Texas 2009 - 81st Regular

Texas House Bill HB2949 Compare Versions

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1	1	81R15536 AJA-F
2	2	By: Eiland H.B. No. 2949
3	3	Substitute the following for H.B. No. 2949:
4	4	By: Elkins C.S.H.B. No. 2949
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the operation of condominium associations.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 82.102, Property Code, is amended by
12	12	amending Subsection (a) and adding Subsection (f) to read as
13	13	follows:
14	14	(a) Unless otherwise provided by the declaration, the
15	15	association, acting through its board, may:
16	16	(1) adopt and amend bylaws;
17	17	(2) adopt and amend budgets for revenues,
18	18	expenditures, and reserves, and collect assessments for common
19	19	expenses from unit owners;
20	20	(3) hire and terminate managing agents and other
21	21	employees, agents, and independent contractors;
22	22	(4) institute, defend, intervene in, settle, or
23	23	compromise litigation or administrative proceedings in its own name
24	24	on behalf of itself or two or more unit owners on matters affecting
25	25	the condominium;
26	26	(5) make contracts and incur liabilities relating to
27	27	the operation of the condominium;
28	28	(6) regulate the use, maintenance, repair,
29	29	replacement, modification, and appearance of the condominium;
30	30	(7) adopt and amend rules regulating the use,
31	31	occupancy, leasing or sale, maintenance, repair, modification, and
32	32	appearance of units and common elements, to the extent the
33	33	regulated actions affect common elements or other units;
34	34	(8) cause additional improvements to be made as a part
35	35	of the common elements;
36	36	(9) acquire, hold, encumber, and convey in its own
37	37	name any right, title, or interest to real or personal property,
38	38	except common elements of the condominium;
39	39	(10) grant easements, leases, licenses, and
40	40	concessions through or over the common elements;
41	41	(11) impose and receive payments, fees, or charges for
42	42	the use, rental, or operation of the common elements and for
43	43	services provided to unit owners;
44	44	(12) impose interest and late charges for late
45	45	payments of assessments, returned check charges, and, if notice and
46	46	an opportunity to be heard are given in accordance with Subsection
47	47	(d), reasonable fines for violations of the declaration, bylaws,
48	48	and rules of the association;
49	49	(13) adopt and amend rules regulating the collection
50	50	of delinquent assessments and the application of payments;
51	51	(14) adopt and amend rules regulating the termination
52	52	of utility service to a unit, the owner of which is delinquent in
53	53	the payment of an assessment that is used, in whole or in part, to
54	54	pay the cost of that utility;
55	55	(15) impose reasonable charges for preparing,
56	56	recording, or copying declaration amendments, resale certificates,
57	57	or statements of unpaid assessments;
58	58	(16) enter a unit for bona fide emergency purposes
59	59	when conditions present an imminent risk of harm or damage to the
60	60	common elements, another unit, or the occupants;
61	61	(17) [assign its right to future income, including the
62	62	right to receive common expense assessments, but only to the extent
63	63	the declaration so provides;
64	64	[(18)] suspend the voting privileges of or the use of
65	65	certain general common elements by an owner delinquent for more
66	66	than 30 days in the payment of assessments;
67	67	(18) [(19)] purchase insurance and fidelity bonds it
68	68	considers appropriate or necessary;
69	69	(19) [(20)] exercise any other powers conferred by the
70	70	declaration or bylaws;
71	71	(20) [(21)] exercise any other powers that may be
72	72	exercised in this state by a corporation of the same type as the
73	73	association; and
74	74	(21) [(22)] exercise any other powers necessary and
75	75	proper for the government and operation of the association.
76	76	(f) The association by resolution of the board of directors
77	77	may borrow money unless prohibited by the declaration, articles of
78	78	incorporation, bylaws, rules, or other restrictions. If the board
79	79	of directors issues a resolution under this subsection, the
80	80	association may assign the association's right to future income,
81	81	including the right to receive common expense assessments and
82	82	assign the association's lien rights, as collateral for the loan
83	83	authorized by the resolution. The association shall comply with
84	84	any member approval requirement in the association's declaration,
85	85	articles of incorporation, bylaws, rules, or other restrictions for
86	86	borrowing money, except that not more than 67 percent of all
87	87	outstanding votes are required to approve an authorization to
88	88	borrow money.
89	89	SECTION 2. Sections 82.111(c) and (i), Property Code, are
90	90	amended to read as follows:
91	91	(c) If the insurance described by Subsections (a) and (b) is
92	92	not reasonably available, the association shall cause notice of
93	93	that fact to be delivered or mailed to all unit owners and
94	94	lienholders. The declaration may require the association to carry
95	95	any other insurance, and the association in any event may carry any
96	96	other insurance the board considers appropriate to protect the
97	97	condominium, the association, or the unit owners. Insurance
98	98	policies carried under Subsection (a) may provide for commercially
99	99	reasonable deductibles as the board considers appropriate or
100	100	necessary. This section does not affect the right of a holder of a
101	101	mortgage on a unit to require a unit owner to acquire insurance in
102	102	addition to that provided by the association.
103	103	(i) Any portion of the condominium for which insurance is
104	104	required that is damaged or destroyed shall be promptly repaired or
105	105	replaced by the association unless the condominium is terminated,
106	106	repair or replacement would be illegal under any state or local
107	107	health or safety statute or ordinance, or at least 80 percent of the
108	108	unit owners, including each owner of a unit or assigned limited
109	109	common element that will not be rebuilt or repaired, vote to not
110	110	rebuild. A vote to not rebuild does not increase an insurer's
111	111	liability to loss payment obligation under a policy, and the vote
112	112	does not cause a presumption of total loss. The cost of repair or
113	113	replacement in excess of the insurance proceeds and reserves is a
114	114	common expense. Costs of repair or replacement incurred before any
115	115	insurance proceeds are available, or that are within the
116	116	association's deductible, shall be paid as determined by resolution
117	117	of the board of directors of the association, or, if the board does
118	118	not approve a resolution, the costs are a common expense. A
119	119	resolution regarding payment of costs under this subsection is
120	120	considered a dedicatory instrument and must be recorded in each
121	121	location in which the declaration is recorded. If the entire
122	122	condominium is not repaired or replaced, any insurance proceeds
123	123	attributable to the damaged common elements shall be used to
124	124	restore the damaged area to a condition compatible with the
125	125	remainder of the condominium, the insurance proceeds attributable
126	126	to units and limited common elements that are not rebuilt shall be
127	127	distributed to the owners of those units and the owners of the units
128	128	to which those limited common elements were assigned, or to their
129	129	mortgagees, as their interests may appear, and the remainder of the
130	130	proceeds shall be distributed to all the unit owners as their
131	131	interests may appear. If the unit owners vote to not rebuild any
132	132	unit, that unit's allocated interests shall be automatically
133	133	reallocated on the vote as if the unit had been condemned, and the
134	134	association shall prepare, execute, and record an amendment to the
135	135	declaration reflecting the reallocation. Section 82.068 governs
136	136	the distribution of insurance proceeds if the condominium is
137	137	terminated.
138	138	SECTION 3. Section 82.113(g), Property Code, is amended to
139	139	read as follows:
140	140	(g) The owner of a unit [used for residential purposes and]
141	141	purchased [by an association] at a foreclosure sale of the
142	142	association's lien for assessments may redeem the unit not later
143	143	than the 90th day after the date of the foreclosure sale. If the
144	144	association is the purchaser [To redeem the unit], the owner must
145	145	pay to the association to redeem the unit all amounts due the
146	146	association at the time of the foreclosure sale, interest from the
147	147	date of foreclosure sale to the date of redemption at the rate
148	148	provided by the declaration for delinquent assessments, reasonable
149	149	attorney's fees and costs incurred by the association in
150	150	foreclosing the lien, any assessment levied against the unit by the
151	151	association after the foreclosure sale, and any reasonable cost
152	152	incurred by the association as owner of the unit, including costs of
153	153	maintenance and leasing. If a party other than the association is
154	154	the purchaser, the redeeming owner must pay to the purchaser of the
155	155	unit at the foreclosure sale an amount equal to the amount bid at
156	156	the sale, interest on the bid amount computed from the date of the
157	157	foreclosure sale to the date of redemption at the rate of six
158	158	percent, any assessment paid by the purchaser after the date of
159	159	foreclosure, and any reasonable costs incurred by the purchaser as
160	160	the owner of the unit, including costs of maintenance and leasing.
161	161	The redeeming owner must also pay to the association all
162	162	assessments that are due as of the date of the redemption and
163	163	reasonable attorney's fees and costs incurred by the association in
164	164	foreclosing the lien. On redemption, the purchaser of the unit at
165	165	the foreclosure sale [association] shall execute a deed with no
166	166	warranty to the redeeming unit owner. The exercise of the right of
167	167	redemption is not effective against a subsequent purchaser or
168	168	lender for value without notice of the redemption after the
169	169	redemption period expires unless the redeeming unit owner records
170	170	the deed from the purchaser of the unit at the foreclosure sale
171	171	[association] or an affidavit stating that the owner has exercised
172	172	the right of redemption. A unit that has been redeemed remains
173	173	subject to all liens and encumbrances on the unit before
174	174	foreclosure. All rents and other income collected from the unit by
175	175	the purchaser of the unit at the foreclosure sale [association]
176	176	from the date of foreclosure sale to the date of redemption belong
177	177	to the purchaser of the unit at the foreclosure sale [association],
178	178	but the rents and income shall be credited against the redemption
179	179	amount. The purchaser of [An association purchasing] a unit at a
180	180	sale foreclosing an association's assessment [its] lien may not
181	181	transfer ownership of the unit during the redemption period to a
182	182	person other than a redeeming owner.
183	183	SECTION 4. (a) The change in law made by this Act to Section
184	184	82.111(i), Property Code, applies only to payment of costs incurred
185	185	on or after the effective date of this Act. Payment of costs
186	186	incurred before the effective date of this Act are governed by the
187	187	law in effect immediately before the effective date of this Act, and
188	188	that law is continued in effect for that purpose.
189	189	(b) Section 82.113(g), Property Code, as amended by this
190	190	Act, applies only to a condominium unit sold at a foreclosure sale
191	191	on or after the effective date of this Act. A unit sold at a
192	192	foreclosure sale before the effective date of this Act is governed
193	193	by the law in effect immediately before the effective date of this
194	194	Act, and that law is continued in effect for that purpose.
195	195	SECTION 5. This Act takes effect September 1, 2009.