Texas 2009 - 81st Regular

Texas Senate Bill SB237 Compare Versions

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1	1	By: West, Davis S.B. No. 237
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to certain procedures and requirements for the operation
7	7	of property owners' associations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subsection (a), Section 5.006, Property Code, is
10	10	amended to read as follows:
11	11	(a) In an action based on breach of a restrictive covenant
12	12	pertaining to real property or a statute pertaining to real
13	13	property subject to a restrictive covenant or to restrictive
14	14	covenants to which real property is subject, the court may [shall]
15	15	allow to a prevailing party [who asserted the action] reasonable
16	16	attorney's fees in addition to the party's costs and claim.
17	17	SECTION 2. Section 5.012, Property Code, is amended by
18	18	amending Subsection (a) and adding Subsections (f) and (g) to read
19	19	as follows:
20	20	(a) A seller of residential real property that is subject to
21	21	membership in a property owners' association and that comprises not
22	22	more than one dwelling unit located in this state shall give to the
23	23	purchaser of the property a written notice that reads substantially
24	24	similar to the following:
25	25	NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
26	26	PROPERTY AT (street address) (name of residential community)
27	27	As a purchaser of property in the residential community in
28	28	which this property is located, you are obligated to be a member of
29	29	a property owners' association. Restrictive covenants governing
30	30	the use and occupancy of the property and all [a] dedicatory
31	31	instruments [instrument] governing the establishment, maintenance,
32	32	or [and] operation of this residential community have been or will
33	33	be recorded in the Real Property Records of the county in which the
34	34	property is located. Copies of the restrictive covenants and
35	35	dedicatory instruments [instrument] may be obtained from the county
36	36	clerk.
37	37	You are obligated to pay assessments to the property owners'
38	38	association. The amount of the assessments is subject to change.
39	39	Your failure to pay the assessments could result in a lien on and
40	40	the foreclosure of your property.
41	41	Section 207.003, Property Code, entitles an owner to receive
42	42	copies of any document that governs the establishment, maintenance,
43	43	or operation of a subdivision, including, but not limited to,
44	44	restrictions, bylaws, rules and regulations, and a resale
45	45	certificate from a property owners' association. A resale
46	46	certificate contains information including, but not limited to,
47	47	statements specifying the amount and frequency of regular
48	48	assessments and the style and cause number of lawsuits to which the
49	49	property owners' association is a party. These documents must be
50	50	made available to you by the seller on your request.
51	51	Date: ____________________________________________
52	52	Signature of Purchaser
53	53	(f) On the purchaser's request for a resale certificate from
54	54	the seller, the seller shall:
55	55	(1) promptly deliver a copy of a current resale
56	56	certificate if one has been issued for the property under Chapter
57	57	207; or
58	58	(2) if the seller does not have a current resale
59	59	certificate:
60	60	(A) request the property owners' association or
61	61	its agent to issue a resale certificate under Chapter 207; and
62	62	(B) promptly deliver a copy of the resale
63	63	certificate to the purchaser on receipt of the resale certificate
64	64	from the property owners' association or its agent.
65	65	(g) The seller or the purchaser, as agreed to by the
66	66	parties, shall pay the fee to the property owners' association or
67	67	its agent for issuing the resale certificate. The property owners'
68	68	association may not process payment for a resale certificate
69	69	requested under Chapter 207 until the certificate is available for
70	70	delivery. The association may not charge a fee if the certificate
71	71	is not provided in the time prescribed by Section 207.003(a).
72	72	SECTION 3. Subdivision (1), Section 202.001, Property Code,
73	73	is amended to read as follows:
74	74	(1) "Dedicatory instrument" means each document
75	75	governing [instrument covering] the establishment, maintenance, or
76	76	[and] operation of a residential subdivision, planned unit
77	77	development, condominium or townhouse regime, or any similar
78	78	planned development. The term includes:
79	79	(A) a declaration or similar instrument
80	80	subjecting real property to:
81	81	(i) restrictive covenants, bylaws, or
82	82	similar instruments governing the administration or operation of a
83	83	property owners' association;
84	84	(ii) [, to] properly adopted rules and
85	85	regulations of the property owners' association; or
86	86	(iii) [, or to] all lawful amendments to the
87	87	covenants, bylaws, instruments, rules, or regulations; and
88	88	(B) bylaws, rules, regulations, or guidelines
89	89	adopted by a property owners' association under an instrument
90	90	described by Paragraph (A).
91	91	SECTION 4. Section 202.004, Property Code, is amended by
92	92	adding Subsections (d) and (e) to read as follows:
93	93	(d) In evaluating an alleged or potential violation of a
94	94	restrictive covenant, the property owners' association or other
95	95	representative designated by an owner of real property may,
96	96	notwithstanding any provision in a dedicatory instrument, grant a
97	97	variance and in doing so not enforce the restrictive covenant if the
98	98	property owners' association board, in the board's reasonable
99	99	judgment, determines:
100	100	(1) the property owners' association's position is not
101	101	sufficiently strong to justify taking any action or further action;
102	102	(2) the provision alleged to have been violated may be
103	103	inconsistent with applicable law;
104	104	(3) the alleged violation is not of such a material or
105	105	visible nature as to be objectionable to a reasonable person or to
106	106	justify expending the property owners' association's resources;
107	107	(4) enforcement of the provision is not in the
108	108	association's best interests, based on hardship, expense, or other
109	109	reasonable criteria; or
110	110	(5) the facts of the particular circumstances, such as
111	111	topography of the owner's land or unforeseen circumstances unique
112	112	to the particular owner, justify the variance.
113	113	(e) A determination by the property owners' association
114	114	board to grant a variance under Subsection (d) may not be considered
115	115	a waiver of the association's ability to enforce any dedicatory
116	116	instrument provision in the future.
117	117	SECTION 5. Section 202.006, Property Code, is amended to
118	118	read as follows:
119	119	Sec. 202.006. PUBLIC RECORDS. (a) A property owners'
120	120	association shall file all [the] dedicatory instruments
121	121	[instrument] in the real property records of each county in which
122	122	the property to which the dedicatory instruments relate [instrument
123	123	relates] is located.
124	124	(b) A dedicatory instrument that is not filed in accordance
125	125	with this section has no effect until filed.
126	126	SECTION 6. Chapter 202, Property Code, is amended by adding
127	127	Sections 202.008, 202.010, 202.011, 202.012, 202.013, 202.014, and
128	128	202.015 to read as follows:
129	129	Sec. 202.008. ASSOCIATION'S RIGHT OF ENTRY. (a) Except as
130	130	provided by this section, a provision in a dedicatory instrument
131	131	that provides a property owners' association the right or authority
132	132	to enter onto an owner's private property to enforce or abate an
133	133	alleged violation of a restrictive covenant is void as against
134	134	public policy except for entry:
135	135	(1) to cure a violation that involves an immediate
136	136	threat to persons or property;
137	137	(2) after 10 days' written notice, to:
138	138	(A) perform a forced mow; or
139	139	(B) remove trash or debris; or
140	140	(3) in circumstances in which it is reasonably
141	141	determined the property has been abandoned and not maintained for
142	142	at least 30 days.
143	143	(b) This section does not prohibit a provision in a
144	144	dedicatory instrument allowing a property owners' association a
145	145	right of entry on the property of an owner that is limited to a
146	146	dedicated access or other easement contained in a final plat or an
147	147	easement filed of record.
148	148	(c) This section does not apply to:
149	149	(1) an association regulated under Title 7;
150	150	(2) a property owners' association that funds through
151	151	assessments:
152	152	(A) insurance on residences;
153	153	(B) one or more utility payments for residences;
154	154	or
155	155	(C) exterior maintenance of residences; or
156	156	(3) a property owners' association that is a mixed use
157	157	master association that existed before January 1, 1974, and that
158	158	does not have the authority under a dedicatory instrument or other
159	159	governing document to impose fines.
160	160	Sec. 202.010. CERTAIN PARKING RESTRICTIONS PROHIBITED.
161	161	(a) A provision in a dedicatory instrument that restricts or
162	162	prohibits an owner from parking an operable, noncommercial, and
163	163	personal automobile or truck on a public street is void as against
164	164	public policy.
165	165	(b) A provision in a dedicatory instrument that restricts or
166	166	prohibits an owner from parking the owner's operable,
167	167	noncommercial, and personal automobile or truck in the owner's
168	168	driveway is void as against public policy.
169	169	(c) For the purposes of this section, "noncommercial
170	170	automobile" means a motor vehicle that may be legally driven on
171	171	public roads under state law and that exhibits no commercial
172	172	advertising other than standard dealer or manufacturer
173	173	advertising.
174	174	(d) For the purposes of this section, a recreational
175	175	vehicle, motor home, camper, all-terrain vehicle, trailer, or
176	176	watercraft, a tow truck, cement mixer, or other similar commercial
177	177	vehicle, or a vehicle that is more than 30 feet long is not
178	178	considered to be a personal automobile or truck.
179	179	(e) This section does not apply to:
180	180	(1) an association regulated under Title 7; or
181	181	(2) a property owners' association that funds through
182	182	assessments:
183	183	(A) insurance on residences;
184	184	(B) one or more utility payments for residences;
185	185	or
186	186	(C) exterior maintenance of residences.
187	187	Sec. 202.011. RIGHT OF FIRST REFUSAL PROHIBITED. (a) In
188	188	this section, "development period" means a period stated in a
189	189	declaration during which a declarant reserves:
190	190	(1) a right to facilitate the development,
191	191	construction, and marketing of the subdivision; and
192	192	(2) a right to direct the size, shape, and composition
193	193	of the subdivision.
194	194	(b) To the extent a restrictive covenant provides a right of
195	195	first refusal for the sale or lease of a residential unit or
196	196	residential lot in favor of the property owners' association or the
197	197	association's members, the covenant is void.
198	198	(c) This section does not apply to a restrictive covenant
199	199	that provides a right of first refusal in favor of a developer or
200	200	builder during the development period.
201	201	Sec. 202.012. REGULATION OF SOLAR ENERGY DEVICES. (a) In
202	202	this section, "solar energy device" has the meaning assigned by
203	203	Section 171.107, Tax Code.
204	204	(b) Except as otherwise provided by this section, a property
205	205	owners' association may not include or enforce a provision in a
206	206	dedicatory instrument that prohibits or restricts a property owner
207	207	from installing a solar energy device.
208	208	(c) A provision that violates Subsection (b) is void.
209	209	(d) This section does not prohibit the inclusion or
210	210	enforcement of a provision in a dedicatory instrument that
211	211	prohibits a solar energy device that:
212	212	(1) as adjudicated by a court:
213	213	(A) threatens the public health or safety; or
214	214	(B) violates a law;
215	215	(2) is located on property owned or maintained by the
216	216	property owners' association;
217	217	(3) is located on property owned in common by the
218	218	members of the property owners' association; or
219	219	(4) is located in an area on the property owner's
220	220	property other than:
221	221	(A) on the roof of the home; or
222	222	(B) in a fenced yard or patio maintained by the
223	223	property owner.
224	224	Sec. 202.013. RENTAL RESTRICTIONS. (a) Except as provided
225	225	by Subsection (b), a property owners' association may not amend a
226	226	dedicatory instrument to prohibit or restrict the rental of
227	227	property subject to the dedicatory instrument without the consent
228	228	of at least 51 percent of the total votes allocated to property
229	229	owners subject to the dedicatory instrument.
230	230	(b) An amendment to a dedicatory instrument may require:
231	231	(1) an owner to:
232	232	(A) exercise due diligence in not leasing to an
233	233	occupant who is a registered sex offender or who has a history of
234	234	violent crime; or
235	235	(B) terminate the possessory right of any tenant
236	236	or occupant who is a registered sex offender or who has a history of
237	237	violent crime;
238	238	(2) all leases to be subject to the dedicatory
239	239	instruments of the property owners' association; or
240	240	(3) a minimum lease term of not more than six months.
241	241	Sec. 202.014. RESTRICTIONS REQUIRING CAPITAL IMPROVEMENTS.
242	242	(a) A dedicatory instrument may not be amended to retroactively
243	243	require a person who owns property subject to the dedicatory
244	244	instrument at the time the amendment is adopted to make a capital
245	245	improvement to the owner's property that is not required before the
246	246	amendment. A provision of a dedicatory instrument requiring an
247	247	owner to make a capital improvement to the owner's property may only
248	248	be adopted by a vote of at least 67 percent of the total votes
249	249	allocated to property owners subject to the dedicatory instrument
250	250	and may be applicable only to owners purchasing property subject to
251	251	the dedicatory instrument after the provision is adopted.
252	252	(b) For the purposes of this section, "capital improvement"
253	253	means items such as additional tree plantings, additional sodding,
254	254	fence construction, hardscape installation, new construction, or
255	255	any similar capital improvement. The term does not include repair
256	256	or maintenance of existing improvements or the removal of
257	257	conditions that are in violation of a dedicatory instrument.
258	258	Sec. 202.015. INJUNCTION; DAMAGES. (a) If a property
259	259	owners' association or other representative designated by the
260	260	property owners' association has violated, is violating, or is
261	261	threatening to violate this chapter, a member of the property
262	262	owners' association may bring a civil action against the property
263	263	owners' association but may not bring an action against an
264	264	association's officer or board member individually.
265	265	(b) A member of a property owners' association bringing an
266	266	action under this section may seek:
267	267	(1) injunctive relief;
268	268	(2) damages in an amount equal to the greater of:
269	269	(A) actual damages arising from the violation; or
270	270	(B) $1,500 for each violation; or
271	271	(3) both injunctive relief and damages as provided in
272	272	this subsection.
273	273	(c) The court may increase an award under Subsection (b)(2)
274	274	to an amount not to exceed three times the amount awarded under
275	275	Subsection (b)(2) if the court finds that violations have occurred
276	276	with a frequency that constitutes a pattern or practice.
277	277	(d) Each day a violation continues is not considered a
278	278	separate violation for purposes of an assessment of damages.
279	279	(e) The court may award damages to a property owners'
280	280	association for a suit brought by a member of the property owners'
281	281	association that the court finds frivolous or groundless in an
282	282	amount that is not more than the greater of:
283	283	(1) three times the association's actual damages; or
284	284	(2) $4,500.
285	285	(f) On or before the 30th day before the date a person files
286	286	a suit under this section, the person must provide notice to the
287	287	other party of the person's intent to file suit under this section.
288	288	The notice must be sent certified mail, return receipt requested,
289	289	or delivered by the United States Postal Service with signature
290	290	confirmation service.
291	291	SECTION 7. Subsection (b), Section 207.003, Property Code,
292	292	is amended to read as follows:
293	293	(b) A resale certificate under Subsection (a) must contain:
294	294	(1) a statement of any right of first refusal, other
295	295	than a right of first refusal that is prohibited by statute, and any
296	296	[or] other restraint contained in the restrictions or restrictive
297	297	covenants that restricts the owner's right to transfer the owner's
298	298	property;
299	299	(2) the frequency and amount of any regular
300	300	assessments;
301	301	(3) the amount and purpose of any special assessment
302	302	that is due after the date the resale certificate is prepared;
303	303	(4) the total of all amounts due and unpaid to the
304	304	property owners' association that are attributable to the owner's
305	305	property;
306	306	(5) capital expenditures, if any, approved by the
307	307	property owners' association for the property owners' association's
308	308	current fiscal year;
309	309	(6) the amount of reserves, if any, for capital
310	310	expenditures;
311	311	(7) the property owners' association's current
312	312	operating budget and balance sheet;
313	313	(8) the total of any unsatisfied judgments against the
314	314	property owners' association;
315	315	(9) the style and cause number of any pending lawsuit
316	316	in which the property owners' association is a party, other than a
317	317	lawsuit relating to unpaid property taxes of an individual member
318	318	of the association [defendant];
319	319	(10) a copy of a certificate of insurance showing the
320	320	property owners' association's property and liability insurance
321	321	relating to the common areas and common facilities;
322	322	(11) a description of any conditions on the owner's
323	323	property that the property owners' association board has actual
324	324	knowledge are in violation of the restrictions applying to the
325	325	subdivision or the bylaws or rules of the property owners'
326	326	association;
327	327	(12) a summary or copy of notices received by the
328	328	property owners' association from any governmental authority
329	329	regarding health or housing code violations existing on the
330	330	preparation date of the certificate relating to the owner's
331	331	property or any common areas or common facilities owned or leased by
332	332	the property owners' association;
333	333	(13) the amount of any administrative transfer fee
334	334	charged by the property owners' association for a change of
335	335	ownership of property in the subdivision;
336	336	(14) the name, mailing address, and telephone number
337	337	of the property owners' association's managing agent, if any; [and]
338	338	(15) a statement indicating whether the restrictions
339	339	allow foreclosure of a property owners' association's lien on the
340	340	owner's property for failure to pay assessments; and
341	341	(16) a statement of all fees associated with the
342	342	transfer of ownership, including a description of each fee, to whom
343	343	each fee is paid, and the amount of each fee.
344	344	SECTION 8. Section 209.003, Property Code, is amended by
345	345	adding Subsection (e) to read as follows:
346	346	(e) The following provisions of this chapter do not apply to
347	347	a property owners' association that is a mixed use master
348	348	association that existed before January 1, 1974, and that does not
349	349	have the authority under a dedicatory instrument or other governing
350	350	document to impose fines:
351	351	(1) Section 209.005(b);
352	352	(2) Section 209.0056;
353	353	(3) Section 209.0057;
354	354	(4) Section 209.0058;
355	355	(5) Section 209.00591;
356	356	(6) Section 209.006(c);
357	357	(7) Section 209.0062; and
358	358	(8) Section 209.014.
359	359	SECTION 9. Chapter 209, Property Code, is amended by adding
360	360	Sections 209.0035 and 209.0041 to read as follows:
361	361	Sec. 209.0035. INJUNCTION; DAMAGES. (a) If a property
362	362	owners' association or other representative designated by the
363	363	property owners' association has violated, is violating, or is
364	364	threatening to violate this chapter, a member of the property
365	365	owners' association may bring a civil action against the property
366	366	owners' association but may not bring an action against an
367	367	association's officer or board member individually.
368	368	(b) A member of a property owners' association bringing an
369	369	action under this section may seek:
370	370	(1) injunctive relief;
371	371	(2) damages in an amount equal to the greater of:
372	372	(A) actual damages arising from the violation; or
373	373	(B) $1,500 for each violation; or
374	374	(3) both injunctive relief and damages as provided in
375	375	this subsection.
376	376	(c) The court may increase an award under Subsection (b)(2)
377	377	to an amount not to exceed three times the amount awarded under
378	378	Subsection (b)(2) if the court finds that violations have occurred
379	379	with a frequency that constitutes a pattern or practice.
380	380	(d) Each day a violation continues is not considered a
381	381	separate violation for purposes of assessment of damages.
382	382	(e) The court may award damages to a property owners'
383	383	association for a suit brought by a member of the property owners'
384	384	association that the court finds frivolous or groundless in an
385	385	amount that is not more than the greater of:
386	386	(1) three times the association's actual damages; or
387	387	(2) $4,500.
388	388	(f) On or before the 30th day before the date a person files
389	389	a suit under this section, the person must provide notice to the
390	390	other party of the person's intent to file suit under this section.
391	391	The notice must be sent certified mail, return receipt requested,
392	392	or delivered by the United States Postal Service with signature
393	393	confirmation service.
394	394	Sec. 209.0041. AMENDMENT OF DEDICATORY INSTRUMENTS.
395	395	(a) This section applies to a residential subdivision in which
396	396	property owners are subject to mandatory membership in a property
397	397	owners' association.
398	398	(b) This section applies to all dedicatory instruments
399	399	regardless of the date on which the dedicatory instruments were
400	400	created.
401	401	(c) This section does not apply to the amendment of a
402	402	dedicatory instrument during a development period, as defined by
403	403	Section 202.011.
404	404	(d) To the extent of any conflict with another provision of
405	405	this title, this section prevails.
406	406	(e) Except as provided by Subsection (f), a dedicatory
407	407	instrument may be amended only by a vote of at least 51 percent of
408	408	the total votes allocated to property owners in the property
409	409	owners' association, in addition to any governmental approval
410	410	required by law.
411	411	(f) A rule or guideline that affects land owned, leased,
412	412	maintained, or otherwise controlled by the property owners'
413	413	association may be adopted or amended by majority vote of the
414	414	association board. A rule or guideline that impacts the use and
415	415	enjoyment of personal or real property owned exclusively by the
416	416	owner or that may result in a fine or loss of privilege of a member
417	417	of the association may be adopted or amended only by a vote of at
418	418	least 51 percent of the total votes allocated to property owners who
419	419	cast votes by any permissible method in an association-wide vote.
420	420	(g) A property owners' association board by majority vote
421	421	may adopt ministerial, office-related procedural policies, such as
422	422	payment plan guidelines under Section 209.0062, a collections
423	423	policy, an enforcement policy, or other similar ministerial,
424	424	office-related procedural policies. The policy may outline
425	425	circumstances under which or the manner by which enforcement
426	426	remedies may be carried out but may not otherwise impact the use and
427	427	enjoyment of personal or real property owned exclusively by the
428	428	owner. The policy may not:
429	429	(1) create a power to:
430	430	(A) levy a fine; or
431	431	(B) impose a loss of a privilege on a member of
432	432	the association; or
433	433	(2) expand the association's powers beyond the powers
434	434	granted by any other dedicatory instrument.
435	435	(h) All ballots cast in a vote that results in an amendment
436	436	to a restrictive covenant, bylaw, or rule are records of the
437	437	association subject to inspection under Section 209.005.
438	438	(i) This section supersedes any contrary requirement in a
439	439	dedicatory instrument.
440	440	(j) This section does not apply to a property owners'
441	441	association that is subject to Chapter 552, Government Code, by
442	442	application of Section 552.0036, Government Code.
443	443	SECTION 10. Section 209.005, Property Code, is amended to
444	444	read as follows:
445	445	Sec. 209.005. ASSOCIATION RECORDS. (a) This section does
446	446	not apply to a property owners' association that is subject to
447	447	Chapter 552, Government Code, by application of Section 552.0036,
448	448	Government Code.
449	449	(b) Notwithstanding a provision in a dedicatory instrument,
450	450	a [A] property owners' association shall make the books and records
451	451	of the association, including financial records, open to and
452	452	reasonably available for examination by [to] an owner [in
453	453	accordance with Section B, Article 2.23, Texas Non-Profit
454	454	Corporation Act (Article 1396-2.23, Vernon's Texas Civil
455	455	Statutes)]. An owner is entitled to obtain from the association
456	456	copies of information contained in the books and records.
457	457	(c) [(a-1) A property owners' association described by
458	458	Section 552.0036(2), Government Code, shall make the books and
459	459	records of the association, including financial records,
460	460	reasonably available to any person requesting access to the books
461	461	or records in accordance with Chapter 552, Government
462	462	Code. Subsection (a) does not apply to a property owners'
463	463	association to which this subsection applies.
464	464	[(b)] An attorney's files and records relating to the
465	465	association, excluding invoices requested by an owner under Section
466	466	209.008(d), are not:
467	467	(1) records of the association;
468	468	(2) subject to inspection by the owner; or
469	469	(3) subject to production in a legal proceeding.
470	470	(d) In addition to the requirements of Subsection (b), a
471	471	property owners' association shall make the association's books and
472	472	records, including financial records and invoices, available in a
473	473	building:
474	474	(1) in which the books and records are appropriately
475	475	stored; and
476	476	(2) that is:
477	477	(A) staffed during normal business hours;
478	478	(B) accessible to members of the association
479	479	during normal business hours; and
480	480	(C) located on property commonly owned by the
481	481	association within the boundaries of the subdivision governed by
482	482	the association.
483	483	(e) If a building described by Subsection (d) does not exist
484	484	on property described by Subsection (d), the property owners'
485	485	association shall make the books and records available in
486	486	accordance with Subsections (g) and (h).
487	487	(f) A party requesting association books or records shall
488	488	submit the request in writing:
489	489	(1) in person by hand delivery to a current board
490	490	member;
491	491	(2) to the mailing address of the association or
492	492	authorized representative as provided on the most current
493	493	management certificate filed under Section 209.004; or
494	494	(3) in person to a managing agent as reflected on the
495	495	most current management certificate filed under Section 209.004.
496	496	(g) A property owners' association shall make books and
497	497	records requested under Subsection (b) available to the requesting
498	498	party within a reasonable time of the property owners'
499	499	association's receipt of the request.
500	500	(h) A reasonable time for providing information requested
501	501	under Subsection (b) is considered to be 10 business days after the
502	502	date the property owners' association receives a request, except as
503	503	otherwise provided by this section.
504	504	(i) If the property owners' association is unable to produce
505	505	a requested book or record on or before the 10th business day after
506	506	the date the request is received, the property owners' association
507	507	must provide to the requestor written notice that:
508	508	(1) informs the requestor that the property owners'
509	509	association is unable to produce the information on or before the
510	510	10th business day after the date of the receipt of the request; and
511	511	(2) states a date by which the information will be
512	512	available for inspection that occurs not later than the 30th day
513	513	after the date notice under this subsection is given.
514	514	(j) A property owners' association shall make books and
515	515	records requested under this section available to the requestor in
516	516	one or more of the following formats, as specified by the requestor:
517	517	(1) an electronic format:
518	518	(A) delivered to an electronic mail address
519	519	provided by the requestor; or
520	520	(B) delivered in a disc or other standard
521	521	electronic format:
522	522	(i) to the mailing address of the
523	523	requestor; or
524	524	(ii) if the requesting party does not
525	525	provide a mailing address, to the address of the requestor's
526	526	property in the subdivision; or
527	527	(2) a hard-copy format:
528	528	(A) delivered to the mailing address of the
529	529	requestor; or
530	530	(B) if the requesting party does not provide a
531	531	mailing address:
532	532	(i) mailed to the address of the requestor's
533	533	property in the subdivision; or
534	534	(ii) made available at a location not more
535	535	than 25 miles from the boundary of the subdivision governed by the
536	536	association.
537	537	(k) This section does not require a property owners'
538	538	association to staff a building described by Subsection (d).
539	539	(l) A property owners' association may charge an owner for
540	540	copies of the requested information in an amount that reasonably
541	541	includes all costs related to reproducing the information,
542	542	including costs of materials, labor, and overhead.
543	543	(m) Any information maintained by the association that is
544	544	released under this section may not identify an individual member
545	545	of an association or an individual's personal financial
546	546	information. Information may be released in an aggregate manner
547	547	that would not identify an individual property owner.
548	548	(n) All ballots cast in an election that results in an
549	549	amendment to a dedicatory instrument, as required by Section
550	550	209.0041, are records of the property owners' association subject
551	551	to inspection under this section.
552	552	(o) All ballots cast in an election of property owners'
553	553	association board or other committee members are considered records
554	554	of the association but may not be made available for inspection
555	555	under this section, except for the purposes of a recount under
556	556	Section 209.0057(e), without a court order or subpoena. The
557	557	association shall take reasonable measures to safeguard the
558	558	security and privacy of those ballots.
559	559	(p) A property owners' association shall:
560	560	(1) keep all records as to changes to the dedicatory
561	561	instruments in perpetuity;
562	562	(2) maintain and secure all ballots in
563	563	association-wide elections for four years; and
564	564	(3) maintain records related to financial matters of
565	565	the association, including assessments, fines, foreclosures, and
566	566	enforcement actions, for at least seven years.
567	567	(q) A member of a property owners' association who is denied
568	568	access to or copies of association books or records to which the
569	569	member is entitled under this section may file a petition with the
570	570	justice of the peace of a justice precinct in which all or part of
571	571	the property that is governed by the association is located
572	572	requesting relief in accordance with this subsection. If the
573	573	justice of the peace finds that the member is entitled to access to
574	574	or copies of the records, the justice of the peace may grant one or
575	575	more of the following remedies:
576	576	(1) a judgment against the property owners'
577	577	association for a penalty of not more than $1,500;
578	578	(2) a judgment against the property owners'
579	579	association for court costs and attorney's fees incurred in
580	580	connection with seeking a remedy under this section; or
581	581	(3) a judgment authorizing the owner or the owner's
582	582	assignee to deduct the amounts awarded under Subdivisions (1) and
583	583	(2) from any future regular or special assessments payable to the
584	584	property owners' association.
585	585	(r) For the purposes of this section, "business day" means a
586	586	day other than Saturday, Sunday, or a state or federal holiday.
587	587	(s) On or before the 10th day before the date a person files
588	588	a suit under this section, the person must provide notice to the
589	589	other party of the person's intent to file suit under this section.
590	590	The notice must be sent certified mail, return receipt requested,
591	591	or delivered by the United States Postal Service with signature
592	592	confirmation service.
593	593	SECTION 11. Chapter 209, Property Code, is amended by
594	594	adding Sections 209.0051, 209.0056, 209.0057, 209.0058, 209.0059,
595	595	209.00591, 209.00592, and 209.00593 to read as follows:
596	596	Sec. 209.0051. OPEN BOARD MEETINGS. (a) This section does
597	597	not apply to a property owners' association that is subject to
598	598	Chapter 551, Government Code, by application of Section 551.0015,
599	599	Government Code.
600	600	(b) In this section, "board meeting" means a deliberation
601	601	between a quorum of the voting board of the property owners'
602	602	association, or between a quorum of the voting board and another
603	603	person, during which property owners' association business or
604	604	policy over which the board has responsibility is discussed or
605	605	considered or during which the board takes formal action. The term
606	606	does not include the gathering of a quorum of the board at a social
607	607	function unrelated to the business of the association, or the
608	608	attendance by a quorum of the board at a regional, state, or
609	609	national convention, workshop, ceremonial event, or press
610	610	conference, if formal action is not taken and any discussion of
611	611	association business is incidental to the social function,
612	612	convention, workshop, ceremonial event, or press conference.
613	613	(c) Except as provided by this section, a meeting of the
614	614	property owners' association board or a committee or subcommittee
615	615	of the board is open to members of the property owners' association
616	616	and shall be held in a county in which all or part of the property
617	617	governed by the association is located or a county adjacent to that
618	618	county.
619	619	(d) The board shall keep a record of each regular,
620	620	emergency, or special board meeting in the form of written minutes
621	621	or an audio recording of the meeting. A record of a meeting must
622	622	state the subject of each motion or inquiry, regardless of whether
623	623	the board takes action on the motion or inquiry, and indicate each
624	624	vote, order, decision, or other action taken by the board. The
625	625	board shall make meeting records, including approved minutes,
626	626	available to a member for inspection and copying on the member's
627	627	written request to the board or the board's representative. The
628	628	board shall approve the minutes of a board meeting not later than
629	629	the next regular board meeting.
630	630	(e) The board shall give members notice of the date, hour,
631	631	place, and subject of a regular or special board meeting, including
632	632	a general description of any matters to be brought up for
633	633	deliberation in executive session. The notice shall be mailed to
634	634	each member or:
635	635	(1) posted at least 72 hours before the start of the
636	636	meeting in a conspicuous manner reasonably designed to provide
637	637	notice to association members:
638	638	(A) in a place located on the association's
639	639	common property or other conspicuously located property within the
640	640	association, with the property owner's consent; or
641	641	(B) on any Internet website maintained by the
642	642	association; and
643	643	(2) sent via e-mail to each owner who has registered an
644	644	e-mail address with the property owners' association; it is an
645	645	owner's duty to keep an e-mail address registered with the property
646	646	owners' association updated.
647	647	(f) If the board recesses a regular or special board meeting
648	648	to continue the following regular business day, the board is not
649	649	required to post notice of the continued meeting if the recess is
650	650	taken in good faith and not to circumvent this section. If a
651	651	regular or special board meeting is continued to the following
652	652	regular business day, and on that following day the board continues
653	653	the meeting to another day, the board shall give notice as required
654	654	by this section of the meeting continued to that other day.
655	655	(g) If at a regular, emergency, administrative, or special
656	656	meeting a member makes an inquiry regarding a subject for which
657	657	notice has not been given as required by this section, the notice
658	658	provisions of this section do not apply to:
659	659	(1) a statement by the board of specific factual
660	660	information given in response to the inquiry; or
661	661	(2) a recitation of existing policy in response to the
662	662	inquiry.
663	663	(h) Any deliberation of or decision relating to the subject
664	664	of an inquiry made under Subsection (g) shall be limited to a
665	665	proposal to place the subject on the agenda for a subsequent board
666	666	meeting.
667	667	(i) In the event of a reasonably unforeseen emergency or
668	668	urgent necessity that requires immediate board action, the board
669	669	may meet in an emergency board meeting. Notice for an emergency
670	670	board meeting may be given in at least one manner prescribed by
671	671	Subsection (e)(1) at least two hours before the emergency session
672	672	is convened and must clearly identify the emergency or urgent
673	673	necessity for which the notice is given. A board in an emergency
674	674	meeting may not consider fines, foreclosures, enforcement actions,
675	675	increases in assessments, or any other foreseeable business or
676	676	policy over which the board has responsibility. Any action taken in
677	677	an emergency board meeting must be summarized orally, including an
678	678	explanation of any known actual or estimated expenditures approved
679	679	at the meeting, and documented in the minutes or tape recording of
680	680	the next regular or special board meeting.
681	681	(j) A property owners' association board may hold an
682	682	administrative session, and that session is not subject to the
683	683	notice requirements of this section. In any administrative
684	684	session, the board may not take action regarding issuance of fines,
685	685	commencement of foreclosure proceedings, levying of a special
686	686	assessment, increases in assessments, or approval of items not
687	687	previously approved in the association's budget.
688	688	(k) Before the board calls an executive session, the board
689	689	shall convene in a regular or special board meeting for which notice
690	690	has been given as provided by this section. During that board
691	691	meeting, the presiding board member may call an executive session
692	692	by announcing that an executive session will be held to deliberate a
693	693	matter described by Subsection (l) and identifying the specific
694	694	subdivision of Subsection (l) under which the executive session
695	695	will be held. A vote or other action item may not be taken in
696	696	executive session.
697	697	(l) A board of a property owners' association may meet in
698	698	executive session, to which the members do not have access, to
699	699	deliberate:
700	700	(1) anticipated or pending litigation, settlement
701	701	offers, or interpretations of the law with the association's legal
702	702	counsel;
703	703	(2) complaints or charges against or issues regarding
704	704	a board member or agent, employee, contractor, or other
705	705	representative of the property owners' association;
706	706	(3) a payment plan under Section 209.0062;
707	707	(4) a foreclosure of a lien;
708	708	(5) an enforcement action against a member of the
709	709	association, including for nonpayment of amounts due;
710	710	(6) the purchase, exchange, lease, or value of real
711	711	property, if the board determines in good faith that deliberation
712	712	in an open board meeting may have a detrimental effect on the
713	713	association;
714	714	(7) business and financial issues relating to the
715	715	negotiation of a contract, if the board determines in good faith
716	716	that deliberation in an open board meeting may have a detrimental
717	717	effect on the position of the association; or
718	718	(8) matters involving the invasion of privacy of an
719	719	individual owner.
720	720	Sec. 209.0056. NOTICE OF ELECTION OR ASSOCIATION VOTE.
721	721	(a) On or before the 30th day before the date an election or vote
722	722	is held by a property owners' association, the association shall
723	723	give each owner of property in the property owners' association
724	724	written notice of the election or vote.
725	725	(b) This section supersedes any contrary requirement in a
726	726	dedicatory instrument.
727	727	(c) This section does not apply to a property owners'
728	728	association that is subject to Chapter 552, Government Code, by
729	729	application of Section 552.0036, Government Code.
730	730	Sec. 209.0057. TABULATION OF VOTES. (a) This section does
731	731	not apply to a property owners' association that is subject to
732	732	Chapter 552, Government Code, by application of Section 552.0036,
733	733	Government Code.
734	734	(b) On the written petition of owners having at least 10
735	735	percent of all voting interests in a property owners' association
736	736	for a vote tabulation under this subsection, received by the
737	737	association at least 15 days before the first date that votes may be
738	738	cast, to tabulate the votes in any matter subject to a vote of the
739	739	members of a mandatory property owners' association, the
740	740	association shall enter into a contract for the services of a person
741	741	who is not a member of the association or related to a member of the
742	742	association board within the third degree by consanguinity or
743	743	affinity, as determined under Chapter 573, Government Code, and who
744	744	is a current or former:
745	745	(1) county judge;
746	746	(2) county elections administrator;
747	747	(3) justice of the peace; or
748	748	(4) county voter registrar.
749	749	(c) The name of each person tabulating votes of the members
750	750	of a property owners' association and the results of the tabulation
751	751	must be reflected in the minutes of the association.
752	752	(d) Any owner may, not later than the fifth day after the
753	753	date of the initial tabulation of votes, require a recount of the
754	754	votes. A demand for a recount must be submitted in writing either:
755	755	(1) in person to a property owners' association board
756	756	member;
757	757	(2) by certified mail, return receipt requested, or by
758	758	delivery by the United States Postal Service with signature
759	759	confirmation service to the association's mailing address on the
760	760	latest management certificate filed under Section 209.004; or
761	761	(3) in person to the association's managing agent as
762	762	reflected on the latest management certificate filed under Section
763	763	209.004.
764	764	(e) The property owners' association shall, at the expense
765	765	of the owner requesting the recount, retain for the purpose of
766	766	performing the recount the services of a person who is not a member
767	767	of the association or related to a member of the association board
768	768	within the third degree of consanguinity or affinity, as determined
769	769	under Chapter 573, Government Code and who is a current or former:
770	770	(1) county judge;
771	771	(2) county elections administrator;
772	772	(3) justice of the peace; or
773	773	(4) county voter registrar.
774	774	(f) Any recount under Subsection (d) must be performed on or
775	775	before the 30th day after the date of receipt of a request for and
776	776	payment for a recount in accordance with Subsections (d) and (e).
777	777	If the recount changes the results of the election, the association
778	778	shall reimburse the requesting owner for the cost of the recount.
779	779	Any action taken by the board in the period between the initial
780	780	election vote tally and the completion of the recount may not be
781	781	affected by any recount.
782	782	Sec. 209.0058. BALLOTS. (a) Any vote cast in an election
783	783	or vote by a member of a property owners' association must be in
784	784	writing and signed by the member.
785	785	(b) Electronic votes cast under Section 209.00593
786	786	constitute written and signed ballots.
787	787	(c) In an association-wide election, written and signed
788	788	ballots are not required for uncontested races.
789	789	Sec. 209.0059. RIGHT TO VOTE. (a) A provision in a
790	790	dedicatory instrument that would disqualify a property owner from
791	791	voting in an association election of board members or on any matter
792	792	concerning the rights or responsibilities of the owner is void.
793	793	(b) This section does not apply to a property owners'
794	794	association that is subject to Chapter 552, Government Code, by
795	795	application of Section 552.0036, Government Code.
796	796	Sec. 209.00591. PROXY VOTING. A provision in any
797	797	dedicatory instrument that provides for a proxy vote in any matter
798	798	subject to a vote of the members of the property owners' association
799	799	is void.
800	800	Sec. 209.00592. BOARD MEMBERSHIP. (a) Except as provided
801	801	by Subsection (b), a provision in a dedicatory instrument that
802	802	restricts a property owner's right to run for a position on the
803	803	board of the property owners' association is void.
804	804	(b) If a board is presented with written, documented
805	805	evidence from a database or other record maintained by a
806	806	governmental law enforcement authority that a board member has been
807	807	convicted of a felony or crime involving moral turpitude, the board
808	808	member is immediately ineligible to serve on the board of the
809	809	property owners' association, automatically considered removed
810	810	from the board, and prohibited from future service on the board.
811	811	Sec. 209.00593. VOTING; QUORUM. (a) The voting rights of
812	812	an owner may be cast or given:
813	813	(1) in person at a meeting of the property owners'
814	814	association;
815	815	(2) by absentee ballot in accordance with this
816	816	section; or
817	817	(3) by electronic ballot in accordance with this
818	818	section.
819	819	(b) An absentee or electronic ballot:
820	820	(1) may be counted as an owner present and voting for
821	821	the purpose of establishing a quorum only for items appearing on the
822	822	ballot;
823	823	(2) may not be counted, even if properly delivered, if
824	824	the owner attends any meeting to vote in person, so that any vote
825	825	cast at a meeting by a property owner supersedes any vote submitted
826	826	by absentee or electronic ballot previously submitted for that
827	827	proposal; and
828	828	(3) may not be counted on the final vote of a proposal
829	829	if the motion was amended at the meeting to be different from the
830	830	exact language on the absentee or electronic ballot.
831	831	(c) A solicitation for votes by absentee ballot must
832	832	include:
833	833	(1) an absentee ballot that contains each proposed
834	834	action and provides an opportunity to vote for or against each
835	835	proposed action;
836	836	(2) instructions for delivery of the completed
837	837	absentee ballot, including the delivery location; and
838	838	(3) the following language: "By casting your vote via
839	839	absentee ballot you will forgo the opportunity to consider and vote
840	840	on any action from the floor on these proposals, if a meeting is
841	841	held. This means that if there are amendments to these proposals
842	842	your votes will not be counted on the final vote on these measures.
843	843	If you desire to retain this ability, please attend any meeting in
844	844	person. You may submit an absentee ballot and later choose to
845	845	attend any meeting in person, in which case any in-person vote will
846	846	prevail."
847	847	(d) For the purposes of this section, "electronic ballot"
848	848	means a ballot:
849	849	(1) given by:
850	850	(A) electronic mail;
851	851	(B) facsimile; or
852	852	(C) posting on an Internet website;
853	853	(2) for which the identity of the property owner
854	854	submitting the ballot can be confirmed; and
855	855	(3) for which the property owner may receive a receipt
856	856	of the electronic transmission and receipt of the owner's ballot.
857	857	(e) If an electronic ballot is posted on an Internet
858	858	website, a notice of the posting shall be sent to each owner that
859	859	contains instructions on obtaining access to the posting on the
860	860	website.
861	861	(f) This section supersedes any contrary provision in a
862	862	dedicatory instrument.
863	863	(g) This section does not apply to a property owners'
864	864	association that is subject to Chapter 552, Government Code, by
865	865	application of Section 552.0036, Government Code.
866	866	SECTION 12. Section 209.006, Property Code, is amended by
867	867	amending Subsection (b) and adding Subsections (c), (d), (e), and
868	868	(f) to read as follows:
869	869	(b) The notice must:
870	870	(1) describe the violation or property damage that is
871	871	the basis for the suspension action, charge, or fine and state any
872	872	amount due the association from the owner; [and]
873	873	(2) except as provided by Subsection (d), inform the
874	874	owner that the owner:
875	875	(A) is entitled to a reasonable period to cure
876	876	the violation and avoid the fine [or suspension unless the owner was
877	877	given notice and a reasonable opportunity to cure a similar
878	878	violation within the preceding six months]; and
879	879	(B) may request a hearing under Section 209.007
880	880	on or before the 30th day after the date notice was delivered to the
881	881	owner;
882	882	(3) specify the date by which the owner must cure the
883	883	violation if the violation is of a curable nature and does not pose
884	884	a threat to public health or safety;
885	885	(4) specify the dollar amount of any fine the
886	886	association seeks to levy;
887	887	(5) specify each provision of the dedicatory
888	888	instrument the owner is alleged to have violated; and
889	889	(6) be sent by certified mail, return receipt
890	890	requested, or delivered by the United States Postal Service with
891	891	signature confirmation service to the owner at the owner's last
892	892	known address as shown on the association's records [receives the
893	893	notice].
894	894	(c) The date specified in the notice under Subsection (b)(3)
895	895	must provide a reasonable period of at least 30 days for the owner
896	896	to cure the violation if the violation is of a curable nature and
897	897	does not pose a threat to public health or safety.
898	898	(d) Subsections (a) and (b) do not apply to a violation for
899	899	which the owner has been previously given notice under this section
900	900	and the opportunity to exercise any rights available under this
901	901	section in the preceding six months.
902	902	(e) If the property owner does not cure the violation in the
903	903	time provided under Subsection (c) and does not request a hearing
904	904	under Subsection (b)(2)(B), the property owners' association may
905	905	assess the fine and shall provide notice of the assessment to the
906	906	owner. If the property owner cures the violation before the
907	907	expiration period for cure specified under Subsection (c), any fine
908	908	assessed for the violation is void.
909	909	(f) For purposes of this section, a violation is considered
910	910	a threat to public health or safety if the violation could
911	911	materially affect the physical health or safety of an ordinary
912	912	resident.
913	913	SECTION 13. Chapter 209, Property Code, is amended by
914	914	adding Sections 209.0061, 209.0062, 209.0063, and 209.0064 to read
915	915	as follows:
916	916	Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed
917	917	by the property owners' association must be reasonable in the
918	918	context of the nature and frequency of the violation and the effect
919	919	of the violation on the subdivision as a whole. If the association
920	920	allows fines for a continuing violation to accumulate against a lot
921	921	or an owner, the association must establish a reasonable maximum
922	922	fine amount for a continuing violation, at which point the total
923	923	fine amount is capped.
924	924	(b) If a lot occupant other than the owner violates a
925	925	provision of the dedicatory instrument, the property owners'
926	926	association, in addition to exercising any of the association's
927	927	powers against the owner, may assess a fine directly against the
928	928	nonowner occupant in the same manner as provided for an owner but
929	929	may not require payment from both the owner and a nonowner occupant
930	930	for the same violation.
931	931	(c) If the property owners' association assesses a fine
932	932	against a nonowner occupant under this section, the notice
933	933	provisions of Section 209.006 and the hearing provisions of Section
934	934	209.007 apply to the nonowner occupant in the same manner as those
935	935	provisions apply to an owner.
936	936	Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
937	937	ASSESSMENTS. (a) A property owners' association shall adopt
938	938	reasonable guidelines to establish an alternative payment schedule
939	939	by which an owner may make partial payments to the property owners'
940	940	association for delinquent regular or special assessments or any
941	941	other amount owed to the association without accruing additional
942	942	monetary penalties. For purposes of this section, monetary
943	943	penalties do not include reasonable costs associated with
944	944	administering the payment plan or interest.
945	945	(b) For any approved special assessment in an amount greater
946	946	than the equivalent of the sum of all regular assessments payable in
947	947	the year the special assessment is approved, a property owners'
948	948	association shall allow partial payments of the special assessment
949	949	for 12 months unless the property owner requests a shorter payment
950	950	period in writing at the time the property owner requests an
951	951	alternative payment plan. A property owners' association may offer
952	952	a reasonable discount for an owner making a one-time lump sum
953	953	payment of the special assessment.
954	954	(c) For any approved special assessment in an amount greater
955	955	than the equivalent of one-half the sum of all regular assessments
956	956	payable in the year the special assessment is approved, a property
957	957	owners' association shall allow partial payments of the special
958	958	assessment for six months unless the property owner requests a
959	959	shorter payment period in writing at the time the property owner
960	960	requests an alternative payment plan. A property owners'
961	961	association may offer a reasonable discount to an owner making a
962	962	one-time lump sum payment of the special assessment.
963	963	(d) A property owners' association is not required to allow
964	964	a payment plan for any amount that extends more than 12 months from
965	965	the date of the owner's request for a payment plan or to enter into a
966	966	payment plan with an owner who failed to honor the terms of a
967	967	previous payment plan during the five years following an owner's
968	968	default under a previous payment plan.
969	969	(e) A property owners' association shall file the
970	970	association's guidelines under this section in the real property
971	971	records of each county in which the subdivision is located.
972	972	(f) A property owners' association's failure to file as
973	973	required by this section the association's guidelines in the real
974	974	property records of each county in which the subdivision is located
975	975	does not prohibit a property owner from receiving an alternative
976	976	payment schedule by which the owner may make partial payments to the
977	977	property owners' association for delinquent regular or special
978	978	assessments or any other amount owed to the association without
979	979	accruing additional monetary penalties, as defined by Subsection
980	980	(a).
981	981	Sec. 209.0063. PRIORITY OF PAYMENTS. Unless otherwise
982	982	provided in writing by the property owner at the time payment is
983	983	made, a payment received by a property owners' association from the
984	984	owner shall be applied to the owner's debt in the following order of
985	985	priority:
986	986	(1) any delinquent assessment;
987	987	(2) any current assessment;
988	988	(3) any attorney's fees incurred by the association
989	989	associated solely with assessments or any other charge that could
990	990	provide the basis for foreclosure;
991	991	(4) any fines assessed by the association;
992	992	(5) any attorney's fees incurred by the association
993	993	that are not subject to Subdivision (3); and
994	994	(6) any other amount owed to the association.
995	995	Sec. 209.0064. COLLECTIONS. A property owners' association
996	996	must bring suit or otherwise initiate against an owner a collection
997	997	action authorized by the dedicatory instruments or other law on or
998	998	before the 10th anniversary of the date on which the cause of action
999	999	for collection of the debt accrues. Section 16.004, Civil Practice
1000	1000	and Remedies Code, does not apply to the collection of a debt owed
1001	1001	by an owner to a property owners' association.
1002	1002	SECTION 14. Section 209.007, Property Code, is amended by
1003	1003	amending Subsection (a) and adding Subsections (f), (g), (h), (i),
1004	1004	and (j) to read as follows:
1005	1005	(a) If the owner is entitled to an opportunity to cure the
1006	1006	violation, the owner has the right to submit a written request for a
1007	1007	hearing to discuss and verify facts and resolve the matter in issue
1008	1008	before a committee appointed by the board of the property owners'
1009	1009	association or before the board if the board does not appoint a
1010	1010	committee. The written request must contain a statement of the
1011	1011	grounds on which the owner believes the owner is not in violation
1012	1012	and citations of the dedicatory instrument for each violation
1013	1013	alleged.
1014	1014	(f) If the parties fail to reach agreement in or after the
1015	1015	hearing described by this section, the property owners' association
1016	1016	must file suit to uphold and enforce any fine sought to be assessed.
1017	1017	The suit must be filed in a justice court or small claims court not
1018	1018	later than the 180th day after the date of the hearing described by
1019	1019	this section or an appeal under Subsection (b), whichever is later.
1020	1020	The complaint must list each violation and be accompanied by
1021	1021	citation of the dedicatory instrument for each violation. If the
1022	1022	property owners' association does not file suit within the time
1023	1023	prescribed by this subsection, the association's right to collect
1024	1024	the fine is considered waived.
1025	1025	(g) Not later than the 30th day after the date a suit is
1026	1026	filed under Subsection (f), the court shall hold an evidentiary
1027	1027	hearing on the matter. The parties are not entitled to any
1028	1028	discovery.
1029	1029	(h) At the evidentiary hearing, the property owners'
1030	1030	association has the burden of proving by a preponderance of the
1031	1031	evidence that the property owner has violated a restrictive
1032	1032	covenant.
1033	1033	(i) The court shall determine whether a violation has
1034	1034	occurred and, if so, whether the fine for the violation is
1035	1035	reasonable considering the type, duration, and severity of the
1036	1036	violation.
1037	1037	(j) If the court finds that the position taken by either
1038	1038	party is groundless or is taken in bad faith, the court may award
1039	1039	the prevailing party's attorney's fees.
1040	1040	SECTION 15. Chapter 209, Property Code, is amended by
1041	1041	adding Section 209.0091 to read as follows:
1042	1042	Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except
1043	1043	as provided by Subsection (c), a property owners' association may
1044	1044	not foreclose a property owners' association assessment lien unless
1045	1045	the association first obtains a court order in an application for
1046	1046	expedited foreclosure under the rules adopted by the supreme court
1047	1047	under Subsection (b). A property owners' association may use the
1048	1048	procedure described by this subsection to foreclose any lien
1049	1049	described by the association's dedicatory instruments.
1050	1050	(b) The supreme court, as an exercise of the court's
1051	1051	authority under Section 74.024, Government Code, shall adopt rules
1052	1052	establishing expedited foreclosure proceedings for use by a
1053	1053	property owners' association in foreclosing an assessment lien of
1054	1054	the association. The rules adopted under this subsection must be
1055	1055	substantially similar to the rules adopted by the supreme court
1056	1056	under Section 50(r), Article XVI, Texas Constitution.
1057	1057	(c) Expedited foreclosure is not required under this
1058	1058	section if the owner of the property that is subject to foreclosure
1059	1059	agrees in writing at the time the foreclosure is sought to waive
1060	1060	expedited foreclosure under this section. A waiver under this
1061	1061	subsection may not be required as a condition of the transfer of
1062	1062	title to real property.
1063	1063	(d) A provision granting a right to foreclose a lien on real
1064	1064	property for unpaid amounts due to a property owners' association
1065	1065	may be removed from a dedicatory instrument or adopted in a
1066	1066	dedicatory instrument by a vote of at least 51 percent of the total
1067	1067	votes allocated to property owners in the property owners'
1068	1068	association. Owners holding at least 10 percent of all voting
1069	1069	interests in the property owners' association may petition the
1070	1070	association and require a special meeting to be called for the
1071	1071	purposes of taking a vote for the purposes of this section.
1072	1072	SECTION 16. Subsection (a), Section 209.010, Property Code,
1073	1073	is amended to read as follows:
1074	1074	(a) A property owners' association that conducts a
1075	1075	foreclosure sale of an owner's lot must send to the lot owner not
1076	1076	later than the 30th day after the date of the foreclosure sale:
1077	1077	(1) a written notice stating the date and time the sale
1078	1078	occurred and informing the lot owner of the owner's right to redeem
1079	1079	the property under Section 209.011; and
1080	1080	(2) a copy of Section 209.011.
1081	1081	SECTION 17. Chapter 209, Property Code, is amended by
1082	1082	adding Section 209.014 to read as follows:
1083	1083	Sec. 209.014. RESTRICTIONS ON OWNERSHIP VOID. A property
1084	1084	owners' association may not prohibit an owner from owning multiple
1085	1085	properties governed by the property owners' association if the
1086	1086	cumulative voting rights of all of that owner's properties are 25
1087	1087	percent or less of all voting interests in the property owners'
1088	1088	association. This section does not apply during a development
1089	1089	period as defined by Section 202.011.
1090	1090	SECTION 18. Subsection (a), Section 211.002, Property Code,
1091	1091	is amended to read as follows:
1092	1092	(a) This chapter applies only to a residential real estate
1093	1093	subdivision or any unit or parcel of a subdivision to which another
1094	1094	chapter in this title that provides a procedure under which a
1095	1095	subdivision's restrictions may be amended does not apply [located
1096	1096	in whole or in part within an unincorporated area of a county if the
1097	1097	county has a population of less than 65,000].
1098	1098	SECTION 19. Subsection (c), Section 202.004, Property Code,
1099	1099	is amended to read as follows:
1100	1100	(c) For a violation of a restrictive covenant of a property
1101	1101	owners' association that is a mixed use master association that
1102	1102	existed before January 1, 1974, and that does not have the authority
1103	1103	under a dedicatory instrument or other governing document to impose
1104	1104	fines, a [A] court may assess civil damages [for the violation of a
1105	1105	restrictive covenant] in an amount not to exceed $200 for each day
1106	1106	of the violation.
1107	1107	SECTION 20. (a) Subsection (a), Section 5.006, Property
1108	1108	Code, as amended by this Act, applies only to an action filed on or
1109	1109	after the effective date of this Act. An action filed before the
1110	1110	effective date of this Act is governed by the law in effect
1111	1111	immediately before the effective date of this Act, and that law is
1112	1112	continued in effect for that purpose.
1113	1113	(b) Section 5.012, Property Code, as amended by this Act,
1114	1114	applies only to a sale of property that occurs on or after the
1115	1115	effective date of this Act. For the purposes of this section, a
1116	1116	sale of property occurs before the effective date of this Act if the
1117	1117	executory contract binding the purchaser to purchase the property
1118	1118	is executed before that date. A sale of property that occurs before
1119	1119	the effective date of this Act is governed by the law in effect
1120	1120	immediately before that date, and that law is continued in effect
1121	1121	for that purpose.
1122	1122	(c) Sections 202.015 and 209.0035, Property Code, as added
1123	1123	by this Act, apply only to a cause of action that accrues on or after
1124	1124	the effective date of this Act. A cause of action that accrues
1125	1125	before the effective date of this Act is governed by the law in
1126	1126	effect immediately before the effective date of this Act, and that
1127	1127	law is continued in effect for that purpose.
1128	1128	(d) Subsection (c), Section 202.004, Property Code, as
1129	1129	amended by this Act, applies only to an action brought on or after
1130	1130	the effective date of this Act. An action brought before the
1131	1131	effective date of this Act is governed by the law in effect
1132	1132	immediately before the effective date of this Act, and that law is
1133	1133	continued in effect for that purpose.
1134	1134	(e) Section 202.006, Property Code, as amended by this Act,
1135	1135	and Sections 202.008, 202.010, 202.011, 202.012, 202.014,
1136	1136	209.0059, and 209.00591 and Subsection (a), Section 209.00592, and
1137	1137	Section 209.014, Property Code, as added by this Act, apply to a
1138	1138	provision in a dedicatory instrument or a restrictive covenant
1139	1139	enacted before, on, or after the effective date of this Act, except
1140	1140	that any action taken before the effective date of this Act based on
1141	1141	an unfiled dedicatory instrument is not invalidated by Section
1142	1142	202.006, Property Code, as amended by this Act.
1143	1143	(f) Section 209.005, Property Code, as amended by this Act,
1144	1144	applies only to a request for information received by a property
1145	1145	owners' association on or after the effective date of this Act. A
1146	1146	request for information received by a property owners' association
1147	1147	before the effective date of this Act is governed by the law in
1148	1148	effect immediately before the effective date of this Act, and that
1149	1149	law is continued in effect for that purpose.
1150	1150	(g) Sections 209.0061, 209.0062, and 209.0064, Property
1151	1151	Code, as added by this Act, apply only to an assessment or other
1152	1152	debt that becomes due on or after the effective date of this Act. An
1153	1153	assessment or other debt that becomes due before the effective date
1154	1154	of this Act is governed by the law in effect immediately before the
1155	1155	effective date of this Act, and that law is continued in effect for
1156	1156	that purpose.
1157	1157	(h) Section 209.0063, Property Code, as added by this Act,
1158	1158	applies only to a payment received by a property owners'
1159	1159	association on or after the effective date of this Act. A payment
1160	1160	received by a property owners' association before the effective
1161	1161	date of this Act is governed by the law in effect immediately before
1162	1162	the effective date of this Act, and that law is continued in effect
1163	1163	for that purpose.
1164	1164	(i) Section 209.0091, Property Code, as added by this Act,
1165	1165	applies only to a foreclosure sale that occurs after January 1,
1166	1166	2010. A foreclosure sale that occurs on or before January 1, 2010,
1167	1167	is governed by the law in effect immediately before the effective
1168	1168	date of this Act, and that law is continued in effect for that
1169	1169	purpose.
1170	1170	(j) Subsection (a), Section 209.010, Property Code, as
1171	1171	amended by this Act, applies only to a foreclosure sale conducted on
1172	1172	or after the effective date of this Act. A foreclosure sale
1173	1173	conducted before the effective date of this Act is governed by the
1174	1174	law in effect immediately before the effective date of this Act, and
1175	1175	that law is continued in effect for that purpose.
1176	1176	SECTION 21. Not later than January 1, 2010, each property
1177	1177	owners' association shall present for recording with the county
1178	1178	clerk as prescribed by Section 202.006, Property Code, as amended
1179	1179	by this Act, each dedicatory instrument governing the association
1180	1180	that has not been previously recorded in the real property records
1181	1181	of the county.
1182	1182	SECTION 22. Not later than January 1, 2010, the Supreme
1183	1183	Court of Texas shall adopt rules of civil procedure under Section
1184	1184	209.0091, Property Code, as added by this Act.
1185	1185	SECTION 23. This Act takes effect January 1, 2010.