Texas 2013 - 83rd Regular

Texas Senate Bill SB1372 Compare Versions

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1	1	By: Hinojosa S.B. No. 1372
2	2	(King of Parker)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to timeshare owners' associations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. This Act shall be known as the Texas Timeshare
10	10	Owners' Association Act.
11	11	SECTION 2. Chapter 221, Property Code, is amended by adding
12	12	Subchapter I to read as follows:
13	13	SUBCHAPTER I. TIMESHARE OWNERS' ASSOCIATIONS
14	14	Sec. 221.081. CONFLICTS OF LAW. The provisions of this
15	15	subchapter prevail over a conflicting or inconsistent provision of
16	16	law applicable to timeshare owners' associations.
17	17	Sec. 221.082. APPLICABILITY. (a) Except as provided by
18	18	this section, this subchapter applies to a timeshare plan and to the
19	19	project instrument governing the timeshare property subject to the
20	20	timeshare plan regardless of the date on which the timeshare plan
21	21	was created.
22	22	(b) Except as provided by Section 221.084(f), this
23	23	subchapter applies to a timeshare plan and to the project
24	24	instrument governing the timeshare property subject to the
25	25	timeshare plan created before September 1, 2013, unless the project
26	26	instrument is amended before September 1, 2013, to provide that
27	27	this subchapter does not apply.
28	28	Sec. 221.083. POWERS AND LIMITATIONS OF BOARD. (a) An
29	29	association may be governed by a board of directors. Except as
30	30	provided in the project instrument, or this subchapter, the board
31	31	may act in all instances on behalf of the association.
32	32	(b) Except as expressly authorized in the project
33	33	instrument or otherwise permitted by the association, the board may
34	34	not act on behalf of the association to:
35	35	(1) amend the project instrument;
36	36	(2) terminate the timeshare plan;
37	37	(3) elect or remove board members; or
38	38	(4) determine the qualifications, powers, duties, or
39	39	terms of office of board members.
40	40	(c) Subject to the project instrument, the board may appoint
41	41	a member to fill a vacancy on the board and the member appointed
42	42	serves for the unexpired portion of the term of the predecessor
43	43	board member.
44	44	Sec. 221.084. PERIOD OF DEVELOPER CONTROL. (a) Except as
45	45	otherwise provided in this section, the project instrument may
46	46	provide for a period of developer control of an association during
47	47	which the developer, or a person designated by the developer, may
48	48	appoint and remove board members and officers of the association.
49	49	(b) Regardless of the period of developer control provided
50	50	in the project instrument, that period expires not later than the
51	51	earlier of:
52	52	(1) the 120th day after the date that at least 95
53	53	percent of the timeshare interests that were created by the
54	54	timeshare instrument are conveyed to owners other than the
55	55	developer; or
56	56	(2) the fifth anniversary of the date the developer
57	57	ceased to offer timeshare interests for sale in the ordinary course
58	58	of business under the timeshare plan or under another timeshare
59	59	plan in which the timeshare interests are included, whichever date
60	60	is later.
61	61	(c) A developer may voluntarily surrender the developer's
62	62	right to appoint and remove board members and officers of the
63	63	association during the period of developer control by executing a
64	64	written instrument stating that the developer's rights are
65	65	surrendered and providing a copy of the instrument to the owners.
66	66	The developer may provide in the surrender instrument that, during
67	67	the remaining period otherwise designated for developer control,
68	68	specified actions of the association or board as described in the
69	69	project instrument are effective only on approval of the developer.
70	70	The surrender instrument must be recorded in the real property
71	71	records of the county in which the timeshare property is located.
72	72	(d) If the project instrument provides for a developer
73	73	control period of shorter duration than any period prescribed by
74	74	this section, the project instrument controls.
75	75	(e) During the period of developer control and subject to
76	76	the project instrument, the developer may determine all matters
77	77	governing the association, including the occurrence of special or
78	78	regular meetings of the members and the notice requirements and
79	79	rules for those meetings.
80	80	(f) This section applies to a timeshare plan created before
81	81	September 1, 2013, and to the project instrument governing the
82	82	timeshare property subject to the timeshare plan only if the
83	83	developer and the association agree to the application in writing
84	84	and the project instrument is amended to provide for that
85	85	application. If the conditions provided by this subsection are not
86	86	satisfied, a timeshare plan created before September 1, 2013, and
87	87	the timeshare property subject to the timeshare plan are governed
88	88	by any developer control provisions provided in the project
89	89	instrument, notwithstanding any other law.
90	90	Sec. 221.085. ELECTION OF INITIAL BOARD MEMBERS AND
91	91	OFFICERS. (a) Not later than the termination, by expiration or
92	92	surrender, of any period of developer control, the owners,
93	93	including the developer to the extent of any developer-owned
94	94	timeshare interests, must elect a board of at least three members.
95	95	The board may include one or more representatives of the developer.
96	96	(b) The board shall elect the officers of the association.
97	97	(c) The board members and officers of the association take
98	98	office on election.
99	99	Sec. 221.086. REMOVAL OF BOARD MEMBERS. Notwithstanding
100	100	any provision of a project instrument to the contrary, the owners,
101	101	by a vote of at least two-thirds of the voting rights of persons
102	102	entitled to vote and voting in person or by proxy at any meeting of
103	103	the owners, may remove a member of the board, with or without cause,
104	104	other than a member appointed by the developer during the period of
105	105	developer control under Section 221.084, provided that the
106	106	developer remains in control of the association.
107	107	Sec. 221.087. QUORUM. (a) Unless the project instrument
108	108	provides for a larger quorum requirement, the percentage of voting
109	109	interests constituting a quorum at a meeting of the members of an
110	110	association is 10 percent of the voting interests of owners who are
111	111	not delinquent in assessments, voting in person or by proxy.
112	112	(b) If a quorum is not present at any meeting of the
113	113	association at which board members will be elected, the meeting may
114	114	be adjourned and reconvened not later than the 90th day after the
115	115	date of adjournment for the sole purpose of electing board members.
116	116	Unless the project instrument provides for a larger quorum
117	117	requirement, the quorum for the reconvened meeting is 10 percent of
118	118	the voting interests of owners who are not delinquent in
119	119	assessments, voting in person or by proxy.
120	120	(c) Unless the project instrument provides otherwise, a
121	121	quorum of the board is considered present throughout a board
122	122	meeting if the members entitled to cast a majority of the votes are
123	123	present at the beginning of the meeting.
124	124	Sec. 221.088. VOTES. (a) If only one of the multiple
125	125	owners of a timeshare interest is present at a meeting of the
126	126	association, that owner may cast all votes allocated to that
127	127	timeshare interest. If more than one of the multiple owners are
128	128	present, the votes allocated to that timeshare interest may be cast
129	129	only in accordance with the agreement of a majority of the timeshare
130	130	interest held by the multiple owners unless the timeshare
131	131	instrument expressly provides otherwise. For purposes of this
132	132	subsection, there is a majority agreement if any one of the multiple
133	133	owners casts the votes allocated to that timeshare interest and no
134	134	protest is made promptly to the person presiding over the meeting by
135	135	any of the other owners of the timeshare interest.
136	136	(b) Votes allocated to a timeshare interest may be cast
137	137	under a proxy duly executed by an owner. A proxy must expressly
138	138	state the dates of execution and termination. An owner may only
139	139	revoke a proxy given under this section by actual notice of
140	140	revocation to the person presiding over a meeting of the
141	141	association. A proxy is revoked on presentation of a later dated
142	142	proxy or other written revocation executed by the same owner. A
143	143	proxy terminates the 25th month after the date the proxy is
144	144	executed, unless the proxy specifies a shorter period or states
145	145	that the proxy is coupled with an interest and is irrevocable.
146	146	(c) The project instrument for a timeshare plan may
147	147	authorize votes of members of an association to be cast by mail only
148	148	if:
149	149	(1) mail ballots are mailed or sent to each member in
150	150	the manner prescribed for a notice of a special meeting under
151	151	Section 221.090;
152	152	(2) the period for return of mail ballots is not later
153	153	than the 30th day after the date the ballots are mailed or sent to
154	154	members; and
155	155	(3) the required minimum number of ballots that must
156	156	be returned by members for the vote to be effective represents at
157	157	least the percentage of voting interests required for a quorum as
158	158	prescribed by Section 221.087(a).
159	159	(d) Only timeshare interests included in the timeshare plan
160	160	have voting rights.
161	161	(e) Unless the project instrument provides otherwise,
162	162	owners who are delinquent in assessments do not have the right to
163	163	cast a vote. The right to cast a vote is also subject to any
164	164	additional limitations provided in the project instrument.
165	165	Sec. 221.089. OPEN MEETINGS; EXCEPTIONS.
166	166	(a) Notwithstanding any provision in the project instrument to the
167	167	contrary and except as provided in this section, after the period of
168	168	developer control under Section 221.084, all meetings of the
169	169	association and board are open to all members of the association and
170	170	all members must be permitted to attend and listen to the
171	171	deliberations and proceedings. Meetings must be conducted as
172	172	provided in the project instrument. The board may adjourn a board
173	173	meeting and reconvene in a closed executive session to consider:
174	174	(1) legal advice from an attorney for the board or the
175	175	association;
176	176	(2) pending or contemplated litigation;
177	177	(3) financial information about an individual member
178	178	of the association, an individual employee of the association, an
179	179	individual employee of the managing entity, or an individual
180	180	employee of a contractor for the association or managing entity; or
181	181	(4) matters relating to the job performance of,
182	182	compensation of, health records of, or specific complaints against
183	183	an individual employee of the association, an individual employee
184	184	of the managing entity, or an individual employee of a contractor of
185	185	the association or managing entity who works under the direction of
186	186	the association or the managing entity.
187	187	(b) If a board meeting is closed as provided by Subsection
188	188	(a)(1) or (2), the board, on final resolution of any matter for
189	189	which the board received legal advice or that concerned pending or
190	190	contemplated litigation, may disclose information about that
191	191	matter in an open meeting, except to the extent that those matters
192	192	are required to remain confidential by the terms of a settlement
193	193	agreement or judgment.
194	194	Sec. 221.090. NOTICE. (a) A meeting of the members of the
195	195	association must be held annually after the termination of the
196	196	period of developer control under Section 221.084. Special
197	197	meetings of the members of the association may be called by the
198	198	president, by a majority of the board, or by owners having at least
199	199	25 percent of the votes allocated to timeshare interests in the
200	200	association or any lower percentage specified in the project
201	201	instrument.
202	202	(b) Unless the project instrument provides otherwise, the
203	203	association or managing entity must send notice of the meeting to
204	204	the mailing address of each owner on record with the association:
205	205	(1) not later than the 30th day or earlier than the
206	206	90th day before the date of an annual meeting; and
207	207	(2) not later than the 10th day or earlier than the
208	208	60th day before the date of a special meeting.
209	209	(c) The notice of a meeting of the owners must state the
210	210	date, time, and place of the meeting. The notice of a special
211	211	meeting of the owners must also state the purpose of the meeting. A
212	212	notice of a meeting may be included in a list of upcoming meetings
213	213	sent to owners, and the list is not required to be specific to one
214	214	meeting. The failure of an owner to receive actual notice of a
215	215	meeting of the owners does not affect the validity of any action
216	216	taken at that meeting.
217	217	(d) Unless the project instrument provides otherwise, the
218	218	association or managing entity must send notice of a board meeting
219	219	held after the date the developer control period terminates to the
220	220	mailing address of each owner on record with the association not
221	221	later than the 10th day before the date of the meeting. Notice to
222	222	owners of a board meeting is not required if emergency
223	223	circumstances require action by the board before notice can be
224	224	given. A notice of a board meeting must state the date, time, and
225	225	place of the meeting. A notice of a meeting may be included in a
226	226	list of upcoming meetings sent to owners, and the list is not
227	227	required to be specific to one meeting. The failure of an owner to
228	228	receive actual notice of a board meeting does not affect the
229	229	validity of any action taken at that meeting.
230	230	(e) A notice may be provided in a newsletter or a similar
231	231	mailing. Notice may be provided by prepaid United States mail,
232	232	e-mail for those owners who have provided an e-mail address, or any
233	233	other reasonable method selected by the board.
234	234	(f) Notwithstanding Subsections (a)-(d) or any other law
235	235	related to notice by an association, a notice to an owner may be
236	236	provided by conspicuous disclosure on the association's website if
237	237	the owner has consented to that alternative notice. Consent to that
238	238	alternative notice must be in writing and may be revoked by the
239	239	owner at any time.
240	240	(g) An affidavit of notice by an officer of the association
241	241	or the managing entity is prima facie evidence that notice was
242	242	provided under this section.
243	243	Sec. 221.091. DUTIES; LIST OF OWNERS. (a) The association
244	244	or managing entity of the association must maintain among its
245	245	records a complete and current list of the names and addresses of
246	246	all owners of timeshare interests in the timeshare plan. The
247	247	association or managing entity must update this list not less than
248	248	quarterly.
249	249	(b) The association or managing entity may not publish the
250	250	owners list or provide a copy of the list to any owner or to any
251	251	third party, except:
252	252	(1) as reasonably required to conduct legitimate
253	253	association business; or
254	254	(2) as authorized or required by law.
255	255	(c) On the termination of the period of developer control
256	256	under Section 221.084 and on the written request of an owner, the
257	257	association or managing entity shall send by first class mail to
258	258	owners on the list described by Subsection (a) any materials
259	259	provided by any owner if the purpose of the mailing is for
260	260	legitimate association business, including a proxy solicitation
261	261	for the recall of a board member elected by the owners, the
262	262	discharge of the managing entity, or any other purpose. The use of
263	263	the solicited proxies must comply with the project instrument and
264	264	this subchapter. Materials required to be provided under this
265	265	subsection must be mailed not later than the 30th day after the date
266	266	the request is received from an owner.
267	267	(d) The board or the managing entity is responsible for
268	268	determining the appropriateness of a mailing requested under
269	269	Subsection (c) and establishing reasonable procedures for
270	270	exercising rights under this section. The association or managing
271	271	entity does not have an obligation to mail an item that the board or
272	272	managing entity reasonably believes based on advice of legal
273	273	counsel may be libelous or otherwise actionable. An owner who
274	274	requests the mailing of materials under Subsection (c) must
275	275	reimburse the association or managing entity in advance for the
276	276	actual costs of performing the mailing or a proportionate share of
277	277	actual costs if the mailing is included in a mailing with other
278	278	items.
279	279	(e) After the termination of the period of developer control
280	280	under Section 221.084, it is a violation of this subchapter to
281	281	refuse to mail material provided by a requesting owner who has
282	282	complied with the reasonable procedures established by the board or
283	283	managing entity, if:
284	284	(1) the sole purpose of the materials is to advance
285	285	legitimate association business; and
286	286	(2) the requesting owner has:
287	287	(A) tendered to the association or managing
288	288	entity payment of the cost under Subsection (d); or
289	289	(B) requested an invoice for that cost and has
290	290	not received the invoice before the 10th day after the date the
291	291	request was delivered to the association or managing entity.
292	292	(f) Except as otherwise authorized or required by law, the
293	293	association or other managing entity may not furnish the name,
294	294	address, telephone number, or e-mail address of any owner to any
295	295	other owner or authorized agent of an owner unless the owner whose
296	296	name, address, phone number, or e-mail address is requested first
297	297	approves the disclosure in writing.
298	298	SECTION 3. Section 221.002, Property Code, is amended by
299	299	adding Subdivision (5-a) to read as follows:
300	300	(5-a) "Board" means the governing body of a timeshare
301	301	association designated in a project instrument to act on behalf of
302	302	the association.
303	303	SECTION 4. Subsection (d), Section 221.003, Property Code,
304	304	is amended to read as follows:
305	305	(d) A timeshare property subject to this chapter is not
306	306	subject to:
307	307	(1) Section 5.008 or 5.012;
308	308	(2) Chapter 202;
309	309	(3) Chapter 207; or
310	310	(4) Chapter 209, unless an individual timeshare owner
311	311	continuously occupies a single timeshare property as the owner's
312	312	primary residence 12 months of the year.
313	313	SECTION 5. Subsections (a) and (b), Section 221.011,
314	314	Property Code, are amended to read as follows:
315	315	(a) The developer of a timeshare plan any part of which is
316	316	located in this state must record the timeshare instrument in this
317	317	state. When a person expressly declares an intent to subject the
318	318	property to a timeshare plan through the recordation of a timeshare
319	319	instrument that sets forth the information provided in Subsection
320	320	[Subsections] (b) [and (c)], that property shall be established
321	321	thenceforth as a timeshare plan.
322	322	(b) The declaration made in a timeshare instrument recorded
323	323	under this section must include:
324	324	(1) a legal description of the timeshare property,
325	325	including a ground plan indicating the location of each existing or
326	326	proposed building included in the timeshare plan;
327	327	(2) a description of each existing or proposed
328	328	accommodation, including the location and square footage of each
329	329	unit and an interior floor plan of each existing or proposed
330	330	building;
331	331	(3) a description of any amenities furnished or to be
332	332	furnished to the purchaser;
333	333	(4) a statement of the fractional or percentage part
334	334	that each timeshare interest bears to the entire timeshare plan;
335	335	(5) if applicable, a statement that the timeshare
336	336	property is part of a multisite timeshare plan; [and]
337	337	(6) any additional provisions that are consistent with
338	338	this section; and
339	339	(7) unless the project instrument provides otherwise,
340	340	provisions required by Subchapter I.
341	341	SECTION 6. Section 221.025, Property Code, is amended by
342	342	amending Subsection (c) and adding Subsection (c-1) to read as
343	343	follows:
344	344	(c) A timeshare plan subject to Chapter 82 that complies
345	345	with this chapter is exempt from the requirements of:
346	346	(1) Section 82.0675 relating to club membership; and
347	347	(2) Sections 82.103(c)-(e) relating to declarant
348	348	control.
349	349	(c-1) The exemption provided by Subsection (c)(2) applies
350	350	to a timeshare plan created before September 1, 2013, and to the
351	351	project instrument governing the timeshare property subject to the
352	352	timeshare plan only if the developer and the association agree to
353	353	the application of the exemption in writing and the project
354	354	instrument is amended to provide for the application of the
355	355	exemption. If the conditions provided by this subsection are not
356	356	satisfied, a timeshare plan created before September 1, 2013, and
357	357	the timeshare property subject to the timeshare plan are governed
358	358	by any developer control provisions provided in the project
359	359	instrument, notwithstanding any other law.
360	360	SECTION 7. Subsection (a), Section 221.071, Property Code,
361	361	is amended to read as follows:
362	362	(a) A developer or other person commits a false, misleading,
363	363	or deceptive act or practice within the meaning of Subchapter E,
364	364	Chapter 17 [Subsections (a) and (b) of Section 17.46 of the Texas
365	365	Deceptive Trade Practices-Consumer Protection Act (Article 17.46
366	366	et seq.], Business & Commerce Code[)], by engaging in any of the
367	367	following acts:
368	368	(1) failing to disclose information concerning a
369	369	timeshare interest required by Subchapter D;
370	370	(2) making false or misleading statements of fact
371	371	concerning the characteristics of accommodations or amenities
372	372	available to a consumer;
373	373	(3) predicting specific or immediate increases in the
374	374	value of a timeshare interest without a reasonable basis for such
375	375	predictions;
376	376	(4) making false or misleading statements of fact
377	377	concerning the duration that accommodations or amenities will be
378	378	available to a consumer;
379	379	(5) making false or misleading statements of fact
380	380	concerning the conditions under which a purchaser of a timeshare
381	381	interest may exchange the right to occupy a unit for the right to
382	382	occupy a unit in the same or another timeshare property;
383	383	(6) representing that a prize, gift, or other benefit
384	384	will be awarded in connection with a promotion with the intent not
385	385	to award that prize, gift, or benefit in the manner represented;
386	386	(7) failing to provide a copy of the purchase contract
387	387	to the purchaser at the time the contract is signed by the
388	388	purchaser;
389	389	(8) failing to provide the annual statement as
390	390	required by Section 221.074(a); or
391	391	(9) exceeding a one-to-one purchaser-to-accommodation
392	392	ratio for a timeshare plan during a consecutive 12-month period, as
393	393	determined under Subsection (c).
394	394	SECTION 8. This Act takes effect September 1, 2013.