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A BILL TO BE ENTITLED
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AN ACT
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relating to real property that is subject to restrictive covenants |
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and the operation of property owners' associations of subdivisions |
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that are subject to restrictive covenants. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 5.006(a), Property Code, is amended to |
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read as 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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SECTION 2. Section 202.004, Property Code, is amended by |
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adding Subsections (d), (e), and (f) to read as follows: |
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(d) In evaluating an alleged or potential violation of a |
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restrictive covenant, a property owners' association board may, |
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notwithstanding any provision in a dedicatory instrument, elect to |
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not enforce the restrictive covenant if the board, in the board's |
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reasonable 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 board's election to not |
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enforce the restrictive covenant. |
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(e) An election by the property owners' association board to |
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not enforce a restrictive covenant under Subsection (d) may not be |
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considered a waiver of the association's authority to enforce any |
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dedicatory instrument provision in the future. |
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(f) A property owners' association board shall document |
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each election by the board to not enforce a restrictive covenant |
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under Subsection (d) by noting in the minutes of the board meeting |
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at which the election was made: |
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(1) the person who was not subjected to enforcement of |
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the covenant; |
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(2) the specific covenant the board did not enforce; |
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and |
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(3) the board's rationale for not enforcing the |
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covenant. |
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SECTION 3. Chapter 202, Property Code, is amended by adding |
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Sections 202.011, 202.012, 202.013, 202.014, and 202.015 to read as |
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follows: |
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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 at least 51 percent 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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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 at least 67 percent 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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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 |
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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 |
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(B) $1,500 for each violation; or |
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(3) both injunctive relief and damages as provided in |
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this subsection. |
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(c) The court may increase an award under Subsection (b)(2) |
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to an amount not to exceed three times the amount awarded under |
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Subsection (b)(2) if the court finds that violations have occurred |
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with a frequency that constitutes a pattern or practice. |
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(d) Each day a violation continues is not considered a |
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separate violation for purposes of an assessment of damages. |
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(e) The court may award damages to a property owners' |
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association for an action brought by a member of the property |
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owners' association that the court finds frivolous or groundless in |
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an amount that is not more than the greater of: |
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(1) three times the association's actual damages; or |
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(2) $4,500. |
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(f) On or before the 30th day before the date a person brings |
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an action under this section, the person must provide notice to the |
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other party of the person's intent to bring an action under this |
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section. The notice must be sent certified mail, return receipt |
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requested, or delivered by the United States Postal Service with |
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signature confirmation service. |
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SECTION 4. Chapter 209, Property Code, is amended by adding |
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Sections 209.0035 and 209.0041 to read as follows: |
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Sec. 209.0035. 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 |
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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 |
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(B) $1,500 for each violation; or |
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(3) both injunctive relief and damages as provided in |
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this subsection. |
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(c) The court may increase an award under Subsection (b)(2) |
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to an amount not to exceed three times the amount awarded under |
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Subsection (b)(2) if the court finds that violations have occurred |
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with a frequency that constitutes a pattern or practice. |
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(d) Each day a violation continues is not considered a |
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separate violation for purposes of assessment of damages. |
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(e) The court may award damages to a property owners' |
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association for an action brought by a member of the property |
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owners' association that the court finds frivolous or groundless in |
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an amount that is not more than the greater of: |
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(1) three times the association's actual damages; or |
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(2) $4,500. |
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(f) On or before the 30th day before the date a person brings |
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an action under this section, the person must provide notice to the |
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other party of the person's intent to bring an action under this |
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section. The notice must be sent certified mail, return receipt |
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requested, or delivered by the United States Postal Service with |
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signature confirmation service. |
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Sec. 209.0041. AMENDMENT OF DEDICATORY INSTRUMENTS. (a) |
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This section applies to a residential subdivision in which property |
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owners are subject to mandatory membership in a property owners' |
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association. |
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(b) This section applies to all dedicatory instruments |
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regardless of the date on which the dedicatory instruments were |
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created. |
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(c) This section does not apply to the amendment of a |
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dedicatory instrument during a development period, as defined by |
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Section 202.011. |
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(d) To the extent of any conflict with another provision of |
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this title, this section prevails. |
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(e) Except as provided by Subsection (f), a dedicatory |
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instrument may be amended only by a vote of at least 51 percent of |
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the total votes allocated to property owners in the property |
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owners' association, in addition to any governmental approval |
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required by law. |
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(f) A rule or guideline that affects land owned, leased, |
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maintained, or otherwise controlled by the property owners' |
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association may be adopted or amended by majority vote of the |
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association board. A rule or guideline that impacts the use and |
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enjoyment of personal or real property owned exclusively by the |
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owner or that may result in a fine or loss of privilege of a member |
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of the association may be adopted or amended only by a vote of at |
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least 51 percent of the total votes allocated to property owners who |
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cast votes by any permissible method in an association-wide vote. |
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(g) A property owners' association board by majority vote |
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may adopt ministerial, office-related procedural policies, such as |
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payment plan guidelines, a collections policy, an enforcement |
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policy, or other similar ministerial, office-related procedural |
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policies. The policy may outline circumstances under which or the |
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manner by which enforcement remedies may be carried out but may not |
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otherwise impact the use and enjoyment of personal or real property |
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owned exclusively by the owner. The policy may not: |
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(1) create a power to: |
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(A) levy a fine; or |
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(B) impose a loss of a privilege on a member of |
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the association; or |
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(2) expand the association's powers beyond the powers |
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granted by any other dedicatory instrument. |
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(h) All ballots cast in an election that results in an |
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amendment to a dedicatory instrument under this section are records |
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of the property owners' association for the purposes of Section |
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209.005. |
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(i) This section supersedes any contrary requirement in a |
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dedicatory instrument. |
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(j) 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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SECTION 5. Section 209.006, Property Code, is amended to |
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read as follows: |
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Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION. |
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(a) Before a property owners' association may suspend an owner's |
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right to use a common area, file a suit against an owner other than a |
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suit to collect a regular or special assessment or foreclose under |
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an association's lien, charge an owner for property damage, or levy |
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a fine for a violation of the restrictions or bylaws or rules of the |
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association, the association or its agent must send [give] written |
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notice to the owner by certified mail, return receipt requested, or |
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delivered by the United States Postal Service with signature |
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confirmation service to the owner at the owner's last known address |
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as shown on the association's records. |
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(b) The notice must: |
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(1) describe the violation or property damage that is |
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the basis for the suspension action, charge, or fine and state any |
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amount due the association from the owner; [and] |
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(2) except as provided by Subsection (d), inform the |
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owner that the owner: |
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(A) is entitled to a reasonable period to cure |
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the violation and avoid the fine [or suspension unless the owner was
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given notice and a reasonable opportunity to cure a similar
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violation within the preceding six months]; and |
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(B) may request a hearing under Section 209.007 |
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on or before the 30th day after the date notice was delivered to the |
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owner; |
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(3) specify the date by which the owner must cure the |
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violation if the violation is of a curable nature and does not pose |
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a threat to public health or safety; |
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(4) specify the dollar amount of any fine the |
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association seeks to levy; and |
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(5) specify each provision of the dedicatory |
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instrument the owner is alleged to have violated [receives the
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notice]. |
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(c) The date specified in the notice under Subsection (b)(3) |
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must provide a reasonable period of at least 30 days for the owner |
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to cure the violation if the violation is of a curable nature and |
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does not pose a threat to public health or safety. |
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(d) Subsections (a) and (b) do not apply to a violation for |
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which the owner has been previously given notice under this section |
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and the opportunity to exercise any rights available under this |
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section in the preceding six months. |
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(e) If the property owner does not cure the violation in the |
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time provided by Subsection (c) and does not request a hearing under |
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Section 209.007 in the time provided by Subsection (b)(2)(B), the |
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property owners' association may assess the fine and shall provide |
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notice of the assessment to the owner. If the property owner cures |
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the violation before the expiration period for cure specified under |
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Subsection (c), any fine assessed for the violation is void. |
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(f) For purposes of this section, a violation is considered |
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a threat to public health or safety if the violation could |
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materially affect the physical health or safety of an ordinary |
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resident. |
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SECTION 6. Chapter 209, Property Code, is amended by adding |
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Section 209.0061 to read as follows: |
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Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed by |
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the property owners' association must be reasonable in the context |
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of the nature and frequency of the violation and the effect of the |
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violation on the subdivision as a whole. If the association allows |
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fines for a continuing violation to accumulate against a lot or an |
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owner, the association must establish a reasonable maximum fine |
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amount for a continuing violation at which point the total fine |
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amount is capped. |
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(b) If a lot occupant other than the owner violates a |
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provision of the dedicatory instrument, the property owners' |
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association, in addition to exercising any of the association's |
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powers against the owner, may assess a fine directly against the |
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nonowner occupant in the same manner as provided for an owner but |
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may not require payment from both the owner and a nonowner occupant |
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for the same violation. |
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(c) If the property owners' association assesses a fine |
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against a nonowner occupant under this section, the notice |
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provisions of Section 209.006 and the hearing provisions of Section |
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209.007 apply to the nonowner occupant in the same manner as those |
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provisions apply to an owner. |
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SECTION 7. Section 209.007, Property Code, is amended by |
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amending Subsection (a) and adding Subsections (f), (g), (h), (i), |
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and (j) to read as follows: |
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(a) If the owner is entitled to an opportunity to cure the |
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violation, the owner has the right to submit a written request for a |
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hearing to discuss and verify facts and resolve the matter in issue |
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before a committee appointed by the board of the property owners' |
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association or before the board if the board does not appoint a |
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committee. The written request must contain a statement of the |
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grounds on which the owner believes the owner is not in violation |
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and citations of the dedicatory instrument for each violation |
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alleged. |
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(f) If the parties fail to reach agreement in or after the |
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hearing described by this section, the property owners' association |
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must file suit to uphold and enforce any fine sought to be assessed. |
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The suit must be filed in a justice court or small claims court not |
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later than the 180th day after the date of the hearing described by |
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this section or an appeal under Subsection (b), whichever is later. |
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The complaint must list each violation and be accompanied by |
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citation of the dedicatory instrument for each violation. If the |
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property owners' association does not file suit within the time |
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prescribed by this subsection, the association's right to collect |
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the fine is considered waived. |
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(g) Not later than the 30th day after the date a suit is |
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filed under Subsection (f), the court shall hold an evidentiary |
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hearing on the matter. The parties are not entitled to any |
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discovery. |
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(h) At the evidentiary hearing, the property owners' |
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association has the burden of proving by a preponderance of the |
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evidence that the property owner has violated a restrictive |
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covenant. |
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(i) The court shall determine whether a violation has |
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occurred and, if so, whether the fine for the violation is |
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reasonable considering the type, duration, and severity of the |
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violation. |
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(j) If the court finds that the position taken by either |
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party is groundless or is taken in bad faith, the court may award |
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the prevailing party's attorney's fees. |
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SECTION 8. (a) Section 5.006(a), Property Code, as amended |
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by this Act, applies only to an action filed on or after the |
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effective date of this Act. An action filed before the effective |
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date of this Act is governed by the law in effect immediately before |
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the effective date of this Act, and that law is continued in effect |
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for that purpose. |
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(b) Sections 202.011 and 202.012, Property Code, as added by |
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this Act, apply to a provision in a dedicatory instrument or a |
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restrictive covenant enacted before, on, or after the effective |
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date of this Act. |
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(c) Sections 202.015 and 209.0035, Property Code, as added |
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by this Act, apply only to a cause of action that accrues on or after |
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the effective date of this Act. A cause of action that accrues |
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before the effective date of this Act is governed by the law in |
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effect immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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(d) Sections 209.006 and 209.007, Property Code, as amended |
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by this Act, apply only to an enforcement action initiated by a |
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property owners' association on or after the effective date of this |
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Act. An enforcement action initiated before the effective date of |
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this Act is governed by the law in effect immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 9. This Act takes effect January 1, 2012. |