81R344 AJA-D
By: West S.B. No. 234
A BILL TO BE ENTITLED
AN ACT
relating to real property subject to restrictive covenants.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 5.006, Property Code, is
amended to read as follows:
(a) In an action based on breach of a restrictive covenant
pertaining to real property, the court shall allow to a prevailing
party [who asserted the action] reasonable attorney's fees in
addition to the party's costs and claim.
SECTION 2. Section 5.012, Property Code, is amended by
amending Subsection (a) and adding Subsections (f) and (g) to read
as follows:
(a) A seller of residential real property that is subject to
membership in a property owners' association and that comprises not
more than one dwelling unit located in this state shall give to the
purchaser of the property a written notice that reads substantially
similar to the following:
NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
PROPERTY AT (street address) (name of residential community)
As a purchaser of property in the residential community in
which this property is located, you are obligated to be a member of
a property owners' association. Restrictive covenants governing
the use and occupancy of the property and a dedicatory instrument
governing the establishment, maintenance, and operation of this
residential community have been or will be recorded in the Real
Property Records of the county in which the property is located.
Copies of the restrictive covenants and dedicatory instrument may
be obtained from the county clerk.
You are obligated to pay assessments to the property owners'
association. The amount of the assessments is subject to change.
Your failure to pay the assessments could result in a lien on and
the foreclosure of your property.
Section 207.003, Property Code, entitles an owner to receive
copies of restrictions, bylaws, and a resale certificate from a
property owners' association. A resale certificate contains
information including, but not limited to, statements specifying
the amount and frequency of regular assessments, the property
owners' association's operating budget and balance sheet, and the
style and cause number of lawsuits to which the property owners'
association is a party. These documents must be made available to
you by the seller on your request.
Date: ____________________________________________
Signature of Purchaser
(f) On the purchaser's request for a resale certificate from
the seller, the seller shall:
(1) promptly deliver a copy of a current resale
certificate if one has been issued for the property under Chapter
207; or
(2) if the seller does not have a current resale
certificate:
(A) request the property owners' association or
its agent to issue a resale certificate under Chapter 207; and
(B) promptly deliver a copy of the resale
certificate to the purchaser on receipt of the resale certificate
from the property owners' association or its agent.
(g) The seller or the purchaser, as agreed to by the
parties, shall pay the fee to the property owners' association or
its agent for issuing the resale certificate under Chapter 207.
SECTION 3. Subsection (b), Section 207.003, Property Code,
is amended to read as follows:
(b) A resale certificate under Subsection (a) must contain:
(1) a statement of any right of first refusal or other
restraint contained in the restrictions or restrictive covenants
that restricts the owner's right to transfer the owner's property;
(2) the frequency and amount of any regular
assessments;
(3) the amount of any special assessment that is due
after the date the resale certificate is prepared;
(4) the total of all amounts due and unpaid to the
property owners' association that are attributable to the owner's
property;
(5) capital expenditures, if any, approved by the
property owners' association for the property owners' association's
current fiscal year;
(6) the amount of reserves, if any, for capital
expenditures;
(7) the property owners' association's current
operating budget and balance sheet;
(8) the total of any unsatisfied judgments against the
property owners' association;
(9) the style and cause number of any pending lawsuit
in which the property owners' association is a party, other than a
lawsuit relating to unpaid property taxes of an individual member
of the association [defendant];
(10) a copy of a certificate of insurance showing the
property owners' association's property and liability insurance
relating to the common areas and common facilities;
(11) a description of any conditions on the owner's
property that the property owners' association board has actual
knowledge are in violation of the restrictions applying to the
subdivision or the bylaws or rules of the property owners'
association;
(12) a summary or copy of notices received by the
property owners' association from any governmental authority
regarding health or housing code violations existing on the
preparation date of the certificate relating to the owner's
property or any common areas or common facilities owned or leased by
the property owners' association;
(13) the amount of any administrative transfer fee
charged by the property owners' association for a change of
ownership of property in the subdivision;
(14) the name, mailing address, and telephone number
of the property owners' association's managing agent, if any; [and]
(15) a statement indicating whether the restrictions
allow foreclosure of a property owners' association's lien on the
owner's property for failure to pay assessments; and
(16) a statement of all fees associated with the
transfer of ownership, including a description of each fee, to whom
each fee is paid, and the amount of each fee.
SECTION 4. (a) Subsection (a), Section 5.006, Property
Code, as amended by this Act, applies only to an action filed on or
after the effective date of this Act. An action filed before the
effective date of this Act is governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) Section 5.012, Property Code, as amended by this Act,
applies only to a sale of property that occurs on or after the
effective date of this Act. For the purposes of this section, a
sale of property occurs before the effective date of this Act if the
executory contract binding the purchaser to purchase the property
is executed before that date. A sale of property that occurs before
the effective date of this Act is governed by the law in effect
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 5. This Act takes effect January 1, 2010.