84R6778 PMO-F

By: Bohac H.B. No. 971

A BILL TO BE ENTITLED

AN ACT

relating to requirements governing officers and directors of condominium unit owners' associations and property owners' associations.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter C, Chapter 81, Property Code, is amended by adding Section 81.2011 to read as follows:

Sec. 81.2011. BOARD MEMBERS AND OFFICERS. (a) Each officer or member of a board of directors or other governing body, if any, of a condominium regime is:

(1) liable as a fiduciary of the unit owners for the officer's or member's acts or omissions; and

(2) subject to Sections 82.103(f) and (g), 82.1031, and 82.1032.

(b) For purposes of this section, a reference to "this chapter" in Section 82.1031 means Chapter 81 and Chapter 82.

(c) To the extent a fiduciary duty imposed by Subsection (a)(1) conflicts with a duty imposed by Chapter 22, Business Organizations Code, Subsection (a)(1) prevails.

SECTION 2. Section 82.103, Property Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) To the extent a duty imposed by Subsection (a) conflicts with a duty imposed by Chapter 22, Business Organizations Code, Subsection (a) prevails.

SECTION 3. Subchapter C, Chapter 82, Property Code, is amended by adding Sections 82.1031 and 82.1032 to read as follows:

Sec. 82.1031. BOARD MEMBER AND OFFICER DUTIES. (a) Before taking office, an officer or board member of a unit owners' association shall read:

(1) this chapter;

(2) the dedicatory instruments and written policies of the condominium regime and the unit owners' association; and

(3) if applicable, Chapter 22, Business Organizations Code.

(b) While in office, an officer or board member of a unit owners' association shall:

(1) uphold and comply with:

(A) this chapter;

(B) the dedicatory instruments and written policies of the condominium regime and the unit owners' association; and

(C) if applicable, Chapter 22, Business Organizations Code; and

(2) faithfully discharge the fiduciary duties the officer or board member owes to the unit owners.

(c) Not later than the 90th day after the date an officer or board member is elected or appointed, the officer or board member shall file a sworn statement with the secretary of the association affirming that the officer or board member:

(1) has complied with Subsection (a); and

(2) while serving as an officer or board member, will comply with Subsection (b).

(d) An officer or board member is required to comply with Subsection (c) only after the officer or board member is first elected or appointed, unless the officer or board member does not serve continuously.

(e) An officer or board member who fails to comply with Subsection (c) is temporarily suspended from office until the date the officer or board member complies with that subsection. The board may appoint another person to perform the duties of the office until the earlier of the date the officer's or board member's term of office expires or the date the officer or board member complies with Subsection (c). The temporary appointee must comply with Subsection (c).

(f) The association shall keep with the association records under Section 82.114 each sworn statement filed under Subsection (c) until at least the fifth anniversary of the date the officer or board member who filed the statement was elected or appointed.

Sec. 82.1032. REMOVAL FROM OFFICE. If the board of a unit owners' association is presented with written, documented evidence from a database or other record maintained by a governmental law enforcement authority that a board member of the association has been convicted of a felony or crime involving moral turpitude, the board member is immediately ineligible to serve in that capacity, automatically removed from office, and prohibited from future service as a board member of the association.

SECTION 4. Chapter 209, Property Code, is amended by adding Section 209.00595 to read as follows:

Sec. 209.00595. OFFICER OR BOARD MEMBER DUTIES. (a) Before taking office, an officer or board member of a property owners' association shall read:

(1) this chapter; and

(2) the dedicatory instruments and written policies of the property owners' association.

(b) While in office, an officer or board member of a property owners' association shall:

(1) uphold and comply with:

(A) this chapter; and

(B) the dedicatory instruments and written policies of the residential subdivision and the property owners' association; and

(2) faithfully discharge the officer's or board member's duties.

(c) Not later than the 90th day after the date an officer or board member is elected or appointed, the officer or board member shall file a sworn statement with the secretary of the association affirming that the officer or board member:

(1) has complied with Subsection (a); and

(2) while serving as an officer or board member, will comply with Subsection (b).

(d) An officer or board member is required to comply with Subsection (c) only after the officer or board member is first elected or appointed, unless the officer or board member does not serve continuously.

(e) An officer or board member who fails to comply with Subsection (c) is temporarily suspended from office until the date the officer or board member complies with that subsection. The board may appoint another person to perform the duties of the office until the earlier of the date the officer's or board member's term of office expires or the date the officer or board member complies with Subsection (c). The temporary appointee must comply with Subsection (c).

(f) The association shall keep with the association records under Section 209.005 each sworn statement filed under Subsection (c) until at least the fifth anniversary of the date the officer or board member who filed the statement was elected or appointed.

SECTION 5. (a) The changes in law made by this Act apply to an officer or board member of a unit owners' association or a property owners' association who is:

(1) elected or appointed to office on or after the effective date of this Act; or

(2) serving in office on the effective date of this Act.

(b) Not later than December 1, 2015, an officer or board member of a unit owners' association or a property owners' association serving in office on the effective date of this Act must comply with the requirements imposed by Section 82.1031 or 209.00595, Property Code, as added by this Act, as applicable.

SECTION 6. This Act takes effect September 1, 2015.