81R10964 UM-D
By: Vo H.B. No. 3946
A BILL TO BE ENTITLED
AN ACT
relating to establishing the office of property owners' association
ombudsman.
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. OFFICE OF PROPERTY OWNERS' ASSOCIATION OMBUDSMAN
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 212.001. DEFINITIONS. In this chapter:
(1) "Homeowner" means a person who holds record title
to property in a residential subdivision and includes the personal
representative of a person who holds record title to property in a
residential subdivision.
(2) "Office" means the office of property owners'
association ombudsman established under this chapter.
(3) "Ombudsman" means the individual who has been
appointed to the office of property owners' association ombudsman.
(4) "Property owners' association" has the meaning
assigned by Section 209.002.
(5) "Residential subdivision" has the meaning
assigned by Section 209.002.
(6) "Restrictive covenant" has the meaning assigned by
Section 209.002.
Sec. 212.002. OFFICE OF PROPERTY OWNERS' ASSOCIATION
OMBUDSMAN. The independent office of property owners' association
ombudsman is established to provide a simple, affordable, and
neutral forum for the resolution of disputes between homeowners and
property owners' associations in residential subdivisions that are
subject to restrictive covenants that authorize a property owners'
association to collect regular or special assessments on all or a
majority of property in the subdivision.
Sec. 212.003. SUNSET PROVISION. The office is subject to
Chapter 325, Government Code (Texas Sunset Act). Unless continued
in existence as provided by that chapter, the office is abolished
September 1, 2023.
Sec. 212.004. RULES. The ombudsman may adopt rules as
necessary to implement this chapter.
Sec. 212.005. PUBLIC INTEREST INFORMATION. (a) The office
shall prepare information of public interest describing the
functions of the office.
(b) The office shall make the information available to the
public and appropriate state agencies.
Sec. 212.006. ACCESS TO PROGRAMS AND FACILITIES. (a) The
office shall prepare and maintain a written plan that describes how
a person who does not speak English can be provided reasonable
access to the office's programs.
(b) The office shall comply with federal and state laws for
program and facility accessibility.
[Sections 212.007-212.050 reserved for expansion]
SUBCHAPTER B. OMBUDSMAN
Sec. 212.051. APPOINTMENT; TERM. (a) The governor, with
the advice and consent of the senate, shall appoint a property
owners' association ombudsman to serve as the executive director of
the office. The ombudsman serves a two-year term that expires on
February 1 of each odd-numbered year.
(b) The governor shall appoint the ombudsman without regard
to the race, color, disability, sex, religion, age, or national
origin of the appointee.
Sec. 212.052. QUALIFICATIONS. To be eligible to serve as
ombudsman, a person must possess the knowledge and experience
necessary to practice mediation and other methods of dispute
resolution.
Sec. 212.053. BUSINESS INTEREST; SERVICE AS OMBUDSMAN. A
person is not eligible for appointment as ombudsman if the person or
the person's spouse is employed by or participates in the
management of a property owners' association or a business engaged
in residential construction, real estate sales, or property
management.
Sec. 212.054. LOBBYING ACTIVITIES. A person may not serve
as ombudsman or act as general counsel to the office if the person
is required to register as a lobbyist under Chapter 305, Government
Code, because of the person's activities for compensation related
to the operation of the office.
Sec. 212.055. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from office if the ombudsman:
(1) does not have at the time of appointment or
maintain during service as ombudsman the qualifications required by
Section 212.052;
(2) violates a prohibition established by Section
212.053, 212.054, 212.056, or 212.102; or
(3) cannot, because of illness or disability,
discharge the ombudsman's duties for a substantial part of the
ombudsman's term.
(b) The validity of an action of the office is not affected
by the fact that the action is taken when a ground for removal of the
ombudsman exists.
Sec. 212.056. PROHIBITED REPRESENTATION OR EMPLOYMENT. A
former ombudsman may not represent any person or receive
compensation for services rendered on behalf of any person
regarding a case pending before the office before the second
anniversary of the date the person ceases to serve as ombudsman.
Sec. 212.057. ADMINISTRATION OF OFFICE. The ombudsman
shall administer and enforce this chapter, including preparing and
submitting to the legislature a budget for the office and approving
expenditures for professional services, travel, per diem, and other
actual and necessary expenses incurred in administering the office.
[Sections 212.058-212.100 reserved for expansion]
SUBCHAPTER C. PERSONNEL
Sec. 212.101. OFFICE PERSONNEL. (a) The ombudsman shall
employ professional, technical, and other employees necessary to
implement this chapter.
(b) Compensation for an employee shall be set under the
General Appropriations Act as provided by the legislature.
Sec. 212.102. TRADE ASSOCIATIONS. (a) In this section,
"trade association" means a cooperative and voluntarily joined
association of business or professional competitors designed to
assist its members and its industry or profession in dealing with
mutual business or professional problems and in promoting their
common interest.
(b) A person may not serve as ombudsman or be an employee of
the office employed in a "bona fide executive, administrative, or
professional capacity" as that phrase is used for purposes of
establishing an exemption to the overtime provisions of the federal
Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if
the person is:
(1) an officer, employee, or paid consultant of a
trade association in the field of residential construction, real
estate sales, or property management; or
(2) the spouse of an officer, manager, or paid
consultant of a trade association in the field of residential
construction, real estate sales, or property management.
Sec. 212.103. CAREER LADDER PROGRAM; PERFORMANCE
EVALUATIONS. (a) The ombudsman or the ombudsman's designee shall
develop an intra-agency career ladder program. The program must
require intra-agency posting of all nonentry level positions
concurrently with any public posting.
(b) The ombudsman or the ombudsman's designee shall develop
a system of annual performance evaluations. All merit pay for
office employees must be based on the system established under this
subsection.
Sec. 212.104. QUALIFICATIONS AND STANDARDS OF CONDUCT. The
office shall provide to the ombudsman and office employees, as
often as necessary, information regarding their:
(1) qualifications for office or employment under this
chapter; and
(2) responsibilities under applicable laws relating
to standards of conduct for state officers or employees.
[Sections 212.105-212.150 reserved for expansion]
SUBCHAPTER D. REGISTRATION OF ASSOCIATIONS; FEES
Sec. 212.151. DUTY TO REGISTER. Each property owners'
association shall register annually with the office, providing:
(1) the name and contact information for the
association;
(2) the name and contact information for any
management company for the association;
(3) the location of each recorded governing document;
(4) the number of homeowners and the number of lots in
the subdivision governed by the association; and
(5) any other information required by the ombudsman.
Sec. 212.152. FEE. Each property owners' association shall
submit to the office with the association's registration under
Section 212.151 a fee equal to $4.00 multiplied by the number of
lots located in the subdivision governed by the association.
[Sections 212.153-212.200 reserved for expansion]
SUBCHAPTER E. POWERS AND DUTIES
Sec. 212.201. DUTIES OF OFFICE. The office shall:
(1) prepare, maintain, and make available to the
public:
(A) informational brochures regarding the
operation of property owners' associations, the law applicable to
deed restrictions and property owners' associations, and the rights
of homeowners with respect to property owners' associations,
including information regarding a property owners' association's
right to foreclose a lien on homeowner's property for unpaid
assessments and the right of the homeowner to redeem the property;
(B) disclosure forms and any other forms that may
assist owners of property in deed-restricted subdivisions; and
(C) a list of free and low-cost mediation
programs that may be available to mediate disputes between
homeowners and property owners' associations; and
(2) promote the availability of the materials prepared
under Subdivision (1) and other services provided by the office.
Sec. 212.202. HOMEOWNER PETITION FOR INVESTIGATION OF
ALLEGED VIOLATION. (a) A homeowner who is affected by an alleged
violation by a property owners' association or an agent of the
homeowner's rights under the law may submit a petition to the
ombudsman, in the form prescribed by the ombudsman, requesting that
the ombudsman investigate the alleged violation.
(b) In performing an investigation under this section, the
ombudsman may hold hearings, take testimony, subpoena witnesses,
and issue subpoenas for the production of relevant books, records,
or documents.
(c) Except as provided by Subsection (d) or (e), not later
than the 90th day after the date the office receives a petition
under this section, the office shall provide the petitioning
homeowner and the responding association with a statement of facts
and legal conclusions regarding the allegations made in the
petition.
(d) If the ombudsman determines that additional time is
needed to complete the investigation or to provide the statement of
facts and legal conclusions under this section, the office may
provide the statement of facts and legal conclusions not later than
the 180th day after the date the office receives the petition, if
the office notifies the petitioning homeowner and the responding
association of the need for the extension before the expiration of
the time for providing the statement under Subsection (c).
(e) Except as provided by this subsection, the ombudsman
shall complete an investigation concerning an election supervised
by the ombudsman under this chapter not later than the 15th day
after the date on which the petition is received by the office. For
good cause, the ombudsman may extend the time for completing the
investigation under this subsection by not more than 15 days.
Sec. 212.203. OMBUDSMAN PARTICIPATION IN MEDIATION. The
ombudsman may offer to participate in any mediation of a dispute
between a homeowner and a property owners' association.
Sec. 212.204. SUPERVISION OF ASSOCIATION ELECTIONS. The
ombudsman may offer to supervise a property owners' association
election, including a vote to elect or recall board members or to
decide a ballot proposition.
Sec. 212.205. OMBUDSMAN'S POWERS AND DUTIES NOT IMPAIRED.
An offer by the ombudsman to participate in a mediation or supervise
an election under this chapter, or the ombudsman's participation in
a mediation or supervision of an election, does not disqualify the
ombudsman from exercising any power or duty of the ombudsman under
this chapter, except that the ombudsman and the parties to a dispute
may, by written agreement, provide that the ombudsman is required
to maintain confidentiality of communications regarding the
mediation or election or adhere to other conditions regarding
action by the ombudsman.
Sec. 212.206. ENFORCEMENT ACTION BY ATTORNEY GENERAL OR
DISTRICT OR COUNTY ATTORNEY. (a) If an investigation by the
ombudsman results in a recommendation by the ombudsman that the
attorney general or a district or county attorney pursue litigation
concerning a property owners' association or the association's
agent, the ombudsman shall notify each petitioning homeowner and
each association board member of the recommendation.
(b) This section does not limit the authority of the
attorney general or a district or county attorney to take any action
with respect to a violation of a law or restrictive covenant or
limit a homeowner's right to seek any remedy provided by law.
(c) The attorney general shall enforce the ombudsman's
subpoenas and decisions regarding association elections supervised
by the ombudsman under this chapter or a determination by the
ombudsman that a violation of law justifies the removal of an
association board member, officer, manager, or other agent.
(d) If the attorney general determines that a property
owners' association has violated or threatened to violate a
homeowner's rights, the attorney general may seek temporary,
preliminary, or final injunctions, independent audits, removal of
directors, statutory penalties, or any other relief or penalty
provided by law.
Sec. 212.207. ANNUAL REPORT. The ombudsman shall publish
annually on the office's Internet website a report regarding:
(1) the number, type, and size of property owners'
associations in this state;
(2) how state law affects the operation and management
of associations;
(3) investigations of violations under this chapter
that result in a finding against an association by the ombudsman;
(4) how often homeowners use options for mediation or
arbitration, the costs incurred by homeowners in using those
options, and the decisions and awards resulting from those
mediation and arbitration procedures;
(5) the number of judicial and nonjudicial foreclosure
proceedings initiated by associations and the number of those
foreclosures completed by the associations and the reason for the
initiation of the proceedings; and
(6) any other issues the ombudsman considers of
concern to homeowners and associations.
SECTION 2. As soon as practicable after the effective date
of this Act, the governor shall appoint a property owners'
association ombudsman in accordance with Chapter 212, Property
Code, as added by this Act, to a term expiring February 1, 2011.
SECTION 3. This Act takes effect September 1, 2009.