82R9269 TJS-F
By: West S.B. No. 1204
A BILL TO BE ENTITLED
AN ACT
relating to the procedures for collection of assessments and other
debts, including foreclosure of an assessment lien, by a property
owners' association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 209, Property Code, is amended by adding
Sections 209.0062, 209.0063, and 209.0064 to read as follows:
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 the owner's
default under the 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 2. Chapter 209, Property Code, is amended by adding
Sections 209.0091 and 209.0092 to read as follows:
Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except
as provided by Subsection (c), a property owners' association may
not foreclose a property owners' association assessment lien unless
the association first obtains a court order in an application for
expedited foreclosure under the rules adopted by the supreme court
under Subsection (b). A property owners' association may use the
procedure described by this subsection to foreclose any lien
described by the association's dedicatory instruments.
(b) The supreme court, as an exercise of the court's
authority under Section 74.024, Government Code, shall adopt rules
establishing expedited foreclosure proceedings for use by a
property owners' association in foreclosing an assessment lien of
the association. The rules adopted under this subsection must be
substantially similar to the rules adopted by the supreme court
under Section 50(r), Article XVI, Texas Constitution.
(c) Expedited foreclosure is not required under this
section if the owner of the property that is subject to foreclosure
agrees in writing at the time the foreclosure is sought to waive
expedited foreclosure under this section. A waiver under this
subsection may not be required as a condition of the transfer of
title to real property.
Sec. 209.0092. REMOVAL OR ADOPTION OF FORECLOSURE
AUTHORITY. A provision granting a right to foreclose a lien on real
property for unpaid amounts due to a property owners' association
may be removed from a dedicatory instrument or adopted in a
dedicatory instrument by a vote of 51 percent of the total votes
allocated to property owners in the property owners' association.
Owners holding at least 10 percent of all voting interests in the
property owners' association may petition the association and
require a special meeting to be called for the purposes of taking a
vote for the purposes of this section.
SECTION 3. Section 209.010(a), Property Code, is amended to
read as follows:
(a) A property owners' association that conducts a
foreclosure sale of an owner's lot must send to the lot owner and to
each lienholder of record, not later than the 30th day after the
date of the foreclosure sale:
(1) [,] a written notice stating the date and time the
sale occurred and informing the lot owner and each lienholder of
record of the right of the lot owner and lienholder to redeem the
property under Section 209.011; and
(2) a copy of Section 209.011.
SECTION 4. (a) Sections 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.
(b) 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.
(c) Sections 209.0091 and 209.0092, Property Code, as added
by this Act, apply only to a foreclosure sale that occurs after
January 1, 2012. A foreclosure sale that occurs on or before
January 1, 2012, 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 209.010(a), Property Code, as amended by this
Act, applies only to a foreclosure sale conducted on or after the
effective date of this Act. A foreclosure sale conducted 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 5. Not later than January 1, 2012, the Supreme Court
of Texas shall adopt rules of civil procedure under Section
209.0091, Property Code, as added by this Act.
SECTION 6. (a) Except as provided by Subsection (b) of this
section, this Act takes effect September 1, 2011.
(b) Sections 209.0091(a) and (c), Property Code, as added by
this Act, take effect January 1, 2012.