By: Hughes S.B. No. 1588
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the powers and duties of property owners' associations;
  authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsections (a) and (c), Section 204.002,
  Property Code, are amended to read as follows:
         Sec. 204.002.  [APPLICATION] APPLICABILITY. (a)  This
  chapter applies [only] to [a] any residential real estate
  subdivision governed by Chapter 209, Title 11, Property Code,
  excluding a condominium [development] regime governed by Chapters
  81 and 82, Title 7, Property Code[, that is located in whole or in
  part:
               (1)  in a county with a population of 3.3 million or
  more;
               (2)  in a county with a population of not less than
  285,000 and not more than 300,000 that is adjacent to the Gulf of
  Mexico and that is adjacent to a county having a population of 3.3
  million or more; or
               (3)  in a county with a population of 275,000 or more
  that:
                     (A)  is adjacent to a county with a population of
  3.3 million or more; and
                     (B)  contains part of a national forest].
         (c)  This chapter does not apply to [portions of] a
  subdivision property that [are] is zoned for [or that contain] a
  commercial structure, an industrial structure, or an apartment
  complex[, or a condominium development governed by Title 7,
  Property Code]. For purposes of this subsection, "apartment
  complex" means two or more dwellings in one or more buildings that
  are owned by the same owner, located on the same lot or tract, and
  managed by the same owner, agent, or management company.
         SECTION 2.  Subsections (b), (c) and (d), Section 204.003,
  Property Code, are amended to read as follows:
         (b)  Notwithstanding Subsection (a), for a residential
  subdivision [described by Subsection (c)], the provisions of this
  chapter prevail over an express designation in a document described
  by Subsection (a) if:
               (1)  the designated number of owners of real property
  in the subdivision required for approval of an extension of,
  addition to, or modification of the document is more than 75
  percent; or
               (2)  the designation prohibits the extension of,
  addition to, or modification of an existing restriction for a
  certain time period and that time period has not expired.
         (c)  [Subsection (b) applies to a residential subdivision
  that is located in a county described by Section 204.002(a)(3)
  other than a gated community with private streets.
         (d)] A document creating restrictions that provides for the
  extension or renewal of restrictions and does not provide for
  modification or amendment of restrictions may be modified under
  this chapter, including modifying the provision that provides for
  extension or renewal of the restrictions.
         SECTION 3.  Chapter 204, Property Code, is amended by adding
  Section 204.012 to read as follows:
         Sec. 204.012.  RESTRICTIONS ON MEMBERSHIP OF ARCHITECTURAL
  CONTROL COMMITTEE. A member or spouse of the board of directors or
  trustees of a property owners' association, or a person in the
  lineal line of consanguinity of a member of the board of directors
  or trustees of a property owners' association may not be appointed
  or elected to serve on an architectural control committee.
         SECTION 4.  Subsection (c), Section 207.003, Property Code,
  is amended to read as follows:
         (c)  A property owners' association may charge a reasonable
  and necessary fee, not to exceed $250, to assemble, copy, and
  deliver the information required by this section and may charge a
  reasonable and necessary fee, not to exceed $30, to prepare and
  deliver an update of a resale certificate under Subsection (f).
         SECTION 5.  Subsection (b), Section 207.004, 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 seventh
  calendar 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 not more than $500];
                     (C)  a judgment against the property owners'
  association for court costs and 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 6.  Section 207.006, Property Code, is amended to
  read as follows:
         Sec. 207.006.  ONLINE SUBDIVISION INFORMATION REQUIRED. (a)
  A property owners' association shall make the most recent versions 
  of its dedicatory instruments, including its amendments, relating
  to the association or subdivision and filed in the county deed
  records available on [a] the homepage of a publicly available 
  website [if] the association [has,] or [a] the management company
  on behalf of the association maintains[, a publicly accessible 
  website].
         SECTION 7.  Section 209.002, Property Code, is amended by
  adding a new subdivision (2-a) to read as follows:
         (2-a) "Commission" has the meaning assigned by Chapter 1101,
  Title 7, Occupations Code.
         SECTION 8.  Sec. 209.004, Property Code, is amended to read
  as follows:
         MANAGEMENT CERTIFICATES. (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 its
  amendments;
               (5)  the name and mailing address of the association;
               (6)  the name, [and] mailing address, phone number, and
  email address of the person managing the association or the
  association's designated representative; [and]
               (7)  the website address of a publicly available
  website for the association; and
               (8) other information the association considers
  appropriate.
         (b)  Not later than July 1 of each calendar year, a property
  owners' association currently formed and operating as of August 31,
  2021 shall also electronically file a management certificate, or an
  amended management certificate required under this chapter to the
  commission. The commission may charge a fee for the electronic
  filing of a management certificate, or an amended management
  certificate. A fee adopted by the commission may not exceed the
  amount charged by a property owners' association for a resale
  certificate under Chapter 207, Title 11, Property Code.
         (b-1)  A property owners' association formed and operating
  as of September 1, 2021 and after shall also electronically file a
  management certificate, or an amended management certificate
  required under this chapter to the commission within 10 calendar
  days of filing the required management certificate with a county
  clerk under this chapter. The commission may charge a fee for the
  electronic filing of a management certificate, or an amended
  management certificate. A fee adopted by the commission may not
  exceed the amount charged by a property owners' association for a
  resale certificate under Chapter 207, Title 11, Property Code.
         [(a-1)] (c) The county clerk of each county in which a
  management certificate is filed as required by this section shall
  record the management certificate in the real property records of
  the county and index the document as a "Property Owners'
  Association Management Certificate."
         [(b)] (d) 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).
         [(c)] (e) 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 with a county clerk's
  office or with the commission a management certificate, unless the
  delay or failure is [wilful] willful or caused by gross negligence.
         [(d)] (f) If a property owners' association fails to record a
  management certificate or an amended management certificate under
  this section, the seller, the purchaser, lender, or title insurance
  company or its agent in a transaction involving property in the
  property owners' association is not liable to the property owners'
  association for:
               (1)  any amount due to the association on the date of a
  transfer to a bona fide purchaser; and
               (2)  any debt to or claim of the association that
  accrued before the date of a transfer to a bona fide purchaser.
         [(e)] (g) A lien of a property owners' association that fails
  to file a management certificate or an amended management
  certificate under this section is unenforceable [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].
         [(f)] (h) For purposes of this section, "bona fide purchaser"
  means:
               (1)  a person who pays valuable consideration without
  notice of outstanding rights of others and acts in good faith; or
               (2)  a third-party lender who acquires a security
  interest in the property under a deed of trust.
         SECTION 9.  Subsections (e) and (h), Section 209.0051,
  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 [72] 144 hours before the start
  of the 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 the homepage of an [any] Internet
  website maintained by the association [or] and 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 10.  Subsection (a), Section 209.006, 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 agency or bureau, the association or its
  agent must give written notice to the owner by certified mail.
         SECTION 11.  Subsection (a), Section 209.0063, Occupations
  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 and necessary incurred amount
  owed to the association.
         SECTION 12.  Subsection (b), Section 209.0064, 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 [30] 45 days for the
  owner to cure the delinquency before further collection action is
  taken.
         SECTION 13.  Chapter 209, Property Code, is amended by
  adding a new Section 209.0065 to read as follows:
         Sec. 209.0065.  CREDIT REPORTING AGENCIES. (a) A property
  owners' association or the association's collection agent may not
  report any delinquent fines, fee, or assessments to a credit
  reporting agency if the property owner has a pending dispute of the
  charges with 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 agency or bureau only
  if:
               (1)  the association has sent, via certified mail, hand
  delivery, electronic delivery, or by other delivery means
  acceptable between the parties, a detailed report of all delinquent
  charges owed;
               (2)  a property owner has been given the opportunity to
  enter into a payment plan; and
               (2)  the detailed report of delinquent charges was sent
  to a property owner at least 45 business days before reporting to a
  credit reporting agency or bureau.
         SECTION 14.  Section 209.007, Property Code, is amended to
  read as follows:
         Sec. 209.007.  HEARING BEFORE BOARD; ALTERNATIVE DISPUTE
  RESOLUTION. (a)  [If the] An owner is entitled to appeal a
  violation, an architectural control committee decision, or dispute
  any fines or fees to the board of directors of a property owners'
  association [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].
         (b)  [If a hearing is to be held before a committee, the 
  notice prescribed by Section 209.006 must state that the owner has
  the right to appeal the committee's decision to the board by written
  notice to the board.
         (c)] The association 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] an appeal 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. The board or the owner may
  request a postponement, and, 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. The
  [owner or the] association [may] shall make an audio recording of
  the meeting. An owner may make an audio recording of the meeting.
         (c)  No later than 10 days before the association holds a
  hearing under this section, the association shall provide to an
  owner an evidence packet containing all documents, photographs, or
  communications relating to the matter in issue which the
  association intends to introduce at the hearing.
         (d)  If an association does not provide a complete evidence
  packet within the time frame described in subsection (c), an owner
  is entitled to an automatic 15 day postponement of the hearing.
         (e)  During a hearing, a member of the board of directors or
  their designated representative of the association shall present
  the association's evidence against the owner first. A property
  owner or their designated representative is entitled to rebut the
  association's evidence, present their evidence, and present issues
  relevant to the appeal.
         (f)  The notice and hearing provisions of Section 209.006 and
  this section do not apply if the association files a suit seeking a
  temporary restraining order or temporary injunctive relief or files
  a suit that includes foreclosure as a cause of action. If a suit is
  filed relating to a matter to which those sections apply, a party to
  the suit may file a motion to compel mediation. The notice and
  hearing provisions of Section 209.006 and this section do not apply
  to a temporary suspension of a person's right to use common areas if
  the temporary suspension is the result of a violation that occurred
  in a common area and involved a significant and immediate risk of
  harm to others in the subdivision. The temporary suspension is
  effective until the board makes a final determination on the
  suspension action after following the procedures prescribed by this
  section.
         [(e)] (g) An owner or property owners' association may use
  alternative dispute resolution services.
         SECTION 15.  Subsection (a), Section 209.008, Property Code,
  is amended to read as follows:
         (a)  A property owners' association may collect
  reimbursement of reasonable attorney's fees and other reasonable
  and necessary costs incurred by the association relating to
  collecting amounts, including damages, due the association for
  enforcing restrictions or the bylaws or rules of the association
  only if the owner is provided a written notice that attorney's fees
  and costs will be charged to the owner if the delinquency or
  violation continues after a date certain.
         SECTION 16.  Subsection (a), Section 209.008, Property Code,
  is amended to read as follows:
         Sec. 209.016.  REGULATION OF RESIDENTIAL LEASES OR RENTAL
  AGREEMENTS. (a)  [In this section, "sensitive personal
  information" means an individual's:
               (1)  social security number;
               (2)  driver's license number;
               (3)  government-issued identification number; or
               (4)  account, credit card, or debit card number.
         (b)] A property owners' association may not adopt or enforce
  a provision in a dedicatory instrument that:
               (1)  requires a lease or rental applicant or a tenant to
  be submitted to and approved for tenancy by the property owners'
  association; or
               (2)  requires the following information to be submitted
  to a property owners' association regarding a lease or rental
  applicant or current tenant:
                     (A)  a consumer or credit report; or
                     (B)  a lease or rental application submitted by
  the applicant, tenant, or that person's agent to the property owner
  or property owner's agent when applying for tenancy.
         [(c)  If a copy of the lease or rental agreement is required 
  by the property owners' association, any sensitive personal
  information may be redacted or otherwise made unreadable or
  indecipherable.
         (d)  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.]
         SECTION 17.  Section 204.003(d), Property Code, is repealed.
         SECTION 18.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2021.