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A BILL TO BE ENTITLED
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AN ACT
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relating to a fidelity bond or insurance requirement for property |
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owners' association and unit owners' association board members. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 82, Property Code, is |
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amended by adding Section 82.1031 to read as follows: |
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Sec. 82.1031. FIDELITY BOND OR INSURANCE REQUIREMENT. The |
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board of a unit owners' association of 20 units or more shall obtain |
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and maintain a fidelity bond or fidelity insurance that covers |
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losses resulting from dishonest or fraudulent acts. The board must |
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maintain the bond or insurance in force for all officers, |
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directors, and employees of the association and all other persons |
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handling or responsible for funds administered by the board. The |
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coverage must be not less than a sum equal to three months' |
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aggregate assessments on all units plus reserve funds. The |
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governing documents of the association may provide for higher |
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limits of coverage. |
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SECTION 2. Chapter 209, Property Code, is amended by adding |
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Section 209.00595 to read as follows: |
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Sec. 209.00595. FIDELITY BOND OR INSURANCE REQUIREMENT. |
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The board of a property owners' association of 20 lots or more shall |
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obtain and maintain a fidelity bond or fidelity insurance that |
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covers losses resulting from dishonest or fraudulent acts. The |
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board must maintain the bond or insurance in force for all officers, |
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directors, and employees of the association and all other persons |
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|
handling or responsible for funds administered by the board. The |
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|
coverage must be not less than a sum equal to three months' |
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aggregate assessments on all lots plus reserve funds. The governing |
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documents of the association may provide for higher limits of |
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coverage. |
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SECTION 3. This Act takes effect September 1, 2013. |