By: Hughes, et al. S.B. No. 1588
 
  (Turner of Tarrant)
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the powers and duties of certain property owners'
  associations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 207.003(c), Property Code, is amended to
  read as follows:
         (c)  A property owners' association may charge a reasonable
  and necessary fee, not to exceed $375, to assemble, copy, and
  deliver the information required by this section and may charge a
  reasonable and necessary fee, not to exceed $75, to prepare and
  deliver an update of a resale certificate under Subsection (f).
         SECTION 2.  Section 207.004(b), Property Code, is amended to
  read as follows:
         (b)  If a property owners' association fails to deliver the
  information required under Section 207.003 before the fifth
  business [seventh] day after the second request for the information
  was mailed by certified mail, return receipt requested, or hand
  delivered, evidenced by receipt, the owner:
               (1)  may seek one or any combination of the following:
                     (A)  a court order directing the property owners'
  association to furnish the required information;
                     (B)  a judgment against the property owners'
  association for actual damages [not more than $500];
                     (C)  a judgment against the property owners'
  association for court costs and reasonable attorney's fees; or
                     (D)  a judgment authorizing the owner or the
  owner's assignee to deduct the amounts awarded under Paragraphs (B)
  and (C) from any future regular or special assessments payable to
  the property owners' association; and
               (2)  may provide a buyer under contract to purchase the
  owner's property an affidavit that states that the owner, owner's
  agent, or title insurance company or its agent acting on behalf of
  the owner made, in accordance with this chapter, two written
  requests to the property owners' association for the information
  described in Section 207.003 and that the association did not
  timely provide the information.
         SECTION 3.  Section 207.006, Property Code, is amended to
  read as follows:
         Sec. 207.006.  ONLINE SUBDIVISION INFORMATION REQUIRED. A
  property owners' association shall make the current version of the
  association's dedicatory instruments relating to the association
  or subdivision and filed in the county deed records available on the
  homepage of an Internet [a] website available to association
  members that is maintained by [if] the association [has,] or by a
  management company on behalf of the association [maintains, a
  publicly accessible website].
         SECTION 4.  Section 207.001, Property Code, is amended by
  adding Subdivision (2-a) to read as follows:
               (2-a)  "Management company" has the meaning assigned by
  Section 209.002.
         SECTION 5.  Section 209.004, Property Code, is amended by
  amending Subsections (a), (b), (c), and (e) and adding Subsection
  (b-1) to read as follows:
         (a)  A property owners' association shall record in each
  county in which any portion of the residential subdivision is
  located a management certificate, signed and acknowledged by an
  officer or the managing agent of the association, stating:
               (1)  the name of the subdivision;
               (2)  the name of the association;
               (3)  the recording data for the subdivision;
               (4)  the recording data for the declaration and any
  amendments to the declaration;
               (5)  the name and mailing address of the association;
               (6)  the name, [and] mailing address, telephone number,
  and e-mail address of the person managing the association or the
  association's designated representative; [and]
               (7)  the website address of any Internet website on
  which the association's dedicatory instruments are available in
  accordance with Section 207.006; and
               (8)  other information the association considers
  appropriate.
         (b)  The property owners' association shall record an
  amended management certificate in each county in which any portion
  of the residential subdivision is located not later than the 30th
  day after the date the association has notice of a change in any
  information in the recorded certificate required by Subsection (a).
         (b-1)  Not later than the seventh day after the date a
  property owners' association files a management certificate for
  recording under Subsection (a) or files an amended management
  certificate for recording under Subsection (b), the property
  owners' association shall electronically file the management
  certificate or amended management certificate with the Texas Real
  Estate Commission. The Texas Real Estate Commission shall only
  collect the management certificate and amended management
  certificate for the purpose of making the data accessible to the
  general public through an Internet website.
         (c)  Except as provided under Subsections (d) and (e), the
  property owners' association and its officers, directors,
  employees, and agents are not subject to liability to any person for
  a delay in recording or failure to record a management certificate
  with a county clerk's office or electronically file the management
  certificate with the Texas Real Estate Commission, unless the delay
  or failure is wilful or caused by gross negligence.
         (e)  A lien of a property owners' association that fails to
  file a management certificate or an amended management certificate
  under this section to secure an amount due on the effective date of
  a transfer to a bona fide purchaser is enforceable only for an
  amount incurred after the effective date of sale. An owner is not
  liable for attorney's fees incurred by a property owners'
  association relating to the collection of a delinquent assessment
  against the owner or interest on the amount of a delinquent
  assessment if the attorney's fees are incurred by the association
  or the interest accrues during the period a management certificate
  is not recorded with a county clerk or electronically filed with the
  Texas Real Estate Commission as required by this section.
         SECTION 6.  Chapter 209, Property Code, is amended by adding
  Section 209.00505 to read as follows:
         Sec. 209.00505.  ARCHITECTURAL REVIEW AUTHORITY. (a) In
  this section, "architectural review authority" means the governing
  authority for the review and approval of improvements within a
  subdivision.
         (b)  This section:
               (1)  applies only to a property owners' association
  that consists of more than 40 lots; and
               (2)  does not apply during a development period or
  during any period in which the declarant:
                     (A)  appoints at least a majority of the members
  of the architectural review authority or otherwise controls the
  appointment of the architectural review authority; or
                     (B)  has the right to veto or modify a decision of
  the architectural review authority.
         (c)  A person may not be appointed or elected to serve on an
  architectural review authority if the person is:
               (1)  a current board member;
               (2)  a current board member's spouse; or
               (3)  a person residing in a current board member's
  household.
         (d)  A decision by the architectural review authority
  denying an application or request by an owner for the construction
  of improvements in the subdivision may be appealed to the board. A
  written notice of the denial must be provided to the owner by
  certified mail, hand delivery, or electronic delivery. The notice
  must:
               (1)  describe the basis for the denial in reasonable
  detail and changes, if any, to the application or improvements
  required as a condition to approval; and
               (2)  inform the owner that the owner may request a
  hearing under Subsection (e) on or before the 30th day after the
  date the notice was mailed to the owner.
         (e)  The board shall hold a hearing under this section not
  later than the 30th day after the date the board receives the
  owner's request for a hearing and shall notify the owner of the
  date, time, and place of the hearing not later than the 10th day
  before the date of the hearing. Only one hearing is required under
  this subsection.
         (f)  During a hearing, the board or the designated
  representative of the property owners' association and the owner or
  the owner's designated representative will each be provided the
  opportunity to discuss, verify facts, and resolve the denial of the
  owner's application or request for the construction of
  improvements, and the changes, if any, requested by the
  architectural review authority in the notice provided to the owner
  under Subsection (d).
         (g)  The board or the owner may request a postponement. If
  requested, a postponement shall be granted for a period of not more
  than 10 days. Additional postponements may be granted by agreement
  of the parties.
         (h)  The property owners' association or the owner may make
  an audio recording of the meeting.
         SECTION 7.  Sections 209.0051(e) and (h), Property Code, are
  amended to read as follows:
         (e)  Members shall be given notice of the date, hour, place,
  and general subject of a regular or special board meeting,
  including a general description of any matter to be brought up for
  deliberation in executive session.  The notice shall be:
               (1)  mailed to each property owner not later than the
  10th day or earlier than the 60th day before the date of the
  meeting; or
               (2)  provided at least 144 [72] hours before the start
  of a regular board [the] meeting and at least 72 hours before the
  start of a special board meeting by:
                     (A)  posting the notice in a conspicuous manner
  reasonably designed to provide notice to property owners'
  association members:
                           (i)  in a place located on the association's
  common property or, with the property owner's consent, on other
  conspicuously located privately owned property within the
  subdivision; or
                           (ii)  on any Internet website available to
  association members that is maintained by the association or by a
  management company on behalf of the association [other Internet
  media]; and
                     (B)  sending the notice by e-mail to each owner
  who has registered an e-mail address with the association.
         (h)  Except as provided by this subsection, a board may take
  action outside of a meeting, including voting by electronic or
  telephonic means, without prior notice to owners under Subsection
  (e), if each board member is given a reasonable opportunity to
  express the board member's opinion to all other board members and to
  vote. Any action taken without notice to owners under Subsection
  (e) must be summarized orally, including an explanation of any
  known actual or estimated expenditures approved at the meeting, and
  documented in the minutes of the next regular or special board
  meeting. The board may not, unless done in an open meeting for
  which prior notice was given to owners under Subsection (e),
  consider or vote on:
               (1)  fines;
               (2)  damage assessments;
               (3)  initiation of foreclosure actions;
               (4)  initiation of enforcement actions, excluding
  temporary restraining orders or violations involving a threat to
  health or safety;
               (5)  increases in assessments;
               (6)  levying of special assessments;
               (7)  appeals from a denial of architectural control
  approval;
               (8)  a suspension of a right of a particular owner
  before the owner has an opportunity to attend a board meeting to
  present the owner's position, including any defense, on the issue;
               (9)  lending or borrowing money;
               (10)  the adoption or amendment of a dedicatory
  instrument;
               (11)  the approval of an annual budget or the approval
  of an amendment of an annual budget [that increases the budget by
  more than 10 percent];
               (12)  the sale or purchase of real property;
               (13)  the filling of a vacancy on the board;
               (14)  the construction of capital improvements other
  than the repair, replacement, or enhancement of existing capital
  improvements; or
               (15)  the election of an officer.
         SECTION 8.  Section 209.006(a), Property Code, is amended to
  read as follows:
         (a)  Before a property owners' association may suspend an
  owner's right to use a common area, file a suit against an owner
  other than a suit to collect a regular or special assessment or
  foreclose under an association's lien, charge an owner for property
  damage, [or] levy a fine for a violation of the restrictions or
  bylaws or rules of the association, or report any delinquency of an
  owner to a credit reporting service, the association or its agent
  must give written notice to the owner by certified mail.
         SECTION 9.  Section 209.0063(a), Property Code, is amended
  to read as follows:
         (a)  Except as provided by Subsection (b), a payment received
  by a property owners' association from the owner shall be applied to
  the owner's debt in the following order of priority:
               (1)  any delinquent assessment;
               (2)  any current assessment;
               (3)  any reasonable attorney's fees or reasonable third
  party collection costs incurred by the association associated
  solely with assessments or any other charge that could provide the
  basis for foreclosure;
               (4)  any reasonable attorney's fees incurred by the
  association that are not subject to Subdivision (3);
               (5)  any reasonable fines assessed by the association;
  and
               (6)  any other reasonable amount owed to the
  association.
         SECTION 10.  Section 209.0064(b), Property Code, is amended
  to read as follows:
         (b)  A property owners' association may not hold an owner
  liable for fees of a collection agent retained by the association
  unless the association first provides written notice to the owner
  by certified mail that:
               (1)  specifies each delinquent amount and the total
  amount of the payment required to make the account current;
               (2)  if the association is subject to Section 209.0062
  or the association's dedicatory instruments contain a requirement
  to offer a payment plan, describes the options the owner has to
  avoid having the account turned over to a collection agent,
  including information regarding availability of a payment plan
  through the association; and
               (3)  provides a period of at least 45 [30] days for the
  owner to cure the delinquency before further collection action is
  taken.
         SECTION 11.  Chapter 209, Property Code, is amended by
  adding Section 209.0065 to read as follows:
         Sec. 209.0065.  CREDIT REPORTING SERVICES. (a) A property
  owners' association or the association's collection agent may not
  report any delinquent fines, fees, or assessments to a credit
  reporting service that are the subject of a pending dispute between
  the owner and the property owners' association.
         (b)  A property owners' association may report delinquent
  payment history assessments, fines, and fees of property owners
  within its jurisdiction to a credit reporting service only if:
               (1)  at least 30 business days before reporting to a
  credit reporting service, the association sends, via certified
  mail, hand delivery, electronic delivery, or by other delivery
  means acceptable between the parties, a detailed report of all
  delinquent charges owed; and
               (2)  a property owner has been given the opportunity to
  enter into a payment plan.
         SECTION 12.  Section 209.007, Property Code, is amended by
  amending Subsection (a) and adding Subsections (f), (g), and (h) to
  read as follows:
         (a)  Except as provided by Subsection (d) and only if [If]
  the owner is entitled to an opportunity to cure the violation, the
  owner has the right to submit a written request for a hearing to
  discuss and verify facts and resolve the matter in issue before [a
  committee appointed by] the board [of the property owners'
  association or before the board if the board does not appoint a
  committee].
         (f)  Not later than 10 days before the association holds a
  hearing under this section, the association shall provide to an
  owner a packet containing all documents, photographs, and
  communications relating to the matter the association intends to
  introduce at the hearing.
         (g)  If an association does not provide a packet within the
  period described by Subsection (f), an owner is entitled to an
  automatic 15-day postponement of the hearing.
         (h)  During a hearing, a member of the board or the
  association's designated representative shall first present the
  association's case against the owner.  An owner or the owner's
  designated representative is entitled to present the owner's
  information and issues relevant to the appeal or dispute.
         SECTION 13.  Section 209.015(c), Property Code, is amended
  to read as follows:
         (c)  An owner must obtain the approval of the property
  owners' association or, if applicable, an architectural review
  authority, as defined by Section 209.00505(a), [committee]
  established by the association or the association's dedicatory
  instruments, based on criteria prescribed by the dedicatory
  instruments specific to the use of a lot for residential purposes,
  including reasonable restrictions regarding size, location,
  shielding, and aesthetics of the residential purpose, before the
  owner begins the construction, placement, or erection of a
  building, structure, or other improvement for the residential
  purpose on an adjacent lot.
         SECTION 14.  Section 209.016, Property Code, is amended by
  amending Subsection (d) and adding Subsection (e) to read as
  follows:
         (d)  Nothing [Except as provided by Subsection (b), nothing]
  in this section shall be construed to prohibit the adoption or
  enforcement of a provision in a dedicatory instrument establishing
  a restriction relating to occupancy or leasing.
         (e)  A property owners' association may request the
  following information to be submitted to the association regarding
  a lease or rental applicant:
               (1)  contact information, including the name, mailing
  address, phone number, and e-mail address of each person who will
  reside at a property in the subdivision under a lease; and
               (2)  the commencement date and term of the lease.
         SECTION 15.  Section 209.002, Property Code, is amended by
  adding Subdivision (5-a) to read as follows:
               (5-a)  "Management company" means a person or entity
  established or contracted to provide management or administrative
  services on behalf of a property owners' association.
         SECTION 16.  The following provisions of the Property Code
  are repealed:
               (1)  Section 209.007(b); and
               (2)  Sections 209.016(a) and (c).
         SECTION 17.  (a)  Not later than December 1, 2021, the Texas
  Real Estate Commission shall establish and make available the
  system necessary for the electronic filing of management
  certificates and amended management certificates as required under
  Section 209.004(b-1), Property Code, as added by this Act.
         (b)  Notwithstanding Section 209.004(b-1), Property Code, as
  added by this Act, a property owners' association that has on or
  before December 1, 2021, recorded a management certificate or
  amended management certificate with a county clerk under Section
  209.004, Property Code, shall electronically file the most recently
  recorded management certificate or amended management certificate
  with the Texas Real Estate Commission not later than June 1, 2022.
         SECTION 18.  Section 209.0065, Property Code, as added by
  this Act, applies only to a fine, fee, or assessment that becomes
  due on or after the effective date of this Act. A fine, fee, or
  assessment that becomes due before the effective date of this Act is
  governed by the law in effect immediately before the effective date
  of this Act, and that law is continued in effect for that purpose.
         SECTION 19.  (a)  Except as provided by Subsection (b) of
  this section, this Act takes effect September 1, 2021.
         (b)  Section 209.004(b-1), Property Code, as added by this
  Act, takes effect December 1, 2021.