Texas 2011 - 82nd Regular

Texas Senate Bill SB142 Compare Versions

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1	1	82R25549 AJA-F
2	2	By: West, et al. S.B. No. 142
3	3	(Solomons)
4	4	Substitute the following for S.B. No. 142: No.
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to real property that is subject to restrictive covenants,
10	10	including the operation of property owners' associations of
11	11	subdivisions that are subject to restrictive covenants, and to
12	12	certain foreclosure actions.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Subsection (a), Section 5.006, Property Code, is
15	15	amended to read as follows:
16	16	(a) In an action based on breach of a restrictive covenant
17	17	pertaining to real property or a statute pertaining to real
18	18	property subject to a restrictive covenant or to restrictive
19	19	covenants to which real property is subject, the court may [shall]
20	20	allow to a prevailing party [who asserted the action] reasonable
21	21	attorney's fees in addition to the party's costs and claim.
22	22	SECTION 2. Section 5.012, Property Code, is amended by
23	23	amending Subsection (a) and adding Subsections (a-1), (f), and (g)
24	24	to read as follows:
25	25	(a) A seller of residential real property that is subject to
26	26	membership in a property owners' association and that comprises not
27	27	more than one dwelling unit located in this state shall give to the
28	28	purchaser of the property a written notice that reads substantially
29	29	similar to the following:
30	30	NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
31	31	PROPERTY AT (street address) (name of residential community)
32	32	As a purchaser of property in the residential community in
33	33	which this property is located, you are obligated to be a member of
34	34	a property owners' association. Restrictive covenants governing
35	35	the use and occupancy of the property and all [a] dedicatory
36	36	instruments [instrument] governing the establishment, maintenance,
37	37	or [and] operation of this residential community have been or will
38	38	be recorded in the Real Property Records of the county in which the
39	39	property is located. Copies of the restrictive covenants and
40	40	dedicatory instruments [instrument] may be obtained from the county
41	41	clerk.
42	42	You are obligated to pay assessments to the property owners'
43	43	association. The amount of the assessments is subject to change.
44	44	Your failure to pay the assessments could result in enforcement of
45	45	the association's [a] lien on and the foreclosure of your property.
46	46	Section 207.003, Property Code, entitles an owner to receive
47	47	copies of any document that governs the establishment, maintenance,
48	48	or operation of a subdivision, including, but not limited to,
49	49	restrictions, bylaws, rules and regulations, and a resale
50	50	certificate from a property owners' association. A resale
51	51	certificate contains information including, but not limited to,
52	52	statements specifying the amount and frequency of regular
53	53	assessments and the style and cause number of lawsuits to which the
54	54	property owners' association is a party, other than lawsuits
55	55	relating to unpaid ad valorem taxes of an individual member of the
56	56	association. These documents must be made available to you by the
57	57	property owners' association or the association's agent on your
58	58	request or the seller's request.
59	59	Date: ____________________________________________
60	60	Signature of Purchaser
61	61	(a-1) The second paragraph of the notice prescribed by
62	62	Subsection (a) must be in bold print and underlined.
63	63	(f) On the purchaser's request for a resale certificate from
64	64	the property owners' association or the association's agent, the
65	65	association or its agent shall promptly deliver a copy of a current
66	66	resale certificate issued for the property under Chapter 207. If a
67	67	resale certificate that meets the requirements of this subsection
68	68	has not been issued for the property, the seller shall request the
69	69	association or its agent to issue a resale certificate under
70	70	Chapter 207, and the association or its agent shall promptly
71	71	prepare and deliver a copy of the resale certificate to the
72	72	purchaser.
73	73	(g) The purchaser shall pay the fee to the property owners'
74	74	association or its agent for issuing the resale certificate unless
75	75	otherwise agreed by the purchaser and seller of the property. The
76	76	property owners' association may not process a payment for a resale
77	77	certificate requested under Chapter 207 until the certificate is
78	78	available for delivery. The association may not charge a fee if the
79	79	certificate is not provided in the time prescribed by Section
80	80	207.003(a).
81	81	SECTION 3. Section 51.002, Property Code, is amended by
82	82	adding Subsection (i) to read as follows:
83	83	(i) Notice served under Subsection (b)(3) or (d) must state
84	84	the name and address of the sender of the notice and contain a
85	85	statement that is conspicuous, printed in boldface or underlined
86	86	type, and substantially similar to the following: "Assert and
87	87	protect your rights as a member of the armed forces of the United
88	88	States. If you are or your spouse is serving on active military
89	89	duty, including active military duty as a member of the Texas
90	90	National Guard or the National Guard of another state or as a member
91	91	of a reserve component of the armed forces of the United States,
92	92	please send written notice of the active duty military service to
93	93	the sender of this notice immediately."
94	94	SECTION 4. Subsection (a), Section 51.015, Property Code,
95	95	is amended by adding Subdivision (1-a) to read as follows:
96	96	(1-a) "Assessment" and "assessments" have the
97	97	meanings assigned by Sections 82.113(a) and 209.002, as applicable.
98	98	SECTION 5. Subsection (b), Section 51.015, Property Code,
99	99	is amended to read as follows:
100	100	(b) This section applies only to an obligation:
101	101	(1) that is secured by a mortgage, deed of trust, or
102	102	other contract lien, including a lien securing payment of a lawful
103	103	assessment or assessments, as applicable, on real property or
104	104	personal property that is a dwelling owned by a military
105	105	servicemember;
106	106	(2) that originates before the date on which the
107	107	servicemember's active duty military service commences; and
108	108	(3) for which the servicemember is still obligated.
109	109	SECTION 6. Subdivision (1), Section 202.001, Property Code,
110	110	is amended to read as follows:
111	111	(1) "Dedicatory instrument" means each document
112	112	governing [instrument covering] the establishment, maintenance, or
113	113	[and] operation of a residential subdivision, planned unit
114	114	development, condominium or townhouse regime, or any similar
115	115	planned development. The term includes a declaration or similar
116	116	instrument subjecting real property to:
117	117	(A) restrictive covenants, bylaws, or similar
118	118	instruments governing the administration or operation of a property
119	119	owners' association;
120	120	(B)[, to] properly adopted rules, bylaws, and
121	121	regulations of the property owners' association; or
122	122	(C)[, or to] all lawful amendments to the
123	123	covenants, bylaws, instruments, rules, or regulations.
124	124	SECTION 7. Subsection (c), Section 202.004, Property Code,
125	125	is amended to read as follows:
126	126	(c) For a violation of a restrictive covenant of a property
127	127	owners' association that is a mixed-use master association that
128	128	existed before January 1, 1974, and that does not have the authority
129	129	under a dedicatory instrument or other governing document to impose
130	130	fines, a [A] court may assess civil damages [for the violation of a
131	131	restrictive covenant] in an amount not to exceed $200 for each day
132	132	of the violation.
133	133	SECTION 8. Section 202.006, Property Code, is amended to
134	134	read as follows:
135	135	Sec. 202.006. PUBLIC RECORDS. (a) A property owners'
136	136	association shall file all [the] dedicatory instruments
137	137	[instrument] in the real property records of each county in which
138	138	the property to which the dedicatory instruments relate [instrument
139	139	relates] is located.
140	140	(b) A dedicatory instrument has no effect until the
141	141	instrument is filed in accordance with this section and may not be
142	142	enforced against a property owner who purchased the property before
143	143	the dedicatory instrument was filed unless the property owner
144	144	agrees to comply with the subsequently filed dedicatory instrument.
145	145	SECTION 9. Chapter 202, Property Code, is amended by adding
146	146	Sections 202.011, 202.012, 202.013, and 202.014 to read as follows:
147	147	Sec. 202.011. RIGHT OF FIRST REFUSAL PROHIBITED. (a) In
148	148	this section, "development period" means a period stated in a
149	149	declaration during which a declarant reserves:
150	150	(1) a right to facilitate the development,
151	151	construction, and marketing of the subdivision; and
152	152	(2) a right to direct the size, shape, and composition
153	153	of the subdivision.
154	154	(b) To the extent a restrictive covenant provides a right of
155	155	first refusal for the sale or lease of a residential unit or
156	156	residential lot in favor of the property owners' association or the
157	157	association's members, the covenant is void.
158	158	(c) This section does not apply to a restrictive covenant
159	159	that provides a right of first refusal in favor of a developer or
160	160	builder during the development period.
161	161	Sec. 202.012. REGULATION OF SOLAR ENERGY DEVICES. (a) In
162	162	this section, "solar energy device" has the meaning assigned by
163	163	Section 171.107, Tax Code.
164	164	(b) Except as otherwise provided by Subsection (d), a
165	165	property owners' association may not include or enforce a provision
166	166	in a dedicatory instrument that prohibits or restricts a property
167	167	owner from installing a solar energy device.
168	168	(c) A provision that violates Subsection (b) is void.
169	169	(d) A property owners' association may include or enforce a
170	170	provision in a dedicatory instrument that prohibits a solar energy
171	171	device that:
172	172	(1) as adjudicated by a court:
173	173	(A) threatens the public health or safety; or
174	174	(B) violates a law;
175	175	(2) is located on property owned or maintained by the
176	176	property owners' association;
177	177	(3) is located on property owned in common by the
178	178	members of the property owners' association;
179	179	(4) is located in an area on the property owner's
180	180	property other than:
181	181	(A) on the roof of the home or of another
182	182	structure allowed under a dedicatory instrument; or
183	183	(B) in a fenced yard or patio owned and
184	184	maintained by the property owner;
185	185	(5) if mounted on the roof of the home:
186	186	(A) extends higher than the roofline;
187	187	(B) is located in an area other than an area
188	188	designated by the property owners' association, unless the
189	189	alternate location increases the estimated annual energy
190	190	production of the device, as determined by using a publicly
191	191	available modeling tool provided by the National Renewable Energy
192	192	Laboratory, by more than 10 percent above the energy production of
193	193	the device if located in an area designated by the property owners'
194	194	association;
195	195	(C) does not conform to the slope of the roof and
196	196	has a top edge that is not parallel to the roofline; or
197	197	(D) has a frame, a support bracket, or visible
198	198	piping or wiring that is not in a silver, bronze, or black tone
199	199	commonly available in the marketplace;
200	200	(6) if located in a fenced yard or patio, is taller
201	201	than the fence line;
202	202	(7) as installed:
203	203	(A) conflicts with the manufacturer's
204	204	installation requirements; or
205	205	(B) voids material warranties; or
206	206	(8) was installed without prior approval by a
207	207	committee created in a dedicatory instrument for such purposes that
208	208	provides decisions within a reasonable period or within a period
209	209	specified in the dedicatory instrument.
210	210	(e) A committee described by Subsection (d)(8) may not
211	211	withhold approval for installation of a solar energy device that
212	212	meets or exceeds the minimum requirements of a dedicatory
213	213	instrument.
214	214	Sec. 202.013. REGULATION OF CERTAIN ROOFING MATERIALS. A
215	215	property owners' association may not include or enforce a provision
216	216	in a dedicatory instrument that prohibits or restricts a property
217	217	owner who is otherwise authorized to install shingles on the roof of
218	218	the owner's property from installing shingles that:
219	219	(1) are designed primarily to:
220	220	(A) be wind and hail resistant;
221	221	(B) provide heating and cooling efficiencies
222	222	greater than those provided by customary composite shingles; or
223	223	(C) provide solar generation capabilities; and
224	224	(2) when installed:
225	225	(A) resemble the shingles used or otherwise
226	226	authorized for use on property in the subdivision;
227	227	(B) are more durable than and are of equal or
228	228	superior quality to the shingles described by Paragraph (A); and
229	229	(C) match the aesthetics of the property
230	230	surrounding the owner's property.
231	231	Sec. 202.014. RESTRICTIONS REQUIRING CAPITAL IMPROVEMENTS.
232	232	(a) A dedicatory instrument may not be amended to retroactively
233	233	require a person who owns property subject to the dedicatory
234	234	instrument at the time the amendment is adopted to make a capital
235	235	improvement to the owner's property that is not required before the
236	236	amendment.
237	237	(b) For the purposes of this section, "capital improvement"
238	238	means items such as additional tree plantings, additional sodding,
239	239	fence construction, hardscape installation, new construction, or
240	240	any similar capital improvement. The term does not include repair
241	241	or maintenance of existing improvements or the removal of
242	242	conditions that are in violation of a dedicatory instrument.
243	243	SECTION 10. Subsections (a), (b), and (c), Section 207.003,
244	244	Property Code, are amended to read as follows:
245	245	(a) Not later than the 10th day after the date a written
246	246	request for subdivision information is received from an owner,
247	247	owner's agent, or title insurance company or its agent acting on
248	248	behalf of the owner, the property owners' association shall deliver
249	249	to the owner, owner's agent, or title insurance company or its
250	250	agent:
251	251	(1) a current copy of the restrictions applying to the
252	252	subdivision;
253	253	(2) a current copy of the bylaws and rules of the
254	254	property owners' association; and
255	255	(3) a current resale certificate that complies with
256	256	Subsection (b).
257	257	(b) A current resale certificate under Subsection (a) must
258	258	contain:
259	259	(1) a statement of any right of first refusal or other
260	260	restraint contained in the restrictions or restrictive covenants
261	261	that restricts the owner's right to transfer the owner's property;
262	262	(2) the frequency and amount of any regular
263	263	assessments;
264	264	(3) the amount and purpose of any special assessment
265	265	that has been approved before and is due after the date the resale
266	266	certificate is prepared;
267	267	(4) the total of all amounts due and unpaid to the
268	268	property owners' association that are attributable to the owner's
269	269	property;
270	270	(5) capital expenditures, if any, approved by the
271	271	property owners' association for the property owners' association's
272	272	current fiscal year;
273	273	(6) the amount of reserves, if any, for capital
274	274	expenditures;
275	275	(7) the property owners' association's current
276	276	operating budget and balance sheet;
277	277	(8) the total of any unsatisfied judgments against the
278	278	property owners' association;
279	279	(9) the style and cause number of any pending lawsuit
280	280	in which the property owners' association is a party, other than a
281	281	lawsuit relating to unpaid ad valorem taxes of an individual member
282	282	of the association [defendant];
283	283	(10) a copy of a certificate of insurance showing the
284	284	property owners' association's property and liability insurance
285	285	relating to the common areas and common facilities;
286	286	(11) a description of any conditions on the owner's
287	287	property that the property owners' association board has actual
288	288	knowledge are in violation of the restrictions applying to the
289	289	subdivision or the bylaws or rules of the property owners'
290	290	association;
291	291	(12) a summary or copy of notices received by the
292	292	property owners' association from any governmental authority
293	293	regarding health or housing code violations existing on the
294	294	preparation date of the certificate relating to the owner's
295	295	property or any common areas or common facilities owned or leased by
296	296	the property owners' association;
297	297	(13) the amount of any administrative transfer fee
298	298	charged by the property owners' association for a change of
299	299	ownership of property in the subdivision;
300	300	(14) the name, mailing address, and telephone number
301	301	of the property owners' association's managing agent, if any; [and]
302	302	(15) a statement indicating whether the restrictions
303	303	allow foreclosure of a property owners' association's lien on the
304	304	owner's property for failure to pay assessments; and
305	305	(16) a statement of all fees associated with the
306	306	transfer of ownership, including a description of each fee, to whom
307	307	each fee is paid, and the amount of each fee.
308	308	(c) A property owners' association may charge a reasonable
309	309	fee to assemble, copy, and deliver the information required by this
310	310	section and may charge a reasonable fee to prepare and deliver an
311	311	update of a resale certificate under Subsection (f). A purchaser
312	312	requesting a resale certificate under Section 5.012 or on whose
313	313	behalf the resale certificate is requested shall pay the fees
314	314	charged under this subsection unless otherwise agreed by the
315	315	purchaser and seller of the property. The prescribed charges shall
316	316	be presumed to be reasonable if they do not exceed costs that would
317	317	be applicable for an item under 1 T.A.C. Section 70.3.
318	318	SECTION 11. Chapter 207, Property Code, is amended by
319	319	adding Section 207.006 to read as follows:
320	320	Sec. 207.006. ONLINE SUBDIVISION INFORMATION REQUIRED. A
321	321	property owners' association shall make dedicatory instruments
322	322	relating to the association or subdivision and filed in the county
323	323	deed records available on a website if the association has, or a
324	324	management company on behalf of the association maintains, a
325	325	publicly accessible website.
326	326	SECTION 12. Section 209.003, Property Code, is amended by
327	327	adding Subsection (e) to read as follows:
328	328	(e) The following provisions of this chapter do not apply to
329	329	a property owners' association that is a mixed-use master
330	330	association that existed before January 1, 1974, and that does not
331	331	have the authority under a dedicatory instrument or other governing
332	332	document to impose fines:
333	333	(1) Section 209.005(b);
334	334	(2) Section 209.0056;
335	335	(3) Section 209.0057;
336	336	(4) Section 209.0058;
337	337	(5) Section 209.00592; and
338	338	(6) Section 209.0062.
339	339	SECTION 13. Chapter 209, Property Code, is amended by
340	340	adding Section 209.0041 to read as follows:
341	341	Sec. 209.0041. ADOPTION OR AMENDMENT OF CERTAIN DEDICATORY
342	342	INSTRUMENTS. (a) This section applies to a residential
343	343	subdivision in which property owners are subject to mandatory
344	344	membership in a property owners' association.
345	345	(b) This section does not apply to a property owners'
346	346	association that is subject to Chapter 552, Government Code, by
347	347	application of Section 552.0036, Government Code.
348	348	(c) This section does not apply to the amendment of a
349	349	declaration during a development period, as defined by Section
350	350	202.011.
351	351	(d) This section applies to a dedicatory instrument
352	352	regardless of the date on which the dedicatory instrument was
353	353	created.
354	354	(e) This section supersedes any contrary requirement in a
355	355	dedicatory instrument.
356	356	(f) To the extent of any conflict with another provision of
357	357	this title, this section prevails.
358	358	(g) Except as provided by this subsection, a declaration may
359	359	be amended only by a vote of 67 percent of the total votes allocated
360	360	to property owners in the property owners' association, in addition
361	361	to any governmental approval required by law. If the declaration
362	362	contains a lower percentage, the percentage in the declaration
363	363	controls.
364	364	(h) A bylaw may not be amended to conflict with the
365	365	declaration.
366	366	(i) All ballots cast in a vote that results in an amendment
367	367	to a restrictive covenant or bylaw are records of the association
368	368	subject to inspection under Section 209.005.
369	369	SECTION 14. Section 209.005, Property Code, is amended to
370	370	read as follows:
371	371	Sec. 209.005. ASSOCIATION RECORDS. (a) This section does
372	372	not apply to a property owners' association that is subject to
373	373	Chapter 552, Government Code, by application of Section 552.0036,
374	374	Government Code.
375	375	(b) A property owners' association shall make the books and
376	376	records of the association, including financial records, open to
377	377	and reasonably available for examination by [to] an owner, or a
378	378	person designated in a writing signed by the owner as the owner's
379	379	agent, attorney, or certified public accountant, in accordance with
380	380	this section. An owner is entitled to obtain from the association
381	381	copies of information contained in the books and records [Section
382	382	B, Article 2.23, Texas Non-Profit Corporation Act (Article
383	383	1396-2.23, Vernon's Texas Civil Statutes)].
384	384	(c) [(a-1) A property owners' association described by
385	385	Section 552.0036(2), Government Code, shall make the books and
386	386	records of the association, including financial records,
387	387	reasonably available to any person requesting access to the books
388	388	or records in accordance with Chapter 552, Government Code.
389	389	Subsection (a) does not apply to a property owners' association to
390	390	which this subsection applies.
391	391	[(b)] An attorney's files and records relating to the
392	392	property owners' association, excluding invoices requested by an
393	393	owner under Section 209.008(d), are not[:
394	394	[(1)] records of the association and are not[;
395	395	[(2)] subject to inspection by the owner[;] or
396	396	[(3)] subject to production in a legal proceeding. If
397	397	a document in an attorney's files and records relating to the
398	398	association would be responsive to a legally authorized request to
399	399	inspect or copy association documents, the document shall be
400	400	produced by using the copy from the attorney's files and records if
401	401	the association has not maintained a separate copy of the document.
402	402	This subsection does not require production of a document that
403	403	constitutes attorney work product or that is privileged as an
404	404	attorney-client communication.
405	405	(d) An owner or the owner's authorized representative
406	406	described by Subsection (b) must submit a written request for
407	407	access or information under Subsection (b) by certified mail or
408	408	another method providing evidence of mailing or delivery, with
409	409	sufficient detail describing the property owners' association's
410	410	books and records requested, to the mailing address of the
411	411	association or authorized representative as reflected on the most
412	412	current management certificate filed under Section 209.004. The
413	413	request must contain an election either to inspect the books and
414	414	records before obtaining copies or to have the property owners'
415	415	association forward copies of the requested books and records and:
416	416	(1) if an inspection is requested, the association, on
417	417	or before the 10th business day after the date the association
418	418	receives the request, shall send written notice of dates during
419	419	normal business hours that the owner may inspect the requested
420	420	books and records to the extent those books and records are in the
421	421	possession, custody, or control of the association; or
422	422	(2) if copies of identified books and records are
423	423	requested, the association shall, to the extent those books and
424	424	records are in the possession, custody, or control of the
425	425	association, produce the requested books and records for the
426	426	requesting party on or before the 10th business day after the date
427	427	the association receives the request, except as otherwise provided
428	428	by this section.
429	429	(e) If the property owners' association is unable to produce
430	430	the books or records requested under Subsection (d) on or before the
431	431	10th business day after the date the association receives the
432	432	request, the association must provide to the requestor written
433	433	notice that:
434	434	(1) informs the requestor of the reason that the
435	435	association is unable to produce the information on or before the
436	436	10th business day after the date the association received the
437	437	request; and
438	438	(2) states a date by which the information will be sent
439	439	or made available for inspection to the requesting party that is not
440	440	later than the 15th business day after the date notice under this
441	441	subsection is given.
442	442	(f) If an inspection is requested or required, the
443	443	inspection shall take place at a mutually agreed on time during
444	444	normal business hours, and the requesting party shall identify the
445	445	books and records for the property owners' association to copy and
446	446	forward to the requesting party.
447	447	(g) A property owners' association may produce books and
448	448	records requested under this section in hard copy, electronic, or
449	449	other format reasonably available to the association.
450	450	(h) A property owners' association board must adopt a
451	451	records production and copying policy that prescribes the actual
452	452	costs the association will charge for the compilation, production,
453	453	and reproduction of information requested under this section. The
454	454	prescribed charges may include all reasonable costs of materials,
455	455	labor, and overhead but may not exceed costs that would be
456	456	applicable for an item under 1 T.A.C. Section 70.3. The policy
457	457	required by this subsection must be recorded as a dedicatory
458	458	instrument in accordance with Section 202.006. An association may
459	459	not charge an owner for the compilation, production, or
460	460	reproduction of information requested under this section unless the
461	461	policy prescribing those costs has been recorded as required by
462	462	this subsection. An owner is responsible for costs related to the
463	463	compilation, production, and reproduction of the requested
464	464	information in the amounts prescribed by the policy adopted under
465	465	this subsection. The association may require advance payment of
466	466	the costs of compilation, production, and reproduction of the
467	467	requested information.
468	468	(i) A property owners' association must estimate costs
469	469	under this section using amounts prescribed by the policy adopted
470	470	under Subsection (h).
471	471	(j) Except as provided by Subsection (k) and to the extent
472	472	the information is provided in the meeting minutes, the property
473	473	owners' association is not required to release or allow inspection
474	474	of any books or records that identify the dedicatory instrument
475	475	violation history of an individual owner of an association, an
476	476	owner's personal financial information, including records of
477	477	payment or nonpayment of amounts due the association, an owner's
478	478	contact information, other than the owner's address, or information
479	479	related to an employee of the association, including personnel
480	480	files. Information may be released in an aggregate or summary
481	481	manner that would not identify an individual property owner.
482	482	(k) The books and records described by Subsection (j) shall
483	483	be released or made available for inspection if:
484	484	(1) the express written approval of the owner whose
485	485	records are the subject of the request for inspection is provided to
486	486	the property owners' association; or
487	487	(2) a court orders the release of the books and records
488	488	or orders that the books and records be made available for
489	489	inspection.
490	490	(l) A property owners' association composed of more than 14
491	491	lots shall adopt and comply with a document retention policy that
492	492	includes, at a minimum, the following requirements:
493	493	(1) certificates of formation, bylaws, restrictive
494	494	covenants, and all amendments to the certificates of formation,
495	495	bylaws, and covenants shall be retained permanently;
496	496	(2) financial books and records shall be retained for
497	497	seven years;
498	498	(3) account records of current owners shall be
499	499	retained for five years;
500	500	(4) contracts with a term of one year or more shall be
501	501	retained for four years after the expiration of the contract term;
502	502	(5) minutes of meetings of the owners and the board
503	503	shall be retained for seven years; and
504	504	(6) tax returns and audit records shall be retained
505	505	for seven years.
506	506	(m) A member of a property owners' association who is denied
507	507	access to or copies of association books or records to which the
508	508	member is entitled under this section may file a petition with the
509	509	justice of the peace of a justice precinct in which all or part of
510	510	the property that is governed by the association is located
511	511	requesting relief in accordance with this subsection. If the
512	512	justice of the peace finds that the member is entitled to access to
513	513	or copies of the records, the justice of the peace may grant one or
514	514	more of the following remedies:
515	515	(1) a judgment ordering the property owners'
516	516	association to release or allow access to the books or records;
517	517	(2) a judgment against the property owners'
518	518	association for court costs and attorney's fees incurred in
519	519	connection with seeking a remedy under this section; or
520	520	(3) a judgment authorizing the owner or the owner's
521	521	assignee to deduct the amounts awarded under Subdivision (2) from
522	522	any future regular or special assessments payable to the property
523	523	owners' association.
524	524	(n) If the property owners' association prevails in an
525	525	action under Subsection (m), the association is entitled to a
526	526	judgment for court costs and attorney's fees incurred by the
527	527	association in connection with the action.
528	528	(o) On or before the 10th business day before the date a
529	529	person brings an action against a property owners' association
530	530	under this section, the person must send written notice to the
531	531	association of the person's intent to bring the action. The notice
532	532	must:
533	533	(1) be sent certified mail, return receipt requested,
534	534	or delivered by the United States Postal Service with signature
535	535	confirmation service; and
536	536	(2) describe with sufficient detail the books and
537	537	records being requested.
538	538	(p) For the purposes of this section, "business day" means a
539	539	day other than Saturday, Sunday, or a state or federal holiday.
540	540	SECTION 15. Chapter 209, Property Code, is amended by
541	541	adding Sections 209.0051, 209.0056, 209.0057, 209.0058, 209.0059,
542	542	209.00591, 209.00592, and 209.00593 to read as follows:
543	543	Sec. 209.0051. OPEN BOARD MEETINGS. (a) This section does
544	544	not apply to a property owners' association that is subject to
545	545	Chapter 551, Government Code, by application of Section 551.0015,
546	546	Government Code.
547	547	(b) In this section, "board meeting" means a deliberation
548	548	between a quorum of the voting board of the property owners'
549	549	association, or between a quorum of the voting board and another
550	550	person, during which property owners' association business or
551	551	policies are considered or during which the board takes formal
552	552	action. The term does not include the gathering of a quorum of the
553	553	board at a social function unrelated to the business of the
554	554	association or the attendance by a quorum of the board at a
555	555	regional, state, or national convention, ceremonial event, or press
556	556	conference, if formal action is not taken and any discussion of
557	557	association business is incidental to the social function,
558	558	convention, ceremonial event, or press conference.
559	559	(c) Regular and special board meetings must be open to
560	560	owners, subject to the right of the board to adjourn a board meeting
561	561	and reconvene in closed executive session to consider actions
562	562	involving personnel, pending or threatened litigation, contract
563	563	negotiations, enforcement actions, confidential communications
564	564	with the property owners' association's attorney, matters involving
565	565	the invasion of privacy of individual owners, or matters that are to
566	566	remain confidential by request of the affected parties and
567	567	agreement of the board. Following an executive session, any
568	568	decision made in the executive session must be summarized orally
569	569	and placed in the minutes, in general terms, without breaching the
570	570	privacy of individual owners, violating any privilege, or
571	571	disclosing information that was to remain confidential at the
572	572	request of the affected parties. The oral summary must include a
573	573	general explanation of expenditures approved in executive session.
574	574	(c-1) Except for a meeting held by electronic or telephonic
575	575	means under Subsection (h), a board meeting must be held in a county
576	576	in which all or part of the property in the subdivision is located
577	577	or in a county adjacent to that county.
578	578	(d) The board shall keep a record of each regular,
579	579	emergency, or special board meeting in the form of written minutes
580	580	or an audio recording of the meeting. The board shall make meeting
581	581	records, including approved minutes, available to a member for
582	582	inspection and copying on the member's written request to the
583	583	property owners' association's managing agent at the address
584	584	appearing on the most recently filed management certificate or, if
585	585	there is not a managing agent, to the board.
586	586	(e) Members shall be given notice of the date, hour, place,
587	587	and general subject of a regular, emergency, or special board
588	588	meeting, including a general description of any matter to be
589	589	brought up for deliberation in executive session. The notice shall
590	590	be:
591	591	(1) mailed to each property owner not later than the
592	592	10th day or earlier than the 60th day before the date of the
593	593	meeting; or
594	594	(2) provided at least 72 hours before the start of the
595	595	meeting by:
596	596	(A) posting the notice in a conspicuous manner
597	597	reasonably designed to provide notice to property owners'
598	598	association members:
599	599	(i) in a place located on the association's
600	600	common property or, with the property owner's consent, on other
601	601	conspicuously located privately owned property within the
602	602	subdivision; or
603	603	(ii) on any Internet website or other
604	604	internet media maintained by the association; and
605	605	(B) sending the notice by e-mail to each owner
606	606	who has registered an e-mail address with the association.
607	607	(f) It is an owner's duty to keep an updated e-mail address
608	608	registered with the property owners' association under Subsection
609	609	(e)(2)(B).
610	610	(g) If the board recesses a regular, emergency, or special
611	611	board meeting to continue the following regular business day, the
612	612	board is not required to post notice of the continued meeting if the
613	613	recess is taken in good faith and not to circumvent this section.
614	614	If a regular, emergency, or special board meeting is continued to
615	615	the following regular business day, and on that following day the
616	616	board continues the meeting to another day, the board shall give
617	617	notice of the continuation in at least one manner prescribed by
618	618	Subsection (e)(2)(A) within two hours after adjourning the meeting
619	619	being continued.
620	620	(h) A board may meet by any method of communication,
621	621	including electronic and telephonic, without prior notice to owners
622	622	under Subsection (e), if each director may hear and be heard by
623	623	every other director, to consider a reasonably unforeseen emergency
624	624	or urgent necessity that requires immediate board action. Any
625	625	action taken without notice to owners under Subsection (e) must be
626	626	recorded by an audio device and kept as part of the association
627	627	records and shall be summarized orally, including an explanation of
628	628	any known actual or estimated expenditures approved at the meeting,
629	629	and documented in the minutes of the next regular or special board
630	630	meeting. The board may not, without prior notice to owners under
631	631	Subsection (e), consider or vote on:
632	632	(1) fines;
633	633	(2) damage assessments;
634	634	(3) initiation of foreclosure actions;
635	635	(4) initiation of enforcement actions, excluding
636	636	temporary restraining orders or violations involving a threat to
637	637	health or safety;
638	638	(5) increases in assessments;
639	639	(6) levying of special assessments;
640	640	(7) appeals from a denial of architectural control
641	641	approval; or
642	642	(8) a suspension of a right of a particular owner
643	643	before the owner has an opportunity to attend a board meeting to
644	644	present the owner's position, including any defense, on the issue.
645	645	(i) This section applies to a meeting of a property owners'
646	646	association board during the development period, as defined by
647	647	Section 202.011, only if the meeting is conducted for the purpose
648	648	of:
649	649	(1) adopting or amending the governing documents,
650	650	including declarations, bylaws, rules, and regulations of the
651	651	association;
652	652	(2) increasing the amount of regular assessments of
653	653	the association or adopting or increasing a special assessment;
654	654	(3) electing non-developer board members of the
655	655	association or establishing a process by which those members are
656	656	elected; or
657	657	(4) changing the voting rights of members of the
658	658	association.
659	659	Sec. 209.0056. NOTICE OF ELECTION OR ASSOCIATION VOTE.
660	660	(a) Not later than the 10th day or earlier than the 60th day before
661	661	the date of an election or vote, a property owners' association
662	662	shall give written notice of the election or vote to:
663	663	(1) each owner of property in the property owners'
664	664	association, for purposes of an association-wide election or vote;
665	665	or
666	666	(2) each owner of property in the property owners'
667	667	association entitled under the dedicatory instruments to vote in a
668	668	particular representative election, for purposes of a vote that
669	669	involves election of representatives of the association who are
670	670	vested under the dedicatory instruments of the property owners'
671	671	association with the authority to elect or appoint board members of
672	672	the property owners' association.
673	673	(b) This section supersedes any contrary requirement in a
674	674	dedicatory instrument.
675	675	(c) This section does not apply to a property owners'
676	676	association that is subject to Chapter 552, Government Code, by
677	677	application of Section 552.0036, Government Code.
678	678	Sec. 209.0057. RECOUNT OF VOTES. (a) This section does
679	679	not apply to a property owners' association that is subject to
680	680	Chapter 552, Government Code, by application of Section 552.0036,
681	681	Government Code.
682	682	(b) Any owner may, not later than the 15th day after the date
683	683	of the meeting at which the election was held, require a recount of
684	684	the votes. A demand for a recount must be submitted in writing
685	685	either:
686	686	(1) by certified mail, return receipt requested, or by
687	687	delivery by the United States Postal Service with signature
688	688	confirmation service to the property owners' association's mailing
689	689	address on the latest management certificate filed under Section
690	690	209.004; or
691	691	(2) in person to the property owners' association's
692	692	managing agent as reflected on the latest management certificate
693	693	filed under Section 209.004 or to the address to which absentee and
694	694	proxy ballots are mailed.
695	695	(c) The property owners' association shall, at the expense
696	696	of the owner requesting the recount, retain for the purpose of
697	697	performing the recount, the services of a person qualified to
698	698	tabulate votes under this subsection. The association shall enter
699	699	into a contract for the services of a person who:
700	700	(1) is not a member of the association or related to a
701	701	member of the association board within the third degree by
702	702	consanguinity or affinity, as determined under Chapter 573,
703	703	Government Code; and
704	704	(2) is:
705	705	(A) a current or former:
706	706	(i) county judge;
707	707	(ii) county elections administrator;
708	708	(iii) justice of the peace; or
709	709	(iv) county voter registrar; or
710	710	(B) a person agreed on by the association and the
711	711	persons requesting the recount.
712	712	(d) Any recount under Subsection (b) must be performed on or
713	713	before the 30th day after the date of receipt of a request and
714	714	payment for a recount in accordance with Subsections (b) and (c).
715	715	If the recount changes the results of the election, the property
716	716	owners' association shall reimburse the requesting owner for the
717	717	cost of the recount. The property owners' association shall
718	718	provide the results of the recount to each owner who requested the
719	719	recount. Any action taken by the board in the period between the
720	720	initial election vote tally and the completion of the recount is not
721	721	affected by any recount.
722	722	Sec. 209.0058. BALLOTS. (a) Any vote cast in an election
723	723	or vote by a member of a property owners' association must be in
724	724	writing and signed by the member.
725	725	(b) Electronic votes cast under Section 209.00592
726	726	constitute written and signed ballots.
727	727	(c) In an association-wide election, written and signed
728	728	ballots are not required for uncontested races.
729	729	Sec. 209.0059. RIGHT TO VOTE. (a) A provision in a
730	730	dedicatory instrument that would disqualify a property owner from
731	731	voting in a property owners' association election of board members
732	732	or on any matter concerning the rights or responsibilities of the
733	733	owner is void.
734	734	(b) This section does not apply to a property owners'
735	735	association that is subject to Chapter 552, Government Code, by
736	736	application of Section 552.0036, Government Code.
737	737	Sec. 209.00591. BOARD MEMBERSHIP. (a) Except as provided
738	738	by this section, a provision in a dedicatory instrument that
739	739	restricts a property owner's right to run for a position on the
740	740	board of the property owners' association is void.
741	741	(b) If a board is presented with written, documented
742	742	evidence from a database or other record maintained by a
743	743	governmental law enforcement authority that a board member has been
744	744	convicted of a felony or crime involving moral turpitude, the board
745	745	member is immediately ineligible to serve on the board of the
746	746	property owners' association, automatically considered removed
747	747	from the board, and prohibited from future service on the board.
748	748	(c) The declaration may provide for a period of declarant
749	749	control of the association during which a declarant, or persons
750	750	designated by the declarant, may appoint and remove board members
751	751	and the officers of the association, other than board members or
752	752	officers elected by members of the property owners' association.
753	753	Regardless of the period of declarant control provided by the
754	754	declaration, on or before the 120th day after the date 75 percent of
755	755	the lots that may be created and made subject to the declaration are
756	756	conveyed to owners other than a declarant, at least one-third of the
757	757	board members must be elected by owners other than the declarant.
758	758	If the declaration does not include the number of lots that may be
759	759	created and made subject to the declaration, at least one-third of
760	760	the board members must be elected by owners other than the declarant
761	761	not later than the 10th anniversary of the date the declaration was
762	762	recorded.
763	763	Sec. 209.00592. VOTING; QUORUM. (a) The voting rights of
764	764	an owner may be cast or given:
765	765	(1) in person or by proxy at a meeting of the property
766	766	owners' association;
767	767	(2) by absentee ballot in accordance with this
768	768	section; or
769	769	(3) by electronic ballot in accordance with this
770	770	section.
771	771	(b) An absentee or electronic ballot:
772	772	(1) may be counted as an owner present and voting for
773	773	the purpose of establishing a quorum only for items appearing on the
774	774	ballot;
775	775	(2) may not be counted, even if properly delivered, if
776	776	the owner attends any meeting to vote in person, so that any vote
777	777	cast at a meeting by a property owner supersedes any vote submitted
778	778	by absentee or electronic ballot previously submitted for that
779	779	proposal; and
780	780	(3) may not be counted on the final vote of a proposal
781	781	if the motion was amended at the meeting to be different from the
782	782	exact language on the absentee or electronic ballot.
783	783	(c) A solicitation for votes by absentee ballot must
784	784	include:
785	785	(1) an absentee ballot that contains each proposed
786	786	action and provides an opportunity to vote for or against each
787	787	proposed action;
788	788	(2) instructions for delivery of the completed
789	789	absentee ballot, including the delivery location; and
790	790	(3) the following language: "By casting your vote via
791	791	absentee ballot you will forgo the opportunity to consider and vote
792	792	on any action from the floor on these proposals, if a meeting is
793	793	held. This means that if there are amendments to these proposals
794	794	your votes will not be counted on the final vote on these measures.
795	795	If you desire to retain this ability, please attend any meeting in
796	796	person. You may submit an absentee ballot and later choose to
797	797	attend any meeting in person, in which case any in-person vote will
798	798	prevail."
799	799	(d) For the purposes of this section, "electronic ballot"
800	800	means a ballot:
801	801	(1) given by:
802	802	(A) e-mail;
803	803	(B) facsimile; or
804	804	(C) posting on an Internet website;
805	805	(2) for which the identity of the property owner
806	806	submitting the ballot can be confirmed; and
807	807	(3) for which the property owner may receive a receipt
808	808	of the electronic transmission and receipt of the owner's ballot.
809	809	(e) If an electronic ballot is posted on an Internet
810	810	website, a notice of the posting shall be sent to each owner that
811	811	contains instructions on obtaining access to the posting on the
812	812	website.
813	813	(f) This section supersedes any contrary provision in a
814	814	dedicatory instrument.
815	815	(g) This section does not apply to a property owners'
816	816	association that is subject to Chapter 552, Government Code, by
817	817	application of Section 552.0036, Government Code.
818	818	Sec. 209.00593. ELECTION OF BOARD MEMBERS. (a) Any board
819	819	member whose term has expired must be elected by owners who are
820	820	members of the property owners' association. A board member may be
821	821	appointed by the board only to fill a vacancy caused by a
822	822	resignation, death, or disability. A board member appointed to
823	823	fill a vacant position shall serve only until the end of the
824	824	unexpired term of the predecessor board member.
825	825	(b) The board of a property owners' association may amend
826	826	the bylaws of the property owners' association to provide for
827	827	elections to be held as required by Subsection (a).
828	828	(c) The appointment of a board member in violation of this
829	829	section is void.
830	830	(d) This section does not apply to the appointment of a
831	831	board member during a development period, as defined by Section
832	832	202.011.
833	833	(e) This section does not apply to a representative board
834	834	whose members or delegates are elected or appointed by
835	835	representatives of a property owners' association who are elected
836	836	by owner members of a property owners' association.
837	837	SECTION 16. Subsection (b), Section 209.006, Property Code,
838	838	is amended to read as follows:
839	839	(b) The notice must:
840	840	(1) describe the violation or property damage that is
841	841	the basis for the suspension action, charge, or fine and state any
842	842	amount due the association from the owner; and
843	843	(2) inform the owner that the owner:
844	844	(A) is entitled to a reasonable period to cure
845	845	the violation and avoid the fine or suspension unless the owner was
846	846	given notice and a reasonable opportunity to cure a similar
847	847	violation within the preceding six months; and
848	848	(B) may request a hearing under Section 209.007
849	849	on or before the 30th day after the date notice was delivered to the
850	850	owner [receives the notice].
851	851	SECTION 17. Chapter 209, Property Code, is amended by
852	852	adding Sections 209.0061, 209.0062, 209.0063, and 209.0064 to read
853	853	as follows:
854	854	Sec. 209.0061. ASSESSMENT OF FINES. (a) A fine assessed
855	855	by the property owners' association must be reasonable in the
856	856	context of the nature and frequency of the violation and the effect
857	857	of the violation on the subdivision as a whole. If the association
858	858	allows fines for a continuing violation to accumulate against a lot
859	859	or an owner, the association must establish a reasonable maximum
860	860	fine amount for a continuing violation at which point the total fine
861	861	amount is capped.
862	862	(b) If a lot occupant other than the owner violates a
863	863	provision of the dedicatory instrument, the property owners'
864	864	association, in addition to exercising any of the association's
865	865	powers against the owner, may assess a fine directly against the
866	866	nonowner occupant in the same manner as provided for an owner but
867	867	may not require payment from both the owner and a nonowner occupant
868	868	for the same violation.
869	869	(c) If the property owners' association assesses a fine
870	870	against a nonowner occupant under this section, the notice
871	871	provisions of Section 209.006 and the hearing provisions of Section
872	872	209.007 apply to the nonowner occupant in the same manner as those
873	873	provisions apply to an owner.
874	874	Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
875	875	ASSESSMENTS. (a) A property owners' association composed of more
876	876	than 14 lots shall adopt reasonable guidelines to establish an
877	877	alternative payment schedule by which an owner shall have a right to
878	878	make partial payments to the property owners' association for
879	879	delinquent regular or special assessments or any other amount owed
880	880	to the association without accruing additional monetary penalties.
881	881	For purposes of this section, monetary penalties do not include
882	882	reasonable costs associated with administering the payment plan or
883	883	interest.
884	884	(b) The minimum term for a payment plan offered by a
885	885	property owners' association is three months.
886	886	(c) A property owners' association is not required to allow
887	887	a payment plan for any amount that extends more than 18 months from
888	888	the date of the owner's request for a payment plan or to enter into a
889	889	payment plan with an owner who failed to honor the terms of a
890	890	previous payment plan during the two years following the owner's
891	891	default under the previous payment plan.
892	892	(d) A property owners' association shall file the
893	893	association's guidelines under this section in the real property
894	894	records of each county in which the subdivision is located.
895	895	(e) A property owners' association's failure to file as
896	896	required by this section the association's guidelines in the real
897	897	property records of each county in which the subdivision is located
898	898	does not affect a property owner's right to an alternative payment
899	899	schedule by which the owner may make partial payments to the
900	900	property owners' association for delinquent regular or special
901	901	assessments or any other amount owed to the association without
902	902	accruing additional monetary penalties, as defined by Subsection
903	903	(a).
904	904	Sec. 209.0063. PRIORITY OF PAYMENTS. A payment received by
905	905	a property owners' association from the owner shall be applied to
906	906	the owner's debt in the following order of priority:
907	907	(1) any delinquent assessment;
908	908	(2) any current assessment;
909	909	(3) any attorney's fees or third party collection
910	910	costs incurred by the association associated solely with
911	911	assessments or any other charge that could provide the basis for
912	912	foreclosure;
913	913	(4) any fines assessed by the association;
914	914	(5) any attorney's fees incurred by the association
915	915	that are not subject to Subdivision (3); and
916	916	(6) any other amount owed to the association.
917	917	Sec. 209.0064. THIRD PARTY COLLECTIONS. Before a property
918	918	owners' association may assess the account of an owner for
919	919	reimbursement of reasonable attorney's fees and other reasonable
920	920	costs payable by the association to another party or billed by a
921	921	third party to the association on a contingency basis and that are
922	922	related to collecting assessments or other amounts owed the
923	923	association by the owner, the association must provide a notice to
924	924	the owner by certified mail, return receipt requested, that:
925	925	(1) specifies each delinquent amount and the total
926	926	amount of the payment required to make the account current;
927	927	(2) describes the options the owner has to avoid
928	928	liability for attorney's fees or other costs related to collection
929	929	of those amounts, including information regarding the availability
930	930	of a payment plan through the association; and
931	931	(3) provides a period of at least 30 days for the owner
932	932	to cure the delinquency before further action is taken by the
933	933	association.
934	934	SECTION 18. Section 209.009, Property Code, is amended to
935	935	read as follows:
936	936	Sec. 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN
937	937	CIRCUMSTANCES. A property owners' association may not foreclose a
938	938	property owners' association's assessment lien if the debt securing
939	939	the lien consists solely of:
940	940	(1) fines assessed by the association; [or]
941	941	(2) attorney's fees incurred by the association solely
942	942	associated with fines assessed by the association; or
943	943	(3) amounts added to the owner's account as an
944	944	assessment under Section 209.005(h) or 209.0064.
945	945	SECTION 19. Chapter 209, Property Code, is amended by
946	946	adding Sections 209.0091, 209.0092, and 209.0093 to read as
947	947	follows:
948	948	Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except
949	949	as provided by Subsection (d) and subject to Section 209.009, a
950	950	property owners' association may not foreclose a property owners'
951	951	association assessment lien unless the association first obtains a
952	952	court order in an application for expedited foreclosure under the
953	953	rules adopted by the supreme court under Subsection (b).
954	954	(b) The supreme court, as an exercise of the court's
955	955	authority under Section 74.024, Government Code, shall adopt rules
956	956	establishing expedited foreclosure proceedings for use by a
957	957	property owners' association in foreclosing an assessment lien of
958	958	the association. Except as provided by this section, the rules
959	959	adopted under this subsection must be substantially similar to the
960	960	rules adopted by the supreme court under Section 50(r), Article
961	961	XVI, Texas Constitution.
962	962	(c) Rules adopted under Subsection (b) must require service
963	963	on the record owners of the property of a copy of the notice and
964	964	application for foreclosure of the lien by the same methods of
965	965	service prescribed for service of citation under Rules 106 through
966	966	119, Texas Rules of Civil Procedure.
967	967	(d) Expedited foreclosure is not required under this
968	968	section if the owner of the property that is subject to foreclosure
969	969	agrees in writing at the time the foreclosure is sought to waive
970	970	expedited foreclosure under this section. A waiver under this
971	971	subsection may not be required as a condition of the transfer of
972	972	title to real property.
973	973	Sec. 209.0092. REMOVAL OR ADOPTION OF FORECLOSURE
974	974	AUTHORITY. A provision granting a right to foreclose a lien on real
975	975	property for unpaid amounts due to a property owners' association
976	976	may be removed from a dedicatory instrument or adopted in a
977	977	dedicatory instrument by a vote of at least 67 percent of the total
978	978	votes allocated to property owners in the property owners'
979	979	association. Owners holding at least 10 percent of all voting
980	980	interests in the property owners' association may petition the
981	981	association and require a special meeting to be called for the
982	982	purposes of taking a vote for the purposes of this section.
983	983	Sec. 209.0093. ASSESSMENT LIEN FILING. A lien, lien
984	984	affidavit, or other instrument evidencing the nonpayment of
985	985	assessments or other charges owed to a property owners' association
986	986	and filed in the official public records of a county is a legal
987	987	instrument affecting title to real property.
988	988	SECTION 20. Subsection (a), Section 209.010, Property Code,
989	989	is amended to read as follows:
990	990	(a) A property owners' association that conducts a
991	991	foreclosure sale of an owner's lot must send to the lot owner and to
992	992	each lienholder of record, not later than the 30th day after the
993	993	date of the foreclosure sale:
994	994	(1) [,] a written notice stating the date and time the
995	995	sale occurred and informing the lot owner and each lienholder of
996	996	record of the right of the lot owner and lienholder to redeem the
997	997	property under Section 209.011; and
998	998	(2) a copy of Section 209.011.
999	999	SECTION 21. Chapter 209, Property Code, is amended by
1000	1000	adding Sections 209.014 and 209.015 to read as follows:
1001	1001	Sec. 209.014. MANDATORY ELECTION REQUIRED AFTER FAILURE TO
1002	1002	CALL ANNUAL MEETING. (a) Notwithstanding any provision in a
1003	1003	dedicatory instrument, a board of a property owners' association
1004	1004	shall call an annual meeting of the members of the association.
1005	1005	(b) If a board of a property owners' association does not
1006	1006	call an annual meeting of the association members, an owner may
1007	1007	demand that a meeting of the association members be called not later
1008	1008	than the 30th day after the date of the owner's demand. The owner's
1009	1009	demand must be made in writing and sent by certified mail, return
1010	1010	receipt requested, to the registered agent of the property owners'
1011	1011	association and to the association at the address for the
1012	1012	association according to the most recently filed management
1013	1013	certificate. A copy of the notice must be sent to each property
1014	1014	owner who is a member of the association.
1015	1015	(c) If the board does not call a meeting of the members of
1016	1016	the property owners' association on or before the 30th day after the
1017	1017	date of a demand under Subsection (b), three or more owners may form
1018	1018	an election committee. The election committee shall file written
1019	1019	notice of the committee's formation with the county clerk of each
1020	1020	county in which the subdivision is located.
1021	1021	(d) A notice filed by an election committee must contain:
1022	1022	(1) a statement that an election committee has been
1023	1023	formed to call a meeting of owners who are members of the property
1024	1024	owners' association for the sole purpose of electing board members;
1025	1025	(2) the name and residential address of each committee
1026	1026	member; and
1027	1027	(3) the name of the subdivision over which the
1028	1028	property owners' association has jurisdiction under a dedicatory
1029	1029	instrument.
1030	1030	(e) Each committee member must sign and acknowledge the
1031	1031	notice before a notary or other official authorized to take
1032	1032	acknowledgments.
1033	1033	(f) The county clerk shall enter on the notice the date the
1034	1034	notice is filed and record the notice in the county's real property
1035	1035	records.
1036	1036	(g) Only one committee in a subdivision may operate under
1037	1037	this section at one time. If more than one committee in a
1038	1038	subdivision files a notice, the first committee that files a
1039	1039	notice, after having complied with all other requirements of this
1040	1040	section, is the committee with the power to act under this section.
1041	1041	A committee that does not hold or conduct a successful election
1042	1042	within four months after the date the notice is filed with the
1043	1043	county clerk is dissolved by operation of law. An election held or
1044	1044	conducted by a dissolved committee is ineffective for any purpose
1045	1045	under this section.
1046	1046	(h) The election committee may call meetings of the owners
1047	1047	who are members of the property owners' association for the sole
1048	1048	purpose of electing board members. Notice, quorum, and voting
1049	1049	provisions contained in the bylaws of the property owners'
1050	1050	association apply to any meeting called by the election committee.
1051	1051	Sec. 209.015. BOARD POWERS. Bylaws adopted by the board of
1052	1052	a property owners' association may not expand the powers of the
1053	1053	association beyond those powers specifically granted in the
1054	1054	declaration. To the extent of any conflict between the bylaws and
1055	1055	any declaration, the declaration prevails.
1056	1056	SECTION 22. Subsection (a), Section 211.002, Property Code,
1057	1057	is amended to read as follows:
1058	1058	(a) This chapter applies only to a residential real estate
1059	1059	subdivision or any unit or parcel of a subdivision to which another
1060	1060	chapter in this title that provides a procedure under which a
1061	1061	subdivision's restrictions may for general purposes be amended does
1062	1062	not apply [located in whole or in part within an unincorporated area
1063	1063	of a county if the county has a population of less than 65,000].
1064	1064	SECTION 23. (a) Subsection (a), Section 5.006, and
1065	1065	Subsection (c), Section 202.004, Property Code, as amended by this
1066	1066	Act, apply only to an action filed on or after the effective date of
1067	1067	this Act. An action filed before the effective date of this Act is
1068	1068	governed by the law in effect immediately before the effective date
1069	1069	of this Act, and that law is continued in effect for that purpose.
1070	1070	(b) Section 5.012, Property Code, as amended by this Act,
1071	1071	applies only to a sale of property that occurs on or after the
1072	1072	effective date of this Act. For the purposes of this subsection, a
1073	1073	sale of property occurs before the effective date of this Act if the
1074	1074	executory contract binding the purchaser to purchase the property
1075	1075	is executed before that date. A sale of property that occurs before
1076	1076	the effective date of this Act is governed by the law in effect
1077	1077	immediately before that date, and that law is continued in effect
1078	1078	for that purpose.
1079	1079	(c) Section 51.015, Property Code, as amended by this Act,
1080	1080	applies only to the levy of an assessment or assessments as
1081	1081	described by Section 51.015, Property Code, as amended by this Act,
1082	1082	the effective date of which is on or after the effective date of
1083	1083	this Act. A levy of an assessment or assessments the effective date
1084	1084	of which is before the effective date of this Act is governed by the
1085	1085	law as it existed immediately before the effective date of this Act,
1086	1086	and that law is continued in effect for that purpose.
1087	1087	(d) Section 202.006, Property Code, as amended by this Act,
1088	1088	and Sections 202.011, 202.012, 202.013, and 209.0059 and Subsection
1089	1089	(a), Section 209.00592, Property Code, as added by this Act, apply
1090	1090	to a provision in a dedicatory instrument or a restrictive covenant
1091	1091	enacted before, on, or after the effective date of this Act, except
1092	1092	that any action taken before the effective date of this Act based on
1093	1093	an unfiled dedicatory instrument is not invalidated by Section
1094	1094	202.006, Property Code, as amended by this Act.
1095	1095	(e) Sections 207.003 and 209.005, Property Code, as amended
1096	1096	by this Act, apply only to a request for information received by a
1097	1097	property owners' association on or after the effective date of this
1098	1098	Act. A request for information received by a property owners'
1099	1099	association before the effective date of this Act is governed by the
1100	1100	law in effect immediately before the effective date of this Act, and
1101	1101	that law is continued in effect for that purpose.
1102	1102	(f) Subsection (l), Section 209.005, Property Code, as
1103	1103	added by this Act, applies only with respect to books and records
1104	1104	generated on or after the effective date of this Act. Books and
1105	1105	records generated before the effective date of this Act are
1106	1106	governed by the law in effect immediately before the effective date
1107	1107	of this Act, and that law is continued in effect for that purpose.
1108	1108	(g) Section 209.006, Property Code, as amended by this Act,
1109	1109	applies only to an enforcement action initiated by a property
1110	1110	owners' association on or after the effective date of this Act. An
1111	1111	enforcement action initiated before the effective date of this Act
1112	1112	is governed by the law in effect immediately before the effective
1113	1113	date of this Act, and that law is continued in effect for that
1114	1114	purpose.
1115	1115	(h) Section 209.0062, Property Code, as added by this Act,
1116	1116	applies only to an assessment or other debt that becomes due on or
1117	1117	after the effective date of this Act. An assessment or other debt
1118	1118	that becomes due before the effective date of this Act is governed
1119	1119	by the law in effect immediately before the effective date of this
1120	1120	Act, and that law is continued in effect for that purpose.
1121	1121	(i) Section 209.0063, Property Code, as added by this Act,
1122	1122	applies only to a payment received by a property owners'
1123	1123	association on or after the effective date of this Act. A payment
1124	1124	received by a property owners' association before the effective
1125	1125	date of this Act is governed by the law in effect immediately before
1126	1126	the effective date of this Act, and that law is continued in effect
1127	1127	for that purpose.
1128	1128	(j) Section 209.0091, Property Code, as added by this Act,
1129	1129	and Subsection (a), Section 209.010, Property Code, as amended by
1130	1130	this Act, apply only to a foreclosure sale conducted on or after the
1131	1131	effective date of this Act. A foreclosure sale conducted before the
1132	1132	effective date of this Act is governed by the law in effect
1133	1133	immediately before the effective date of this Act, and that law is
1134	1134	continued in effect for that purpose.
1135	1135	(k) Section 209.0093, Property Code, as added by this Act,
1136	1136	applies only to an instrument filed on or after January 1, 2012. An
1137	1137	instrument filed before January 1, 2012, is governed by the law in
1138	1138	effect on the date the instrument was filed, and that law is
1139	1139	continued in effect for that purpose.
1140	1140	(l) Section 209.014, Property Code, as added by this Act,
1141	1141	applies to a property owners' association created before, on, or
1142	1142	after the effective date of this Act.
1143	1143	SECTION 24. Not later than January 1, 2012, each property
1144	1144	owners' association shall present for recording with the county
1145	1145	clerk as prescribed by Section 202.006, Property Code, as amended
1146	1146	by this Act, each dedicatory instrument governing the association
1147	1147	that has not been previously recorded in the real property records
1148	1148	of the county.
1149	1149	SECTION 25. Not later than January 1, 2012, the Supreme
1150	1150	Court of Texas shall adopt rules of civil procedure under Section
1151	1151	209.0091, Property Code, as added by this Act.
1152	1152	SECTION 26. (a) Except as provided by Subsection (b) of
1153	1153	this section, this Act takes effect January 1, 2012.
1154	1154	(b) Subsection (b), Section 209.0091, Property Code, as
1155	1155	added by this Act, takes effect September 1, 2011.