By: King of Parker H.B. No. 2944
A BILL TO BE ENTITLED
AN ACT
relating to the powers and duties of timeshare owners'
associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act may be cited as the Texas Timeshare
Owners' Association Act.
SECTION 2. The following definition is added to Section
221.002 of the Property Code in alphabetical order, and the
existing subsections contained in Section 221.002 are renumbered:
(6) "Board" means the governing body of a timeshare
association designated in a project instrument to act on behalf of
that association.
SECTION 3. Section 221.003(d) of the Property Code is
amended to read as follows:
(d) A timeshare property subject to this chapter is not
subject to Chapter 209 the following provisions of the Property
Code:
(1) Section 5.008;
(2) Section 5.012;
(3) Chapter 202;
(4) Chapter 207; and
(5) Chapter 209 unless an individual owner occupies a
single timeshare property as the owner's primary residence 12
months of the year.
SECTION 4. Section 221.011 of the Property Code is amended
to read as follows:
(a) The developer of a timeshare plan any part of which is
located in this state must record the timeshare instrument in this
state. When a person expressly declares an intent to subject the
property to a timeshare plan through the recordation of a timeshare
instrument that sets forth the information provided in Subsections
(b), and (c), that property shall be established thenceforth as a
timeshare plan.
(b) The declaration made in a timeshare instrument recorded
under this section must include:
(1) a legal description of the timeshare property,
including a ground plan indicating the location of each existing or
proposed building included in the timeshare plan;
(2) a description of each existing or proposed
accommodation, including the location and square footage of each
unit and an interior floor plan of each existing or proposed
building;
(3) a description of any amenities furnished or to be
furnished to the purchaser;
(4) a statement of the fractional or percentage part
that each timeshare interest bears to the entire timeshare plan;
(5) if applicable, a statement that the timeshare
property is part of a multisite timeshare plan; and
(6) any additional provisions that are consistent with
this section.
(c) Unless set forth in other project instruments for the
property, the declaration made in the timeshare instrument recorded
under this section must also include those matters required by
Subchapter I of this chapter to be set forth in a project
instrument.
(d) Any timeshare interest created under this section is
subject to Section 1101.002(5), Occupations Code, but Sections
1101.351(a)(1) and (c), Occupations Code, do not apply to the acts
of an exchange company in exchanging timeshare periods.
SECTION 5. Section 221.025(c) of the Property Code is
amended to read as follows:
(c) A timeshare plan subject to Chapter 82 that complies
with this chapter is exempt from the requirements of Section
82.0675 relating to club membership and Section 82.103(c)-(e)
relating to declarant control.
SECTION 6. The reference in Section 221.071(a) of the
Property Code to Texas Deceptive Trade Practices-Consumer
Protection Act (Article 17.46 et seq., Business & Commerce Code) is
amended to read Texas Deceptive Trade Practices-Consumer
Protection Act (Article 17.46 Subchapter E, Chapter 17, Business &
Commerce Code).
SECTION 7. A new Subchapter I is added to the Texas
Timeshare Act, which subchapter will read as follows:
SUBCHAPTER I. TIMESHARE OWNERS' ASSOCIATIONS
Section 221.081. POWERS OF BOARD AND LIMITATIONS. (a) An
association may be governed by a board of directors. Except as
provided in the project instrument, Subsection (b) of this section,
or other provisions of this chapter, the board may act in all
instances on behalf of the association.
(b) Except as expressly authorized in the project
instrument or otherwise permitted by the association, the board may
not act on behalf of the association to amend the project
instrument, terminate the timeshare plan, elect or remove members
of the board, or determine the qualifications, powers, duties, or
terms of office of directors. The board may fill vacancies in its
membership for the unexpired portion of any term, subject to the
project instrument.
Section 221.082. PERIOD OF DEVELOPER CONTROL. (a) Except as
otherwise provided in this section, the project instrument may
provide for a period of developer control of an association during
which the developer, or a person designated by the developer, may
appoint and remove the officers of the association and the members
of the board. Notwithstanding the period provided in the project
instrument, the period of developer control of the association
terminates no later than the earlier of:
(1) one hundred twenty days after conveyance of
ninety-five percent of the timeshare interests that were created by
the timeshare instrument to owners other than the developer; or
(2) five years after the developer has ceased to offer
timeshare interests for sale in the ordinary course of business,
under either the timeshare plan itself or another timeshare plan in
which the timeshare interests are included, whichever is later.
(b) A developer may voluntarily surrender the right to
appoint and remove officers of the association and members of the
board during the period provided for in Subsection (a) by executing
a written instrument declaring the surrender and providing a copy
of the instrument to the owners. In the developer's surrender
instrument, the developer may require that, for the duration of the
period of the developer's control, specified actions of the
association or board as described in the project instrument be
approved by the developer before they become effective. The
developer's surrender instrument must be recorded.
(c) If the project instrument provides for a developer
control period of shorter duration than any period prescribed by
this section, the project instrument controls.
(d) During the period of developer control and subject to
the project instrument, the developer may determine all matters
governing the association, including whether there will be special
or regular meetings of the members and the notices and rules for any
such meetings.
Section 221.083. ELECTION OF DIRECTORS AND OFFICERS;
REMOVAL OF DIRECTORS. (a) No later than the termination of any
period of developer control, the owners, including the developer to
the extent of any developer-owned timeshare interests, must elect a
board of at least three members, which may include representatives
of the developer. The board will elect the officers of the
association. The board members and officers of the association take
office on election.
(b) Notwithstanding any provision of a project instrument
to the contrary, the owners, by a vote representing at least
two-thirds of all voting rights of persons present in person or by
proxy who are entitled to vote at any meeting of the owners at which
a quorum is present, may remove any member of the board, with or
without cause, other than a member appointed by the developer
during the period of developer control under Section 221.082 so
long as the developer remains in control of the association.
Section 221.084. QUORUM. (a) Unless the project instrument
provides for a higher quorum requirement, the percentage of voting
interests constituting a quorum at a meeting of the members of an
association is ten percent of the voting interests of owners who are
not delinquent in assessments, in person or by proxy. If a quorum is
not present at any meeting of the association at which members of
the board are to be elected, the meeting may be adjourned and
reconvened within ninety days for the sole purpose of electing
members of the board, and the quorum for the adjourned meeting will
be ten percent of the voting interests of owners who are not
delinquent in assessments, in person or by proxy, unless the
project instrument provides for a higher quorum requirement.
(b) Unless the project instrument provides otherwise, a
quorum will be deemed to be present throughout a meeting of an
association's board if persons entitled to cast a majority of the
votes on that board are present at the beginning of the meeting.
Section 221.085. VOTES. (a) If only one of the multiple
owners of a timeshare interest is present at a meeting of the
association, that owner is entitled to cast all the votes allocated
to that timeshare interest. If more than one of the multiple owners
are present, the votes allocated to that timeshare interest may be
cast only in accordance with the agreement of a majority in interest
of the multiple owners unless the timeshare instrument expressly
provides otherwise. There is a majority agreement if any one of the
multiple owners casts the votes allocated to that timeshare
interest without protest being made promptly to the person
presiding over the meeting by any of the other owners of the
timeshare interest.
(b) Votes allocated to a timeshare interest may be cast
pursuant to a proxy duly executed by an owner. A proxy must
expressly state its dates of execution and termination. An owner
may not revoke a proxy given pursuant to this section except by
actual notice of revocation to the person presiding over a meeting
of the association. A proxy is revoked on presentation of a later
dated proxy or other written revocation executed by the same owner.
A proxy terminates twenty-five months after its date of execution,
unless it specifies a shorter term or unless it states that it is
coupled with an interest and is irrevocable.
(c) The project instrument for a timeshare plan may
authorize votes of members of an association to be conducted by mail
on compliance with all of the following:
(1) mail ballots are mailed or sent to all members in
the manner prescribed for notices of special meetings pursuant to
Section 221.087;
(2) the period for return of mail ballots is at least
thirty days after the date the ballots are mailed or sent to
members; and
(3) the required minimum number of ballots that must
be returned by members for the vote to be effective is at least
equal to the quorum percentage prescribed in Section 221.084(a).
(d) Except as otherwise provided in the project instrument,
owners who are delinquent in assessments do not have the right to
cast votes. The right to cast votes is also subject to any
additional limitations provided in the project instrument.
(e) Only timeshare interests included in the timeshare plan
have voting rights.
Section 221.086. ASSOCIATION OPEN MEETINGS AND EXCEPTIONS.
(a) Notwithstanding any provision in the project instrument to the
contrary and except as provided in this section, after the period of
developer control under Section 221.082, all meetings of the
association and board are open to all members of the association and
all members so desiring must be permitted to attend and listen to
the deliberations and proceedings. Meetings will be conducted as
provided in the project instrument. The board may close to the
association members any portion of a meeting of the board if that
portion of the meeting is limited to consideration of one or more of
the following:
(1) legal advice from an attorney for the board or the
association;
(2) pending or contemplated litigation;
(3) financial information about an individual member
of the association, an individual employee of the association, an
individual employee of the managing entity, or an individual
employee of a contractor for the association or managing entity; or
(4) matters relating to the job performance of,
compensation of, health records of, or specific complaints against
an individual employee of the association, an individual employee
of the managing entity, or an individual employee of a contractor of
the association or managing entity who works under the direction of
the association or the managing entity.
(b) If a meeting is closed by the board pursuant to
Subsection (a)(1) or Subsection (a)(2) of this section, on final
resolution of any matter for which the board received legal advice
or that concerned pending or contemplated litigation, the board may
disclose information about that matter in an open meeting except
for matters that are required to remain confidential by the terms of
a settlement agreement or judgment.
Section 221.087. NOTICE. (a) A meeting of the members of the
association must be held at least once each year after the period of
developer control under Section 221.082. Special meetings of the
members of the association may be called by the president, by a
majority of the board, or by owners having at least twenty-five
percent of the votes in the association or any lower percentage
specified in the project instrument. Unless otherwise provided in
the project instrument, not fewer than thirty nor more than ninety
days in advance of any regular meeting of the owners, and not fewer
than ten nor more than sixty days in advance of any special meeting
of the owners, the association or managing entity must cause notice
of the meeting to be sent or provided to the mailing address of each
owner on record with the association. The notice of any meeting of
the owners must state the time and place of the meeting. The notice
of any special meeting of the owners must also state the purpose for
which the meeting is called. Notices of meetings may be in the form
of an annual or other list of upcoming meetings and need not be
specific to one meeting. The failure of any owner to receive actual
notice of a meeting of the owners does not affect the validity of
any action taken at that meeting.
(b) Unless otherwise provided in the project instrument,
for meetings of the board that are held after the termination of
developer control of the association, at least ten days in advance
of any meeting of the board, the association or managing entity must
cause notice of the meeting to be sent to the mailing address of
each owner on record with the association. Notice to owners of
meetings of the board is not required if emergency circumstances
require action by the board before notice can be given. Any notice
of a board meeting must state the time and place of the meeting.
Notices of meetings may be in the form of an annual or other list of
upcoming meetings and need not be specific to one meeting. The
failure of any owner to receive actual notice of a meeting of the
board does not affect the validity of any action taken at that
meeting.
(c) Notices may be in newsletters or similar mailings.
Mailing may occur by prepaid United States mail or electronic mail
for those owners who have provided electronic mail addresses or
another reasonable method selected by the board. The contrary
requirements of Section 221.087(a)-(b) and any other statutes
related to associations notwithstanding, notices to owners may also
be given by conspicuous disclosure on the association's website for
those owners who have consented to that alternative for notice,
which consent must be in writing and subject to revocation by each
owner at any time. An affidavit of notice by an officer of the
association or by the managing entity is prima facie evidence that
notice was given as prescribed by this section.
Section 221.088. LIST OF OWNERS. (a) The association or
other managing entity must maintain among its records a complete
list of the names and addresses of all owners of timeshare interests
in the timeshare plan. The association or other managing entity
must update this list no less frequently than quarterly. Neither
the association nor other managing entity may publish this owners'
list or provide a copy of it to any owner or to any third party,
except:
(1) for disclosure to a third party reasonably
required for the association or other managing entity to conduct
legitimate association business, or
(2) as otherwise authorized or required by law.
(b) After the period of developer control under Section
221.082, the association or other managing entity must mail to
those persons listed on the owners' list prescribed by Subsection
(a) any materials provided by any owner, on the written request of
that owner, if the purpose of the mailing is to advance legitimate
association business, such as a proxy solicitation for any purpose,
including the recall of one or more board members elected by the
owners or the discharge of the managing entity. The use of any
proxies solicited in this manner must comply with the project
instrument and this chapter. A mailing requested for the purpose of
advancing legitimate association business must be made within
thirty days after receipt of a request from an owner.
(c) The board of the association or the managing entity is
responsible for determining the appropriateness of any mailing
requested pursuant to Subsection (b) and for establishing
reasonable procedures for the exercise of the rights provided in
this section. The association or other managing entity does not
have an obligation to mail items that the association or other
managing entity reasonably believes may be libelous or otherwise
actionable based on advice of legal counsel. The owner who requests
the mailing must reimburse the association or other managing entity
in advance for the actual costs in performing the mailing or a
proportionate share of actual costs if the mailing is included in a
mailing that includes other items.
(d) After the period of developer control under Section
221.082, if the requesting owner has complied with the reasonable
procedures established by the board or managing entity for mailing
requests, it is a violation of this chapter for the association or
other managing entity to refuse to mail any material requested by
the owner to be mailed, if the sole purpose of the materials is to
advance legitimate association business and the requesting owner
has either tendered to the association or managing entity payment
of the cost pursuant to Subsection (c) or has requested an invoice
for that cost and has not received an invoice within ten days after
delivering that request to the association or managing entity.
(e) Except as otherwise authorized or required by law, the
association or other managing entity may not furnish the name,
address, telephone number, or electronic mail address of any owner
to any other owner or authorized agent of an owner unless the owner
whose name, address, phone number, or electronic mail address is
requested first approves the disclosure in writing.
Section 221.089. APPLICATION. (a) This Act applies to all
timeshare plans, timeshare property, and associations in this state
that are established on or after the effective date of this Act.
(b) Except for the amendment to Section 221.025(c) and new
Section 221.082, this Act also applies to timeshare plans,
timeshare property, and associations in this state that are
established at any time before the effective date of this Act,
unless the timeshare instrument is amended on or before September
1, 2013, to provide that this Act shall not apply.
(c) The amendment to Section 221.025(c) and new Section
221.082 shall not apply to timeshare plans, timeshare property, and
associations in this state that are established at any time before
the effective date of this Act, unless, as to either, the
association and the developer agree in writing to its application
and the timeshare instrument is amended to provide that it applies.
Otherwise, any existing developer control provisions contained in
the timeshare instrument shall govern, any other statutes related
to associations notwithstanding.
(d) Anything to the contrary notwithstanding:
(1) this chapter governs if there is a conflict
between this chapter and any other statute related to associations
subject to this chapter; and
(2) the provisions of the other chapters of the
Property Code relating to property owners' associations do not
apply to associations subject to this chapter.
SECTION 8. This Act takes effect September 1, 2013.