By: Kleinschmidt H.B. No. 3440
A BILL TO BE ENTITLED
AN ACT
relating to amendment and enforcement of restrictive covenants in
certain areas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 11, Property Code, is amended by adding
Chapter 212 to read as follows:
CHAPTER 212. AMENDMENT AND ENFORCEMENT OF RESTRICTIONS IN
CERTAIN AREAS
Sec. 212.001. DEFINITIONS. In this chapter:
(1) "Dedicatory instrument" means each governing
instrument covering the establishment, maintenance, and operation
of a residential subdivision or any similar planned
development. The term includes a declaration or similar
instrument subjecting real property to restrictive covenants,
bylaws, or similar instruments governing the administration or
operation of a property owners' association, to properly adopted
rules and regulations of the property owners' association, or to
all lawful amendments to the covenants, bylaws, instruments, rules,
or regulations.
(2) "Lienholder," "owner," "real property records,"
and "restrictions" have the meanings assigned by Section 201.003.
(3) "Property owners' association" means an
incorporated or unincorporated association owned by or whose
members consist primarily of the owners of the property covered by
the dedicatory instrument and through which the owners, or the
board of directors or similar governing body, manage or regulate
the residential subdivision or similar planned development.
(4) "Residential real estate subdivision" or
"subdivision" means all land encompassed within one or more maps or
plats of land that is divided into two or more parts if:
(A) the maps or plats cover land that is not
within a municipality or within the extraterritorial jurisdiction
of a municipality;
(B) the land encompassed within the maps or plats
is or was burdened by restrictions limiting all or at least a
majority of the land area covered by the map or plat, excluding
streets and public areas, to residential use only; and
(C) all instruments creating the restrictions
are recorded in the deed or real property records of a county.
Sec. 212.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to a residential real estate subdivision or any unit or
parcel of a subdivision located, wholly or partly, in a county that
is not subject to another chapter of this title regarding the
amendment and enforcement of a restriction.
(b) This chapter applies only to restrictions that affect
real property within a residential real estate subdivision or any
units or parcels of the subdivision and that, by the express terms
of the instrument creating the restrictions:
(1) are not subject to a procedure by which the
restrictions may be amended; or
(2) may not be amended without the unanimous consent
of:
(A) all property owners in the subdivision; or
(B) all property owners in any unit or parcel of
the subdivision.
(c) This chapter applies to a restriction regardless of the
date on which it was created.
Sec. 212.003. FINDINGS AND PURPOSE. (a) The legislature
finds that:
(1) owners of land in certain real estate subdivisions
are unable to govern the subdivisions by democratic principles of
self-government;
(2) requiring unanimous consent to amend or modify
restrictions in affected subdivisions or units or parcels of the
subdivisions is impractical and unworkable to bring needed change
and improvement;
(3) the inability of owners to amend or modify
property restrictions in certain real estate subdivisions in which
no zoning regulations apply creates uncertainty in living
conditions and discourages investments in those subdivisions;
(4) owners of land in affected subdivisions are
reluctant or unable to provide proper maintenance, upkeep, and
repairs of structures because of the inability to amend or modify
the restrictions in response to changing circumstances;
(5) financial institutions are reluctant to or will
not lend money for investments, maintenance, upkeep, or repairs in
affected subdivisions;
(6) these conditions will cause dilapidation of
housing and other structures and cause unhealthful and unsanitary
conditions in affected subdivisions, contrary to the health,
safety, and welfare of the public; and
(7) the existence of race-related covenants in
restrictions, regardless of their unenforceability, is offensive,
repugnant, and harmful to members of racial or ethnic minority
groups and public policy requires that those covenants be removed.
(b) The purpose of this chapter is to provide a procedure
for creating, modifying, or adding to residential restrictions and
to provide for the removal of any restriction or other provision
relating to race, religion, or national origin that is void and
unenforceable under either the United States Constitution or
Section 5.026.
Sec. 212.004. CREATION OR MODIFICATION OF PROCEDURE TO
AMEND RESTRICTIONS. (a) A property owners' association by a
two-thirds vote of the association's governing body may submit a
procedure for amending restrictions to a vote of the property
owners in the subdivision or in the unit or parcel of the
subdivision governed by restrictions.
(b) An amendment procedure submitted to a vote under
Subsection (a) binds all property owners in the subdivision or the
unit or parcel of the subdivision to which the procedure applies if
more than two-thirds of the voting property owners vote in favor of
the procedure.
(c) Not later than the 30th day before the date a ballot for
a vote under this section must be received to be counted, the
property owners' association shall mail to each affected property
owner a notice that includes:
(1) the exact wording of the amendment procedure; and
(2) the date by which a property owner's ballot must be
received to be counted.
(d) The property owners' association shall pay all costs of:
(1) printing and mailing the required notices and
ballots; and
(2) canvassing, tabulating, and certifying the vote.
(e) A property owner may not cast more than one vote,
regardless of the number of lots the person owns. If more than one
person owns an interest in a lot, the owners may cast only one vote
for that lot. A person may not vote if the person has an interest
in a lot only by virtue of being a lienholder.
(f) A ballot cast under this section is secret and may not be
counted unless it is placed inside an unmarked envelope that is
placed inside another envelope that bears the signature and printed
name of the property owner casting the enclosed ballot.
(g) The presiding officer of the property owners'
association shall appoint an election canvassing committee and a
committee chairperson to canvass and count the votes and determine
the outcome.
(h) If the amendment procedure receives the number of votes
required under Subsection (b), the election canvassing committee
chairperson shall certify the result to the presiding officer of
the property owners' association. The presiding officer shall
file in the real property records of each county in which all or
part of the subdivision is located an instrument that indicates
that the procedure was adopted.
(i) If the amendment procedure is not adopted, the property
owners' association may not submit the same amendment procedure to
a vote under this section on or before the first anniversary of the
date the previous votes on the procedure were certified.
Sec. 212.005. EFFECT OF ADOPTING AMENDMENT PROCEDURE.
After the effective date of the adoption of the amendment procedure
under this chapter, any proposed amendment to the restrictions
described by Section 212.002(b) applicable to the subdivision or
unit or parcel of the subdivision, as applicable, must be submitted
for approval to the owners under the amendment procedure.
SECTION 2. This Act takes effect September 1, 2009.