89R11319 RAL-F

By: Hinojosa of Hidalgo S.B. No. 1935

A BILL TO BE ENTITLED

AN ACT

relating to the composition and operation of a property owners' association board.

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

SECTION 1. Section 209.0051(c-1), Property Code, is amended to read as follows:

(c-1) Except for a meeting held by electronic or telephonic means under Subsection (c-2), a board meeting must be held:

(1) in a county in which all or part of the property in the subdivision is located or in a county adjacent to that county; and

(2) within 10 miles of the subdivision, if a majority of the board members are not elected by owners other than the declarant.

SECTION 2. Section 209.00591, Property Code, is amended by amending Subsection (c) and adding Subsections (d), (e), and (f) to read as follows:

(c) The declaration may provide for a period of declarant control of the association during which a declarant, or persons designated by the declarant, may appoint and remove board members and the officers of the association, other than board members or officers elected by members of the property owners' association.

(d) Regardless of the period of declarant control provided by the declaration:

(1) on or before the 120th day after the date a majority of the lots that may be created and made subject to the declaration are conveyed to owners other than a declarant or a builder in the business of constructing homes who purchased the lots from the declarant for the purpose of selling completed homes built on the lots, at least one-third of the board members must be elected by owners other than the declarant; and

(2) [,] on or before the 120th day after the date 75 percent of the lots that may be created and made subject to the declaration are conveyed to owners other than a declarant or a builder in the business of constructing homes who purchased the lots from the declarant for the purpose of selling completed homes built on the lots, at least a majority [one-third] of the board members must be elected by owners other than the declarant.

(e) If the declaration does not include the number of lots that may be created and made subject to the declaration, at least a majority [one-third] of the board members must be elected by owners other than the declarant not later than the 10th anniversary of the date the declaration was recorded.

(f) Not later than the 30th day after the date a majority of the lots that may be created and made subject to the declaration are conveyed as described by Subsection(d)(1), the declarant shall give notice to the owners that at least one-third of the board members must be elected by owners other than the declarant. Notice required under this subsection must be provided by:

(1) posting the notice on any Internet website available to association members that is maintained by the association or by a management company on behalf of the association; and

(2) sending the notice by e-mail to each owner who has registered an e-mail address with the association.

SECTION 3. Section 209.0061, Property Code, is amended by adding Subsection (e) to read as follows:

(e) The amount of a fine assessed by the property owners' association must be reasonable in the context of the nature and frequency of the violation and the effect of the violation on the subdivision as a whole. If the association allows fines for a continuing violation to accumulate against a lot or an owner, the association must establish a reasonable maximum fine amount for a continuing violation at which point the total fine amount is capped.

SECTION 4. Chapter 209, Property Code, is amended by adding Section 209.018 to read as follows:

Sec. 209.018. RESTRICTION ON INCREASE OF REGULAR ASSESSMENT. Notwithstanding a provision in a dedicatory instrument, a property owners' association may not increase the amount of a regular assessment by an amount greater than or equal to five percent per year unless the increase is approved by an affirmative vote of at least a majority of the total votes allocated to property owners entitled to vote on the proposed increase.

SECTION 5. (a) Section 209.00591, Property Code, as amended by this Act, applies to a property owners' association board regardless of whether the association's declaration was adopted before, on, or after the effective date of this Act.

(b) Notwithstanding Section 209.00591, Property Code, as amended by this Act, at least one-third of the board members of a property owners' association to which Chapter 209, Property Code, applies must be elected by owners other than the declarant on or before March 1, 2026, if the association reached the majority conveyance threshold described by Section 209.00591(d)(1), Property Code, as added by this Act, before the effective date of this Act.

(c) Notwithstanding Section 209.00591, Property Code, as amended by this Act, at least a majority of the board members of a property owners' association to which Chapter 209, Property Code, applies must be elected by owners other than the declarant on or before March 1, 2026, if:

(1) the association reached the 75 percent conveyance threshold described by Section 209.00591(d)(2), Property Code, as added by this Act, before the effective date of this Act; or

(2) the 10th anniversary of the date the association's declaration was recorded occurred before the effective date of this Act or occurs on or after the effective date of this Act and before March 1, 2026.

SECTION 6. Section 209.0061, Property Code, as amended by this Act, applies only to a fine that becomes due on or after the effective date of this Act. A fine 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 7. Section 209.018, Property Code, as added by this Act, applies only to an increase of a regular assessment proposed by a property owners' association on or after the effective date of this Act.

SECTION 8. This Act takes effect September 1, 2025.