|
construction, and marketing of the subdivision; and |
|
(2) a right to direct the size, shape, and composition |
|
of the subdivision. |
|
(d) Subject to Section 209.013, the declaration and any |
|
subsequently enacted declarations may be amended at any time on a |
|
vote of at least 67 percent of the total votes entitled to be cast |
|
with respect to the declaration amendment. If the declaration |
|
provides a lower percentage, the percentage in the declaration |
|
controls. During the development period, amendments to the |
|
declaration require the joinder of the developer. |
|
(e) This section does not preclude amendment of a |
|
declaration under other statutory authority. |
|
SECTION 10. Section 209.005, Property Code, is amended to |
|
read as follows: |
|
Sec. 209.005. ASSOCIATION RECORDS. (a) Except as provided |
|
by Subsection (b), this section applies to all property owners' |
|
associations and controls over other law not specifically |
|
applicable to a property owners' association. |
|
(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. |
|
(c) 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, or an |
|
owner's attorney or certified public accountant, in accordance with |
|
this section. An owner is entitled to obtain from the association |
|
copies of information contained in the books and records [Section
|
|
B, Article 2.23, Texas Non-Profit Corporation Act (Article
|
|
1396-2.23, Vernon's Texas Civil Statutes)]. |
|
(d) [(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]. |
|
(e) [(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. |
|
(f) An owner or the owner's attorney or certified public |
|
accountant must submit a written request for access or information |
|
under Subsection (c) by certified mail, with sufficient |
|
particularity detailing the association's books and records |
|
requested, to the mailing address of the association or authorized |
|
representative as reflected on the most current management |
|
certificate filed under Section 209.004. The request must contain |
|
an election either to inspect the books and records before |
|
obtaining copies or to have the property owners' association |
|
forward copies of the requested books and records and: |
|
(1) if an inspection is requested, the association, on |
|
or before the 10th business day after the date the association |
|
receives the request, shall send written notice of dates during |
|
normal business hours that the owner may inspect the requested |
|
books and records to the extent those books and records are required |
|
to be retained by the association; or |
|
(2) if copies of identified books and records are |
|
requested, the association shall, to the extent those books and |
|
records are required to be retained by the association, produce the |
|
requested books and records for the requesting party on or before |
|
the 10th business day after the date the association receives the |
|
request, except as otherwise provided by this section. |
|
(g) If the property owners' association is unable to produce |
|
the books or records requested under Subsection (f) on or before the |
|
10th business day after the date the association receives the |
|
request, the association must provide to the requestor written |
|
notice that: |
|
(1) informs the requestor that the association is |
|
unable to produce the information on or before the 10th business day |
|
after the date the association received the request; and |
|
(2) states a date by which the information will be sent |
|
or made available for inspection to the requesting party that is not |
|
later than the 30th business day after the date notice under this |
|
subsection is given. |
|
(h) If an inspection is requested or required, the |
|
inspection shall take place at a mutually agreed on time during |
|
normal business hours, and the requesting party shall identify the |
|
books and records for the association to copy and forward to the |
|
requesting party. |
|
(i) A property owners' association may produce books and |
|
records requested under this section in hard copy, electronic, or |
|
other format reasonably available to the association. |
|
(j) An owner is responsible for costs related to compilation |
|
and reproduction of the requested information in an amount that |
|
reasonably includes all costs related to compilation and |
|
reproduction of the information, including costs of materials, |
|
labor, and overhead. The association may require advance payment |
|
of the estimated costs of compilation and reproduction. If the |
|
estimated costs are lesser or greater than actual costs, the |
|
association shall submit a final invoice to the owner on or before |
|
the 30th business day after the date the information is delivered to |
|
the requestor. If the final invoice includes additional amounts |
|
due from the owner, the additional amounts, if not reimbursed to the |
|
association before the 30th business day after the date the invoice |
|
is sent to the owner, may be added to the owner's account as an |
|
assessment. If the estimated costs exceeded the final invoice |
|
amount, the owner is entitled to a refund, and the refund shall be |
|
issued to the owner not later than the 30th business day after the |
|
date the invoice is sent to the owner. |
|
(k) Except as provided in Subsection (l), the association is |
|
not required, other than in meeting minutes, to release or allow |
|
inspection of any books or records that identify the dedicatory |
|
instrument violation history of an individual owner of an |
|
association, an owner's personal financial information, including |
|
records of payment or nonpayment of amounts due the association, an |
|
owner's contact information, other than the owner's address, or |
|
information related to an employee of the association, including |
|
personnel files. Information may be released in an aggregate or |
|
summary manner that would not identify an individual property |
|
owner. |
|
(l) The books and records described by Subsection (k) shall |
|
be released or made available for inspection if: |
|
(1) the express written approval of the owner whose |
|
records are the subject of the request for inspection is provided to |
|
the association; or |
|
(2) a court orders the release of the books and records |
|
or orders that the books and records be made available for |
|
inspection. |
|
(m) A property owners' association composed of more than 12 |
|
lots may adopt a document retention policy that supersedes this |
|
subsection. In the absence of the adoption of a document retention |
|
policy, the property owners' association shall retain books and |
|
records as follows: |
|
(1) certificates of formation, bylaws, restrictive |
|
covenants, and all amendments to the certificates of formation, |
|
bylaws, and covenants shall be retained permanently; |
|
(2) financial books and records shall be retained for |
|
seven years; |
|
(3) account records of current owners shall be |
|
retained for five years; |
|
(4) contracts with a term of one year or more shall be |
|
retained for four years after the expiration of the contract term; |
|
(5) minutes of meetings of the owners and the board |
|
shall be retained for seven years; and |
|
(6) tax returns and audit records shall be retained |
|
for seven years. |
|
SECTION 11. Chapter 209, Property Code, is amended by |
|
adding Sections 209.0051, 209.0056, and 209.00593 to read as |
|
follows: |
|
Sec. 209.0051. OPEN BOARD MEETINGS. (a) Meetings of the |
|
board must be open to owners, subject to the right of the board to |
|
adjourn a board meeting and reconvene in closed executive session |
|
to consider actions involving personnel, pending or threatened |
|
litigation, contract negotiations, enforcement actions, |
|
confidential communications with the association's attorney, |
|
matters involving the invasion of privacy of individual owners, or |
|
matters that are to remain confidential by request of the affected |
|
parties and agreement of the board. The general nature of any |
|
business to be considered in executive session must first be |
|
announced at the open meeting. |
|
(b) Unless the declaration, bylaws, or certificate of |
|
formation of the association provide otherwise: |
|
(1) a meeting of the board may be held by any method of |
|
communication, including electronic and telephonic, if: |
|
(A) notice of the meeting has been given as |
|
required by law; |
|
(B) each director may hear and be heard by every |
|
other director; and |
|
(C) the meeting does not involve voting on a |
|
fine, damage assessment, appeal from a denial of architectural |
|
control approval, or suspension of a right of a particular owner |
|
before the owner has an opportunity to attend a board meeting to |
|
present the owner's position, including any defense, on the issue; |
|
and |
|
(2) the board may act by unanimous written consent of |
|
all the directors, without a meeting, if: |
|
(A) the board action does not involve voting on a |
|
fine, damage assessment, appeal from a denial of architectural |
|
control approval, or suspension of a right of a particular owner |
|
before the owner has an opportunity to attend a board meeting to |
|
present the owner's position, including any defense, on the issue; |
|
and |
|
(B) a record of the board action is filed with the |
|
minutes of board meetings. |
|
(c) An association, on the written request of an owner, |
|
shall inform the owner of the time and place of the next regular or |
|
special meeting of the board. If the association representative to |
|
whom the request is made does not know the time and place of the |
|
meeting, the association promptly shall obtain the information and |
|
disclose it to the owner or inform the owner where the information |
|
may be obtained. |
|
(d) This section does not apply to meetings of the board |
|
during a development period, as defined by Section 209.0041. |
|
Sec. 209.0056. BOARD REPRESENTATION. The declaration may |
|
provide for a period of declarant control of the association during |
|
which period a declarant, or persons designated by the declarant, |
|
may appoint and remove members of the board and the officers of the |
|
association. Regardless of the period of declarant control |
|
prescribed by the declaration, at least one-third of the board |
|
members must be elected by owners other than the declarant on or |
|
before the 120th day after the date on which 75 percent of the lots |
|
that may be created and made subject to the declaration are conveyed |
|
to owners other than a declarant. If the declaration does not |
|
include the number of lots that may be created and made subject to |
|
the declaration, at least one-third of the members of the board must |
|
be elected by owners other than the declarant not later than the |
|
10th anniversary of the date the declaration was recorded. |
|
Sec. 209.00593. VOTING; QUORUM. (a) The voting rights of |
|
an owner may be cast or given: |
|
(1) in person or by proxy at a meeting of the property |
|
owners' association; |
|
(2) by absentee ballot in accordance with this |
|
section; |
|
(3) by any method of representative or delegated |
|
voting provided by a dedicatory instrument; or |
|
(4) 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 be withdrawn by an owner if the owner attends a |
|
meeting at which votes on the ballot items are cast; and |
|
(3) may not be counted, except for quorum purposes, 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 or electronic |
|
ballot must include: |
|
(1) an absentee or electronic 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 or electronic ballot, including the delivery location; and |
|
(3) the following language: "By casting your vote via |
|
absentee or electronic 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 or electronic |
|
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) conveyed in an electronic manner and format |
|
prescribed by the property owners' association board; |
|
(2) for which the identity of the property owner |
|
submitting the ballot can be reasonably established; 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 shall be provided to each owner that contains |
|
instructions on obtaining access to the posting on the website. |
|
(f) The property owners' association board has the sole |
|
authority to prescribe or cause to be prescribed all proxy and |
|
ballot forms. |
|
(g) This section supersedes any contrary provision in a |
|
dedicatory instrument. |
|
(h) Except as provided by Subsection (i), this section |
|
applies to all property owners' associations and controls over any |
|
other law not specifically applicable to a property owners' |
|
association. |
|
(i) 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 12. 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 mailed to the |
|
owner; and |
|
(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 [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. A |
|
shorter notice period is permitted in the case of a threat to public |
|
health or safety. |
|
(d) Subsections (a) and (b) do not apply to: |
|
(1) 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; or |
|
(2) a violation that is not of a curable nature. |
|
(e) If the property owner does not cure the violation in the |
|
time provided by Subsection (c) and does not request a hearing under |
|
Section 209.007 in the time provided by Subsection (b)(2)(B), the |
|
property owners' association may assess the fine and shall provide |
|
notice of the assessment to the owner. If the violation is of a |
|
curable nature and 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 13. Chapter 209, Property Code, is amended by |
|
adding Sections 209.0061 and 209.0062 to read as follows: |
|
Sec. 209.0061. ASSESSMENT OF FINES. 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 maximum fine amount for a |
|
continuing violation at which point the total fine amount is |
|
capped. A fine may be collected in the same manner as assessments |
|
under the dedicatory instrument. |
|
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN |
|
ASSESSMENTS. (a) This section applies only to a property owners' |
|
association composed of more than 12 lots. |
|
(b) 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. |
|
(c) A property owners' association is not required to offer |
|
a payment plan to an owner more than once each year. The minimum |
|
term for a payment plan offered by a property owners' association is |
|
three months. 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 the owner's |
|
default under the previous payment plan. |
|
SECTION 14. (a) Section 82.111(i), Property Code, as |
|
amended by this Act, applies only to payment of costs incurred and a |
|
resolution regarding payment of costs approved on or after the |
|
effective date of this Act. Payment of costs incurred or a |
|
resolution approved 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 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. |
|
(c) Sections 207.003 and 209.005, Property Code, as amended |
|
by this Act, apply 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. |
|
(d) Section 209.005(m), Property Code, as added by this Act, |
|
applies only with respect to books and records generated on or after |
|
the effective date of this Act. Books and records generated 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. |
|
(e) Section 209.0056, Property Code, as added by this Act, |
|
applies only to a property owners' association created on or after |
|
January 1, 2012. |
|
(f) Section 209.006, Property Code, as amended by this Act, |
|
applies only to an enforcement action initiated by a property |
|
owners' association on or after the effective date of this Act. An |
|
enforcement action initiated 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) Sections 209.0061 and 209.0062, Property Code, as added |
|
by this Act, apply only to an assessment, fine, or other debt that |
|
becomes due on or after the effective date of this Act. An |
|
assessment, fine, 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. |
|
SECTION 15. This Act takes effect January 1, 2012. |