By: Garza, Howard of Fort Bend H.B. No. 2761
A BILL TO BE ENTITLED
AN ACT
relating to meetings and records of certain property owners'
associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 209.005, Property Code, is amended to
read as follows:
Sec. 209.005. ASSOCIATION RECORDS. (a) This section does
not apply to a property owners' association that is subject to
Chapter 552, Government Code, by application of Section 552.0036,
Government Code.
(b) A property owners' association shall make the books and
records of the association, including financial records, open to
and reasonably available for examination by [to] an owner, or an
owner's attorney or certified public accountant, in accordance with
this section. An owner is entitled to obtain from the association
copies of information contained in the books and records [Section
B, Article 2.23, Texas Non-Profit Corporation Act (Article
1396-2.23, Vernon's Texas Civil Statutes)].
(c) [(a-1)] A property owners' association described by
Section 552.0036(2), Government Code, shall make the books and
records of the association, including financial records,
reasonably available to any person requesting access to the books
or records in accordance with Chapter 552, Government Code[.
Subsection (a) does not apply to a property owners' association to
which this subsection applies].
(d) [(b)] An attorney's files and records relating to the
association, excluding invoices requested by an owner under Section
209.008(d), are not:
(1) records of the association;
(2) subject to inspection by the owner; or
(3) subject to production in a legal proceeding.
(e) An owner or the owner's authorized representative must
submit a written request for access or information under Subsection
(b) by certified mail or other evidence of mailing or delivery, with
sufficient particularity detailing the association's books and
records requested, to the mailing address of the association or
authorized representative as reflected on the most current
management certificate filed under Section 209.004. The request
must contain an election either to inspect the books and records
before obtaining copies or to have the property owners' association
forward copies of the requested books and records and:
(1) if an inspection is requested, the association, on
or before the 10th business day after the date the association
receives the request, shall send written notice of dates during
normal business hours that the owner may inspect the requested
books and records to the extent those books and records are required
to be retained by the association; or
(2) if copies of identified books and records are
requested, the association shall, to the extent those books and
records are required to be retained by the association, produce the
requested books and records for the requesting party on or before
the 10th business day after the date the association receives the
request, except as otherwise provided by this section.
(f) If the property owners' association is unable to produce
the books or records requested under Subsection (f) on or before the
10th business day after the date the association receives the
request, the association must provide to the requestor written
notice that:
(1) informs the requestor the reason that the
association is unable to produce the information on or before the
10th business day after the date the association received the
request; and
(2) states a date by which the information will be sent
or made available for inspection to the requesting party that is not
later than the 30th business day after the date notice under this
subsection is given.
(g) If an inspection is requested or required, the
inspection shall take place at a mutually agreed on time during
normal business hours, and the requesting party shall identify the
books and records for the association to copy and forward to the
requesting party.
(h) A property owners' association may produce books and
records requested under this section in hard copy, electronic, or
other format reasonably available to the association.
(i) An owner is responsible for actual costs related to
compilation and reproduction of the requested information in an
amount that reasonably includes all actual costs related to
compilation and reproduction of the information, including costs of
materials, labor, and overhead, but may not exceed costs that would
be applicable for an item under Section 70.3, Administrative Code.
The association may require advance payment of the costs of
compilation and reproduction.
(j) Except as provided by Subsection (l), the association is
not required, other than in meeting minutes, to release or allow
inspection of any books or records that identify the dedicatory
instrument violation history of an individual owner of an
association, an owner's personal financial information, including
records of payment or nonpayment of amounts due the association, an
owner's contact information, other than the owner's address, or
information related to an employee of the association, including
personnel files. Information may be released in an aggregate or
summary manner that would not identify an individual property
owner.
(k) The books and records described by Subsection (k) shall
be released or made available for inspection if:
(1) the express written approval of the owner whose
records are the subject of the request for inspection is provided to
the association; or
(2) a court orders the release of the books and records
or orders that the books and records be made available for
inspection.
(l) A property owners' association composed of more than 12
lots shall adopt a records retention policy that, except as
provided by this subsection, conforms to the records retention
schedule adopted by the Texas State Library and Archives Commission
applicable to all local governments. An association's records
retention policy may require a class of records to be retained
longer than would otherwise be required under this subsection.
SECTION 2. Chapter 209, Property Code, is amended by adding
Section 209.0051 to read as follows:
Sec. 209.0051. OPEN BOARD MEETINGS. (a) Meetings of the
board must be open to owners, subject to the right of the board to
adjourn a board meeting and reconvene in closed executive session
to consider actions involving personnel, pending or threatened
litigation, contract negotiations, enforcement actions,
confidential communications with the association's attorney,
matters involving the invasion of privacy of individual owners, or
matters that are to remain confidential by request of the affected
parties and agreement of the board. The general nature of any
business to be considered in executive session must first be
announced at the open meeting.
(b) Unless the declaration, bylaws, or certificate of
formation of the association provide otherwise:
(1) a meeting of the board may be held by any method of
communication, including electronic and telephonic, if:
(A) notice of the meeting has been given as
required by law;
(B) each director may hear and be heard by every
other director; and
(C) the meeting does not involve voting on a
fine, damage assessment, appeal from a denial of architectural
control approval, or suspension of a right of a particular owner
before the owner has an opportunity to attend a board meeting to
present the owner's position, including any defense, on the issue;
and
(2) the board may act by unanimous written consent of
all the directors, without a meeting, if:
(A) the board action does not involve voting on a
fine, damage assessment, appeal from a denial of architectural
control approval, or suspension of a right of a particular owner
before the owner has an opportunity to attend a board meeting to
present the owner's position, including any defense, on the issue;
and
(B) a record of the board action is filed with the
minutes of board meetings.
(c) Members shall be given notice of the date, hour, place,
and general subject of a regular, emergency, or special board
meeting, including a general description of any matter to be
brought up for deliberation in executive session.
(d) This section does not apply to meetings of the board
during a development period. For purposes of this subsection,
"development period" means a period stated in a declaration during
which a declarant reserves:
(1) a right to facilitate the development,
construction, and marketing of the subdivision; and
(2) a right to direct the size, shape, and composition
of the subdivision.
(e) An action taken by a board at a meeting held in violation
of this section is voidable.
SECTION 3. (a) Section 209.005, Property Code, as amended
by this Act, applies only to a request for information received by a
property owners' association on or after the effective date of this
Act. A request for information 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.
(b) Section 209.005(m), Property Code, as added by this Act,
applies only with respect to records generated on or after the
effective date of this Act. Records generated before the effective
date of this Act are 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, 2012.