82R12452 AJA-F
By: Deshotel H.B. No. 3347
A BILL TO BE ENTITLED
AN ACT
relating to the operation of property owners' associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 82.003(11), Property Code, is amended to
read as follows:
(11) "Declaration" means an [a recorded] instrument,
however denominated, that creates a condominium, and any [recorded]
amendment to that instrument.
SECTION 2. Section 82.102, Property Code, is amended by
amending Subsection (a) and adding Subsection (f) to read as
follows:
(a) Unless otherwise provided by the declaration, the
association, acting through its board, may:
(1) adopt and amend bylaws;
(2) adopt and amend budgets for revenues,
expenditures, and reserves, and collect assessments for common
expenses from unit owners;
(3) hire and terminate managing agents and other
employees, agents, and independent contractors;
(4) institute, defend, intervene in, settle, or
compromise litigation or administrative proceedings in its own name
on behalf of itself or two or more unit owners on matters affecting
the condominium;
(5) make contracts and incur liabilities relating to
the operation of the condominium;
(6) regulate the use, maintenance, repair,
replacement, modification, and appearance of the condominium;
(7) adopt and amend rules regulating the use,
occupancy, leasing or sale, maintenance, repair, modification, and
appearance of units and common elements, to the extent the
regulated actions affect common elements or other units;
(8) cause additional improvements to be made as a part
of the common elements;
(9) acquire, hold, encumber, and convey in its own
name any right, title, or interest to real or personal property,
except common elements of the condominium;
(10) grant easements, leases, licenses, and
concessions through or over the common elements;
(11) impose and receive payments, fees, or charges for
the use, rental, or operation of the common elements and for
services provided to unit owners;
(12) impose interest and late charges for late
payments of assessments, returned check charges, and, if notice and
an opportunity to be heard are given, reasonable fines for
violations of the declaration, bylaws, and rules of the
association;
(13) adopt and amend rules regulating the collection
of delinquent assessments and the application of payments;
(14) adopt and amend rules regulating the termination
of utility service to a unit, the owner of which is delinquent in
the payment of an assessment that is used, in whole or in part, to
pay the cost of that utility;
(15) impose reasonable charges for preparing,
recording, or copying declaration amendments, resale certificates,
or statements of unpaid assessments;
(16) enter a unit for bona fide emergency purposes
when conditions present an imminent risk of harm or damage to the
common elements, another unit, or the occupants;
(17) [assign its right to future income, including the
right to receive common expense assessments, but only to the extent
the declaration so provides;
[(18)] suspend the voting privileges of or the use of
certain general common elements by an owner delinquent for more
than 30 days in the payment of assessments;
(18) [(19)] purchase insurance and fidelity bonds it
considers appropriate or necessary;
(19) [(20)] exercise any other powers conferred by the
declaration or bylaws;
(20) [(21)] exercise any other powers that may be
exercised in this state by a corporation of the same type as the
association; and
(21) [(22)] exercise any other powers necessary and
proper for the government and operation of the association.
(f) The association by resolution of the board of directors
may borrow money unless prohibited by the declaration, certificate
of formation, bylaws, or rules. If the board of directors approves
a resolution under this subsection, the association may assign the
association's right to future income, including the right to
receive common expense assessments and assign the association's
lien rights, as collateral for the loan authorized by the
resolution. The association shall comply with any member approval
requirement in the association's declaration, certificate of
formation, bylaws, or rules for borrowing money, except that not
more than 67 percent of all outstanding votes are required to
approve an authorization to borrow money.
SECTION 3. Sections 82.111(c) and (i), Property Code, are
amended to read as follows:
(c) If the insurance described by Subsections (a) and (b) is
not reasonably available, the association shall cause notice of
that fact to be delivered or mailed to all unit owners and
lienholders. The declaration may require the association to carry
any other insurance, and the association in any event may carry any
other insurance the board considers appropriate to protect the
condominium, the association, or the unit owners. Insurance
policies carried under Subsections (a) and (b) may provide for
deductibles as the board considers appropriate or necessary. This
section does not affect the right of a holder of a mortgage on a unit
to require a unit owner to acquire insurance in addition to that
provided by the association.
(i) Any portion of the condominium for which insurance is
required that is damaged or destroyed shall be promptly repaired or
replaced by the association unless the condominium is terminated,
repair or replacement would be illegal under any state or local
health or safety statute or ordinance, or at least 80 percent of the
unit owners, including each owner of a unit or assigned limited
common element that will not be rebuilt or repaired, vote to not
rebuild. A vote to not rebuild does not increase an insurer's
liability to loss payment obligation under a policy, and the vote
does not cause a presumption of total loss. Costs of repair or
replacement incurred before any insurance proceeds are available
that are within the association's deductible, or that are in excess
of the insurance proceeds and reserves, shall be paid as determined
by resolution of the board of directors of the association, or, if
the board does not approve a resolution, the costs are a common
expense. A resolution regarding payment of costs under this
subsection is considered a dedicatory instrument and must be
recorded in accordance with Section 202.006. [The cost of repair or
replacement in excess of the insurance proceeds and reserves is a
common expense.] If the entire condominium is not repaired or
replaced, any insurance proceeds attributable to the damaged common
elements shall be used to restore the damaged area to a condition
compatible with the remainder of the condominium, the insurance
proceeds attributable to units and limited common elements that are
not rebuilt shall be distributed to the owners of those units and
the owners of the units to which those limited common elements were
assigned, or to their mortgagees, as their interests may appear,
and the remainder of the proceeds shall be distributed to all the
unit owners as their interests may appear. If the unit owners vote
to not rebuild any unit, that unit's allocated interests shall be
automatically reallocated on the vote as if the unit had been
condemned, and the association shall prepare, execute, and record
an amendment to the declaration reflecting the reallocation.
Section 82.068 governs the distribution of insurance proceeds if
the condominium is terminated.
SECTION 4. Section 82.113(g), Property Code, is amended to
read as follows:
(g) The owner of a unit [used for residential purposes and]
purchased [by an association] at a foreclosure sale of the
association's lien for assessments may redeem the unit not later
than the 90th day after the date of the foreclosure sale. If the
association is the purchaser [To redeem the unit], the owner must
pay to the association to redeem the unit all amounts due the
association at the time of the foreclosure sale, interest from the
date of foreclosure sale to the date of redemption at the rate
provided by the declaration for delinquent assessments, reasonable
attorney's fees, and all costs incurred by the association in
foreclosing the lien and in connection with the redemption process,
any assessment levied against the unit by the association after the
foreclosure sale, and any reasonable cost incurred by the
association as owner of the unit, including costs of maintenance,
[and] leasing, mortgage payments, taxes, and insurance. If a party
other than the association is the purchaser of the unit at the
foreclosure sale, the redeeming owner must pay to the purchaser an
amount equal to the amount bid at the sale, interest on the bid
amount computed from the date of the foreclosure sale to the date of
redemption at the rate of six percent, any assessment paid by the
purchaser after the date of foreclosure, and any reasonable costs
incurred by the purchaser as the owner of the unit, including costs
of maintenance, leasing, mortgage payments, taxes, and insurance.
The redeeming owner must also pay to the association all
assessments that are due as of the date of the redemption and
reasonable attorney's fees and all costs incurred by the
association in foreclosing the lien. On redemption, the purchaser
of the unit at the foreclosure sale [association] shall execute a
deed with special warranty to the redeeming unit owner. The
exercise of the right of redemption is not effective against a
subsequent purchaser or lender for value without notice of the
redemption after the redemption period expires unless the redeeming
unit owner records the deed from the purchaser of the unit at the
foreclosure sale [association] or an affidavit stating that the
owner has exercised the right of redemption. A unit that has been
redeemed remains subject to all liens and encumbrances on the unit
before foreclosure. All rents and other income collected from the
unit by the purchaser of the unit at the foreclosure sale
[association] from the date of foreclosure sale to the date of
redemption belong to the purchaser of the unit at the foreclosure
sale [association], but the rents and income shall be credited
against the redemption amount. The purchaser of [An association
purchasing] a unit at a sale foreclosing an association's
assessment [its] lien may not transfer ownership of the unit during
the redemption period to a person other than a redeeming owner.
SECTION 5. Section 202.004, Property Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) In evaluating an alleged or potential violation of a
restrictive covenant, a property owners' association board or
another person with a right or duty to enforce a dedicatory
instrument may, notwithstanding any provision in a dedicatory
instrument, elect to not enforce the restrictive covenant if the
board or other person, in the board's or other person's reasonable
judgment, determines:
(1) the association's or other person's position is
not sufficiently strong to justify taking any action or further
action;
(2) the provision alleged to have been violated may be
inconsistent with applicable law;
(3) the alleged violation is not of such a material or
visible nature as to be objectionable to a reasonable person or to
justify expending the property owners' association's or other
person's resources;
(4) enforcement of the provision is not in the
association's or other person's best interests, based on hardship,
expense, or other reasonable criteria; or
(5) the facts of the particular circumstances, such as
topography of the owner's land or unforeseen circumstances unique
to the particular owner, justify the election to not enforce the
restrictive covenant.
(e) An election to not enforce a restrictive covenant under
Subsection (d) may not be considered a waiver of authority to
enforce any dedicatory instrument provision in the future.
SECTION 6. Section 207.003, Property Code, is amended by
amending Subsections (a), (b), (c), and (f) and adding Subsection
(a-1) to read as follows:
(a) Not later than the 10th business day after the date a
written request for subdivision information is received from an
owner or an[,] owner's agent, a purchaser of property in a
subdivision or the purchaser's agent, or a title insurance company
or its agent acting on behalf of the owner or purchaser, the
property owners' association shall deliver to the owner or the[,]
owner's agent, the purchaser or the purchaser's agent, or the title
insurance company or its agent:
(1) a current copy of the restrictions applying to the
subdivision;
(2) a current copy of the bylaws and rules of the
property owners' association; and
(3) a resale certificate that complies with Subsection
(b).
(a-1) For a request from a purchaser of property in a
subdivision or the purchaser's agent, the property owners'
association may require the purchaser or purchaser's agent to
provide to the association, before the association delivers the
items listed in Subsection (a), reasonable evidence that the
purchaser has a contractual or other right to acquire property in
the subdivision.
(b) A resale certificate under Subsection (a) must:
(1) be in writing;
(2) be issued, signed, and dated by an officer or
authorized agent of the property owners' association; and
(3) contain:
(A) [(1)] a statement of any right of first
refusal, other than a right of first refusal that is prohibited by
statute, and any [or] other restraint contained in the restrictions
or restrictive covenants that restricts the owner's right to
transfer the owner's property;
(B) [(2)] the frequency and amount of any regular
assessments;
(C) [(3)] the amount of any special assessment
that has been approved as of [is due after] the date the resale
certificate is prepared;
(D) [(4)] the total of all amounts due and unpaid
to the property owners' association that are attributable to the
owner's property;
(E) [(5)] capital expenditures, if any, approved
by the property owners' association for the property owners'
association's current fiscal year;
(F) [(6)] the amount of reserves, if any, for
capital expenditures;
(G) [(7)] the property owners' association's
current operating budget and balance sheet;
(H) [(8)] the total of any unsatisfied judgments
against the property owners' association;
(I) [(9)] the style and cause number of any
pending lawsuit in which the property owners' association is a
defendant, other than a lawsuit relating to unpaid property taxes
of an individual member of the association;
(J) [(10)] a copy of a certificate of insurance
showing the property owners' association's property and liability
insurance relating to the common areas and common facilities;
(K) [(11)] a description of any conditions on the
owner's property that the property owners' association board has
actual knowledge are in violation of the restrictions applying to
the subdivision or the bylaws or rules of the property owners'
association;
(L) [(12)] a summary or copy of notices received
by the property owners' association from any governmental authority
regarding health or housing code violations existing on the
preparation date of the certificate relating to the owner's
property or any common areas or common facilities owned or leased by
the property owners' association;
(M) [(13)] the amount of any administrative
transfer fee charged by the property owners' association for a
change of ownership of property in the subdivision;
(N) [(14)] the name, mailing address, and
telephone number of the property owners' association's managing
agent, if any; [and]
(O) [(15)] a statement indicating whether the
restrictions allow foreclosure of a property owners' association's
lien on the owner's property for failure to pay assessments; and
(P) a statement of all fees associated with the
transfer of ownership, including a description of each fee, to whom
each fee is paid, and the amount of each fee.
(c) A property owners' association may charge a reasonable
fee to assemble, copy, and deliver the information required by this
section and may charge a reasonable fee to prepare and deliver an
update of a resale certificate under Subsection (f). The person
requesting a resale certificate or an update of a resale
certificate is responsible for the payment of any fee charged for
the resale certificate or the update of the certificate.
(f) Not later than the seventh business day after the date a
written request for an update of [to] a resale certificate
delivered under Subsection (a) is received from a person entitled
to request a resale certificate under Subsection (a) [an owner,
owner's agent, or title insurance company or its agent acting on
behalf of the owner], the property owners' association shall
deliver to the requestor [owner, owner's agent, or title insurance
company or its agent] an updated resale certificate that contains
the following information:
(1) if a right of first refusal or other restraint on
sale is contained in the restrictions, a statement of whether the
property owners' association waives the restraint on sale;
(2) the status of any unpaid special assessments,
dues, or other payments attributable to the owner's property; and
(3) any changes to the information provided in the
resale certificate issued under Subsection (a).
SECTION 7. Section 209.002, Property Code, is amended by
amending Subdivisions (3), (5), and (9) and adding Subdivision
(3-a) to read as follows:
(3) "Declarant" means:
(A) any person or group of persons acting in
concert that:
(i) as part of a common promotional plan,
offers to dispose of the person's or group's interest in a
subdivision; and
(ii) files a declaration; and
(B) one or more successors to a person or group
described by Paragraph (A) to whom the person's or group's rights as
a declarant under the declaration are transferred by a written
instrument evidencing the transfer that is recorded in the real
property records of each county in which the declaration is
recorded.
(3-a) "Declaration" means an instrument filed in the
real property records of a county that creates the original
[includes] restrictive covenants for a [governing a residential]
subdivision, as amended or supplemented.
(5) "Lot" means any designated parcel of land [located
in a residential subdivision], including any improvements on the
designated parcel.
(9) "Residential subdivision" or "subdivision" means
a subdivision, planned unit development, townhouse regime, or
similar planned development in which all land has been divided into
two or more lots [parts] and is subject to restrictions that:
(A) limit a majority of the land subject to the
dedicatory instruments, excluding streets, common areas, and
public areas, to residential use for single-family homes,
townhomes, or duplexes only;
(B) are recorded in the real property records of
the county in which the residential subdivision is located; and
(C) require membership in a property owners'
association that has authority to impose regular or special
assessments on the property in the subdivision.
SECTION 8. Section 209.003(d), Property Code, is amended to
read as follows:
(d) This chapter does not apply to a condominium development
governed wholly or partly by Chapter 82.
SECTION 9. Chapter 209, Property Code, is amended by adding
Section 209.0041 to read as follows:
Sec. 209.0041. AMENDMENT OF DECLARATION. (a) This section
applies only to a residential subdivision in which property owners
are subject to mandatory regular or special assessments.
(b) This section applies to a declaration regardless of the
date on which the declaration was created.
(c) This section does not apply to the amendment of a
declaration 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.
(d) Subject to Section 209.013, the declaration and any
subsequently enacted declarations may be amended at any time on a
vote of at least 67 percent of the total votes entitled to be cast
with respect to the declaration amendment. If the declaration
provides a lower percentage, the percentage in the declaration
controls. During the development period, amendments to the
declaration require the joinder of the developer.
(e) This section does not preclude amendment of a
declaration under other statutory authority.
SECTION 10. Section 209.005, Property Code, is amended to
read as follows:
Sec. 209.005. ASSOCIATION RECORDS. (a) Except as provided
by Subsection (b), this section applies to all property owners'
associations and controls over other law not specifically
applicable to a property owners' association.
(b) 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.
(c) Notwithstanding a provision in a dedicatory instrument,
a [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)].
(d) [(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].
(e) [(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.
(f) An owner or the owner's attorney or certified public
accountant must submit a written request for access or information
under Subsection (c) by certified mail, 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.
(g) 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 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.
(h) 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.
(i) 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.
(j) An owner is responsible for costs related to compilation
and reproduction of the requested information in an amount that
reasonably includes all costs related to compilation and
reproduction of the information, including costs of materials,
labor, and overhead. The association may require advance payment
of the estimated costs of compilation and reproduction. If the
estimated costs are lesser or greater than actual costs, the
association shall submit a final invoice to the owner on or before
the 30th business day after the date the information is delivered to
the requestor. If the final invoice includes additional amounts
due from the owner, the additional amounts, if not reimbursed to the
association before the 30th business day after the date the invoice
is sent to the owner, may be added to the owner's account as an
assessment. If the estimated costs exceeded the final invoice
amount, the owner is entitled to a refund, and the refund shall be
issued to the owner not later than the 30th business day after the
date the invoice is sent to the owner.
(k) Except as provided in 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.
(l) 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.
(m) A property owners' association composed of more than 12
lots may adopt a document retention policy that supersedes this
subsection. In the absence of the adoption of a document retention
policy, the property owners' association shall retain books and
records as follows:
(1) certificates of formation, bylaws, restrictive
covenants, and all amendments to the certificates of formation,
bylaws, and covenants shall be retained permanently;
(2) financial books and records shall be retained for
seven years;
(3) account records of current owners shall be
retained for five years;
(4) contracts with a term of one year or more shall be
retained for four years after the expiration of the contract term;
(5) minutes of meetings of the owners and the board
shall be retained for seven years; and
(6) tax returns and audit records shall be retained
for seven years.
SECTION 11. Chapter 209, Property Code, is amended by
adding Sections 209.0051, 209.0056, and 209.00593 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) An association, on the written request of an owner,
shall inform the owner of the time and place of the next regular or
special meeting of the board. If the association representative to
whom the request is made does not know the time and place of the
meeting, the association promptly shall obtain the information and
disclose it to the owner or inform the owner where the information
may be obtained.
(d) This section does not apply to meetings of the board
during a development period, as defined by Section 209.0041.
Sec. 209.0056. BOARD REPRESENTATION. The declaration may
provide for a period of declarant control of the association during
which period a declarant, or persons designated by the declarant,
may appoint and remove members of the board and the officers of the
association. Regardless of the period of declarant control
prescribed by the declaration, at least one-third of the board
members must be elected by owners other than the declarant on or
before the 120th day after the date on which 75 percent of the lots
that may be created and made subject to the declaration are conveyed
to owners other than a declarant. If the declaration does not
include the number of lots that may be created and made subject to
the declaration, at least one-third of the members of the board must
be elected by owners other than the declarant not later than the
10th anniversary of the date the declaration was recorded.
Sec. 209.00593. VOTING; QUORUM. (a) The voting rights of
an owner may be cast or given:
(1) in person or by proxy at a meeting of the property
owners' association;
(2) by absentee ballot in accordance with this
section;
(3) by any method of representative or delegated
voting provided by a dedicatory instrument; or
(4) by electronic ballot in accordance with this
section.
(b) An absentee or electronic ballot:
(1) may be counted as an owner present and voting for
the purpose of establishing a quorum only for items appearing on the
ballot;
(2) may be withdrawn by an owner if the owner attends a
meeting at which votes on the ballot items are cast; and
(3) may not be counted, except for quorum purposes, on
the final vote of a proposal if the motion was amended at the
meeting to be different from the exact language on the absentee or
electronic ballot.
(c) A solicitation for votes by absentee or electronic
ballot must include:
(1) an absentee or electronic ballot that contains
each proposed action and provides an opportunity to vote for or
against each proposed action;
(2) instructions for delivery of the completed
absentee or electronic ballot, including the delivery location; and
(3) the following language: "By casting your vote via
absentee or electronic ballot you will forgo the opportunity to
consider and vote on any action from the floor on these proposals,
if a meeting is held. This means that if there are amendments to
these proposals your votes will not be counted on the final vote on
these measures. If you desire to retain this ability, please attend
any meeting in person. You may submit an absentee or electronic
ballot and later choose to attend any meeting in person, in which
case any in-person vote will prevail."
(d) For the purposes of this section, "electronic ballot"
means a ballot:
(1) conveyed in an electronic manner and format
prescribed by the property owners' association board;
(2) for which the identity of the property owner
submitting the ballot can be reasonably established; and
(3) for which the property owner may receive a receipt
of the electronic transmission and receipt of the owner's ballot.
(e) If an electronic ballot is posted on an Internet
website, a notice shall be provided to each owner that contains
instructions on obtaining access to the posting on the website.
(f) The property owners' association board has the sole
authority to prescribe or cause to be prescribed all proxy and
ballot forms.
(g) This section supersedes any contrary provision in a
dedicatory instrument.
(h) Except as provided by Subsection (i), this section
applies to all property owners' associations and controls over any
other law not specifically applicable to a property owners'
association.
(i) 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.
SECTION 12. Section 209.006, Property Code, is amended by
amending Subsection (b) and adding Subsections (c), (d), (e), and
(f) to read as follows:
(b) The notice must:
(1) describe the violation or property damage that is
the basis for the suspension action, charge, or fine and state any
amount due the association from the owner; [and]
(2) except as provided by Subsection (d), inform the
owner that the owner:
(A) is entitled to a reasonable period to cure
the violation and avoid the fine [or suspension unless the owner was
given notice and a reasonable opportunity to cure a similar
violation within the preceding six months]; and
(B) may request a hearing under Section 209.007
on or before the 30th day after the date notice was mailed to the
owner; and
(3) specify the date by which the owner must cure the
violation if the violation is of a curable nature and does not pose
a threat to public health or safety [receives the notice].
(c) The date specified in the notice under Subsection (b)(3)
must provide a reasonable period of at least 30 days for the owner
to cure the violation if the violation is of a curable nature. A
shorter notice period is permitted in the case of a threat to public
health or safety.
(d) Subsections (a) and (b) do not apply to:
(1) a violation for which the owner has been
previously given notice under this section and the opportunity to
exercise any rights available under this section in the preceding
six months; or
(2) a violation that is not of a curable nature.
(e) If the property owner does not cure the violation in the
time provided by Subsection (c) and does not request a hearing under
Section 209.007 in the time provided by Subsection (b)(2)(B), the
property owners' association may assess the fine and shall provide
notice of the assessment to the owner. If the violation is of a
curable nature and the property owner cures the violation before
the expiration period for cure specified under Subsection (c), any
fine assessed for the violation is void.
(f) For purposes of this section, a violation is considered
a threat to public health or safety if the violation could
materially affect the physical health or safety of an ordinary
resident.
SECTION 13. Chapter 209, Property Code, is amended by
adding Sections 209.0061 and 209.0062 to read as follows:
Sec. 209.0061. ASSESSMENT OF FINES. 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 maximum fine amount for a
continuing violation at which point the total fine amount is
capped. A fine may be collected in the same manner as assessments
under the dedicatory instrument.
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
ASSESSMENTS. (a) This section applies only to a property owners'
association composed of more than 12 lots.
(b) 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.
(c) A property owners' association is not required to offer
a payment plan to an owner more than once each year. The minimum
term for a payment plan offered by a property owners' association is
three months. 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 the owner's
default under the previous payment plan.
SECTION 14. (a) Section 82.111(i), Property Code, as
amended by this Act, applies only to payment of costs incurred and a
resolution regarding payment of costs approved on or after the
effective date of this Act. Payment of costs incurred or a
resolution approved 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 82.113(g), Property Code, as amended by this
Act, applies only to a condominium unit sold at a foreclosure sale
on or after the effective date of this Act. A unit sold at a
foreclosure sale 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) Sections 207.003 and 209.005, Property Code, as amended
by this Act, apply 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.
(d) Section 209.005(m), Property Code, as added by this Act,
applies only with respect to books and records generated on or after
the effective date of this Act. Books and 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.
(e) Section 209.0056, Property Code, as added by this Act,
applies only to a property owners' association created on or after
January 1, 2012.
(f) Section 209.006, Property Code, as amended by this Act,
applies only to an enforcement action initiated by a property
owners' association on or after the effective date of this Act. An
enforcement action initiated 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.
(g) Sections 209.0061 and 209.0062, Property Code, as added
by this Act, apply only to an assessment, fine, or other debt that
becomes due on or after the effective date of this Act. An
assessment, fine, 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.
SECTION 15. This Act takes effect January 1, 2012.