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A BILL TO BE ENTITLED
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AN ACT
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relating to meetings and records of and certain information |
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provided by or concerning a property owners' association. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 5.012, Property Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1), (f), and (g) |
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to read as follows: |
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(a) A seller of residential real property that is subject to |
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membership in a property owners' association and that comprises not |
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more than one dwelling unit located in this state shall give to the |
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purchaser of the property a written notice that reads substantially |
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similar to the following: |
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NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION |
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CONCERNING THE PROPERTY AT (street address) |
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(name of residential community) |
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As a purchaser of property in the residential community in |
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which this property is located, you are obligated to be a member of |
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a property owners' association. Restrictive covenants governing |
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the use and occupancy of the property and all [a] dedicatory |
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instruments [instrument] governing the establishment, maintenance, |
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or [and] operation of this residential community have been or will |
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be recorded in the Real Property Records of the county in which the |
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property is located. Copies of the restrictive covenants and |
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dedicatory instruments [instrument] may be obtained from the county |
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clerk. |
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You are obligated to pay assessments to the property owners' |
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association. The amount of the assessments is subject to change. |
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Your failure to pay the assessments could result in enforcement of |
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the association's [a] lien on and the foreclosure of your property. |
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Section 207.003, Property Code, entitles an owner to receive |
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copies of any document that governs the establishment, maintenance, |
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or operation of a subdivision, including, but not limited to, |
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restrictions, bylaws, rules and regulations, and a resale |
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certificate from a property owners' association. A resale |
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certificate contains information including, but not limited to, |
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statements specifying the amount and frequency of regular |
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assessments and the style and cause number of lawsuits to which the |
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property owners' association is a party. These documents must be |
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made available to you by the seller on your request. |
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Date: ____________________________________________ |
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Signature of Purchaser |
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(a-1) The second paragraph of the notice prescribed by |
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Subsection (a) must be in bold print and underlined. |
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(f) On the purchaser's request for a resale certificate from |
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the seller, the seller shall: |
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(1) promptly deliver a copy of a current resale |
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certificate if one has been issued for the property under Chapter |
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207; or |
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(2) if the seller does not have a current resale |
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certificate: |
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(A) request the property owners' association or |
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its agent to issue a resale certificate under Chapter 207; and |
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(B) promptly deliver a copy of the resale |
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certificate to the purchaser on receipt of the resale certificate |
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from the property owners' association or its agent. |
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(g) The seller or the purchaser, as agreed to by the |
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parties, shall pay the fee to the property owners' association or |
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its agent for issuing the resale certificate. The property owners' |
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association may not process a payment for a resale certificate |
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requested under Chapter 207 until the certificate is available for |
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delivery. The association may not charge a fee if the certificate |
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is not provided in the time prescribed by Section 207.003(a). |
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SECTION 2. Section 207.003(b), Property Code, is amended to |
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read as follows: |
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(b) A resale certificate under Subsection (a) must contain: |
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(1) a statement of any right of first refusal, other |
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than a right of first refusal that is prohibited by statute, and any |
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[or] other restraint contained in the restrictions or restrictive |
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covenants that restricts the owner's right to transfer the owner's |
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property; |
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(2) the frequency and amount of any regular |
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assessments; |
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(3) the amount and purpose of any special assessment |
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that is due after the date the resale certificate is prepared; |
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(4) the total of all amounts due and unpaid to the |
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property owners' association that are attributable to the owner's |
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property; |
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(5) capital expenditures, if any, approved by the |
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property owners' association for the property owners' association's |
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current fiscal year; |
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(6) the amount of reserves, if any, for capital |
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expenditures; |
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(7) the property owners' association's current |
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operating budget and balance sheet; |
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(8) the total of any unsatisfied judgments against the |
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property owners' association; |
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(9) the style and cause number of any pending lawsuit |
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in which the property owners' association is a party, other than a |
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lawsuit relating to unpaid property taxes of an individual member |
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of the association [defendant]; |
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(10) a copy of a certificate of insurance showing the |
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property owners' association's property and liability insurance |
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relating to the common areas and common facilities; |
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(11) a description of any conditions on the owner's |
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property that the property owners' association board has actual |
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knowledge are in violation of the restrictions applying to the |
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subdivision or the bylaws or rules of the property owners' |
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association; |
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(12) a summary or copy of notices received by the |
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property owners' association from any governmental authority |
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regarding health or housing code violations existing on the |
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preparation date of the certificate relating to the owner's |
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property or any common areas or common facilities owned or leased by |
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the property owners' association; |
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(13) the amount of any administrative transfer fee |
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charged by the property owners' association for a change of |
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ownership of property in the subdivision; |
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(14) the name, mailing address, and telephone number |
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of the property owners' association's managing agent, if any; [and] |
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(15) a statement indicating whether the restrictions |
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allow foreclosure of a property owners' association's lien on the |
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owner's property for failure to pay assessments; and |
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(16) a statement of all fees associated with the |
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transfer of ownership, including a description of each fee, to whom |
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each fee is paid, and the amount of each fee. |
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SECTION 3. 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) This section does |
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not apply to a property owners' association that is subject to |
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Chapter 552, Government Code, by application of Section 552.0036, |
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Government Code [A property owners' association shall make the
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books and records of the association, including financial records,
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reasonably available to an owner in accordance with Section B,
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Article 2.23, Texas Non-Profit Corporation Act (Article 1396-2.23,
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Vernon's Texas Civil Statutes)]. |
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(b) Notwithstanding a provision in a dedicatory instrument, |
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a [(a-1) A] property owners' association [described by Section
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552.0036(2), Government Code,] shall make the books and records of |
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the association, including financial records and invoices, open to |
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and reasonably available for examination by an owner, except as |
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otherwise provided by this section. An owner is entitled to obtain |
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from the association copies of the information contained in the |
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books and records [to any person requesting access to the books or
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records in accordance with Chapter 552, Government
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Code.
Subsection (a) does not apply to a property owners'
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association to which this subsection applies]. |
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(c) [(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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(d) In addition to the requirements of Subsection (b), a |
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property owners' association shall make the association's books and |
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records, including financial records and invoices, available in a |
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building: |
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(1) in which the books and records are appropriately |
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stored; and |
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(2) that is: |
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(A) staffed during normal business hours; |
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(B) accessible to an owner during normal business |
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hours; and |
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(C) located on property commonly owned by the |
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association within the boundaries of the subdivision governed by |
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the association. |
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(e) If a building described by Subsection (d) does not exist |
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on property described by Subsection (d), the property owners' |
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association shall make the books and records available in |
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accordance with Subsections (g) and (h). |
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(f) A requestor shall submit the request in writing: |
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(1) in person by hand delivery to a current board |
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member; |
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(2) to the mailing address of the association or |
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authorized representative as provided on the most current |
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management certificate filed under Section 209.004; or |
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(3) in person to a managing agent as reflected on the |
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most current management certificate filed under Section 209.004. |
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(g) A property owners' association shall make books and |
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records requested under Subsection (b) available to the requestor |
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within a reasonable time of the property owners' association's |
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receipt of the request. |
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(h) A reasonable time for providing information requested |
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under Subsection (b) is 10 business days after the date the property |
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owners' association receives a request, except as otherwise |
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provided by this section. |
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(i) If the property owners' association is unable to produce |
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a requested book or record on or before the 10th business day after |
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the date the request is received, the property owners' association |
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shall provide to the requestor written notice that: |
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(1) informs the requestor that the property owners' |
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association is unable to produce the information on or before the |
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10th business day after the date of the receipt of the request; and |
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(2) states a date by which the information will be |
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available for inspection that occurs not later than the 30th day |
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after the date notice under this subsection is given. |
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(j) A property owners' association shall make books and |
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records requested under this section available to the requestor in |
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one or more of the following formats, as specified by the requestor: |
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(1) an electronic format: |
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(A) delivered to an e-mail address provided by |
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the requestor; or |
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(B) delivered in a disc or other standard |
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electronic format: |
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(i) to the mailing address of the |
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requestor; or |
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(ii) if the requestor does not provide a |
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mailing address, to the address of the requestor's property in the |
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subdivision; or |
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(2) a hard-copy format: |
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(A) delivered to the mailing address of the |
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requestor; or |
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(B) if the requestor does not provide a mailing |
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address: |
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(i) mailed to the address of the requestor's |
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property in the subdivision; or |
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(ii) made available at a location not more |
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than 25 miles from the boundary of the subdivision governed by the |
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association. |
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(k) This section does not require a property owners' |
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association to staff a building described by Subsection (d). |
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(l) A property owners' association may charge an owner for |
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copies of the requested information in an amount that reasonably |
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includes all costs related to reproducing the information, |
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including costs of materials, labor, and overhead. |
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(m) Any information maintained by the association that is |
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released under this section may not identify an individual owner or |
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an individual owner's personal financial information. Information |
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may be released in an aggregate manner that would not identify an |
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individual owner. |
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(n) All ballots cast in an election that results in an |
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amendment to a dedicatory instrument are records of the property |
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owners' association subject to inspection under this section. |
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(o) All ballots cast in an election of property owners' |
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association board or other committee members are considered records |
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of the association but may not be made available for inspection |
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under this section, except for the purposes of a recount, without a |
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court order or subpoena. The association shall take reasonable |
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measures to safeguard the security and privacy of those ballots. |
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(p) A property owners' association shall: |
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(1) keep all records as to changes to the dedicatory |
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instruments in perpetuity; |
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(2) maintain and secure all ballots in |
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association-wide elections for four years; and |
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(3) maintain records related to financial matters of |
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the association, including assessments, fines, foreclosures, and |
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enforcement actions, for at least seven years. |
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(q) An owner who is denied access to or a copy of association |
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books or records to which the owner is entitled under this section |
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may file a petition with the justice of the peace of a justice |
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precinct in which all or part of the subdivision that is governed by |
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the association is located, requesting relief in accordance with |
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this subsection. If the justice of the peace finds that the owner |
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is entitled to access to or copies of the books or records, the |
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justice of the peace may grant one or more of the following |
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remedies: |
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(1) a judgment against the property owners' |
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association for a penalty of not more than $1,500; |
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(2) a judgment against the property owners' |
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association for court costs and attorney's fees incurred in |
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connection with seeking a remedy under this section; or |
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(3) a judgment authorizing the owner or the owner's |
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assignee to deduct the amounts awarded under Subdivisions (1) and |
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(2) from any future regular or special assessments payable to the |
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property owners' association. |
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(r) For the purposes of this section, "business day" means a |
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day other than Saturday, Sunday, or a state or federal holiday. |
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(s) On or before the 10th day before the date an owner files |
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a suit under this section, the owner must provide notice to the |
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other party of the person's intent to file suit under this section. |
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The notice must be sent by 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 209.0051 and 209.0056 to read as follows: |
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Sec. 209.0051. OPEN BOARD MEETINGS. (a) This section does |
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not apply to a property owners' association that is subject to |
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Chapter 551, Government Code, by application of Section 551.0015, |
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Government Code. |
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(b) In this section: |
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(1) "Board meeting": |
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(A) means a deliberation between a quorum of the |
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voting board of the property owners' association, or between a |
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quorum of the voting board and another person, during which |
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property owners' association business or policy over which the |
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board has responsibility is discussed or considered, or during |
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which the board takes formal action; and |
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(B) does not include the gathering of a quorum of |
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the board at a social function unrelated to the business of the |
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association, or the attendance by a quorum of the board at a |
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regional, state, or national convention, workshop, ceremonial |
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event, or press conference, if formal action is not taken and any |
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discussion of association business is incidental to the social |
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function, convention, workshop, ceremonial event, or press |
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conference. |
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(2) "Development period" means a period stated in a |
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declaration during which a declarant reserves: |
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(A) a right to facilitate the development, |
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construction, and marketing of the subdivision; and |
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(B) a right to direct the size, shape, and |
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composition of the subdivision. |
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(c) This section applies to a meeting of a property owners' |
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association during the development period only if the meeting is |
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conducted for the purpose of: |
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(1) adopting or amending the governing documents, |
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including declarations, bylaws, rules, and regulations of the |
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association; |
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(2) increasing the amount of regular assessments of |
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the association or adopting or increasing a special assessment; |
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(3) electing non-developer board members of the |
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association or establishing a process by which those members are |
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elected; or |
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(4) changing the voting rights of members of the |
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association. |
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(d) Except as provided by this section, a meeting of the |
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property owners' association board or a committee or subcommittee |
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of the board is open to owners and shall be held within the boundary |
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of the subdivision governed by the association. |
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(e) The board shall keep a record of each regular, |
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emergency, or special board meeting in the form of written minutes |
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or an audio recording of the meeting. A record of a meeting must |
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state the subject of each motion or inquiry, regardless of whether |
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the board takes action on the motion or inquiry, and indicate each |
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vote, order, decision, or other action taken by the board. The |
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board shall make meeting records, including approved minutes, |
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available to an owner for inspection and copying on the owner's |
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written request to the board or the board's representative. The |
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board shall approve the minutes of a board meeting not later than |
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the next regular board meeting. |
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(f) The board shall give owners notice of the date, hour, |
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place, and subject of a regular or special board meeting, including |
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a general description of any matters to be brought up for |
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deliberation in executive session. The notice shall be mailed to |
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each owner or: |
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(1) posted at least 72 hours before the start of the |
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meeting in a conspicuous manner reasonably designed to provide |
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notice to owners: |
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(A) in a place located on: |
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(i) the association's common property; or |
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(ii) other property located within the |
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boundary of the subdivision governed by the association, with the |
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property owner's consent; or |
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(B) on an Internet website maintained by the |
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association; and |
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(2) sent by e-mail to each owner who registers an |
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e-mail address with the property owners' association. |
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(g) An owner who registers an e-mail address with the |
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property owners' association as provided by Subsection (f)(2) must |
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update the e-mail address if the address changes. |
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(h) If the board recesses a regular or special board meeting |
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to continue the following regular business day, the board is not |
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required to post notice of the continued meeting if the recess is |
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taken in good faith and not to circumvent this section. If a |
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regular or special board meeting is continued to the following |
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regular business day, and on that following day the board continues |
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the meeting to another day, the board shall give notice as required |
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by this section of the meeting continued to that other day. |
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(i) If at a regular, emergency, or special meeting, an owner |
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makes an inquiry regarding a subject for which notice has not been |
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given as required by this section, the notice provisions of this |
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section do not apply to: |
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(1) a statement by the board of specific factual |
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information given in response to the inquiry; or |
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(2) a recitation of existing policy in response to the |
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inquiry. |
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(j) Any deliberation of or decision relating to the subject |
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of an inquiry made under Subsection (i) shall be limited to a |
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proposal to place the subject on the agenda for a subsequent board |
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meeting. |
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(k) In the event of a reasonably unforeseen emergency or |
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urgent necessity that requires immediate board action, the board |
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may meet in an emergency board meeting. Notice for an emergency |
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board meeting may be given in at least one manner prescribed by |
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Subsection (f)(1) at least two hours before the emergency session |
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is convened and must clearly identify the emergency or urgent |
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necessity for which the notice is given. A board in an emergency |
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meeting may not consider fines, foreclosures, enforcement actions, |
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increases in assessments, or any other foreseeable business or |
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policy over which the board has responsibility. Any action taken in |
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an emergency board meeting must be summarized orally, including an |
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explanation of any known actual or estimated expenditures approved |
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at the meeting, and documented in the minutes or tape recording of |
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the next regular or special board meeting. |
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(l) Before the board calls an executive session, the board |
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shall convene in a regular or special board meeting for which notice |
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has been given as provided by this section. During that board |
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meeting, the presiding board member may call an executive session |
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by announcing that an executive session will be held to deliberate a |
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matter described by Subsection (m) and identifying the specific |
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subdivision of Subsection (m) under which the executive session |
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will be held. A vote or other action item may not be taken in |
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executive session. |
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(m) A board of a property owners' association may meet in |
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executive session, to which the owners do not have access, to |
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deliberate: |
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(1) anticipated or pending litigation, settlement |
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offers, or interpretations of the law with the association's legal |
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counsel; |
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(2) complaints or charges against or issues regarding |
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a board member, or agent, employee, contractor, or other |
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representative of the property owners' association; |
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(3) a payment plan under which an owner may make |
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partial payments to the property owners' association for delinquent |
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assessments or other amounts owed without accruing additional |
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penalties; |
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(4) a foreclosure of a lien; |
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(5) an enforcement action against an owner, including |
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for nonpayment of amounts due; |
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(6) the purchase, exchange, lease, or value of real |
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property, if the board determines in good faith that deliberation |
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in an open board meeting may have a detrimental effect on the |
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association; |
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(7) business and financial issues relating to the |
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negotiation of a contract, if the board determines in good faith |
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that deliberation in an open board meeting may have a detrimental |
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effect on the position of the association; or |
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(8) matters involving the invasion of privacy of an |
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individual owner. |
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Sec. 209.0056. NOTICE OF ELECTION OR ASSOCIATION VOTE. |
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(a) On or before the 30th day before the date an election or vote |
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is held by a property owners' association, the association shall |
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give each owner of property in the property owners' association |
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written notice of the election or vote. |
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(b) This section supersedes any contrary requirement in a |
|
dedicatory instrument. |
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(c) This section does not apply to a property owners' |
|
association that is subject to Chapter 552, Government Code, by |
|
application of Section 552.0036, Government Code. |
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SECTION 5. (a) Section 5.012, Property Code, as amended by |
|
this Act, applies only to a sale of property that occurs on or after |
|
the effective date of this Act. For the purposes of this section, a |
|
sale of property occurs before the effective date of this Act if the |
|
executory contract binding the purchaser to purchase the property |
|
is executed before that date. A sale of property that occurs before |
|
the effective date of this Act is governed by the law in effect |
|
immediately before that date, and that law is continued in effect |
|
for that purpose. |
|
(b) 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. |
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SECTION 6. This Act takes effect January 1, 2012. |