By: West S.B. No. 240
Substitute the following for S.B. No. 240:
By: Quintanilla C.S.S.B. No. 240
A BILL TO BE ENTITLED
AN ACT
relating to the enforcement of deed restrictions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (c), Section 202.004, Property Code,
is amended to read as follows:
(c) For a violation of a restrictive covenant of a planned
development governed by a property owner's association that
existed before January 1, 1974, and that does not have the
authority under a dedicatory instrument or other governing
document to impose fines, a [A] court may assess civil damages [for
the violation of a restrictive covenant] in an amount not to exceed
$200 for each day of the violation.
SECTION 2. Chapter 209, Property Code, is amended by adding
Sections 209.0061, 209.0062, 209.0063, 209.0064, and 209.0091 to
read as follows:
Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed by
the property owners' association must be reasonable in the context
of the nature and frequency of the violation and the effect of the
violation on the subdivision as a whole. If the association allows
fines for a continuing violation to accumulate against a lot or an
owner, the association must establish a reasonable maximum fine
amount for a continuing violation at which point the total fine
amount is capped.
(b) If a lot occupant other than the owner violates a
provision of the dedicatory instrument, the property owners'
association, in addition to exercising any of the association's
powers against the owner, may assess a fine directly against the
nonowner occupant in the same manner as provided for an owner but
may not require payment from both the owner and a nonowner occupant
for the same violation.
(c) If the property owners' association assesses a fine
against a nonowner occupant under this section, the notice
provisions of Section 209.006 and the hearing provisions of
Section 209.007 apply to the nonowner occupant in the same manner
as those provisions apply to an owner.
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
ASSESSMENTS. (a) A property owners' association shall adopt
reasonable guidelines to establish an alternative payment schedule
by which an owner may make partial payments to the property owners'
association for delinquent regular or special assessments or any
other amount owed to the association without accruing additional
monetary penalties. For purposes of this section, monetary
penalties do not include reasonable costs associated with
administering the payment plan or interest.
(b) For any approved special assessment in an amount greater
than the equivalent of the sum of all regular assessments payable in
the year the special assessment is approved, a property owners'
association shall allow partial payments of the special assessment
for 12 months unless the property owner requests a shorter payment
period in writing at the time the property owner requests an
alternative payment plan. A property owners' association may offer
a reasonable discount for an owner making a one-time lump sum
payment of the special assessment.
(c) For any approved special assessment in an amount
greater than the equivalent of one-half the sum of all regular
assessments payable in the year the special assessment is
approved, a property owners' association shall allow partial
payments of the special assessment for six months unless the
property owner requests a shorter payment period in writing at the
time the property owner requests an alternative payment plan. A
property owners' association may offer a reasonable discount to an
owner making a one-time lump sum payment of the special assessment.
(d) A property owners' association is not required to allow
a payment plan for any amount that extends more than 12 months from
the date of the owner's request for a payment plan or to enter into a
payment plan with an owner who failed to honor the terms of a
previous payment plan during the five years following an owner's
default under a previous payment plan.
(e) A property owners' association shall file the
association's guidelines under this section in the real property
records of each county in which the subdivision is located.
(f) A property owners' association's failure to file as
required by this section the association's guidelines in the real
property records of each county in which the subdivision is located
does not prohibit a property owner from receiving an alternative
payment schedule by which the owner may make partial payments to
the property owners' association for delinquent regular or special
assessments or any other amount owed to the association without
accruing additional monetary penalties, as defined by Subsection
(a).
Sec. 209.0063. PRIORITY OF PAYMENTS. Unless otherwise
provided in writing by the property owner at the time payment is
made, a payment received by a property owners' association from the
owner shall be applied to the owner's debt in the following order of
priority:
(1) any delinquent assessment;
(2) any current assessment;
(3) any attorney's fees incurred by the association
associated solely with assessments or any other charge that could
provide the basis for foreclosure;
(4) any fines assessed by the association;
(5) any attorney's fees incurred by the association
that are not subject to Subdivision (3); and
(6) any other amount owed to the association.
Sec. 209.0064. COLLECTIONS. A property owners' association
must bring suit or otherwise initiate against an owner a collection
action authorized by the dedicatory instruments or other law on or
before the 10th anniversary of the date on which the cause of action
for collection of the debt accrues. Section 16.004, Civil Practice
and Remedies Code, does not apply to the collection of a debt owed
by an owner to a property owners' association.
SECTION 3. (a) Subsection (c), Section 202.004, 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) Sections 209.0061, 209.0062, and 209.0064, Property
Code, as added by this Act, apply only to an assessment or other
debt that becomes due on or after the effective date of this Act. An
assessment or other debt that becomes due 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.
(c) Section 209.0063, Property Code, as added by this Act,
applies only to a payment received by a property owners'
association on or after the effective date of this Act. A payment
received by a property owners' association 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.
SECTION 4. This Act takes effect January 1, 2010.