81R22842 AJA-D
By: Solomons, et al. H.B. No. 1977
Substitute the following for H.B. No. 1977:
By: Quintanilla C.S.H.B. No. 1977
A BILL TO BE ENTITLED
AN ACT
relating to encumbrances that may be fixed on homestead property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 41.001(a) and (b), Property Code, are
amended to read as follows:
(a) A homestead and one or more lots used for a place of
burial of the dead are exempt from seizure for the claims of
creditors except for encumbrances described by Subsection (b)
[properly fixed on homestead property].
(b) A homestead is not exempt from seizure as provided by
Subsection (a) for encumbrances that are [Encumbrances may be]
properly fixed on homestead property for:
(1) purchase money;
(2) taxes on the property;
(3) work and material used in constructing
improvements on the property if contracted for in writing as
provided by Sections 53.254(a), (b), and (c);
(4) an owelty of partition imposed against the
entirety of the property by a court order or by a written agreement
of the parties to the partition, including a debt of one spouse in
favor of the other spouse resulting from a division or an award of a
family homestead in a divorce proceeding;
(5) the refinance of a lien against a homestead,
including a federal tax lien resulting from the tax debt of both
spouses, if the homestead is a family homestead, or from the tax
debt of the owner;
(6) an extension of credit that meets the requirements
of Section 50(a)(6), Article XVI, Texas Constitution; or
(7) a reverse mortgage that meets the requirements of
Sections 50(k)-(p), Article XVI, Texas Constitution.
SECTION 2. Subchapter A, Chapter 41, Property Code, is
amended by adding Section 41.0011 to read as follows:
Sec. 41.0011. HOMESTEAD EXEMPT FROM SEIZURE FOR CERTAIN
ENCUMBRANCES. (a) In this section:
(1) "Dedicatory instrument" has the meaning assigned
by Section 202.001.
(2) "Development period" means a period stated in a
declaration during which a declarant reserves:
(A) a right to facilitate the development,
construction, and marketing of the subdivision; and
(B) a right to direct the size, shape, and
composition of the subdivision.
(3) "Property owners' association" has the meaning
assigned by Section 202.001.
(b) An obligation to pay property owners' association fees
for maintenance and ownership of common facilities and services or
to pay other fees imposed by a property owners' association is a
debt for which an encumbrance may be properly fixed on homestead
property. Homestead property is exempt from seizure for the claims
of creditors for an encumbrance described by this subsection unless
the seizure is authorized by a provision in a dedicatory instrument
adopted in accordance with this section. If the seizure is not
authorized in that manner, the property owners' association may
collect on an encumbrance described by this subsection properly
fixed on homestead property at the time the homestead is
transferred.
(c) Section 41.001(c) does not apply to a claim of a
property owners' association under this section.
(d) A provision in a dedicatory instrument may not authorize
a property owners' association to foreclose the association's
assessment lien on a homestead unless the provision is adopted in
accordance with this section by a majority of all votes allocated to
members of the association after the development period has ended.
(e) Votes in an election for the purposes of this section
must be registered by ballot. The ballots may be submitted in
person, in absentia, or by electronic means so long as:
(1) each ballot can be verified as having been
submitted by a member of the association; and
(2) each vote allocated can be verified as having been
submitted only once.
(f) Ballots in an election under this section may not be
cast by proxy.
(g) A provision in a dedicatory instrument adopted before
January 1, 2010, that authorizes a property owners' association to
foreclose an assessment lien on an owner's property is void on April
1, 2010, to the extent it authorizes a foreclosure of a lien on an
owner's homestead unless on or after January 1, 2010, the provision
is ratified or reenacted in accordance with this section by a
majority of all votes allocated to the members of the association
after the development period has ended.
SECTION 3. Section 209.009, Property Code, is repealed.
SECTION 4. This Act takes effect January 1, 2010, but only
if the constitutional amendment proposed by the 81st Legislature,
Regular Session, 2009, permitting an encumbrance to be fixed on
homestead property for an obligation to pay certain property
owners' association fees and prohibiting the forced sale of the
homestead to pay those fees unless authorized by the members of the
association in accordance with general law takes effect. If that
amendment is not approved by the voters, this Act has no effect.