Texas 2009 - 81st Regular

Texas Senate Bill SB429 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R2722 AJA-F
2	2	By: West S.B. No. 429
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the operation of property owners' associations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 5.006(a), Property Code, is amended to
10	10	read as follows:
11	11	(a) In an action based on breach of a restrictive covenant
12	12	pertaining to real property, the court shall allow to a prevailing
13	13	party [who asserted the action] reasonable attorney's fees in
14	14	addition to the party's costs and claim.
15	15	SECTION 2. Section 5.012, Property Code, is amended by
16	16	amending Subsection (a) and adding Subsections (f) and (g) to read
17	17	as follows:
18	18	(a) A seller of residential real property that is subject to
19	19	membership in a property owners' association and that comprises not
20	20	more than one dwelling unit located in this state shall give to the
21	21	purchaser of the property a written notice that reads substantially
22	22	similar to the following:
23	23	NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
24	24	PROPERTY AT (street address) (name of residential community)
25	25	As a purchaser of property in the residential community in
26	26	which this property is located, you are obligated to be a member of
27	27	a property owners' association. Restrictive covenants governing
28	28	the use and occupancy of the property and a dedicatory instrument
29	29	governing the establishment, maintenance, and operation of this
30	30	residential community have been or will be recorded in the Real
31	31	Property Records of the county in which the property is located.
32	32	Copies of the restrictive covenants and dedicatory instrument may
33	33	be obtained from the county clerk.
34	34	You are obligated to pay assessments to the property owners'
35	35	association. The amount of the assessments is subject to change.
36	36	Your failure to pay the assessments could result in a lien on and
37	37	the foreclosure of your property.
38	38	Section 207.003, Property Code, entitles an owner to receive
39	39	copies of restrictions, bylaws, and a resale certificate from a
40	40	property owners' association. A resale certificate contains
41	41	information including, but not limited to, statements specifying
42	42	the amount and frequency of regular assessments, the property
43	43	owners' association's operating budget and balance sheet, and the
44	44	style and cause number of lawsuits to which the property owners'
45	45	association is a party. These documents must be made available to
46	46	you by the seller on your request.
47	47	Date: ____________________________________________
48	48	Signature of Purchaser
49	49	(f) On the purchaser's request for a resale certificate from
50	50	the seller, the seller shall:
51	51	(1) promptly deliver a copy of a current resale
52	52	certificate if one has been issued for the property under Chapter
53	53	207; or
54	54	(2) if the seller does not have a current resale
55	55	certificate:
56	56	(A) request the property owners' association or
57	57	its agent to issue a resale certificate under Chapter 207; and
58	58	(B) promptly deliver a copy of the resale
59	59	certificate to the purchaser on receipt of the resale certificate
60	60	from the property owners' association or its agent.
61	61	(g) The seller or the purchaser, as agreed to by the
62	62	parties, shall pay the fee to the property owners' association or
63	63	its agent for issuing the resale certificate under Chapter 207.
64	64	SECTION 3. Chapter 202, Property Code, is amended by adding
65	65	Sections 202.008 and 202.010 to read as follows:
66	66	Sec. 202.008. RIGHT OF FIRST REFUSAL PROHIBITED. (a) In
67	67	this section, "development period" means a period stated in a
68	68	declaration during which a declarant reserves:
69	69	(1) a right to facilitate the development,
70	70	construction, and marketing of the subdivision;
71	71	(2) a right to direct the size, shape, and composition
72	72	of the subdivision; or
73	73	(3) any other right customarily reserved by a
74	74	declarant for the benefit of developers and builders.
75	75	(b) To the extent a restrictive covenant provides a right of
76	76	first refusal for the sale or lease of a residential unit or
77	77	residential lot in favor of the property owners' association or the
78	78	association's members, the covenant is void.
79	79	(c) This section does not apply to a restrictive covenant
80	80	that provides a right of first refusal in favor of a developer or
81	81	builder during the development period.
82	82	Sec. 202.010. REGULATION OF SOLAR ENERGY DEVICES. (a) In
83	83	this section, "solar energy device" has the meaning assigned by
84	84	Section 171.107, Tax Code.
85	85	(b) Except as otherwise provided by this section, a property
86	86	owners' association may not include or enforce a provision in a
87	87	dedicatory instrument that prohibits or restricts a property owner
88	88	from installing a solar energy device.
89	89	(c) A provision that violates Subsection (b) is void.
90	90	(d) This section does not prohibit the inclusion or
91	91	enforcement of a provision in a dedicatory instrument that
92	92	prohibits a solar energy device that:
93	93	(1) threatens the public health or safety;
94	94	(2) violates a law;
95	95	(3) is located on property owned or maintained by the
96	96	property owners' association;
97	97	(4) is located on property owned in common by the
98	98	members of the property owners' association;
99	99	(5) is located in an area on the property owner's
100	100	property other than:
101	101	(A) on the roof of the home; or
102	102	(B) in a fenced yard or patio maintained by the
103	103	property owner; or
104	104	(6) is mounted on a device that is taller or more
105	105	visually obtrusive than is necessary for the solar energy device to
106	106	operate at not less than 90 percent of its rated efficiency.
107	107	SECTION 4. Section 207.003(b), Property Code, is amended to
108	108	read as follows:
109	109	(b) A resale certificate under Subsection (a) must contain:
110	110	(1) a statement of any right of first refusal or other
111	111	restraint contained in the restrictions or restrictive covenants
112	112	that restricts the owner's right to transfer the owner's property;
113	113	(2) the frequency and amount of any regular
114	114	assessments;
115	115	(3) the amount of any special assessment that is due
116	116	after the date the resale certificate is prepared;
117	117	(4) the total of all amounts due and unpaid to the
118	118	property owners' association that are attributable to the owner's
119	119	property;
120	120	(5) capital expenditures, if any, approved by the
121	121	property owners' association for the property owners' association's
122	122	current fiscal year;
123	123	(6) the amount of reserves, if any, for capital
124	124	expenditures;
125	125	(7) the property owners' association's current
126	126	operating budget and balance sheet;
127	127	(8) the total of any unsatisfied judgments against the
128	128	property owners' association;
129	129	(9) the style and cause number of any pending lawsuit
130	130	in which the property owners' association is a party, other than a
131	131	lawsuit relating to unpaid property taxes of an individual member
132	132	of the association [defendant];
133	133	(10) a copy of a certificate of insurance showing the
134	134	property owners' association's property and liability insurance
135	135	relating to the common areas and common facilities;
136	136	(11) a description of any conditions on the owner's
137	137	property that the property owners' association board has actual
138	138	knowledge are in violation of the restrictions applying to the
139	139	subdivision or the bylaws or rules of the property owners'
140	140	association;
141	141	(12) a summary or copy of notices received by the
142	142	property owners' association from any governmental authority
143	143	regarding health or housing code violations existing on the
144	144	preparation date of the certificate relating to the owner's
145	145	property or any common areas or common facilities owned or leased by
146	146	the property owners' association;
147	147	(13) the amount of any administrative transfer fee
148	148	charged by the property owners' association for a change of
149	149	ownership of property in the subdivision;
150	150	(14) the name, mailing address, and telephone number
151	151	of the property owners' association's managing agent, if any; [and]
152	152	(15) a statement indicating whether the restrictions
153	153	allow foreclosure of a property owners' association's lien on the
154	154	owner's property for failure to pay assessments; and
155	155	(16) a statement of all fees associated with the
156	156	transfer of ownership, including a description of each fee, to whom
157	157	each fee is paid, and the amount of each fee.
158	158	SECTION 5. Chapter 209, Property Code, is amended by adding
159	159	Sections 209.0041 through 209.0044 to read as follows:
160	160	Sec. 209.0041. AMENDMENT OF DECLARATION. (a) This section
161	161	applies only to a residential subdivision in which property owners
162	162	are subject to mandatory regular or special assessments.
163	163	(b) This section applies to a declaration regardless of the
164	164	date on which the declaration was created.
165	165	(c) This section does not apply to the amendment of a
166	166	declaration during a development period, as defined by Section
167	167	202.008.
168	168	(d) To the extent of any conflict with another provision of
169	169	this title, this section prevails.
170	170	(e) Unless a declaration creating a residential subdivision
171	171	provides a lower percentage, the declaration and any subsequently
172	172	enacted declarations may be amended on a vote of 67 percent of the
173	173	total votes allocated to owners of property in the subdivision. If
174	174	the declaration provides a lower percentage, the percentage in the
175	175	declaration controls.
176	176	(f) All ballots cast in an election that results in the
177	177	amendment of a declaration under this section shall be deposited in
178	178	the county clerk's office of each county in which the declaration is
179	179	recorded and are subject to inspection by the public. A county
180	180	clerk shall retain ballots deposited with the clerk under this
181	181	subsection until the fourth anniversary of the date the ballots
182	182	were deposited. A county clerk may not charge a fee for the deposit
183	183	of ballots under this subsection.
184	184	Sec. 209.0042. TABULATION OF VOTES. (a) In any matter
185	185	subject to a vote of the members of the property owners'
186	186	association, the association shall utilize a neutral third party to
187	187	tabulate the votes:
188	188	(1) if the association schedules the election with
189	189	less than 30 days' notice; or
190	190	(2) for an election scheduled with notice of 30 days or
191	191	more, if the association receives written requests from at least 25
192	192	percent of the owners of property in the subdivision or 50 owners of
193	193	property in the subdivision, whichever is less:
194	194	(A) at least 10 days before the date of the
195	195	meeting at which the vote will be taken; or
196	196	(B) if no meeting is to be held, at least 10 days
197	197	before the deadline to cast a vote.
198	198	(b) For the purposes of this section, a person is considered
199	199	a neutral third party if the person is anyone other than a candidate
200	200	for an association office, a current or former member or officer of
201	201	the board of directors, an attorney who represents the property
202	202	owners' association, or a representative of the association's
203	203	management company, or a person related to one of those persons
204	204	within the second degree by consanguinity or affinity, as
205	205	determined under Chapter 573, Government Code.
206	206	(c) This section does not apply to a property owners'
207	207	association if:
208	208	(1) membership in the property owners' association is
209	209	mandatory for owners or for a defined class of owners of private
210	210	real property in a defined geographic area in a county with a
211	211	population of 2.8 million or more or in a county adjacent to a
212	212	county with a population of 2.8 million or more;
213	213	(2) the property owners' association has the power to
214	214	make mandatory special assessments for capital improvements or
215	215	mandatory regular assessments; and
216	216	(3) the amount of the mandatory special or regular
217	217	assessments is or has ever been based in whole or in part on the
218	218	value at which the state or a local governmental body assesses the
219	219	property for purposes of ad valorem taxation under Section 20,
220	220	Article VIII, Texas Constitution.
221	221	Sec. 209.0043. RIGHT TO VOTE. A provision of a dedicatory
222	222	instrument that would disqualify a property owner from voting in an
223	223	association election of board members or on any matter concerning
224	224	the rights or responsibilities of the owner is void.
225	225	Sec. 209.0044. BOARD MEMBERSHIP. (a) A provision of a
226	226	dedicatory instrument that restricts a property owner's right to
227	227	run for a position on the board of the property owners' association
228	228	is void.
229	229	(b) A property owners' association board may make
230	230	information available to members of the association regarding a
231	231	candidate for a position on the board regarding:
232	232	(1) any amount owed to the association by the
233	233	candidate that is six months or more overdue;
234	234	(2) any violation of a restrictive covenant of which
235	235	notice was delivered to a board candidate under Section 209.006
236	236	more than 30 days before the date of the election; and
237	237	(3) any lawsuits to which both the property owners'
238	238	association or any of its directors or agents and the board
239	239	candidate are a party.
240	240	SECTION 6. Section 209.005, Property Code, is amended by
241	241	amending Subsection (a) and adding Subsection (c) to read as
242	242	follows:
243	243	(a) A property owners' association shall make the books and
244	244	records of the association, including financial records,
245	245	reasonably available to an owner in accordance with Section B,
246	246	Article 2.23, Texas Non-Profit Corporation Act (Article 1396-2.23,
247	247	Vernon's Texas Civil Statutes), or a successor to that statute.
248	248	(c) If a property owners' association subject to Subsection
249	249	(a) fails to comply with Subsection (a), an owner may seek one or
250	250	more of the following remedies:
251	251	(1) a court order directing the property owners'
252	252	association to provide the required information;
253	253	(2) a judgment against the property owners'
254	254	association for a penalty of not more than $1,500;
255	255	(3) a judgment against the property owners'
256	256	association for court costs and attorney's fees incurred in
257	257	connection with seeking a remedy under this section; or
258	258	(4) a judgment authorizing the owner or the owner's
259	259	assignee to deduct the amounts awarded under Subdivisions (2) and
260	260	(3) from any future regular or special assessments payable to the
261	261	property owners' association.
262	262	SECTION 7. Section 209.006, Property Code, is amended by
263	263	amending Subsection (b) and adding Subsections (c) and (d) to read
264	264	as follows:
265	265	(b) The notice must:
266	266	(1) describe the violation or property damage that is
267	267	the basis for the suspension action, charge, or fine and state any
268	268	amount due the association from the owner; [and]
269	269	(2) inform the owner that the owner:
270	270	(A) is entitled to a reasonable period to cure
271	271	the violation and avoid the fine or suspension unless the owner was
272	272	given notice and a reasonable opportunity to cure a similar
273	273	violation within the preceding six months; and
274	274	(B) may request a hearing under Section 209.007
275	275	on or before the 30th day after the date notice was delivered to the
276	276	owner; and
277	277	(3) specify a date certain by which the owner must cure
278	278	the violation [receives the notice].
279	279	(c) Notice under Subsection (b) must be personally
280	280	delivered, sent by certified mail with a return receipt requested,
281	281	or delivered by the United States Postal Service with signature
282	282	confirmation service to the owner at the owner's last known address
283	283	as shown on the association's records.
284	284	(d) The date specified in the notice under Subsection (b)(3)
285	285	must provide a reasonable period for the owner to cure the
286	286	violation.
287	287	SECTION 8. Chapter 209, Property Code, is amended by adding
288	288	Sections 209.0061 through 209.0064 and Section 209.0091 to read as
289	289	follows:
290	290	Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed by
291	291	the property owners' association must be reasonable in the context
292	292	of the nature, frequency, and effect of the violation. If the
293	293	association allows fines for a continuing violation to accumulate
294	294	against a lot or an owner, the association must establish a maximum
295	295	fine amount for a continuing violation at which point the total fine
296	296	amount is capped.
297	297	(b) If a lot occupant other than the owner violates a
298	298	provision of the dedicatory instrument, the property owners'
299	299	association, in addition to exercising any of the association's
300	300	powers against the owner, may assess a fine directly against the
301	301	nonowner occupant in the same manner as provided for an owner but
302	302	may not require payment from both the owner and a nonowner occupant
303	303	for the same violation.
304	304	(c) If the property owners' association assesses a fine
305	305	against a nonowner occupant under this section, the notice
306	306	provisions of Section 209.006 and the hearing provisions of Section
307	307	209.007 apply to the nonowner occupant in the same manner as those
308	308	provisions apply to an owner.
309	309	Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
310	310	ASSESSMENTS. (a) A property owners' association shall adopt
311	311	reasonable guidelines to establish an alternative payment schedule
312	312	by which an owner may make partial payments to the property owners'
313	313	association for delinquent regular or special assessments or any
314	314	other amount owed to the association.
315	315	(b) A property owners' association is not required to allow
316	316	a payment plan that extends more than 12 months from the date of the
317	317	owner's request for a payment plan or to enter into a payment plan
318	318	with an owner who failed to honor the terms of a previous payment
319	319	plan.
320	320	(c) The property owners' association shall file the
321	321	association's guidelines under this section in the real property
322	322	records of each county in which the subdivision is located.
323	323	Sec. 209.0063. PRIORITY OF PAYMENTS. Unless otherwise
324	324	provided in writing by the property owner, a payment received by a
325	325	property owners' association from the owner shall be applied to the
326	326	owner's debt in the following order of priority:
327	327	(1) any delinquent assessment;
328	328	(2) any current assessment;
329	329	(3) any attorney's fees incurred by the association
330	330	associated solely with assessments or any other charge that could
331	331	provide the basis for foreclosure;
332	332	(4) any fines assessed by the association;
333	333	(5) any attorney's fees incurred by the association
334	334	that are not subject to Subdivision (3); and
335	335	(6) any other amount owed to the association.
336	336	Sec. 209.0064. COLLECTIONS. A property owners' association
337	337	must bring suit or otherwise initiate against an owner a collection
338	338	action authorized by the dedicatory instruments or other law on or
339	339	before the 10th anniversary of the date on which the cause of action
340	340	for collection of the debt accrues. Section 16.004, Civil Practice
341	341	and Remedies Code, does not apply to the collection of a debt owed
342	342	by an owner to a property owners' association.
343	343	Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except
344	344	as provided by Subsection (b), a property owners' association may
345	345	not foreclose a property owners' association's assessment lien
346	346	unless the association first obtains a court judgment foreclosing
347	347	the lien and providing for issuance of an order of sale.
348	348	(b) Judicial foreclosure is not required under this section
349	349	if the owner of the property that is subject to foreclosure agrees
350	350	in writing to waive judicial foreclosure under this section.
351	351	SECTION 9. Section 209.010(a), Property Code, is amended to
352	352	read as follows:
353	353	(a) A property owners' association that conducts a
354	354	foreclosure sale of an owner's lot must send to the lot owner not
355	355	later than the 30th day after the date of the foreclosure sale:
356	356	(1) a written notice stating the date and time the sale
357	357	occurred and informing the lot owner of the owner's right to redeem
358	358	the property under Section 209.011; and
359	359	(2) a copy of Section 209.011.
360	360	SECTION 10. Section 211.002(a), Property Code, is amended
361	361	to read as follows:
362	362	(a) This chapter applies only to a residential real estate
363	363	subdivision or any unit or parcel of a subdivision to which another
364	364	chapter in this title that provides a procedure under which a
365	365	subdivision's restrictions may be amended does not apply [located
366	366	in whole or in part within an unincorporated area of a county if the
367	367	county has a population of less than 65,000].
368	368	SECTION 11. Section 202.004(c), Property Code, is repealed.
369	369	SECTION 12. (a) Section 5.006(a), Property Code, as amended
370	370	by this Act, and the repeal by this Act of Section 202.004(c),
371	371	Property Code, apply only to an action filed on or after the
372	372	effective date of this Act. An action filed before the effective
373	373	date of this Act is governed by the law in effect immediately before
374	374	the effective date of this Act, and that law is continued in effect
375	375	for that purpose.
376	376	(b) Section 5.012, Property Code, as amended by this Act,
377	377	applies only to a sale of property that occurs on or after the
378	378	effective date of this Act. For the purposes of this section, a
379	379	sale of property occurs before the effective date of this Act if the
380	380	executory contract binding the purchaser to purchase the property
381	381	is executed before that date. A sale of property that occurs before
382	382	the effective date of this Act is governed by the law in effect
383	383	immediately before that date, and that law is continued in effect
384	384	for that purpose.
385	385	(c) Sections 202.008, 202.010, 209.0043, and 209.0044(a),
386	386	Property Code, as added by this Act, apply to a deed restriction
387	387	enacted before, on, or after the effective date of this Act.
388	388	(d) Section 209.005(c), Property Code, as added by this Act,
389	389	applies only to a property owners' association's failure to comply
390	390	with Section 209.005(a), Property Code, on or after the effective
391	391	date of this Act. A property owners' association's failure to
392	392	comply with that section before the effective date of this Act is
393	393	governed by the law in effect immediately before the effective date
394	394	of this Act, and that law is continued in effect for that purpose.
395	395	(e) Sections 209.0061, 209.0062, and 209.0064, Property
396	396	Code, as added by this Act, apply only to an assessment or other
397	397	debt that becomes due on or after the effective date of this Act. An
398	398	assessment or other debt that becomes due before the effective date
399	399	of this Act is governed by the law in effect immediately before the
400	400	effective date of this Act, and that law is continued in effect for
401	401	that purpose.
402	402	(f) Section 209.0063, Property Code, as added by this Act,
403	403	applies only to a payment received by a property owners'
404	404	association on or after the effective date of this Act. A payment
405	405	received by a property owners' association before the effective
406	406	date of this Act is governed by the law in effect immediately before
407	407	the effective date of this Act, and that law is continued in effect
408	408	for that purpose.
409	409	(g) Section 209.0091, Property Code, as added by this Act,
410	410	applies only to foreclosure of a lien that attaches on or after the
411	411	effective date of this Act. Foreclosure of a lien that attaches
412	412	before the effective date of this Act is governed by the law in
413	413	effect immediately before that date, and that law is continued in
414	414	effect for that purpose.
415	415	SECTION 13. This Act takes effect January 1, 2010.