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SECTION 3. Chapter 215,
Property Code, is amended by adding Section 215.0135 to read as follows:
Sec. 215.0135.
ASSOCIATION RECORDS. (a) To the extent of any conflict or inconsistency,
this section prevails over other provisions of law and the dedicatory
instruments of a property owners' association subject to this chapter. This
section is the exclusive procedure for a property owner to inspect the
books and records of the association.
(b) Except as provided by
Subsection (c) or (j), a property owners' association shall, on written
request as provided by this section, make the books and records of the
association open to and reasonably available for examination by an owner or
a person designated in a written instrument signed by the owner as the
owner's agent, attorney, or certified public accountant. Except as provided
by Subsection (c) or (j), an owner is entitled to obtain copies of the
books and records from the association.
(c) An attorney's files
and records relating to the property owners' association, excluding
invoices, are not records of the association and are not subject to
inspection by the owner or the owner's authorized representative or to
production in a legal proceeding. This subsection does not require
production of a document that is covered by the attorney-client privilege.
(d) An owner or the owner's
authorized representative described by Subsection (b) must submit a written
request by certified mail to the mailing address of the property owners'
association or the association's authorized representative, as reflected on
the most current management certificate filed under Section 215.013, for
access to the books and records of the association. The request must
describe, in sufficient detail, the association's books and records
requested by the owner or the owner's representative and:
(1) if an inspection is
requested, the association shall, on or before the l0th business day after
the date the association receives the request, send written notice of
dates that the owner may inspect, during normal business hours, the
requested books and records to the extent those books and records are in
the actual physical possession, custody, and control of the association; or
(2) if copies of
identified books and records are requested, the association shall, to the
extent those books and records are in the actual physical possession,
custody, and control of the association, produce copies of the requested
books and records on or before the 10th business day after the date the
association receives the request, except as otherwise provided by this
section.
(e) If the property
owners' association fails to produce the books or records requested under
Subsection (d) on or before the l0th 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 and the specific
reasons for that inability on or before the 10th business day after the
date the association received the request; and
(2) if the association
can produce the information, notifies the requestor of the date by which
the information will be sent or made available for inspection to the
requesting party, which may not be later than the 15th day after the date
notice under this subsection is given.
(f) If an inspection is
requested or required, the inspection shall take place at a mutually agreed
on time during normal business hours of the property owners' association,
and the requesting party shall identify the books and records for the
association to copy and forward to the requesting party.
(g) 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.
(h) A property owners'
association board must adopt a records production and copying policy that
prescribes the costs the association will charge for the compilation,
production, and reproduction of information requested under this section.
The prescribed charges may include all reasonable costs of materials,
labor, and overhead but may not exceed costs
that would be applicable for an item under 1 T.A.C. Section 70.3.
The policy required by this subsection must be recorded as a dedicatory
instrument. If the policy is not recorded, the association may not charge
an owner for the compilation, production, or reproduction of information
requested under this section. If the policy is recorded, the requesting
owner or the owner's representative is responsible for all costs related to
the compilation, production, and reproduction of the requested information
based on the amounts prescribed by the policy. The association may require
advance payment of the estimated costs of compilation, production, and
reproduction of the requested information. If the total of the estimated
costs differs from the total of the actual costs, the association shall
submit a final invoice to the owner on or before the 30th business day
after the date the requested copies are delivered. If the actual total
cost is higher than the estimated total cost, and the owner fails to
reimburse the association before the 30th business day after the date the
invoice is sent to the owner, the association may add the amount due to the
owner's account as an assessment. If the actual total cost is less than the
estimated total cost, the association shall issue a refund to the owner not
later than the 30th business day after the date the requested copies are
delivered.
(i) A property owners'
association must estimate costs under this section using amounts prescribed
by the policy adopted under Subsection (h).
(j) Information may be
released in an aggregate or summary manner that would not identify an
individual property owner. Except as provided by Subsection (k) and to the
extent the information is provided in the meeting minutes, the property
owners' association is not required to release or allow inspection of any
books or records that identify:
(1) the dedicatory
instrument violation history of an individual owner;
(2) an owner's personal financial
information, including records of payment or nonpayment of amounts due the
association;
(3) an owner's contact
information, other than the owner's address;
(4) an owner's property
files or building plans;
(5) books or records
described by Subsection (c);
(6) any information to
which an owner objects to releasing or has not granted approval for
releasing; or
(7) information related
to an employee of the association, including personnel files.
(k) The books and records
described by Subsection (j) 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 property owners' 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.
(l) A property owners'
association shall adopt and comply with a document retention policy that
includes, at a minimum, the following requirements:
(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.
(m) A member of a
property owners' association who is denied access to or copies of the
association books or records to which the member is entitled under this
section may file a petition with the county court at law in which all or
part of the property that is governed by the association is located
requesting relief in accordance with this subsection. If the county court
at law finds that the member is entitled to access to or copies of the
records, the county court at law may grant one or more of the following
remedies:
(1) a judgment ordering
the association to release or allow access to the books or records;
(2) a judgment against
the association for court costs and attorney's fees incurred in connection
with seeking a remedy under this section; or
(3) a judgment
authorizing the owner or the owner's assignee to deduct the amounts awarded
under Subdivision (2) from any future regular or special assessments
payable to the association.
(n) If the property
owners' association prevails in an action under Subsection (m), the
association is entitled to a judgment for court costs and attorney's fees
incurred by the association in connection with the action.
(o) On or before the 10th
business day before the date a person brings an action against a property
owners' association under this section, the person must send written notice
to the association of the person's intent to bring the action. The notice
must:
(1) be sent certified
mail, return receipt requested, or delivered by the United States Postal
Service with signature confirmation service, to the mailing address of the
association or the association's authorized representative as reflected on
the most current management certificate filed under Section 215.013; and
(2) describe with
sufficient detail the books and records being requested.
(p) For the purposes of
this section, "business day" means a day other than Saturday,
Sunday, or a state or federal holiday.
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SECTION
3. Chapter 215, Property Code, is amended by adding Section 215.0135 to
read as follows:
Sec.
215.0135. ASSOCIATION RECORDS. (a) To the extent of any conflict or
inconsistency, this section prevails over other provisions of law and the
dedicatory instruments of a property owners' association subject to this
chapter. This section is the exclusive procedure for a property owner to
inspect the books and records of the association.
(b)
Except as provided by Subsection (c) or (j), a property owners' association
shall, on written request as provided by this section, make the books and
records of the association open to and reasonably available for examination
by an owner or a person designated in a written instrument signed by the
owner as the owner's agent, attorney, or certified public accountant.
Except as provided by Subsection (c) or (j), an owner is entitled to obtain
copies of the books and records from the association.
(c)
An attorney's files and records relating to the property owners'
association, excluding invoices, are not records of the association and are
not subject to inspection by the owner or the owner's authorized
representative or to production in a legal proceeding. This subsection does
not require production of a document that is covered by the attorney-client
privilege.
(d)
An owner or the owner's authorized representative described by Subsection
(b) must submit a written request by certified mail to the mailing address
of the property owners' association or the association's authorized
representative, as reflected on the most current management certificate
filed under Section 215.013, for access to the books and records of the
association. The request must describe, in sufficient detail, the
association's books and records requested by the owner or the owner's
representative and:
(1)
if an inspection is requested, the association shall, on or before the l0th
business day after the date the association receives the request, send
written notice of dates that the owner may inspect, during normal business
hours, the requested books and records to the extent those books and
records are in the actual physical possession, custody, and control of the
association; or
(2)
if copies of identified books and records are requested, the association
shall, to the extent those books and records are in the actual physical
possession, custody, and control of the association, produce copies of the
requested books and records on or before the 10th business day after the
date the association receives the request, except as otherwise provided by
this section.
(e)
If the property owners' association fails to produce the books or records
requested under Subsection (d) on or before the l0th 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 and the specific reasons for that inability on or before the
10th business day after the date the association received the request; and
(2)
if the association can produce the information, notifies the requestor of
the date by which the information will be sent or made available for
inspection to the requesting party, which may not be later than the 15th
day after the date notice under this subsection is given.
(f)
If an inspection is requested or required, the inspection shall take place
at a mutually agreed on time during normal business hours of the property
owners' association, and the requesting party shall identify the books and
records for the association to copy and forward to the requesting party.
(g) 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.
(h) A
property owners' association board must adopt a records production and
copying policy that prescribes the costs the association will charge for
the compilation, production, and reproduction of information requested
under this section. The prescribed charges may include all reasonable costs
of materials, labor, and overhead.
The
policy required by this subsection must be recorded as a dedicatory
instrument. If the policy is not recorded, the association may not charge
an owner for the compilation, production, or reproduction of information
requested under this section. If the policy is recorded, the requesting
owner or the owner's representative is responsible for all costs related to
the compilation, production, and reproduction of the requested information
based on the amounts prescribed by the policy. The association may require
advance payment of the estimated costs of compilation, production, and
reproduction of the requested information. If the total of the estimated
costs differs from the total of the actual costs, the association shall
submit a final invoice to the owner on or before the 30th business day
after the date the requested copies are delivered. If the actual total
cost is higher than the estimated total cost, and the owner fails to reimburse
the association before the 30th business day after the date the invoice is
sent to the owner, the association may add the amount due to the owner's
account as an assessment. If the actual total cost is less than the
estimated total cost, the association shall issue a refund to the owner not
later than the 30th business day after the date the requested copies are
delivered.
(i) A
property owners' association must estimate costs under this section using
amounts prescribed by the policy adopted under Subsection (h).
(j)
Information may be released in an aggregate or summary manner that would
not identify an individual property owner. Except as provided by Subsection
(k) and to the extent the information is provided in the meeting minutes,
the property owners' association is not required to release or allow
inspection of any books or records that identify:
(1)
the dedicatory instrument violation history of an individual owner;
(2)
an owner's personal financial information, including records of payment or
nonpayment of amounts due the association;
(3)
an owner's contact information, other than the owner's address;
(4)
an owner's property files or building plans;
(5)
books or records described by Subsection (c);
(6)
any information to which an owner objects to releasing or has not granted
approval for releasing; or
(7)
information related to an employee of the association, including personnel
files.
(k)
The books and records described by Subsection (j) 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 property owners' 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.
(l) A
property owners' association shall adopt and comply with a document
retention policy that includes, at a minimum, the following requirements:
(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.
(m) A
member of a property owners' association who is denied access to or copies
of the association books or records to which the member is entitled under
this section may file a petition with the county court at law in which all
or part of the property that is governed by the association is located
requesting relief in accordance with this subsection. If the county court
at law finds that the member is entitled to access to or copies of the
records, the county court at law may grant one or more of the following
remedies:
(1) a
judgment ordering the association to release or allow access to the books
or records;
(2) a
judgment against the association for court costs and attorney's fees
incurred in connection with seeking a remedy under this section; or
(3) a
judgment authorizing the owner or the owner's assignee to deduct the
amounts awarded under Subdivision (2) from any future regular or special
assessments payable to the association.
(n)
If the property owners' association prevails in an action under Subsection
(m), the association is entitled to a judgment for court costs and
attorney's fees incurred by the association in connection with the action.
(o)
On or before the 10th business day before the date a person brings an
action against a property owners' association under this section, the
person must send written notice to the association of the person's intent
to bring the action. The notice must:
(1)
be sent certified mail, return receipt requested, or delivered by the
United States Postal Service with signature confirmation service, to the
mailing address of the association or the association's authorized
representative as reflected on the most current management certificate
filed under Section 215.013; and
(2)
describe with sufficient detail the books and records being requested.
(p)
For the purposes of this section, "business day" means a day
other than Saturday, Sunday, or a state or federal holiday.
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