BILL ANALYSIS |
C.S.H.B. 971 |
By: Bohac |
Business & Industry |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Reports indicate that Texas is estimated to have almost 20,000 property owners' associations, which are managed by an estimated 130,000 volunteer property owners serving on the governing body of the respective association. The reports also estimate that several million Texans live in a real estate development administered by a property owners' association and that the property owners pay several billion dollars in annual assessments and reserve fund contributions to these associations. Interested parties explain that these property owners' associations administer real estate developments consisting of real property valued at more than $250 billion and are charged with the duty to maintain common area facilities and property, insure commonly owned property, administer property damage insurance claims, enforce land use regulations, contract on behalf of association members, engage in litigation on behalf of association members, maintain streets and recreational facilities, operate security services, and perform other related functions.
With this great responsibility, the parties have expressed concerns regarding inconsistent standards of care and eligibility requirements currently imposed upon the individuals serving on the boards of the various types of property owners' associations. As the popularity and number of property owners' associations increase, the parties contend that there is more potential for abuse and harm to property owners if these associations are not properly managed in compliance with applicable dedicatory instruments and state law. C.S.H.B. 971 seeks to address these concerns.
|
||||||||||||||
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
|
||||||||||||||
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.
|
||||||||||||||
ANALYSIS
C.S.H.B. 971 amends the Property Code to establish that each officer or member of a board of directors or other governing body, if any, of a condominium regime is liable as a fiduciary of the unit owners for the officer's or member's acts or omissions and is subject to provisions of the Uniform Condominium Act and the bill regarding condominium unit owners' association board member and officer powers, duties, and liability. The bill establishes that such fiduciary duty and a fiduciary duty imposed under the act prevails in the event of a conflict with a duty imposed by Business Organizations Code provisions relating to nonprofit corporations.
C.S.H.B. 971 requires an officer or board member of a condominium unit owners' association or property owners' association to read before taking office the Uniform Condominium Act and the Texas Residential Property Owners Protection Act, respectively; the dedicatory instruments and written policies of the condominium regime and the unit owners' association or the residential subdivision and the property owners' association, respectively; and Business Organizations Code provisions relating to nonprofit corporations, if applicable. The bill requires an officer or board member of a condominium unit owners' association or property owners' association, not later than the 90th day after the date the officer or board member is elected or appointed, to file a sworn statement with the secretary of the applicable association affirming that the officer or board member has complied with the respective requirements before taking office. The bill requires an association officer or board member to comply with that filing requirement only after being first appointed or elected unless the officer or member does not serve continuously, provides for an officer's or member's temporary suspension and for the appointment of a temporary replacement for noncompliance with that filing requirement, and requires an association to keep each filed sworn statement with the association records for a specified period. The bill provides for the removal from office a board member of a unit owners' association based on evidence of a conviction for a felony or crime involving moral turpitude not more than 20 years before the date the board is presented with the evidence.
C.S.H.B. 971 requires an officer or board member of a condominium unit owners' association or a property owners' association serving in office on the bill's effective date to comply with the bill's requirements not later than December 1, 2015.
|
||||||||||||||
EFFECTIVE DATE
September 1, 2015.
|
||||||||||||||
COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 971 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
|
||||||||||||||
|