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A BILL TO BE ENTITLED
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AN ACT
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relating to the operation of certain property owners' associations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 207.001(2), Property Code, is amended to |
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read as follows: |
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(2) "Dedicatory instrument," "property owners' |
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association," and "restrictive covenant" have the meanings |
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assigned by Section 209.002 [202.001]. |
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SECTION 2. Section 207.002, Property Code, is amended to |
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read as follows: |
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Sec. 207.002. APPLICABILITY. (a) This chapter applies to a |
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subdivision with a property owners' association that is entitled to |
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levy regular or special assessments. |
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(b) This chapter does not apply to a condominium council of |
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owners governed by Chapter 81 or a condominium unit owners' |
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association governed by Chapter 82. |
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SECTION 3. Section 209.002, Property Code, is amended by |
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amending Subdivision (4-a) and adding Subdivision (13) to read as |
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follows: |
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(4-a) "Development period" means a period stated in a |
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declaration during which a declarant reserves: |
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(A) a right to facilitate the development, |
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construction, and marketing of the subdivision; or [and] |
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(B) a right to direct the size, shape, and |
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composition of the subdivision. |
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(13) "Verified mail" means any method of mailing that |
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provides evidence of mailing. |
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SECTION 4. Section 209.003(d), Property Code, is amended to |
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read as follows: |
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(d) This chapter does not apply to a condominium as defined |
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[development governed] by Section 81.002 or 82.003 [Chapter 82]. |
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SECTION 5. Section 209.0041, Property Code, is amended by |
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amending Subsection (h) and adding Subsection (h-1) to read as |
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follows: |
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(h) Except as provided by Subsection (h-1) [this
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subsection], a declaration may be amended only by a vote of: |
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(1) 67 percent of the total votes allocated to |
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property owners in the property owners' association, in addition to |
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any governmental approval required by law; or |
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(2) 67 percent of those entitled to vote on the |
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amendment of the declaration, in addition to any governmental |
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approval required by law. |
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(h-1) If the declaration contains a lower percentage than |
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prescribed by Subsection (h), the percentage in the declaration |
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controls. |
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SECTION 6. Section 209.0051, Property Code, is amended by |
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amending Subsections (b), (c-1), and (h) and adding Subsection |
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(c-2) to read as follows: |
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(b) In this section, "board [:
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[(1) "Board] meeting": |
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(1) [(A)] means a deliberation between a quorum of the |
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voting board of the property owners' association, or between a |
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quorum of the voting board and another person, during which |
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property owners' association business is considered and the board |
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takes formal action; and |
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(2) [(B)] does not include the gathering of a quorum |
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of the board at a social function unrelated to the business of the |
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association or the attendance by a quorum of the board at a |
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regional, state, or national convention, ceremonial event, or press |
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conference, if formal action is not taken and any discussion of |
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association business is incidental to the social function, |
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convention, ceremonial event, or press conference. |
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[(2)
"Development period" means a period stated in a
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declaration during which a declarant reserves:
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[(A)
a right to facilitate the development,
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construction, and marketing of the subdivision; and
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[(B)
a right to direct the size, shape, and
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composition of the subdivision.] |
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(c-1) Except for a meeting held by electronic or telephonic |
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means under Subsection (c-2) [(h)], a board meeting must be held in |
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a county in which all or part of the property in the subdivision is |
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located or in a county adjacent to that county. |
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(c-2) A board meeting may be held by electronic or |
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telephonic means provided that: |
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(1) all directors may hear and be heard by every other |
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director; and |
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(2) except for any portion of the meeting conducted in |
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executive session, all owners in attendance at the meeting may hear |
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all directors. |
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(h) Except as provided by this subsection, a [A] board may |
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take action outside of a meeting [meet by any method of
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communication], including voting by electronic or [and] telephonic |
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means, without prior notice to owners under Subsection (e), if each |
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director is given a reasonable opportunity to express the |
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director's opinion to all other directors and to vote [may hear and
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be heard by every other director, or the board may take action by
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unanimous written consent to consider routine and administrative
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matters or a reasonably unforeseen emergency or urgent necessity
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that requires immediate board action]. Any action taken without |
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notice to owners under Subsection (e) must be summarized orally, |
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including an explanation of any known actual or estimated |
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expenditures approved at the meeting, and documented in the minutes |
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of the next regular or special board meeting. The board may not, |
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without prior notice to owners under Subsection (e), [consider or] |
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vote on: |
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(1) fines; |
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(2) damage assessments; |
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(3) initiation of foreclosure actions; |
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(4) initiation of enforcement actions, excluding |
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temporary restraining orders or violations involving a threat to |
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health or safety; |
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(5) increases in assessments; |
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(6) levying of special assessments; |
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(7) appeals from a denial of architectural control |
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approval; or |
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(8) a suspension of a right of a particular owner |
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before the owner has an opportunity to attend a board meeting to |
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present the owner's position, including any defense, on the issue. |
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SECTION 7. Section 209.0056, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (a-1) to read as |
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follows: |
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(a) For an election or vote taken at a meeting of the |
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association owners, not [Not] later than the 10th day or earlier |
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than the 60th day before the date of the [an] election or vote, a |
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property owners' association shall give written notice of the |
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election or vote to: |
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(1) each owner of property in the property owners' |
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association, for purposes of an association-wide election or vote; |
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or |
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(2) each owner of property in the property owners' |
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association entitled under the dedicatory instruments to vote in a |
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particular representative election, for purposes of a vote that |
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involves election of representatives of the association who are |
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vested under the dedicatory instruments of the property owners' |
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association with the authority to elect or appoint board members of |
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the property owners' association. |
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(a-1) For an election or vote of association owners not |
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taken at a meeting, the property owners' association shall give |
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notice of the election or vote to all owners. |
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SECTION 8. Section 209.0057, Property Code, is amended by |
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amending Subsections (b), (c), and (d) and adding Subsections |
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(b-1), (b-2), (b-3), and (b-4) to read as follows: |
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(b) Any owner may, not later than the 15th day after the date |
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of the meeting of association owners at which the election or vote |
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was held or the date of the announcement of the results of the |
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election or vote if no meeting was held, require a recount of the |
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votes. A demand for a recount must be submitted in writing either: |
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(1) by verified [certified] mail[, return receipt
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requested, or by delivery by the United States Postal Service with
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signature confirmation service] to the property owners' |
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association's mailing address as reflected on the latest management |
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certificate filed under Section 209.004; or |
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(2) in person to the property owners' association's |
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managing agent as reflected on the latest management certificate |
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filed under Section 209.004 or to the address to which absentee and |
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proxy ballots are mailed. |
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(b-1) The association must estimate the costs for |
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performance of the recount by a person qualified to tabulate votes |
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under Subsection (c) and must send an invoice for the estimated |
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costs to the requesting owner at the owner's last known address |
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according to association records not later than the 20th day after |
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the date the association receives the owner's demand for the |
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recount. |
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(b-2) The owner demanding a recount under this section must |
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pay the invoice described by Subsection (b-1) in full to the |
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property owners' association on or before the 30th day after the |
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date the invoice is sent to the owner. |
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(b-3) If the invoice described by Subsection (b-1) is not |
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paid by the deadline prescribed by Subsection (b-2), the owner's |
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demand for a recount is considered withdrawn and a recount is not |
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required. |
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(b-4) If the estimated costs under Subsection (b-1) are |
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lesser or greater than the actual costs, the association must send a |
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final invoice to the owner on or before the 30th business day after |
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the date the results of the recount are provided. If the final |
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invoice includes additional amounts owed by the owner, any |
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additional amounts not paid to the association before the 30th |
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business day after the date the invoice is sent to the owner may be |
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added to the owner's account as an assessment. If the estimated |
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costs exceed the final invoice amount, the owner is entitled to a |
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refund. The association shall issue the refund to the owner not |
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later than the 30th business day after the date the invoice is sent |
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to the owner. |
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(c) Following receipt of payment under Subsection (b-2), |
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the [The] property owners' association shall, at the expense of the |
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owner requesting the recount, retain for the purpose of performing |
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the recount[,] the services of a person qualified to tabulate votes |
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under this subsection. The association shall enter into a contract |
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for the services of a person who: |
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(1) is not a member of the association or related to a |
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member of the association board within the third degree by |
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consanguinity or affinity, as determined under Chapter 573, |
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Government Code; and |
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(2) is: |
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(A) a current or former: |
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(i) county judge; |
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(ii) county elections administrator; |
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(iii) justice of the peace; or |
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(iv) county voter registrar; or |
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(B) a person agreed on by the association and |
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each person [the persons] requesting the recount. |
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(d) Any recount under Subsection (b) must be performed on or |
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before the 30th day after the date of receipt of [a request and] |
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payment for a recount in accordance with Subsection (b-2) |
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[Subsections (b) and (c)]. If the recount changes the results of |
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the election, the property owners' association shall reimburse the |
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requesting owner for the cost of the recount. The property owners' |
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association shall provide the results of the recount to each owner |
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who requested the recount. Any action taken by the board in the |
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period between the initial election vote tally and the completion |
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of the recount is not affected by any recount. |
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SECTION 9. Sections 209.0058(a) and (c), Property Code, are |
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amended to read as follows: |
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(a) Any vote cast by a member of a property owners' |
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association in a director [an] election or in a vote on the issue of |
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whether to amend a dedicatory instrument, increase a regular |
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assessment, adopt a special assessment, or remove a director [or
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vote by a member of a property owners' association] must be in |
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writing and signed by the member. |
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(c) In an association [association-wide] election, written |
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and signed ballots are not required for uncontested races. |
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SECTION 10. Section 209.00591, Property Code, is amended by |
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adding Subsection (b-1) and amending Subsection (c) to read as |
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follows: |
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(b-1) Notwithstanding any other provision of this chapter, |
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a property owners' association's bylaws may require one or more |
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board members to reside in the subdivision subject to the |
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dedicatory instruments. A requirement described by this subsection |
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is not applicable during the development period. |
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(c) The declaration may provide for a period of declarant |
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control of the association during which a declarant, or persons |
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designated by the declarant, may appoint and remove board members |
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and the officers of the association, other than board members or |
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officers elected by members of the property owners' |
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association. Regardless of the period of declarant control |
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provided by the declaration, on or before the 120th day after the |
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date 75 percent of the lots that may be created and made subject to |
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the declaration are conveyed to owners other than a declarant or a |
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builder in the business of constructing homes who purchased the |
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lots from the declarant for the purpose of selling completed homes |
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built on the lots, at least one-third of the board members must be |
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elected by owners other than the declarant. If the declaration |
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does not include the number of lots that may be created and made |
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subject to the declaration, at least one-third of the board members |
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must be elected by owners other than the declarant not later than |
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the 10th anniversary of the date the declaration was recorded. |
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SECTION 11. Section 209.00592, Property Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1) and (c-1) to |
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read as follows: |
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(a) The voting rights of an owner may be cast or given: |
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(1) if a meeting of the property owners' association is |
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held, in person or by proxy at the [a] meeting [of the property
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owners' association]; |
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(2) by absentee ballot in accordance with this |
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section; or |
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(3) [by electronic ballot in accordance with this
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section; or
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[(4)] by any method of representative or delegated |
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voting provided by a dedicatory instrument. |
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(a-1) The board may in its discretion use electronic ballots |
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in accordance with this section as an additional method of voting. |
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(c-1) For purposes of Subsection (b), a nomination taken |
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from the floor in an election of directors is not considered an |
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amendment to the proposal for the election. |
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SECTION 12. Section 209.00593(d), Property Code, is amended |
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to read as follows: |
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(d) This section does not apply to the appointment of a |
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board member during a development period. [In this subsection,
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"development period" means a period stated in a declaration during
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which a declarant reserves:
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[(1)
a right to facilitate the development,
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construction, and marketing of the subdivision; and
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[(2)
a right to direct the size, shape, and
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composition of the subdivision.] |
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SECTION 13. Section 209.00594, Property Code, is amended by |
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adding Subsection (b-1) and amending Subsection (c) to read as |
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follows: |
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(b-1) A person performing a recount under Section |
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209.0057(c) may not disclose to any other person how an individual |
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voted. |
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(c) Notwithstanding any other provision of this chapter or |
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any other law, only a person [other than a person] who tabulates |
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votes under Subsection (b) or who performs a recount under Section |
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209.0057(c) [, including a person described by Subsection (a),] may |
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be given access to the ballots cast in the election or vote [only as
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part of a recount process authorized by law]. |
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SECTION 14. Section 209.006, Property Code, is amended to |
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read as follows: |
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Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION. |
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(a) Before a property owners' association may suspend an owner's |
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right to use a common area, file a suit against an owner other than a |
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suit to collect a regular or special assessment or foreclose under |
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an association's lien, charge an owner for property damage, or levy |
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a fine for a violation of the restrictions or bylaws or rules of the |
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association, the association or its agent must give written notice |
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to the owner by verified [certified] mail[, return receipt
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requested]. |
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(b) The notice must: |
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(1) describe the nature of the violation or property |
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damage that is the basis for the suspension action, charge, or fine |
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and state any amount due the association from the owner; [and] |
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(2) except as provided in Subsection (d), inform the |
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owner that the owner: |
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(A) is entitled to a reasonable period to cure |
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the violation and avoid the fine or suspension [unless the owner was
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given notice and a reasonable opportunity to cure a similar
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violation within the preceding six months]; |
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(B) may request a hearing under Section 209.007 |
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on or before the 30th day after the date [the owner receives] the |
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notice was mailed to the owner; and |
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(C) may have special rights or relief related to |
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the enforcement action under federal law, including the |
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Servicemembers Civil Relief Act (50 U.S.C. App. [app.] Section 501 |
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et seq.), if the owner is serving on active military duty; |
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(3) specify the date by which the owner must cure the |
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violation if the violation is of a curable nature and does not pose |
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a threat to public health or safety; and |
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(4) be sent by verified mail to the owner at the |
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owner's last known address as shown on the association records. |
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(c) The date specified in the notice under Subsection (b)(3) |
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must provide a reasonable period to cure the violation if the |
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violation is of a curable nature and does not pose a threat to |
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public health or safety. |
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(d) Subsections (a) and (b) do not apply to a violation for |
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which the owner has been previously given notice under this section |
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and the opportunity to exercise any rights available under this |
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section in the preceding six months. |
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(e) If the owner cures the violation before the expiration |
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of the period for cure described by Subsection (c), any fine |
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assessed for the violation is void. |
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(f) For purposes of this section, a violation is considered |
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a threat to public health or safety if the violation could |
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materially affect the physical health or safety of an ordinary |
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resident. |
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SECTION 15. Section 209.0062(c), Property Code, is amended |
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to read as follows: |
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(c) A property owners' association is [may] not required to |
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allow a payment plan for any amount that extends more than 18 months |
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from the date of the owner's request for a payment plan. The |
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association is not required to enter into a payment plan with an |
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owner who failed to honor the terms of a previous payment plan |
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during the two years following the owner's default under the |
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previous payment plan. The association is not required to make a |
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payment plan available to an owner after the period for cure |
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described by Section 209.0064(b)(3) expires. The association is |
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not required to allow an owner to enter into a payment plan more |
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than once in any 12-month period. |
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SECTION 16. Section 209.0063, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (c) to read as |
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follows: |
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(a) Except as provided by Subsections [Subsection] (b) and |
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(c), a payment received by a property owners' association from the |
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owner shall be applied to the owner's debt in the following order of |
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priority: |
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(1) any delinquent assessment; |
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(2) any current assessment; |
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(3) any attorney's fees or third party collection |
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costs incurred by the association associated solely with |
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assessments or any other charge that could provide the basis for |
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foreclosure; |
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(4) any attorney's fees incurred by the association |
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that are not subject to Subdivision (3); |
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(5) any fines assessed by the association; and |
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(6) any other amount owed to the association. |
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(c) This section does not apply to a payment made pursuant |
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to a final judgment, another binding court order, or any mutual |
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agreement of the parties entered into after the 30-day period |
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described in Section 209.0064(b)(3). |
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SECTION 17. Section 209.0064(b), Property Code, is amended |
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to read as follows: |
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(b) A property owners' association may not hold an owner |
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liable for fees of a collection agent retained by the property |
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owners' association unless the association first provides written |
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notice to the owner by certified mail, return receipt requested, |
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that: |
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(1) specifies each delinquent amount and the total |
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amount of the payment required to make the account current; |
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(2) if the property owners' association is subject to |
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Section 209.0062, describes the options the owner has to avoid |
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having the account turned over to a collection agent, including |
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information regarding availability of a payment plan through the |
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association; and |
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(3) provides a period of at least 30 days for the owner |
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to cure the delinquency before further collection action is taken. |
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SECTION 18. Section 209.0091, Property Code, is amended to |
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read as follows: |
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Sec. 209.0091. PREREQUISITES TO FORECLOSURE: NOTICE AND |
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OPPORTUNITY TO CURE FOR CERTAIN OTHER LIENHOLDERS. (a) A property |
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owners' association may not sell a property pursuant to a |
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foreclosure right [foreclose a property owners' association
|
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assessment lien on real property by giving notice of sale under
|
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Section 51.002 or commencing a judicial foreclosure action] unless |
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the association has: |
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(1) provided written notice of the total amount of the |
|
delinquency giving rise to the foreclosure to any other holder of a |
|
lien of record on the property whose lien is inferior or subordinate |
|
to the association's lien and is evidenced by a deed of trust; and |
|
(2) provided the recipient of the notice an |
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opportunity to cure the delinquency before the 61st day after the |
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date the association mails [recipient receives] the notice |
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described in Subdivision (1). |
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(b) Notice under this section must be sent by verified |
|
[certified] mail[, return receipt requested,] to the address for |
|
the lienholder shown in the deed records relating to the property |
|
that is subject to the property owners' association assessment |
|
lien. |
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(c) Notwithstanding any other law, notice under this |
|
section may be provided to any holder of a lien of record on the |
|
property. |
|
SECTION 19. Section 209.0092, Property Code, is amended by |
|
amending Subsection (a) and adding Subsection (d) to read as |
|
follows: |
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(a) Except as provided by Subsection (c) or (d) and subject |
|
to Section 209.009, a property owners' association may not |
|
foreclose a property owners' association assessment lien unless the |
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association first obtains a court order in an application for |
|
expedited foreclosure under the rules adopted by the supreme court |
|
under Subsection (b). A property owners' association may use the |
|
procedure described by this subsection to foreclose any lien |
|
described by the association's dedicatory instruments and is |
|
considered to have with respect to the lien any power of sale |
|
required by law as a condition of using the procedure described by |
|
this subsection. |
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(d) The association may in its discretion elect not to use |
|
the expedited procedure described by Subsection (b) and instead |
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foreclose the association's assessment lien under court judgment |
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foreclosing the lien and ordering the sale, pursuant to Rules 309 |
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and 646a, Texas Rules of Civil Procedure. |
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SECTION 20. Section 209.0041(a), Property Code, is |
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repealed. |
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SECTION 21. (a) The changes in law made by this Act to |
|
Chapter 207, Property Code, apply only to a request for subdivision |
|
information made on or after the effective date of this Act and any |
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resale certificate delivered in response to that request. A |
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request for subdivision information made before the effective date |
|
of this Act, any resale certificate delivered in response to that |
|
request, and any request for an update of that resale certificate |
|
are governed by the law as it existed immediately before that date, |
|
and that law is continued in effect for that purpose. |
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(b) Sections 209.0041, 209.0056, 209.0057, 209.0058, |
|
209.00592, and 209.00594(c), Property Code, as amended by this Act, |
|
apply only to an election or vote held on or after the effective |
|
date of this Act. An election or vote held before the effective |
|
date of this Act is governed by the law as it existed immediately |
|
before that date, and that law is continued in effect for that |
|
purpose. |
|
(c) Section 209.006, Property Code, as amended by this Act, |
|
applies only to an enforcement action taken on or after the |
|
effective date of this Act. An enforcement action taken before the |
|
effective date of this Act is governed by the law as it existed |
|
immediately before that date, and that law is continued in effect |
|
for that purpose. |
|
(d) Section 209.0064, Property Code, as amended by this Act, |
|
applies only to a collection action taken on or after the effective |
|
date of this Act. A collection action taken before the effective |
|
date of this Act is governed by the law as it existed immediately |
|
before that date, and that law is continued in effect for that |
|
purpose. |
|
(e) Section 209.0091, Property Code, as amended by this Act, |
|
applies only to a foreclosure sale that takes place on or after the |
|
effective date of this Act. A foreclosure sale that takes place |
|
before the effective date of this Act is governed by the law as it |
|
existed immediately before that date, and that law is continued in |
|
effect for that purpose. |
|
SECTION 22. This Act takes effect September 1, 2015. |