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Texas House Bill HB1976

Texas 2009 - 81st Regular

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11 By: Solomons, et al. (Senate Sponsor - West) H.B. No. 1976
22 (In the Senate - Received from the House May 18, 2009;
33 May 19, 2009, read first time and referred to Committee on
44 Intergovernmental Relations; May 23, 2009, reported adversely,
55 with favorable Committee Substitute by the following vote: Yeas 3,
66 Nays 2; May 23, 2009, sent to printer.)
77 COMMITTEE SUBSTITUTE FOR H.B. No. 1976 By: West
88
99
1010 A BILL TO BE ENTITLED
1111 AN ACT
1212 relating to the operation of property owners' associations.
1313 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1414 SECTION 1. Subsection (a), Section 5.006, Property Code, is
1515 amended to read as follows:
1616 (a) In an action based on breach of a restrictive covenant
1717 pertaining to real property or a statute pertaining to real
1818 property subject to a restrictive covenant or to restrictive
1919 covenants to which real property is subject, the court may [shall]
2020 allow to a prevailing party [who asserted the action] reasonable
2121 attorney's fees in addition to the party's costs and claim.
2222 SECTION 2. Section 5.012, Property Code, is amended by
2323 amending Subsection (a) and adding Subsections (f) and (g) to read
2424 as follows:
2525 (a) A seller of residential real property that is subject to
2626 membership in a property owners' association and that comprises not
2727 more than one dwelling unit located in this state shall give to the
2828 purchaser of the property a written notice that reads substantially
2929 similar to the following:
3030 NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
3131 PROPERTY AT (street address) (name of residential community)
3232 As a purchaser of property in the residential community in
3333 which this property is located, you are obligated to be a member of
3434 a property owners' association. Restrictive covenants governing
3535 the use and occupancy of the property and all [a] dedicatory
3636 instruments [instrument] governing the establishment, maintenance,
3737 or [and] operation of this residential community have been or will
3838 be recorded in the Real Property Records of the county in which the
3939 property is located. Copies of the restrictive covenants and
4040 dedicatory instruments [instrument] may be obtained from the county
4141 clerk.
4242 You are obligated to pay assessments to the property owners'
4343 association. The amount of the assessments is subject to change.
4444 Your failure to pay the assessments could result in a lien on and
4545 the foreclosure of your property.
4646 Section 207.003, Property Code, entitles an owner to receive
4747 copies of any document that governs the establishment, maintenance,
4848 or operation of a subdivision, including, but not limited to,
4949 restrictions, bylaws, rules and regulations, and a resale
5050 certificate from a property owners' association. A resale
5151 certificate contains information including, but not limited to,
5252 statements specifying the amount and frequency of regular
5353 assessments and the style and cause number of lawsuits to which the
5454 property owners' association is a party. These documents must be
5555 made available to you by the seller on your request.
5656 Date: ____________________________________________
5757 Signature of Purchaser
5858 (f) On the purchaser's request for a resale certificate from
5959 the seller, the seller shall:
6060 (1) promptly deliver a copy of a current resale
6161 certificate if one has been issued for the property under Chapter
6262 207; or
6363 (2) if the seller does not have a current resale
6464 certificate:
6565 (A) request the property owners' association or
6666 its agent to issue a resale certificate under Chapter 207; and
6767 (B) promptly deliver a copy of the resale
6868 certificate to the purchaser on receipt of the resale certificate
6969 from the property owners' association or its agent.
7070 (g) The seller or the purchaser, as agreed to by the
7171 parties, shall pay the fee to the property owners' association or
7272 its agent for issuing the resale certificate. The property owners'
7373 association may not process payment for a resale certificate
7474 requested under Chapter 207 until the certificate is available for
7575 delivery. The association may not charge a fee if the certificate
7676 is not provided in the time prescribed by Section 207.003(a).
7777 SECTION 3. Subsection (c), Section 5.017, Property Code, is
7878 amended to read as follows:
7979 (c) This section does not apply to a deed restriction or
8080 other covenant running with the land that requires a fee associated
8181 with the conveyance of property in a subdivision that is payable:
8282 (1) to:
8383 (A) [(1)] a property owners' association that
8484 manages or regulates the subdivision or the association's managing
8585 agent if the subdivision contains more than one platted lot;
8686 (B) [(2)] an entity organized under Section
8787 501(c)(3), Internal Revenue Code of 1986; [or]
8888 (C) [(3)] a governmental entity; or
8989 (D) an entity other than a property owners'
9090 association that operates a golf course and country club in or
9191 adjacent to the subdivision if property owners in the subdivision
9292 are required by deed restriction to obtain and maintain a
9393 membership in the golf course and country club; or
9494 (2) for the benefit or in consideration of a
9595 conservation easement created under Chapter 183, Natural Resources
9696 Code, located in a county with a population of at least 500,000 and
9797 not more than one million.
9898 SECTION 4. Subdivision (1), Section 202.001, Property Code,
9999 is amended to read as follows:
100100 (1) "Dedicatory instrument" means each document
101101 governing [instrument covering] the establishment, maintenance, or
102102 [and] operation of a residential subdivision, planned unit
103103 development, condominium or townhouse regime, or any similar
104104 planned development. The term includes:
105105 (A) a declaration or similar instrument
106106 subjecting real property to:
107107 (i) restrictive covenants, bylaws, or
108108 similar instruments governing the administration or operation of a
109109 property owners' association;
110110 (ii) [, to] properly adopted rules and
111111 regulations of the property owners' association; or
112112 (iii) [, or to] all lawful amendments to the
113113 covenants, bylaws, instruments, rules, or regulations; and
114114 (B) bylaws, rules, regulations, or guidelines
115115 adopted by a property owners' association under an instrument
116116 described by Paragraph (A).
117117 SECTION 5. Section 202.004, Property Code, is amended by
118118 adding Subsections (d) and (e) to read as follows:
119119 (d) In evaluating an alleged or potential violation of a
120120 restrictive covenant, the property owners' association or other
121121 representative designated by an owner of real property may,
122122 notwithstanding any provision in a dedicatory instrument, grant a
123123 variance and in doing so not enforce the restrictive covenant if the
124124 property owners' association board, in the board's reasonable
125125 judgment, determines:
126126 (1) the property owners' association's position is not
127127 sufficiently strong to justify taking any action or further action;
128128 (2) the provision alleged to have been violated may be
129129 inconsistent with applicable law;
130130 (3) the alleged violation is not of such a material or
131131 visible nature as to be objectionable to a reasonable person or to
132132 justify expending the property owners' association's resources;
133133 (4) enforcement of the provision is not in the
134134 association's best interests, based on hardship, expense, or other
135135 reasonable criteria; or
136136 (5) the facts of the particular circumstances, such as
137137 topography of the owner's land or unforeseen circumstances unique
138138 to the particular owner, justify the variance.
139139 (e) A determination by the property owners' association
140140 board to grant a variance under Subsection (d) may not be considered
141141 a waiver of the association's ability to enforce any dedicatory
142142 instrument provision in the future.
143143 SECTION 6. Section 202.006, Property Code, is amended to
144144 read as follows:
145145 Sec. 202.006. PUBLIC RECORDS. (a) A property owners'
146146 association shall file all [the] dedicatory instruments
147147 [instrument] in the real property records of each county in which
148148 the property to which the dedicatory instruments relate [instrument
149149 relates] is located.
150150 (b) A dedicatory instrument that is not filed in accordance
151151 with this section has no effect until filed.
152152 SECTION 7. Chapter 202, Property Code, is amended by adding
153153 Sections 202.008, 202.010, 202.011, 202.012, 202.013, 202.014, and
154154 202.015 to read as follows:
155155 Sec. 202.008. ASSOCIATION'S RIGHT OF ENTRY. (a) Except as
156156 provided by this section, a provision in a dedicatory instrument
157157 that provides a property owners' association the right or authority
158158 to enter onto an owner's private property to enforce or abate an
159159 alleged violation of a restrictive covenant is void as against
160160 public policy except for entry:
161161 (1) to cure a violation that involves an immediate
162162 threat to persons or property;
163163 (2) after 10 days' written notice, to:
164164 (A) perform a forced mow; or
165165 (B) remove trash or debris; or
166166 (3) in circumstances in which it is reasonably
167167 determined the property has been abandoned and not maintained for
168168 at least 30 days.
169169 (b) This section does not prohibit a provision in a
170170 dedicatory instrument allowing a property owners' association a
171171 right of entry on the property of an owner that is limited to a
172172 dedicated access or other easement contained in a final plat or an
173173 easement filed of record.
174174 (c) This section does not apply to:
175175 (1) an association regulated under Title 7;
176176 (2) a property owners' association that funds through
177177 assessments:
178178 (A) insurance on residences;
179179 (B) one or more utility payments for residences;
180180 or
181181 (C) exterior maintenance of residences; or
182182 (3) a property owners' association that is a mixed use
183183 master association that existed before January 1, 1974, and that
184184 does not have the authority under a dedicatory instrument or other
185185 governing document to impose fines.
186186 Sec. 202.010. CERTAIN PARKING RESTRICTIONS PROHIBITED.
187187 (a) A provision in a dedicatory instrument that restricts or
188188 prohibits an owner from parking an operable, noncommercial, and
189189 personal automobile or truck on a public street is void as against
190190 public policy.
191191 (b) A provision in a dedicatory instrument that restricts or
192192 prohibits an owner from parking the owner's operable,
193193 noncommercial, and personal automobile or truck in the owner's
194194 driveway is void as against public policy.
195195 (c) For the purposes of this section, "noncommercial
196196 automobile" means a motor vehicle that may be legally driven on
197197 public roads under state law and that exhibits no commercial
198198 advertising other than standard dealer or manufacturer
199199 advertising.
200200 (d) For the purposes of this section, a recreational
201201 vehicle, motor home, camper, all-terrain vehicle, trailer, or
202202 watercraft, a tow truck, cement mixer, or other similar commercial
203203 vehicle, or a vehicle that is more than 30 feet long is not
204204 considered to be a personal automobile or truck.
205205 (e) This section does not apply to:
206206 (1) an association regulated under Title 7; or
207207 (2) a property owners' association that funds through
208208 assessments:
209209 (A) insurance on residences;
210210 (B) one or more utility payments for residences;
211211 or
212212 (C) exterior maintenance of residences.
213213 Sec. 202.011. RIGHT OF FIRST REFUSAL PROHIBITED. (a) In
214214 this section, "development period" means a period stated in a
215215 declaration during which a declarant reserves:
216216 (1) a right to facilitate the development,
217217 construction, and marketing of the subdivision; and
218218 (2) a right to direct the size, shape, and composition
219219 of the subdivision.
220220 (b) To the extent a restrictive covenant provides a right of
221221 first refusal for the sale or lease of a residential unit or
222222 residential lot in favor of the property owners' association or the
223223 association's members, the covenant is void.
224224 (c) This section does not apply to a restrictive covenant
225225 that provides a right of first refusal in favor of a developer or
226226 builder during the development period.
227227 Sec. 202.012. REGULATION OF SOLAR ENERGY DEVICES. (a) In
228228 this section, "solar energy device" has the meaning assigned by
229229 Section 171.107, Tax Code.
230230 (b) Except as otherwise provided by this section, a property
231231 owners' association may not include or enforce a provision in a
232232 dedicatory instrument that prohibits or restricts a property owner
233233 from installing a solar energy device.
234234 (c) A provision that violates Subsection (b) is void.
235235 (d) This section does not prohibit the inclusion or
236236 enforcement of a provision in a dedicatory instrument that
237237 prohibits a solar energy device that:
238238 (1) as adjudicated by a court:
239239 (A) threatens the public health or safety; or
240240 (B) violates a law;
241241 (2) is located on property owned or maintained by the
242242 property owners' association;
243243 (3) is located on property owned in common by the
244244 members of the property owners' association; or
245245 (4) is located in an area on the property owner's
246246 property other than:
247247 (A) on the roof of the home; or
248248 (B) in a fenced yard or patio maintained by the
249249 property owner.
250250 Sec. 202.013. RENTAL RESTRICTIONS. (a) Except as provided
251251 by Subsection (b), a property owners' association may not amend a
252252 dedicatory instrument to prohibit or restrict the rental of
253253 property subject to the dedicatory instrument without the consent
254254 of at least 51 percent of the total votes allocated to property
255255 owners subject to the dedicatory instrument.
256256 (b) An amendment to a dedicatory instrument may require:
257257 (1) an owner to:
258258 (A) exercise due diligence in not leasing to an
259259 occupant who is a registered sex offender or who has a history of
260260 violent crime; or
261261 (B) terminate the possessory right of any tenant
262262 or occupant who is a registered sex offender or who has a history of
263263 violent crime;
264264 (2) all leases to be subject to the dedicatory
265265 instruments of the property owners' association; or
266266 (3) a minimum lease term of not more than six months.
267267 Sec. 202.014. RESTRICTIONS REQUIRING CAPITAL IMPROVEMENTS.
268268 (a) A dedicatory instrument may not be amended to retroactively
269269 require a person who owns property subject to the dedicatory
270270 instrument at the time the amendment is adopted to make a capital
271271 improvement to the owner's property that is not required before the
272272 amendment. A provision of a dedicatory instrument requiring an
273273 owner to make a capital improvement to the owner's property may only
274274 be adopted by a vote of at least 67 percent of the total votes
275275 allocated to property owners subject to the dedicatory instrument
276276 and may be applicable only to owners purchasing property subject to
277277 the dedicatory instrument after the provision is adopted.
278278 (b) For the purposes of this section, "capital improvement"
279279 means items such as additional tree plantings, additional sodding,
280280 fence construction, hardscape installation, new construction, or
281281 any similar capital improvement. The term does not include repair
282282 or maintenance of existing improvements or the removal of
283283 conditions that are in violation of a dedicatory instrument.
284284 Sec. 202.015. INJUNCTION; DAMAGES. (a) If a property
285285 owners' association or other representative designated by the
286286 property owners' association has violated, is violating, or is
287287 threatening to violate this chapter, a member of the property
288288 owners' association may bring a civil action against the property
289289 owners' association but may not bring an action against an
290290 association's officer or board member individually.
291291 (b) A member of a property owners' association bringing an
292292 action under this section may seek:
293293 (1) injunctive relief;
294294 (2) damages in an amount equal to the greater of:
295295 (A) actual damages arising from the violation; or
296296 (B) $1,500 for each violation; or
297297 (3) both injunctive relief and damages as provided in
298298 this subsection.
299299 (c) The court may increase an award under Subsection (b)(2)
300300 to an amount not to exceed three times the amount awarded under
301301 Subsection (b)(2) if the court finds that violations have occurred
302302 with a frequency that constitutes a pattern or practice.
303303 (d) Each day a violation continues is not considered a
304304 separate violation for purposes of an assessment of damages.
305305 (e) The court may award damages to a property owners'
306306 association for a suit brought by a member of the property owners'
307307 association that the court finds frivolous or groundless in an
308308 amount that is not more than the greater of:
309309 (1) three times the association's actual damages; or
310310 (2) $4,500.
311311 (f) On or before the 30th day before the date a person files
312312 a suit under this section, the person must provide notice to the
313313 other party of the person's intent to file suit under this section.
314314 The notice must be sent certified mail, return receipt requested,
315315 or delivered by the United States Postal Service with signature
316316 confirmation service.
317317 SECTION 8. Subsection (b), Section 207.003, Property Code,
318318 is amended to read as follows:
319319 (b) A resale certificate under Subsection (a) must contain:
320320 (1) a statement of any right of first refusal, other
321321 than a right of first refusal that is prohibited by statute, and any
322322 [or] other restraint contained in the restrictions or restrictive
323323 covenants that restricts the owner's right to transfer the owner's
324324 property;
325325 (2) the frequency and amount of any regular
326326 assessments;
327327 (3) the amount and purpose of any special assessment
328328 that is due after the date the resale certificate is prepared;
329329 (4) the total of all amounts due and unpaid to the
330330 property owners' association that are attributable to the owner's
331331 property;
332332 (5) capital expenditures, if any, approved by the
333333 property owners' association for the property owners' association's
334334 current fiscal year;
335335 (6) the amount of reserves, if any, for capital
336336 expenditures;
337337 (7) the property owners' association's current
338338 operating budget and balance sheet;
339339 (8) the total of any unsatisfied judgments against the
340340 property owners' association;
341341 (9) the style and cause number of any pending lawsuit
342342 in which the property owners' association is a party, other than a
343343 lawsuit relating to unpaid property taxes of an individual member
344344 of the association [defendant];
345345 (10) a copy of a certificate of insurance showing the
346346 property owners' association's property and liability insurance
347347 relating to the common areas and common facilities;
348348 (11) a description of any conditions on the owner's
349349 property that the property owners' association board has actual
350350 knowledge are in violation of the restrictions applying to the
351351 subdivision or the bylaws or rules of the property owners'
352352 association;
353353 (12) a summary or copy of notices received by the
354354 property owners' association from any governmental authority
355355 regarding health or housing code violations existing on the
356356 preparation date of the certificate relating to the owner's
357357 property or any common areas or common facilities owned or leased by
358358 the property owners' association;
359359 (13) the amount of any administrative transfer fee
360360 charged by the property owners' association for a change of
361361 ownership of property in the subdivision;
362362 (14) the name, mailing address, and telephone number
363363 of the property owners' association's managing agent, if any; [and]
364364 (15) a statement indicating whether the restrictions
365365 allow foreclosure of a property owners' association's lien on the
366366 owner's property for failure to pay assessments; and
367367 (16) a statement of all fees associated with the
368368 transfer of ownership, including a description of each fee, to whom
369369 each fee is paid, and the amount of each fee.
370370 SECTION 9. Section 209.003, Property Code, is amended by
371371 adding Subsection (e) to read as follows:
372372 (e) The following provisions of this chapter do not apply to
373373 a property owners' association that is a mixed use master
374374 association that existed before January 1, 1974, and that does not
375375 have the authority under a dedicatory instrument or other governing
376376 document to impose fines:
377377 (1) Section 209.005(b);
378378 (2) Section 209.0056;
379379 (3) Section 209.0057;
380380 (4) Section 209.0058;
381381 (5) Section 209.00591;
382382 (6) Section 209.00593;
383383 (7) Section 209.006(c);
384384 (8) Section 209.0062; and
385385 (9) Section 209.014.
386386 SECTION 10. Chapter 209, Property Code, is amended by
387387 adding Sections 209.0035 and 209.0041 to read as follows:
388388 Sec. 209.0035. INJUNCTION; DAMAGES. (a) If a property
389389 owners' association or other representative designated by the
390390 property owners' association has violated, is violating, or is
391391 threatening to violate this chapter, a member of the property
392392 owners' association may bring a civil action against the property
393393 owners' association but may not bring an action against an
394394 association's officer or board member individually.
395395 (b) A member of a property owners' association bringing an
396396 action under this section may seek:
397397 (1) injunctive relief;
398398 (2) damages in an amount equal to the greater of:
399399 (A) actual damages arising from the violation; or
400400 (B) $1,500 for each violation; or
401401 (3) both injunctive relief and damages as provided in
402402 this subsection.
403403 (c) The court may increase an award under Subsection (b)(2)
404404 to an amount not to exceed three times the amount awarded under
405405 Subsection (b)(2) if the court finds that violations have occurred
406406 with a frequency that constitutes a pattern or practice.
407407 (d) Each day a violation continues is not considered a
408408 separate violation for purposes of assessment of damages.
409409 (e) The court may award damages to a property owners'
410410 association for a suit brought by a member of the property owners'
411411 association that the court finds frivolous or groundless in an
412412 amount that is not more than the greater of:
413413 (1) three times the association's actual damages; or
414414 (2) $4,500.
415415 (f) On or before the 30th day before the date a person files
416416 a suit under this section, the person must provide notice to the
417417 other party of the person's intent to file suit under this section.
418418 The notice must be sent certified mail, return receipt requested,
419419 or delivered by the United States Postal Service with signature
420420 confirmation service.
421421 Sec. 209.0041. AMENDMENT OF DEDICATORY INSTRUMENTS.
422422 (a) This section applies to a residential subdivision in which
423423 property owners are subject to mandatory membership in a property
424424 owners' association.
425425 (b) This section applies to all dedicatory instruments
426426 regardless of the date on which the dedicatory instruments were
427427 created.
428428 (c) This section does not apply to the amendment of a
429429 dedicatory instrument during a development period, as defined by
430430 Section 202.011.
431431 (d) To the extent of any conflict with another provision of
432432 this title, this section prevails.
433433 (e) Except as provided by Subsection (f), a dedicatory
434434 instrument may be amended only by a vote of at least 51 percent of
435435 the total votes allocated to property owners in the property
436436 owners' association, in addition to any governmental approval
437437 required by law.
438438 (f) A rule or guideline that affects land owned, leased,
439439 maintained, or otherwise controlled by the property owners'
440440 association may be adopted or amended by majority vote of the
441441 association board. A rule or guideline that impacts the use and
442442 enjoyment of personal or real property owned exclusively by the
443443 owner or that may result in a fine or loss of privilege of a member
444444 of the association may be adopted or amended only by a vote of at
445445 least 51 percent of the total votes allocated to property owners who
446446 cast votes by any permissible method in an association-wide vote.
447447 (g) A property owners' association board by majority vote
448448 may adopt ministerial, office-related procedural policies, such as
449449 payment plan guidelines under Section 209.0062, a collections
450450 policy, an enforcement policy, or other similar ministerial,
451451 office-related procedural policies. The policy may outline
452452 circumstances under which or the manner by which enforcement
453453 remedies may be carried out but may not otherwise impact the use and
454454 enjoyment of personal or real property owned exclusively by the
455455 owner. The policy may not:
456456 (1) create a power to:
457457 (A) levy a fine; or
458458 (B) impose a loss of a privilege on a member of
459459 the association; or
460460 (2) expand the association's powers beyond the powers
461461 granted by any other dedicatory instrument.
462462 (h) All ballots cast in a vote that results in an amendment
463463 to a restrictive covenant, bylaw, or rule are records of the
464464 association subject to inspection under Section 209.005.
465465 (i) This section supersedes any contrary requirement in a
466466 dedicatory instrument.
467467 (j) This section does not apply to a property owners'
468468 association that is subject to Chapter 552, Government Code, by
469469 application of Section 552.0036, Government Code.
470470 SECTION 11. Section 209.005, Property Code, is amended to
471471 read as follows:
472472 Sec. 209.005. ASSOCIATION RECORDS. (a) This section does
473473 not apply to a property owners' association that is subject to
474474 Chapter 552, Government Code, by application of Section 552.0036,
475475 Government Code.
476476 (b) Notwithstanding a provision in a dedicatory instrument,
477477 a [A] property owners' association shall make the books and records
478478 of the association, including financial records, open to and
479479 reasonably available for examination by [to] an owner [in
480480 accordance with Section B, Article 2.23, Texas Non-Profit
481481 Corporation Act (Article 1396-2.23, Vernon's Texas Civil
482482 Statutes)]. An owner is entitled to obtain from the association
483483 copies of information contained in the books and records.
484484 (c) [(a-1) A property owners' association described by
485485 Section 552.0036(2), Government Code, shall make the books and
486486 records of the association, including financial records,
487487 reasonably available to any person requesting access to the books
488488 or records in accordance with Chapter 552, Government
489489 Code. Subsection (a) does not apply to a property owners'
490490 association to which this subsection applies.
491491 [(b)] An attorney's files and records relating to the
492492 association, excluding invoices requested by an owner under Section
493493 209.008(d), are not:
494494 (1) records of the association;
495495 (2) subject to inspection by the owner; or
496496 (3) subject to production in a legal proceeding.
497497 (d) In addition to the requirements of Subsection (b), a
498498 property owners' association shall make the association's books and
499499 records, including financial records and invoices, available in a
500500 building:
501501 (1) in which the books and records are appropriately
502502 stored; and
503503 (2) that is:
504504 (A) staffed during normal business hours;
505505 (B) accessible to members of the association
506506 during normal business hours; and
507507 (C) located on property commonly owned by the
508508 association within the boundaries of the subdivision governed by
509509 the association.
510510 (e) If a building described by Subsection (d) does not exist
511511 on property described by Subsection (d), the property owners'
512512 association shall make the books and records available in
513513 accordance with Subsections (g) and (h).
514514 (f) A party requesting association books or records shall
515515 submit the request in writing:
516516 (1) in person by hand delivery to a current board
517517 member;
518518 (2) to the mailing address of the association or
519519 authorized representative as provided on the most current
520520 management certificate filed under Section 209.004; or
521521 (3) in person to a managing agent as reflected on the
522522 most current management certificate filed under Section 209.004.
523523 (g) A property owners' association shall make books and
524524 records requested under Subsection (b) available to the requesting
525525 party within a reasonable time of the property owners'
526526 association's receipt of the request.
527527 (h) A reasonable time for providing information requested
528528 under Subsection (b) is considered to be 10 business days after the
529529 date the property owners' association receives a request, except as
530530 otherwise provided by this section.
531531 (i) If the property owners' association is unable to produce
532532 a requested book or record on or before the 10th business day after
533533 the date the request is received, the property owners' association
534534 must provide to the requestor written notice that:
535535 (1) informs the requestor that the property owners'
536536 association is unable to produce the information on or before the
537537 10th business day after the date of the receipt of the request; and
538538 (2) states a date by which the information will be
539539 available for inspection that occurs not later than the 30th day
540540 after the date notice under this subsection is given.
541541 (j) A property owners' association shall make books and
542542 records requested under this section available to the requestor in
543543 one or more of the following formats, as specified by the requestor:
544544 (1) an electronic format:
545545 (A) delivered to an electronic mail address
546546 provided by the requestor; or
547547 (B) delivered in a disc or other standard
548548 electronic format:
549549 (i) to the mailing address of the
550550 requestor; or
551551 (ii) if the requesting party does not
552552 provide a mailing address, to the address of the requestor's
553553 property in the subdivision; or
554554 (2) a hard-copy format:
555555 (A) delivered to the mailing address of the
556556 requestor; or
557557 (B) if the requesting party does not provide a
558558 mailing address:
559559 (i) mailed to the address of the requestor's
560560 property in the subdivision; or
561561 (ii) made available at a location not more
562562 than 25 miles from the boundary of the subdivision governed by the
563563 association.
564564 (k) This section does not require a property owners'
565565 association to staff a building described by Subsection (d).
566566 (l) A property owners' association may charge an owner for
567567 copies of the requested information in an amount that reasonably
568568 includes all costs related to reproducing the information,
569569 including costs of materials, labor, and overhead.
570570 (m) Any information maintained by the association that is
571571 released under this section may not identify an individual member
572572 of an association or an individual's personal financial
573573 information. Information may be released in an aggregate manner
574574 that would not identify an individual property owner.
575575 (n) All ballots cast in an election that results in an
576576 amendment to a dedicatory instrument, as required by Section
577577 209.0041, are records of the property owners' association subject
578578 to inspection under this section.
579579 (o) All ballots cast in an election of property owners'
580580 association board or other committee members are considered records
581581 of the association but may not be made available for inspection
582582 under this section, except for the purposes of a recount under
583583 Section 209.0057(e), without a court order or subpoena. The
584584 association shall take reasonable measures to safeguard the
585585 security and privacy of those ballots.
586586 (p) A property owners' association shall:
587587 (1) keep all records as to changes to the dedicatory
588588 instruments in perpetuity;
589589 (2) maintain and secure all ballots in
590590 association-wide elections for four years; and
591591 (3) maintain records related to financial matters of
592592 the association, including assessments, fines, foreclosures, and
593593 enforcement actions, for at least seven years.
594594 (q) A member of a property owners' association who is denied
595595 access to or copies of association books or records to which the
596596 member is entitled under this section may file a petition with the
597597 justice of the peace of a justice precinct in which all or part of
598598 the property that is governed by the association is located
599599 requesting relief in accordance with this subsection. If the
600600 justice of the peace finds that the member is entitled to access to
601601 or copies of the records, the justice of the peace may grant one or
602602 more of the following remedies:
603603 (1) a judgment against the property owners'
604604 association for a penalty of not more than $1,500;
605605 (2) a judgment against the property owners'
606606 association for court costs and attorney's fees incurred in
607607 connection with seeking a remedy under this section; or
608608 (3) a judgment authorizing the owner or the owner's
609609 assignee to deduct the amounts awarded under Subdivisions (1) and
610610 (2) from any future regular or special assessments payable to the
611611 property owners' association.
612612 (r) For the purposes of this section, "business day" means a
613613 day other than Saturday, Sunday, or a state or federal holiday.
614614 (s) On or before the 10th day before the date a person files
615615 a suit under this section, the person must provide notice to the
616616 other party of the person's intent to file suit under this section.
617617 The notice must be sent certified mail, return receipt requested,
618618 or delivered by the United States Postal Service with signature
619619 confirmation service.
620620 SECTION 12. Chapter 209, Property Code, is amended by
621621 adding Sections 209.0051, 209.0056, 209.0057, 209.0058, 209.0059,
622622 209.00591, 209.00592, and 209.00593 to read as follows:
623623 Sec. 209.0051. OPEN BOARD MEETINGS. (a) This section does
624624 not apply to a property owners' association that is subject to
625625 Chapter 551, Government Code, by application of Section 551.0015,
626626 Government Code.
627627 (b) In this section, "board meeting" means a deliberation
628628 between a quorum of the voting board of the property owners'
629629 association, or between a quorum of the voting board and another
630630 person, during which property owners' association business or
631631 policy over which the board has responsibility is discussed or
632632 considered or during which the board takes formal action. The term
633633 does not include the gathering of a quorum of the board at a social
634634 function unrelated to the business of the association, or the
635635 attendance by a quorum of the board at a regional, state, or
636636 national convention, workshop, ceremonial event, or press
637637 conference, if formal action is not taken and any discussion of
638638 association business is incidental to the social function,
639639 convention, workshop, ceremonial event, or press conference.
640640 (c) Except as provided by this section, a meeting of the
641641 property owners' association board or a committee or subcommittee
642642 of the board is open to members of the property owners' association
643643 and shall be held in a county in which all or part of the property
644644 governed by the association is located or a county adjacent to that
645645 county.
646646 (d) The board shall keep a record of each regular,
647647 emergency, or special board meeting in the form of written minutes
648648 or an audio recording of the meeting. A record of a meeting must
649649 state the subject of each motion or inquiry, regardless of whether
650650 the board takes action on the motion or inquiry, and indicate each
651651 vote, order, decision, or other action taken by the board. The
652652 board shall make meeting records, including approved minutes,
653653 available to a member for inspection and copying on the member's
654654 written request to the board or the board's representative. The
655655 board shall approve the minutes of a board meeting not later than
656656 the next regular board meeting.
657657 (e) The board shall give members notice of the date, hour,
658658 place, and subject of a regular or special board meeting, including
659659 a general description of any matters to be brought up for
660660 deliberation in executive session. The notice shall be mailed to
661661 each member or:
662662 (1) posted at least 72 hours before the start of the
663663 meeting in a conspicuous manner reasonably designed to provide
664664 notice to association members:
665665 (A) in a place located on the association's
666666 common property or other conspicuously located property within the
667667 association, with the property owner's consent; or
668668 (B) on any Internet website maintained by the
669669 association; and
670670 (2) sent via e-mail to each owner who has registered an
671671 e-mail address with the property owners' association; it is an
672672 owner's duty to keep an e-mail address registered with the property
673673 owners' association updated.
674674 (f) If the board recesses a regular or special board meeting
675675 to continue the following regular business day, the board is not
676676 required to post notice of the continued meeting if the recess is
677677 taken in good faith and not to circumvent this section. If a
678678 regular or special board meeting is continued to the following
679679 regular business day, and on that following day the board continues
680680 the meeting to another day, the board shall give notice as required
681681 by this section of the meeting continued to that other day.
682682 (g) If at a regular, emergency, administrative, or special
683683 meeting a member makes an inquiry regarding a subject for which
684684 notice has not been given as required by this section, the notice
685685 provisions of this section do not apply to:
686686 (1) a statement by the board of specific factual
687687 information given in response to the inquiry; or
688688 (2) a recitation of existing policy in response to the
689689 inquiry.
690690 (h) Any deliberation of or decision relating to the subject
691691 of an inquiry made under Subsection (g) shall be limited to a
692692 proposal to place the subject on the agenda for a subsequent board
693693 meeting.
694694 (i) In the event of a reasonably unforeseen emergency or
695695 urgent necessity that requires immediate board action, the board
696696 may meet in an emergency board meeting. Notice for an emergency
697697 board meeting may be given in at least one manner prescribed by
698698 Subsection (e)(1) at least two hours before the emergency session
699699 is convened and must clearly identify the emergency or urgent
700700 necessity for which the notice is given. A board in an emergency
701701 meeting may not consider fines, foreclosures, enforcement actions,
702702 increases in assessments, or any other foreseeable business or
703703 policy over which the board has responsibility. Any action taken in
704704 an emergency board meeting must be summarized orally, including an
705705 explanation of any known actual or estimated expenditures approved
706706 at the meeting, and documented in the minutes or tape recording of
707707 the next regular or special board meeting.
708708 (j) A property owners' association board may hold an
709709 administrative session, and that session is not subject to the
710710 notice requirements of this section. In any administrative
711711 session, the board may not take action regarding issuance of fines,
712712 commencement of foreclosure proceedings, levying of a special
713713 assessment, increases in assessments, or approval of items not
714714 previously approved in the association's budget.
715715 (k) Before the board calls an executive session, the board
716716 shall convene in a regular or special board meeting for which notice
717717 has been given as provided by this section. During that board
718718 meeting, the presiding board member may call an executive session
719719 by announcing that an executive session will be held to deliberate a
720720 matter described by Subsection (l) and identifying the specific
721721 subdivision of Subsection (l) under which the executive session
722722 will be held. A vote or other action item may not be taken in
723723 executive session.
724724 (l) A board of a property owners' association may meet in
725725 executive session, to which the members do not have access, to
726726 deliberate:
727727 (1) anticipated or pending litigation, settlement
728728 offers, or interpretations of the law with the association's legal
729729 counsel;
730730 (2) complaints or charges against or issues regarding
731731 a board member or agent, employee, contractor, or other
732732 representative of the property owners' association;
733733 (3) a payment plan under Section 209.0062;
734734 (4) a foreclosure of a lien;
735735 (5) an enforcement action against a member of the
736736 association, including for nonpayment of amounts due;
737737 (6) the purchase, exchange, lease, or value of real
738738 property, if the board determines in good faith that deliberation
739739 in an open board meeting may have a detrimental effect on the
740740 association;
741741 (7) business and financial issues relating to the
742742 negotiation of a contract, if the board determines in good faith
743743 that deliberation in an open board meeting may have a detrimental
744744 effect on the position of the association; or
745745 (8) matters involving the invasion of privacy of an
746746 individual owner.
747747 Sec. 209.0056. NOTICE OF ELECTION OR ASSOCIATION VOTE.
748748 (a) On or before the 30th day before the date an election or vote
749749 is held by a property owners' association, the association shall
750750 give each owner of property in the property owners' association
751751 written notice of the election or vote.
752752 (b) This section supersedes any contrary requirement in a
753753 dedicatory instrument.
754754 (c) This section does not apply to a property owners'
755755 association that is subject to Chapter 552, Government Code, by
756756 application of Section 552.0036, Government Code.
757757 Sec. 209.0057. TABULATION OF VOTES. (a) This section does
758758 not apply to a property owners' association that is subject to
759759 Chapter 552, Government Code, by application of Section 552.0036,
760760 Government Code.
761761 (b) On the written petition of owners having at least 10
762762 percent of all voting interests in a property owners' association
763763 for a vote tabulation under this subsection, received by the
764764 association at least 15 days before the first date that votes may be
765765 cast, to tabulate the votes in any matter subject to a vote of the
766766 members of a mandatory property owners' association, the
767767 association shall enter into a contract for the services of a person
768768 who is not a member of the association or related to a member of the
769769 association board within the third degree by consanguinity or
770770 affinity, as determined under Chapter 573, Government Code, and who
771771 is a current or former:
772772 (1) county judge;
773773 (2) county elections administrator;
774774 (3) justice of the peace; or
775775 (4) county voter registrar.
776776 (c) The name of each person tabulating votes of the members
777777 of a property owners' association and the results of the tabulation
778778 must be reflected in the minutes of the association.
779779 (d) Any owner may, not later than the fifth day after the
780780 date of the initial tabulation of votes, require a recount of the
781781 votes. A demand for a recount must be submitted in writing either:
782782 (1) in person to a property owners' association board
783783 member;
784784 (2) by certified mail, return receipt requested, or by
785785 delivery by the United States Postal Service with signature
786786 confirmation service to the association's mailing address on the
787787 latest management certificate filed under Section 209.004; or
788788 (3) in person to the association's managing agent as
789789 reflected on the latest management certificate filed under Section
790790 209.004.
791791 (e) The property owners' association shall, at the expense
792792 of the owner requesting the recount, retain for the purpose of
793793 performing the recount the services of a person who is not a member
794794 of the association or related to a member of the association board
795795 within the third degree of consanguinity or affinity, as determined
796796 under Chapter 573, Government Code and who is a current or former:
797797 (1) county judge;
798798 (2) county elections administrator;
799799 (3) justice of the peace; or
800800 (4) county voter registrar.
801801 (f) Any recount under Subsection (d) must be performed on or
802802 before the 30th day after the date of receipt of a request for and
803803 payment for a recount in accordance with Subsections (d) and (e).
804804 If the recount changes the results of the election, the association
805805 shall reimburse the requesting owner for the cost of the recount.
806806 Any action taken by the board in the period between the initial
807807 election vote tally and the completion of the recount may not be
808808 affected by any recount.
809809 Sec. 209.0058. BALLOTS. (a) Any vote cast in an election
810810 or vote by a member of a property owners' association must be in
811811 writing and signed by the member.
812812 (b) Electronic votes cast under Section 209.00593
813813 constitute written and signed ballots.
814814 (c) In an association-wide election, written and signed
815815 ballots are not required for uncontested races.
816816 Sec. 209.0059. RIGHT TO VOTE. (a) A provision in a
817817 dedicatory instrument that would disqualify a property owner from
818818 voting in an association election of board members or on any matter
819819 concerning the rights or responsibilities of the owner is void.
820820 (b) This section does not apply to a property owners'
821821 association that is subject to Chapter 552, Government Code, by
822822 application of Section 552.0036, Government Code.
823823 Sec. 209.00591. PROXY VOTING. A provision in any
824824 dedicatory instrument that provides for a proxy vote in any matter
825825 subject to a vote of the members of the property owners' association
826826 is void.
827827 Sec. 209.00592. BOARD MEMBERSHIP. (a) Except as provided
828828 by Subsection (b), a provision in a dedicatory instrument that
829829 restricts a property owner's right to run for a position on the
830830 board of the property owners' association is void.
831831 (b) If a board is presented with written, documented
832832 evidence from a database or other record maintained by a
833833 governmental law enforcement authority that a board member has been
834834 convicted of a felony or crime involving moral turpitude, the board
835835 member is immediately ineligible to serve on the board of the
836836 property owners' association, automatically considered removed
837837 from the board, and prohibited from future service on the board.
838838 Sec. 209.00593. VOTING; QUORUM. (a) The voting rights of
839839 an owner may be cast or given:
840840 (1) in person at a meeting of the property owners'
841841 association;
842842 (2) by absentee ballot in accordance with this
843843 section; or
844844 (3) by electronic ballot in accordance with this
845845 section.
846846 (b) An absentee or electronic ballot:
847847 (1) may be counted as an owner present and voting for
848848 the purpose of establishing a quorum only for items appearing on the
849849 ballot;
850850 (2) may not be counted, even if properly delivered, if
851851 the owner attends any meeting to vote in person, so that any vote
852852 cast at a meeting by a property owner supersedes any vote submitted
853853 by absentee or electronic ballot previously submitted for that
854854 proposal; and
855855 (3) may not be counted on the final vote of a proposal
856856 if the motion was amended at the meeting to be different from the
857857 exact language on the absentee or electronic ballot.
858858 (c) A solicitation for votes by absentee ballot must
859859 include:
860860 (1) an absentee ballot that contains each proposed
861861 action and provides an opportunity to vote for or against each
862862 proposed action;
863863 (2) instructions for delivery of the completed
864864 absentee ballot, including the delivery location; and
865865 (3) the following language: "By casting your vote via
866866 absentee ballot you will forgo the opportunity to consider and vote
867867 on any action from the floor on these proposals, if a meeting is
868868 held. This means that if there are amendments to these proposals
869869 your votes will not be counted on the final vote on these measures.
870870 If you desire to retain this ability, please attend any meeting in
871871 person. You may submit an absentee ballot and later choose to
872872 attend any meeting in person, in which case any in-person vote will
873873 prevail."
874874 (d) For the purposes of this section, "electronic ballot"
875875 means a ballot:
876876 (1) given by:
877877 (A) electronic mail;
878878 (B) facsimile; or
879879 (C) posting on an Internet website;
880880 (2) for which the identity of the property owner
881881 submitting the ballot can be confirmed; and
882882 (3) for which the property owner may receive a receipt
883883 of the electronic transmission and receipt of the owner's ballot.
884884 (e) If an electronic ballot is posted on an Internet
885885 website, a notice of the posting shall be sent to each owner that
886886 contains instructions on obtaining access to the posting on the
887887 website.
888888 (f) This section supersedes any contrary provision in a
889889 dedicatory instrument.
890890 (g) This section does not apply to a property owners'
891891 association that is subject to Chapter 552, Government Code, by
892892 application of Section 552.0036, Government Code.
893893 SECTION 13. Section 209.006, Property Code, is amended by
894894 amending Subsection (b) and adding Subsections (c), (d), (e), and
895895 (f) to read as follows:
896896 (b) The notice must:
897897 (1) describe the violation or property damage that is
898898 the basis for the suspension action, charge, or fine and state any
899899 amount due the association from the owner; [and]
900900 (2) except as provided by Subsection (d), inform the
901901 owner that the owner:
902902 (A) is entitled to a reasonable period to cure
903903 the violation and avoid the fine [or suspension unless the owner was
904904 given notice and a reasonable opportunity to cure a similar
905905 violation within the preceding six months]; and
906906 (B) may request a hearing under Section 209.007
907907 on or before the 30th day after the date notice was delivered to the
908908 owner;
909909 (3) specify the date by which the owner must cure the
910910 violation if the violation is of a curable nature and does not pose
911911 a threat to public health or safety;
912912 (4) specify the dollar amount of any fine the
913913 association seeks to levy;
914914 (5) specify each provision of the dedicatory
915915 instrument the owner is alleged to have violated; and
916916 (6) be sent by certified mail, return receipt
917917 requested, or delivered by the United States Postal Service with
918918 signature confirmation service to the owner at the owner's last
919919 known address as shown on the association's records [receives the
920920 notice].
921921 (c) The date specified in the notice under Subsection (b)(3)
922922 must provide a reasonable period of at least 30 days for the owner
923923 to cure the violation if the violation is of a curable nature and
924924 does not pose a threat to public health or safety.
925925 (d) Subsections (a) and (b) do not apply to a violation for
926926 which the owner has been previously given notice under this section
927927 and the opportunity to exercise any rights available under this
928928 section in the preceding six months.
929929 (e) If the property owner does not cure the violation in the
930930 time provided under Subsection (c) and does not request a hearing
931931 under Subsection (b)(2)(B), the property owners' association may
932932 assess the fine and shall provide notice of the assessment to the
933933 owner. If the property owner cures the violation before the
934934 expiration period for cure specified under Subsection (c), any fine
935935 assessed for the violation is void.
936936 (f) For purposes of this section, a violation is considered
937937 a threat to public health or safety if the violation could
938938 materially affect the physical health or safety of an ordinary
939939 resident.
940940 SECTION 14. Chapter 209, Property Code, is amended by
941941 adding Sections 209.0061, 209.0062, 209.0063, and 209.0064 to read
942942 as follows:
943943 Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed
944944 by the property owners' association must be reasonable in the
945945 context of the nature and frequency of the violation and the effect
946946 of the violation on the subdivision as a whole. If the association
947947 allows fines for a continuing violation to accumulate against a lot
948948 or an owner, the association must establish a reasonable maximum
949949 fine amount for a continuing violation, at which point the total
950950 fine amount is capped.
951951 (b) If a lot occupant other than the owner violates a
952952 provision of the dedicatory instrument, the property owners'
953953 association, in addition to exercising any of the association's
954954 powers against the owner, may assess a fine directly against the
955955 nonowner occupant in the same manner as provided for an owner but
956956 may not require payment from both the owner and a nonowner occupant
957957 for the same violation.
958958 (c) If the property owners' association assesses a fine
959959 against a nonowner occupant under this section, the notice
960960 provisions of Section 209.006 and the hearing provisions of Section
961961 209.007 apply to the nonowner occupant in the same manner as those
962962 provisions apply to an owner.
963963 Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
964964 ASSESSMENTS. (a) A property owners' association shall adopt
965965 reasonable guidelines to establish an alternative payment schedule
966966 by which an owner may make partial payments to the property owners'
967967 association for delinquent regular or special assessments or any
968968 other amount owed to the association without accruing additional
969969 monetary penalties. For purposes of this section, monetary
970970 penalties do not include reasonable costs associated with
971971 administering the payment plan or interest.
972972 (b) For any approved special assessment in an amount greater
973973 than the equivalent of the sum of all regular assessments payable in
974974 the year the special assessment is approved, a property owners'
975975 association shall allow partial payments of the special assessment
976976 for 12 months unless the property owner requests a shorter payment
977977 period in writing at the time the property owner requests an
978978 alternative payment plan. A property owners' association may offer
979979 a reasonable discount for an owner making a one-time lump sum
980980 payment of the special assessment.
981981 (c) For any approved special assessment in an amount greater
982982 than the equivalent of one-half the sum of all regular assessments
983983 payable in the year the special assessment is approved, a property
984984 owners' association shall allow partial payments of the special
985985 assessment for six months unless the property owner requests a
986986 shorter payment period in writing at the time the property owner
987987 requests an alternative payment plan. A property owners'
988988 association may offer a reasonable discount to an owner making a
989989 one-time lump sum payment of the special assessment.
990990 (d) A property owners' association is not required to allow
991991 a payment plan for any amount that extends more than 12 months from
992992 the date of the owner's request for a payment plan or to enter into a
993993 payment plan with an owner who failed to honor the terms of a
994994 previous payment plan during the five years following an owner's
995995 default under a previous payment plan.
996996 (e) A property owners' association shall file the
997997 association's guidelines under this section in the real property
998998 records of each county in which the subdivision is located.
999999 (f) A property owners' association's failure to file as
10001000 required by this section the association's guidelines in the real
10011001 property records of each county in which the subdivision is located
10021002 does not prohibit a property owner from receiving an alternative
10031003 payment schedule by which the owner may make partial payments to the
10041004 property owners' association for delinquent regular or special
10051005 assessments or any other amount owed to the association without
10061006 accruing additional monetary penalties, as defined by Subsection
10071007 (a).
10081008 Sec. 209.0063. PRIORITY OF PAYMENTS. Unless otherwise
10091009 provided in writing by the property owner at the time payment is
10101010 made, a payment received by a property owners' association from the
10111011 owner shall be applied to the owner's debt in the following order of
10121012 priority:
10131013 (1) any delinquent assessment;
10141014 (2) any current assessment;
10151015 (3) any attorney's fees incurred by the association
10161016 associated solely with assessments or any other charge that could
10171017 provide the basis for foreclosure;
10181018 (4) any fines assessed by the association;
10191019 (5) any attorney's fees incurred by the association
10201020 that are not subject to Subdivision (3); and
10211021 (6) any other amount owed to the association.
10221022 Sec. 209.0064. COLLECTIONS. A property owners' association
10231023 must bring suit or otherwise initiate against an owner a collection
10241024 action authorized by the dedicatory instruments or other law on or
10251025 before the 10th anniversary of the date on which the cause of action
10261026 for collection of the debt accrues. Section 16.004, Civil Practice
10271027 and Remedies Code, does not apply to the collection of a debt owed
10281028 by an owner to a property owners' association.
10291029 SECTION 15. Section 209.007, Property Code, is amended by
10301030 amending Subsection (a) and adding Subsections (f), (g), (h), (i),
10311031 and (j) to read as follows:
10321032 (a) If the owner is entitled to an opportunity to cure the
10331033 violation, the owner has the right to submit a written request for a
10341034 hearing to discuss and verify facts and resolve the matter in issue
10351035 before a committee appointed by the board of the property owners'
10361036 association or before the board if the board does not appoint a
10371037 committee. The written request must contain a statement of the
10381038 grounds on which the owner believes the owner is not in violation
10391039 and citations of the dedicatory instrument for each violation
10401040 alleged.
10411041 (f) If the parties fail to reach agreement in or after the
10421042 hearing described by this section, the property owners' association
10431043 must file suit to uphold and enforce any fine sought to be assessed.
10441044 The suit must be filed in a justice court or small claims court not
10451045 later than the 180th day after the date of the hearing described by
10461046 this section or an appeal under Subsection (b), whichever is later.
10471047 The complaint must list each violation and be accompanied by
10481048 citation of the dedicatory instrument for each violation. If the
10491049 property owners' association does not file suit within the time
10501050 prescribed by this subsection, the association's right to collect
10511051 the fine is considered waived.
10521052 (g) Not later than the 30th day after the date a suit is
10531053 filed under Subsection (f), the court shall hold an evidentiary
10541054 hearing on the matter. The parties are not entitled to any
10551055 discovery.
10561056 (h) At the evidentiary hearing, the property owners'
10571057 association has the burden of proving by a preponderance of the
10581058 evidence that the property owner has violated a restrictive
10591059 covenant.
10601060 (i) The court shall determine whether a violation has
10611061 occurred and, if so, whether the fine for the violation is
10621062 reasonable considering the type, duration, and severity of the
10631063 violation.
10641064 (j) If the court finds that the position taken by either
10651065 party is groundless or is taken in bad faith, the court may award
10661066 the prevailing party's attorney's fees.
10671067 SECTION 16. Chapter 209, Property Code, is amended by
10681068 adding Section 209.0091 to read as follows:
10691069 Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except
10701070 as provided by Subsection (c), a property owners' association may
10711071 not foreclose a property owners' association assessment lien unless
10721072 the association first obtains a court order in an application for
10731073 expedited foreclosure under the rules adopted by the supreme court
10741074 under Subsection (b). A property owners' association may use the
10751075 procedure described by this subsection to foreclose any lien
10761076 described by the association's dedicatory instruments.
10771077 (b) The supreme court, as an exercise of the court's
10781078 authority under Section 74.024, Government Code, shall adopt rules
10791079 establishing expedited foreclosure proceedings for use by a
10801080 property owners' association in foreclosing an assessment lien of
10811081 the association. The rules adopted under this subsection must be
10821082 substantially similar to the rules adopted by the supreme court
10831083 under Section 50(r), Article XVI, Texas Constitution.
10841084 (c) Expedited foreclosure is not required under this
10851085 section if the owner of the property that is subject to foreclosure
10861086 agrees in writing at the time the foreclosure is sought to waive
10871087 expedited foreclosure under this section. A waiver under this
10881088 subsection may not be required as a condition of the transfer of
10891089 title to real property.
10901090 (d) A provision granting a right to foreclose a lien on real
10911091 property for unpaid amounts due to a property owners' association
10921092 may be removed from a dedicatory instrument or adopted in a
10931093 dedicatory instrument by a vote of at least 51 percent of the total
10941094 votes allocated to property owners in the property owners'
10951095 association. Owners holding at least 10 percent of all voting
10961096 interests in the property owners' association may petition the
10971097 association and require a special meeting to be called for the
10981098 purposes of taking a vote for the purposes of this section.
10991099 SECTION 17. Subsection (a), Section 209.010, Property Code,
11001100 is amended to read as follows:
11011101 (a) A property owners' association that conducts a
11021102 foreclosure sale of an owner's lot must send to the lot owner not
11031103 later than the 30th day after the date of the foreclosure sale:
11041104 (1) a written notice stating the date and time the sale
11051105 occurred and informing the lot owner of the owner's right to redeem
11061106 the property under Section 209.011; and
11071107 (2) a copy of Section 209.011.
11081108 SECTION 18. Chapter 209, Property Code, is amended by
11091109 adding Section 209.014 to read as follows:
11101110 Sec. 209.014. RESTRICTIONS ON OWNERSHIP VOID. A property
11111111 owners' association may not prohibit an owner from owning multiple
11121112 properties governed by the property owners' association if the
11131113 cumulative voting rights of all of that owner's properties are 25
11141114 percent or less of all voting interests in the property owners'
11151115 association. This section does not apply during a development
11161116 period as defined by Section 202.011.
11171117 SECTION 19. Subsection (a), Section 211.002, Property Code,
11181118 is amended to read as follows:
11191119 (a) This chapter applies only to a residential real estate
11201120 subdivision or any unit or parcel of a subdivision to which another
11211121 chapter in this title that provides a procedure under which a
11221122 subdivision's restrictions may be amended does not apply [located
11231123 in whole or in part within an unincorporated area of a county if the
11241124 county has a population of less than 65,000].
11251125 SECTION 20. Subsection (c), Section 202.004, Property Code,
11261126 is amended to read as follows:
11271127 (c) For a violation of a restrictive covenant of a property
11281128 owners' association that is a mixed use master association that
11291129 existed before January 1, 1974, and that does not have the authority
11301130 under a dedicatory instrument or other governing document to impose
11311131 fines, a [A] court may assess civil damages [for the violation of a
11321132 restrictive covenant] in an amount not to exceed $200 for each day
11331133 of the violation.
11341134 SECTION 21. (a) Subsection (a), Section 5.006, Property
11351135 Code, as amended by this Act, applies only to an action filed on or
11361136 after the effective date of this Act. An action filed before the
11371137 effective date of this Act is governed by the law in effect
11381138 immediately before the effective date of this Act, and that law is
11391139 continued in effect for that purpose.
11401140 (b) Section 5.012, Property Code, as amended by this Act,
11411141 applies only to a sale of property that occurs on or after the
11421142 effective date of this Act. For the purposes of this section, a
11431143 sale of property occurs before the effective date of this Act if the
11441144 executory contract binding the purchaser to purchase the property
11451145 is executed before that date. A sale of property that occurs before
11461146 the effective date of this Act is governed by the law in effect
11471147 immediately before that date, and that law is continued in effect
11481148 for that purpose.
11491149 (c) Sections 202.015 and 209.0035, Property Code, as added
11501150 by this Act, apply only to a cause of action that accrues on or after
11511151 the effective date of this Act. A cause of action that accrues
11521152 before the effective date of this Act is governed by the law in
11531153 effect immediately before the effective date of this Act, and that
11541154 law is continued in effect for that purpose.
11551155 (d) Subsection (c), Section 202.004, Property Code, as
11561156 amended by this Act, applies only to an action brought on or after
11571157 the effective date of this Act. An action brought before the
11581158 effective date of this Act is governed by the law in effect
11591159 immediately before the effective date of this Act, and that law is
11601160 continued in effect for that purpose.
11611161 (e) Section 202.006, Property Code, as amended by this Act,
11621162 and Sections 202.008, 202.010, 202.011, 202.012, 202.014,
11631163 209.0059, and 209.00591 and Subsection (a), Section 209.00592, and
11641164 Section 209.014, Property Code, as added by this Act, apply to a
11651165 provision in a dedicatory instrument or a restrictive covenant
11661166 enacted before, on, or after the effective date of this Act, except
11671167 that any action taken before the effective date of this Act based on
11681168 an unfiled dedicatory instrument is not invalidated by Section
11691169 202.006, Property Code, as amended by this Act.
11701170 (f) Section 209.005, Property Code, as amended by this Act,
11711171 applies only to a request for information received by a property
11721172 owners' association on or after the effective date of this Act. A
11731173 request for information received by a property owners' association
11741174 before the effective date of this Act is governed by the law in
11751175 effect immediately before the effective date of this Act, and that
11761176 law is continued in effect for that purpose.
11771177 (g) Sections 209.0061, 209.0062, and 209.0064, Property
11781178 Code, as added by this Act, apply only to an assessment or other
11791179 debt that becomes due on or after the effective date of this Act. An
11801180 assessment or other debt that becomes due before the effective date
11811181 of this Act is governed by the law in effect immediately before the
11821182 effective date of this Act, and that law is continued in effect for
11831183 that purpose.
11841184 (h) Section 209.0063, Property Code, as added by this Act,
11851185 applies only to a payment received by a property owners'
11861186 association on or after the effective date of this Act. A payment
11871187 received by a property owners' association before the effective
11881188 date of this Act is governed by the law in effect immediately before
11891189 the effective date of this Act, and that law is continued in effect
11901190 for that purpose.
11911191 (i) Section 209.0091, Property Code, as added by this Act,
11921192 applies only to a foreclosure sale that occurs after January 1,
11931193 2010. A foreclosure sale that occurs on or before January 1, 2010,
11941194 is governed by the law in effect immediately before the effective
11951195 date of this Act, and that law is continued in effect for that
11961196 purpose.
11971197 (j) Subsection (a), Section 209.010, Property Code, as
11981198 amended by this Act, applies only to a foreclosure sale conducted on
11991199 or after the effective date of this Act. A foreclosure sale
12001200 conducted before the effective date of this Act is governed by the
12011201 law in effect immediately before the effective date of this Act, and
12021202 that law is continued in effect for that purpose.
12031203 SECTION 22. Not later than January 1, 2010, each property
12041204 owners' association shall present for recording with the county
12051205 clerk as prescribed by Section 202.006, Property Code, as amended
12061206 by this Act, each dedicatory instrument governing the association
12071207 that has not been previously recorded in the real property records
12081208 of the county.
12091209 SECTION 23. Not later than January 1, 2010, the Supreme
12101210 Court of Texas shall adopt rules of civil procedure under Section
12111211 209.0091, Property Code, as added by this Act.
12121212 SECTION 24. This Act takes effect January 1, 2010.
12131213 * * * * *