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A BILL TO BE ENTITLED
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AN ACT
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relating to suits to collect past due property owners' association |
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assessments. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 4, Property Code, is amended by adding |
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Chapter 31 to read as follows: |
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CHAPTER 31. SUITS TO COLLECT PROPERTY OWNERS' ASSOCIATION |
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ASSESSMENTS |
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Sec. 31.001. DEFINITIONS. In this chapter, a term defined |
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by Section 209.002 has the meaning assigned by that section. |
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Sec. 31.002. APPLICABILITY OF CHAPTER. This chapter |
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applies only to a property owners' association to which Chapter 209 |
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applies. |
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Sec. 31.003. SUIT IN JUSTICE COURT; EXCLUSIVE JURISDICTION. |
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(a) A property owners' association that brings a suit to collect |
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past due assessments or interest or late fees associated with past |
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due assessments must bring the suit in a justice court. |
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(b) Notwithstanding Section 27.034(d), Government Code, a |
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justice court has exclusive jurisdiction of a suit under this |
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chapter. |
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Sec. 31.004. PETITION. The petition in a suit under this |
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chapter: |
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(1) must include a verified statement detailing: |
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(A) the basis for each amount sought by the |
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property owners' association, citing applicable provisions of the |
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association's dedicatory instruments; and |
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(B) the steps taken by the association to comply |
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with procedures required by Chapter 209 or other law, as |
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applicable, including procedures required by the association's |
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dedicatory instruments; and |
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(2) may not seek relief other than relief authorized |
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by Section 31.007 or 31.008. |
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Sec. 31.005. COUNTERCLAIMS; OFFSET. (a) A property owner's |
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answer in a suit under this chapter may not include a counterclaim |
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other than a claim that the property owners' association owes the |
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owner money and a request that any amount awarded to the association |
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be offset by the amount owed to the owner. |
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(b) A property owner's failure to assert a counterclaim |
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authorized by this section does not bar the owner from bringing a |
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separate suit on the claim, but the owner's failure to timely assert |
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the counterclaim in the answer bars consideration of the claim in |
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the suit brought against the owner under this chapter. |
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(c) This section does not affect the property owner's |
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ability to assert any lawful defense to the property owners' |
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association's claim. |
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Sec. 31.006. MEDIATION. (a) A justice court in a suit |
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under this chapter may order mediation of the dispute at no cost to |
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the property owner. Mediation ordered under this section shall be |
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conducted as provided by Chapter 154, Civil Practice and Remedies |
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Code. |
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(b) This section does not affect the justice court's |
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authority to order another method of alternative dispute resolution |
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under Section 27.034(c), Government Code, or the Texas Rules of |
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Civil Procedure. |
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Sec. 31.007. JUDGMENT; PAYMENT SCHEDULE. (a) A justice |
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court in a suit under this chapter shall: |
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(1) determine: |
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(A) whether the property owners' association is |
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entitled to all or part of the amounts requested in the |
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association's petition; and |
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(B) whether the property owner is entitled to any |
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offset requested in the owner's answer; and |
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(2) make an award as appropriate. |
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(b) The justice court's judgment must provide, if |
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applicable, that the property owner is not required to make a |
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payment to satisfy the award before the 30th day after the date the |
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judgment is signed or a later date specified in the judgment. |
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Subject to this subsection, the court may order that the property |
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owner be allowed to make partial payments toward satisfaction of |
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the award according to a payment schedule prescribed by the court. |
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Sec. 31.008. COSTS; ATTORNEY'S FEES. (a) The prevailing |
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party in a suit under this chapter is entitled to recover filing |
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fees and service costs incurred in connection with the suit. |
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(b) In addition to any amounts awarded under Subsection (a), |
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the justice court may award a party to the suit other costs and |
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reasonable and necessary attorney's fees as is equitable and just, |
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in an amount that does not exceed the greater of: |
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(1) 15 percent of the amount sought by the property |
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owners' association; or |
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(2) $500. |
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(c) The justice court may award a party to the suit |
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attorney's fees or other penalties or costs not specifically |
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authorized by this section only if: |
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(1) the court finds the other party to have acted in |
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bad faith in connection with the suit; or |
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(2) the sanction is authorized under Chapter 10, Civil |
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Practice and Remedies Code, or Rule 13, Texas Rules of Civil |
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Procedure. |
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(d) A court hearing an appeal or enforcing a judgment under |
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this chapter may award a party to the appeal or enforcement action |
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costs and reasonable and necessary attorney's fees as is equitable |
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and just. |
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Sec. 31.009. COLLECTION OF AMOUNTS NOT AWARDED. A judgment |
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under this chapter in favor of a property owners' association must |
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provide that the association or the association's agent may not |
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seek to impose or collect any additional penalty, cost, attorney's |
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fees, or other charge related to the assessments that are the |
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subject of the suit except in a proceeding to enforce the judgment. |
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Sec. 31.010. RECORDING OF CERTAIN INSTRUMENTS. (a) A |
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judgment under this chapter that has become final after the |
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exhaustion of appeals or after the expiration of the time for appeal |
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is the only basis to record a lien based on unpaid property owners' |
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association assessments and related charges. |
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(b) A lis pendens, notice of assessment lien, or similar |
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instrument may not be recorded with respect to any amount sought by |
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a property owners' association in a suit under this chapter: |
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(1) while the property owner is current under a |
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payment plan ordered under Section 31.007; or |
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(2) before the 30th day after the date the owner |
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becomes delinquent under the payment plan. |
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Sec. 31.011. FORECLOSURE. (a) A judgment in a suit under |
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this chapter may be enforced by foreclosure on the property with |
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respect to which the assessments that are the subject of the suit |
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were imposed only if the association: |
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(1) otherwise has authority to foreclose an assessment |
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lien on the property for the amount awarded by the judgment; and |
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(2) complies with Section 209.0092 and any other law |
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governing the foreclosure of the lien. |
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(b) The property owners' association may not initiate |
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foreclosure of an assessment lien for the amount awarded by the |
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judgment: |
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(1) while the property owner is current under a |
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payment plan ordered under Section 31.007; or |
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(2) before the 30th day after the date: |
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(A) the owner becomes delinquent under the |
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payment plan; or |
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(B) the owner becomes delinquent under an order |
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to pay the entire award if no payment plan is ordered. |
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SECTION 2. (a) Except as provided by Subsection (b) of this |
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section, this Act applies to assessments imposed under a dedicatory |
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instrument adopted before, on, or after the effective date of this |
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Act. |
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(b) This Act applies only to collection of property owners' |
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association assessments that become due on or after the effective |
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date of this Act and any interest, fees, or other costs related to |
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those assessments. Collection of property owners' association |
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assessments that became due before the effective date of this Act, |
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and any interest, fees, or other costs related to those |
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assessments, is governed by the law as it existed immediately |
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before the effective date of this Act, and that law is continued in |
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effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2021. |