BILL ANALYSIS |
C.S.H.B. 503 |
By: Hernandez Luna |
Business & Industry |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Interested parties contend that a conflict of interest arises when a residential property owners' association board member enters into a contract that provides the member financial compensation. C.S.H.B. 503 seeks to remedy this concern by regulating such contracts.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 503 amends the Property Code to authorize certain property owners' associations, under certain conditions as specified in the bill, to enter into an enforceable contract with a current association board member, a person related to a current association board member within the third degree by consanguinity or affinity, or a company in which a current association board member or a person related to a current association board member within the third degree by consanguinity or affinity has a financial interest in at least 51 percent of the profits.
C.S.H.B. 503 exempts from its provisions a contract entered into by an association during a development period, defined in the bill as a period stated in a declaration during which a declarant reserves a right to facilitate the development, construction, and marketing of the subdivision and reserves a right to direct the size, shape, and composition of the subdivision.
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EFFECTIVE DATE
September 1, 2013.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 503 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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