Texas 2013 - 83rd Regular

Texas House Bill HB1824 Compare Versions

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1	1	By: Harper-Brown, Ratliff H.B. No. 1824
2	2	(Senate Sponsor - Hancock)
3	3	(In the Senate - Received from the House May 6, 2013;
4	4	May 8, 2013, read first time and referred to Committee on
5	5	Intergovernmental Relations; May 16, 2013, reported favorably by
6	6	the following vote: Yeas 4, Nays 0; May 16, 2013, sent to
7	7	printer.)
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the operation of master mixed-use property owners'
13	13	associations.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Section 215.003, Property Code, is amended to
16	16	read as follows:
17	17	Sec. 215.003. APPLICABILITY OF CHAPTER 209. Chapter 209
18	18	does not apply to [Sections 209.007, 209.008, 209.011, and 209.012
19	19	apply only to single-family residential properties governed by] a
20	20	property owners' association subject to this chapter.
21	21	SECTION 2. Section 215.008, Property Code, is amended by
22	22	adding Subsection (d) to read as follows:
23	23	(d) Notwithstanding any provision of the certificate of
24	24	formation, declaration, or bylaws to the contrary, the declaration
25	25	and any supplementary declaration, including amendments,
26	26	modifications, or corrections, may be amended by a simple majority
27	27	of the eligible votes being cast in favor of the amendment.
28	28	SECTION 3. Chapter 215, Property Code, is amended by adding
29	29	Section 215.0135 to read as follows:
30	30	Sec. 215.0135. ASSOCIATION RECORDS. (a) To the extent of
31	31	any conflict or inconsistency, this section prevails over other
32	32	provisions of law and the dedicatory instruments of a property
33	33	owners' association subject to this chapter. This section is the
34	34	exclusive procedure for a property owner to inspect the books and
35	35	records of the association.
36	36	(b) Except as provided by Subsection (c) or (j), a property
37	37	owners' association shall, on written request as provided by this
38	38	section, make the books and records of the association open to and
39	39	reasonably available for examination by an owner or a person
40	40	designated in a written instrument signed by the owner as the
41	41	owner's agent, attorney, or certified public accountant. Except as
42	42	provided by Subsection (c) or (j), an owner is entitled to obtain
43	43	copies of the books and records from the association.
44	44	(c) An attorney's files and records relating to the property
45	45	owners' association, excluding invoices, are not records of the
46	46	association and are not subject to inspection by the owner or the
47	47	owner's authorized representative or to production in a legal
48	48	proceeding. This subsection does not require production of a
49	49	document that is covered by the attorney-client privilege.
50	50	(d) An owner or the owner's authorized representative
51	51	described by Subsection (b) must submit a written request by
52	52	certified mail to the mailing address of the property owners'
53	53	association or the association's authorized representative, as
54	54	reflected on the most current management certificate filed under
55	55	Section 215.013, for access to the books and records of the
56	56	association. The request must describe, in sufficient detail, the
57	57	association's books and records requested by the owner or the
58	58	owner's representative and:
59	59	(1) if an inspection is requested, the association
60	60	shall, on or before the l0th business day after the date the
61	61	association receives the request, send written notice of dates that
62	62	the owner may inspect, during normal business hours, the requested
63	63	books and records to the extent those books and records are in the
64	64	actual physical possession, custody, and control of the
65	65	association; or
66	66	(2) if copies of identified books and records are
67	67	requested, the association shall, to the extent those books and
68	68	records are in the actual physical possession, custody, and control
69	69	of the association, produce copies of the requested books and
70	70	records on or before the 10th business day after the date the
71	71	association receives the request, except as otherwise provided by
72	72	this section.
73	73	(e) If the property owners' association fails to produce the
74	74	books or records requested under Subsection (d) on or before the
75	75	l0th business day after the date the association receives the
76	76	request, the association must provide to the requestor written
77	77	notice that:
78	78	(1) informs the requestor that the association is
79	79	unable to produce the information and the specific reasons for that
80	80	inability on or before the 10th business day after the date the
81	81	association received the request; and
82	82	(2) if the association can produce the information,
83	83	notifies the requestor of the date by which the information will be
84	84	sent or made available for inspection to the requesting party,
85	85	which may not be later than the 15th day after the date notice under
86	86	this subsection is given.
87	87	(f) If an inspection is requested or required, the
88	88	inspection shall take place at a mutually agreed on time during
89	89	normal business hours of the property owners' association, and the
90	90	requesting party shall identify the books and records for the
91	91	association to copy and forward to the requesting party.
92	92	(g) A property owners' association may produce books and
93	93	records requested under this section in hard copy, electronic, or
94	94	other format reasonably available to the association.
95	95	(h) A property owners' association board must adopt a
96	96	records production and copying policy that prescribes the costs the
97	97	association will charge for the compilation, production, and
98	98	reproduction of information requested under this section. The
99	99	prescribed charges may include all reasonable costs of materials,
100	100	labor, and overhead. The policy required by this subsection must be
101	101	recorded as a dedicatory instrument. If the policy is not recorded,
102	102	the association may not charge an owner for the compilation,
103	103	production, or reproduction of information requested under this
104	104	section. If the policy is recorded, the requesting owner or the
105	105	owner's representative is responsible for all costs related to the
106	106	compilation, production, and reproduction of the requested
107	107	information based on the amounts prescribed by the policy. The
108	108	association may require advance payment of the estimated costs of
109	109	compilation, production, and reproduction of the requested
110	110	information. If the total of the estimated costs differs from the
111	111	total of the actual costs, the association shall submit a final
112	112	invoice to the owner on or before the 30th business day after the
113	113	date the requested copies are delivered. If the actual total cost
114	114	is higher than the estimated total cost, and the owner fails to
115	115	reimburse the association before the 30th business day after the
116	116	date the invoice is sent to the owner, the association may add the
117	117	amount due to the owner's account as an assessment. If the actual
118	118	total cost is less than the estimated total cost, the association
119	119	shall issue a refund to the owner not later than the 30th business
120	120	day after the date the requested copies are delivered.
121	121	(i) A property owners' association must estimate costs
122	122	under this section using amounts prescribed by the policy adopted
123	123	under Subsection (h).
124	124	(j) Information may be released in an aggregate or summary
125	125	manner that would not identify an individual property owner. Except
126	126	as provided by Subsection (k) and to the extent the information is
127	127	provided in the meeting minutes, the property owners' association
128	128	is not required to release or allow inspection of any books or
129	129	records that identify:
130	130	(1) the dedicatory instrument violation history of an
131	131	individual owner;
132	132	(2) an owner's personal financial information,
133	133	including records of payment or nonpayment of amounts due the
134	134	association;
135	135	(3) an owner's contact information, other than the
136	136	owner's address;
137	137	(4) an owner's property files or building plans;
138	138	(5) books or records described by Subsection (c);
139	139	(6) any information to which an owner objects to
140	140	releasing or has not granted approval for releasing; or
141	141	(7) information related to an employee of the
142	142	association, including personnel files.
143	143	(k) The books and records described by Subsection (j) shall
144	144	be released or made available for inspection if:
145	145	(1) the express written approval of the owner whose
146	146	records are the subject of the request for inspection is provided to
147	147	the property owners' association; or
148	148	(2) a court orders the release of the books and records
149	149	or orders that the books and records be made available for
150	150	inspection.
151	151	(l) A property owners' association shall adopt and comply
152	152	with a document retention policy that includes, at a minimum, the
153	153	following requirements:
154	154	(1) certificates of formation, bylaws, restrictive
155	155	covenants, and all amendments to the certificates of formation,
156	156	bylaws, and covenants shall be retained permanently;
157	157	(2) financial books and records shall be retained for
158	158	seven years;
159	159	(3) account records of current owners shall be
160	160	retained for five years;
161	161	(4) contracts with a term of one year or more shall be
162	162	retained for four years after the expiration of the contract term;
163	163	(5) minutes of meetings of the owners and the board
164	164	shall be retained for seven years; and
165	165	(6) tax returns and audit records shall be retained
166	166	for seven years.
167	167	(m) A member of a property owners' association who is denied
168	168	access to or copies of the association books or records to which the
169	169	member is entitled under this section may file a petition with the
170	170	county court at law in which all or part of the property that is
171	171	governed by the association is located requesting relief in
172	172	accordance with this subsection. If the county court at law finds
173	173	that the member is entitled to access to or copies of the records,
174	174	the county court at law may grant one or more of the following
175	175	remedies:
176	176	(1) a judgment ordering the association to release or
177	177	allow access to the books or records;
178	178	(2) a judgment against the association for court costs
179	179	and attorney's fees incurred in connection with seeking a remedy
180	180	under this section; or
181	181	(3) a judgment authorizing the owner or the owner's
182	182	assignee to deduct the amounts awarded under Subdivision (2) from
183	183	any future regular or special assessments payable to the
184	184	association.
185	185	(n) If the property owners' association prevails in an
186	186	action under Subsection (m), the association is entitled to a
187	187	judgment for court costs and attorney's fees incurred by the
188	188	association in connection with the action.
189	189	(o) On or before the 10th business day before the date a
190	190	person brings an action against a property owners' association
191	191	under this section, the person must send written notice to the
192	192	association of the person's intent to bring the action. The notice
193	193	must:
194	194	(1) be sent certified mail, return receipt requested,
195	195	or delivered by the United States Postal Service with signature
196	196	confirmation service, to the mailing address of the association or
197	197	the association's authorized representative as reflected on the
198	198	most current management certificate filed under Section 215.013;
199	199	and
200	200	(2) describe with sufficient detail the books and
201	201	records being requested.
202	202	(p) For the purposes of this section, "business day" means a
203	203	day other than Saturday, Sunday, or a state or federal holiday.
204	204	SECTION 4. Chapter 215, Property Code, is amended by adding
205	205	Sections 215.016, 215.017, and 215.018 to read as follows:
206	206	Sec. 215.016. NOTICE REQUIRED BEFORE CERTAIN ENFORCEMENT
207	207	ACTIONS. (a) Before a property owners' association may file a suit
208	208	against an owner, other than a suit to collect a regular or special
209	209	assessment or judicial foreclosure under the association's lien, or
210	210	charge an owner for property damage, the association or its agent
211	211	must give written notice sent to the owner by certified mail, return
212	212	receipt requested, to the property address of the owner.
213	213	(b) The notice must:
214	214	(1) describe the violation of the declaration or
215	215	property damage that is the basis for the suit or charge and state
216	216	any amount due to the association from the owner; and
217	217	(2) inform the owner that the owner:
218	218	(A) is entitled, as applicable, to a reasonable
219	219	period to cure the violation and avoid the suit unless the owner was
220	220	previously given notice and a reasonable opportunity to cure by the
221	221	association for the same or a similar violation within the
222	222	preceding six months;
223	223	(B) may request a hearing under Section 215.017
224	224	on or before the 30th day after the date the owner receives the
225	225	notice; and
226	226	(C) may have special rights or relief related to
227	227	the suit or charge under federal law, including, without
228	228	limitation, the Servicemembers Civil Relief Act (50 U.S.C. app.
229	229	Section 501 et seq.), if the owner is serving on active military
230	230	duty.
231	231	Sec. 215.017. HEARING BEFORE BOARD. (a) Except as provided
232	232	by Section 215.009(c), if the owner is entitled to an opportunity to
233	233	cure a violation, the owner has the right to submit a written
234	234	request for a hearing to discuss and verify facts and resolve the
235	235	matter at issue before a committee appointed by the board of the
236	236	property owners' association or before the board if the board does
237	237	not appoint a committee.
238	238	(b) The association shall hold a hearing under this section
239	239	not later than the 30th day after the date the board receives the
240	240	owner's request for a hearing and shall notify the owner of the
241	241	date, time, and place of the hearing not later than the 10th day
242	242	before the date of the hearing. The board or committee or the owner
243	243	may request a postponement, and if requested, a postponement shall
244	244	be granted for a period of not more than 10 days. Additional
245	245	postponements may be granted by agreement of the parties.
246	246	(c) The notice and hearing provisions of this section and
247	247	Section 215.016 do not apply if the association files a suit seeking
248	248	a temporary restraining order or temporary injunctive relief or a
249	249	suit that includes foreclosure as a cause of action.
250	250	Sec. 215.018. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
251	251	ASSESSMENTS. (a) A property owners' association shall adopt
252	252	reasonable guidelines to establish an alternative payment schedule
253	253	by which an owner may make partial payments to the association for
254	254	delinquent regular or special assessments or any other amount owed
255	255	to the association without accruing additional monetary penalties.
256	256	For purposes of this section, monetary penalties do not include
257	257	reasonable costs associated with administering the payment plan or
258	258	interest.
259	259	(b) A property owners' association is not required to enter
260	260	into a payment plan with an owner who failed to honor the terms of a
261	261	previous payment plan.
262	262	(c) A property owners' association shall file the
263	263	association's guidelines under this section in the real property
264	264	records of each county in which any portion of the subdivision is
265	265	located.
266	266	SECTION 5. This Act takes effect September 1, 2013.
267	267	* * * * *