Texas 2015 - 84th Regular

Texas House Bill HB2797 Compare Versions

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1	1	84R9630 AJA-F
2	2	By: Villalba H.B. No. 2797
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the operation of certain property owners' associations.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 207.001(2), Property Code, is amended to
10	10	read as follows:
11	11	(2) "Dedicatory instrument," "property owners'
12	12	association," and "restrictive covenant" have the meanings
13	13	assigned by Section 209.002 [202.001].
14	14	SECTION 2. Section 207.002, Property Code, is amended to
15	15	read as follows:
16	16	Sec. 207.002. APPLICABILITY. (a) This chapter applies to a
17	17	subdivision with a property owners' association that is entitled to
18	18	levy regular or special assessments.
19	19	(b) This chapter does not apply to a condominium council of
20	20	owners governed by Chapter 81 or a condominium unit owners'
21	21	association governed by Chapter 82.
22	22	SECTION 3. Section 209.002, Property Code, is amended by
23	23	amending Subdivision (4-a) and adding Subdivision (13) to read as
24	24	follows:
25	25	(4-a) "Development period" means a period stated in a
26	26	declaration during which a declarant reserves:
27	27	(A) a right to facilitate the development,
28	28	construction, and marketing of the subdivision; or [and]
29	29	(B) a right to direct the size, shape, and
30	30	composition of the subdivision.
31	31	(13) "Verified mail" means any method of mailing that
32	32	provides evidence of mailing.
33	33	SECTION 4. Section 209.003(d), Property Code, is amended to
34	34	read as follows:
35	35	(d) This chapter does not apply to a condominium as defined
36	36	[development governed] by Section 81.002 or 82.003 [Chapter 82].
37	37	SECTION 5. Section 209.0041, Property Code, is amended by
38	38	amending Subsection (h) and adding Subsection (h-1) to read as
39	39	follows:
40	40	(h) Except as provided by Subsection (h-1) [this
41	41	subsection], a declaration may be amended only by a vote of:
42	42	(1) 67 percent of the total votes allocated to
43	43	property owners in the property owners' association, in addition to
44	44	any governmental approval required by law; or
45	45	(2) 67 percent of those entitled to vote on the
46	46	amendment of the declaration, in addition to any governmental
47	47	approval required by law.
48	48	(h-1) If the declaration contains a lower percentage than
49	49	prescribed by Subsection (h), the percentage in the declaration
50	50	controls.
51	51	SECTION 6. Section 209.0051, Property Code, is amended by
52	52	amending Subsections (b), (c-1), and (h) and adding Subsection
53	53	(c-2) to read as follows:
54	54	(b) In this section, "board [:
55	55	[(1) "Board] meeting":
56	56	(1) [(A)] means a deliberation between a quorum of the
57	57	voting board of the property owners' association, or between a
58	58	quorum of the voting board and another person, during which
59	59	property owners' association business is considered and the board
60	60	takes formal action; and
61	61	(2) [(B)] does not include the gathering of a quorum
62	62	of the board at a social function unrelated to the business of the
63	63	association or the attendance by a quorum of the board at a
64	64	regional, state, or national convention, ceremonial event, or press
65	65	conference, if formal action is not taken and any discussion of
66	66	association business is incidental to the social function,
67	67	convention, ceremonial event, or press conference.
68	68	[(2) "Development period" means a period stated in a
69	69	declaration during which a declarant reserves:
70	70	[(A) a right to facilitate the development,
71	71	construction, and marketing of the subdivision; and
72	72	[(B) a right to direct the size, shape, and
73	73	composition of the subdivision.]
74	74	(c-1) Except for a meeting held by electronic or telephonic
75	75	means under Subsection (c-2) [(h)], a board meeting must be held in
76	76	a county in which all or part of the property in the subdivision is
77	77	located or in a county adjacent to that county.
78	78	(c-2) A board meeting may be held by electronic or
79	79	telephonic means provided that:
80	80	(1) all directors may hear and be heard by every other
81	81	director; and
82	82	(2) except for any portion of the meeting conducted in
83	83	executive session, all owners in attendance at the meeting may hear
84	84	all directors.
85	85	(h) Except as provided by this subsection, a [A] board may
86	86	take action outside of a meeting [meet by any method of
87	87	communication], including voting by electronic or [and] telephonic
88	88	means, without prior notice to owners under Subsection (e), if each
89	89	director is given a reasonable opportunity to express the
90	90	director's opinion to all other directors and to vote [may hear and
91	91	be heard by every other director, or the board may take action by
92	92	unanimous written consent to consider routine and administrative
93	93	matters or a reasonably unforeseen emergency or urgent necessity
94	94	that requires immediate board action]. Any action taken without
95	95	notice to owners under Subsection (e) must be summarized orally,
96	96	including an explanation of any known actual or estimated
97	97	expenditures approved at the meeting, and documented in the minutes
98	98	of the next regular or special board meeting. The board may not,
99	99	without prior notice to owners under Subsection (e), [consider or]
100	100	vote on:
101	101	(1) fines;
102	102	(2) damage assessments;
103	103	(3) initiation of foreclosure actions;
104	104	(4) initiation of enforcement actions, excluding
105	105	temporary restraining orders or violations involving a threat to
106	106	health or safety;
107	107	(5) increases in assessments;
108	108	(6) levying of special assessments;
109	109	(7) appeals from a denial of architectural control
110	110	approval; or
111	111	(8) a suspension of a right of a particular owner
112	112	before the owner has an opportunity to attend a board meeting to
113	113	present the owner's position, including any defense, on the issue.
114	114	SECTION 7. Section 209.0056, Property Code, is amended by
115	115	amending Subsection (a) and adding Subsection (a-1) to read as
116	116	follows:
117	117	(a) For an election or vote taken at a meeting of the
118	118	association owners, not [Not] later than the 10th day or earlier
119	119	than the 60th day before the date of the [an] election or vote, a
120	120	property owners' association shall give written notice of the
121	121	election or vote to:
122	122	(1) each owner of property in the property owners'
123	123	association, for purposes of an association-wide election or vote;
124	124	or
125	125	(2) each owner of property in the property owners'
126	126	association entitled under the dedicatory instruments to vote in a
127	127	particular representative election, for purposes of a vote that
128	128	involves election of representatives of the association who are
129	129	vested under the dedicatory instruments of the property owners'
130	130	association with the authority to elect or appoint board members of
131	131	the property owners' association.
132	132	(a-1) For an election or vote of association owners not
133	133	taken at a meeting, the property owners' association shall give
134	134	notice of the election or vote to all owners.
135	135	SECTION 8. Section 209.0057, Property Code, is amended by
136	136	amending Subsections (b), (c), and (d) and adding Subsections
137	137	(b-1), (b-2), (b-3), and (b-4) to read as follows:
138	138	(b) Any owner may, not later than the 15th day after the date
139	139	of the meeting of association owners at which the election or vote
140	140	was held or the date of the announcement of the results of the
141	141	election or vote if no meeting was held, require a recount of the
142	142	votes. A demand for a recount must be submitted in writing either:
143	143	(1) by verified [certified] mail[, return receipt
144	144	requested, or by delivery by the United States Postal Service with
145	145	signature confirmation service] to the property owners'
146	146	association's mailing address as reflected on the latest management
147	147	certificate filed under Section 209.004; or
148	148	(2) in person to the property owners' association's
149	149	managing agent as reflected on the latest management certificate
150	150	filed under Section 209.004 or to the address to which absentee and
151	151	proxy ballots are mailed.
152	152	(b-1) The association must estimate the costs for
153	153	performance of the recount by a person qualified to tabulate votes
154	154	under Subsection (c) and must send an invoice for the estimated
155	155	costs to the requesting owner at the owner's last known address
156	156	according to association records not later than the 20th day after
157	157	the date the association receives the owner's demand for the
158	158	recount.
159	159	(b-2) The owner demanding a recount under this section must
160	160	pay the invoice described by Subsection (b-1) in full to the
161	161	property owners' association on or before the 30th day after the
162	162	date the invoice is sent to the owner.
163	163	(b-3) If the invoice described by Subsection (b-1) is not
164	164	paid by the deadline prescribed by Subsection (b-2), the owner's
165	165	demand for a recount is considered withdrawn and a recount is not
166	166	required.
167	167	(b-4) If the estimated costs under Subsection (b-1) are
168	168	lesser or greater than the actual costs, the association must send a
169	169	final invoice to the owner on or before the 30th business day after
170	170	the date the results of the recount are provided. If the final
171	171	invoice includes additional amounts owed by the owner, any
172	172	additional amounts not paid to the association before the 30th
173	173	business day after the date the invoice is sent to the owner may be
174	174	added to the owner's account as an assessment. If the estimated
175	175	costs exceed the final invoice amount, the owner is entitled to a
176	176	refund. The association shall issue the refund to the owner not
177	177	later than the 30th business day after the date the invoice is sent
178	178	to the owner.
179	179	(c) Following receipt of payment under Subsection (b-2),
180	180	the [The] property owners' association shall, at the expense of the
181	181	owner requesting the recount, retain for the purpose of performing
182	182	the recount[,] the services of a person qualified to tabulate votes
183	183	under this subsection. The association shall enter into a contract
184	184	for the services of a person who:
185	185	(1) is not a member of the association or related to a
186	186	member of the association board within the third degree by
187	187	consanguinity or affinity, as determined under Chapter 573,
188	188	Government Code; and
189	189	(2) is:
190	190	(A) a current or former:
191	191	(i) county judge;
192	192	(ii) county elections administrator;
193	193	(iii) justice of the peace; or
194	194	(iv) county voter registrar; or
195	195	(B) a person agreed on by the association and
196	196	each person [the persons] requesting the recount.
197	197	(d) Any recount under Subsection (b) must be performed on or
198	198	before the 30th day after the date of receipt of [a request and]
199	199	payment for a recount in accordance with Subsection (b-2)
200	200	[Subsections (b) and (c)]. If the recount changes the results of
201	201	the election, the property owners' association shall reimburse the
202	202	requesting owner for the cost of the recount. The property owners'
203	203	association shall provide the results of the recount to each owner
204	204	who requested the recount. Any action taken by the board in the
205	205	period between the initial election vote tally and the completion
206	206	of the recount is not affected by any recount.
207	207	SECTION 9. Sections 209.0058(a) and (c), Property Code, are
208	208	amended to read as follows:
209	209	(a) Any vote cast by a member of a property owners'
210	210	association in a director [an] election or in a vote on the issue of
211	211	whether to amend a dedicatory instrument, increase a regular
212	212	assessment, adopt a special assessment, or remove a director [or
213	213	vote by a member of a property owners' association] must be in
214	214	writing and signed by the member.
215	215	(c) In an association [association-wide] election, written
216	216	and signed ballots are not required for uncontested races.
217	217	SECTION 10. Section 209.00591, Property Code, is amended by
218	218	adding Subsection (b-1) and amending Subsection (c) to read as
219	219	follows:
220	220	(b-1) Notwithstanding any other provision of this chapter,
221	221	a property owners' association's bylaws may require one or more
222	222	board members to reside in the subdivision subject to the
223	223	dedicatory instruments. A requirement described by this subsection
224	224	is not applicable during the development period.
225	225	(c) The declaration may provide for a period of declarant
226	226	control of the association during which a declarant, or persons
227	227	designated by the declarant, may appoint and remove board members
228	228	and the officers of the association, other than board members or
229	229	officers elected by members of the property owners'
230	230	association. Regardless of the period of declarant control
231	231	provided by the declaration, on or before the 120th day after the
232	232	date 75 percent of the lots that may be created and made subject to
233	233	the declaration are conveyed to owners other than a declarant or a
234	234	builder in the business of constructing homes who purchased the
235	235	lots from the declarant for the purpose of selling completed homes
236	236	built on the lots, at least one-third of the board members must be
237	237	elected by owners other than the declarant. If the declaration
238	238	does not include the number of lots that may be created and made
239	239	subject to the declaration, at least one-third of the board members
240	240	must be elected by owners other than the declarant not later than
241	241	the 10th anniversary of the date the declaration was recorded.
242	242	SECTION 11. Section 209.00592, Property Code, is amended by
243	243	amending Subsection (a) and adding Subsections (a-1) and (c-1) to
244	244	read as follows:
245	245	(a) The voting rights of an owner may be cast or given:
246	246	(1) if a meeting of the property owners' association is
247	247	held, in person or by proxy at the [a] meeting [of the property
248	248	owners' association];
249	249	(2) by absentee ballot in accordance with this
250	250	section; or
251	251	(3) [by electronic ballot in accordance with this
252	252	section; or
253	253	[(4)] by any method of representative or delegated
254	254	voting provided by a dedicatory instrument.
255	255	(a-1) The board may in its discretion use electronic ballots
256	256	in accordance with this section as an additional method of voting.
257	257	(c-1) For purposes of Subsection (b), a nomination taken
258	258	from the floor in an election of directors is not considered an
259	259	amendment to the proposal for the election.
260	260	SECTION 12. Section 209.00593(d), Property Code, is amended
261	261	to read as follows:
262	262	(d) This section does not apply to the appointment of a
263	263	board member during a development period. [In this subsection,
264	264	"development period" means a period stated in a declaration during
265	265	which a declarant reserves:
266	266	[(1) a right to facilitate the development,
267	267	construction, and marketing of the subdivision; and
268	268	[(2) a right to direct the size, shape, and
269	269	composition of the subdivision.]
270	270	SECTION 13. Section 209.00594, Property Code, is amended by
271	271	adding Subsection (b-1) and amending Subsection (c) to read as
272	272	follows:
273	273	(b-1) A person performing a recount under Section
274	274	209.0057(c) may not disclose to any other person how an individual
275	275	voted.
276	276	(c) Notwithstanding any other provision of this chapter or
277	277	any other law, only a person [other than a person] who tabulates
278	278	votes under Subsection (b) or who performs a recount under Section
279	279	209.0057(c) [, including a person described by Subsection (a),] may
280	280	be given access to the ballots cast in the election or vote [only as
281	281	part of a recount process authorized by law].
282	282	SECTION 14. Section 209.006, Property Code, is amended to
283	283	read as follows:
284	284	Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION.
285	285	(a) Before a property owners' association may suspend an owner's
286	286	right to use a common area, file a suit against an owner other than a
287	287	suit to collect a regular or special assessment or foreclose under
288	288	an association's lien, charge an owner for property damage, or levy
289	289	a fine for a violation of the restrictions or bylaws or rules of the
290	290	association, the association or its agent must give written notice
291	291	to the owner by verified [certified] mail[, return receipt
292	292	requested].
293	293	(b) The notice must:
294	294	(1) describe the nature of the violation or property
295	295	damage that is the basis for the suspension action, charge, or fine
296	296	and state any amount due the association from the owner; [and]
297	297	(2) except as provided in Subsection (d), inform the
298	298	owner that the owner:
299	299	(A) is entitled to a reasonable period to cure
300	300	the violation and avoid the fine or suspension [unless the owner was
301	301	given notice and a reasonable opportunity to cure a similar
302	302	violation within the preceding six months];
303	303	(B) may request a hearing under Section 209.007
304	304	on or before the 30th day after the date [the owner receives] the
305	305	notice was mailed to the owner; and
306	306	(C) may have special rights or relief related to
307	307	the enforcement action under federal law, including the
308	308	Servicemembers Civil Relief Act (50 U.S.C. App. [app.] Section 501
309	309	et seq.), if the owner is serving on active military duty;
310	310	(3) specify the date by which the owner must cure the
311	311	violation if the violation is of a curable nature and does not pose
312	312	a threat to public health or safety; and
313	313	(4) be sent by verified mail to the owner at the
314	314	owner's last known address as shown on the association records.
315	315	(c) The date specified in the notice under Subsection (b)(3)
316	316	must provide a reasonable period to cure the violation if the
317	317	violation is of a curable nature and does not pose a threat to
318	318	public health or safety.
319	319	(d) Subsections (a) and (b) do not apply to a violation for
320	320	which the owner has been previously given notice under this section
321	321	and the opportunity to exercise any rights available under this
322	322	section in the preceding six months.
323	323	(e) If the owner cures the violation before the expiration
324	324	of the period for cure described by Subsection (c), any fine
325	325	assessed for the violation is void.
326	326	(f) For purposes of this section, a violation is considered
327	327	a threat to public health or safety if the violation could
328	328	materially affect the physical health or safety of an ordinary
329	329	resident.
330	330	SECTION 15. Section 209.0062(c), Property Code, is amended
331	331	to read as follows:
332	332	(c) A property owners' association is [may] not required to
333	333	allow a payment plan for any amount that extends more than 18 months
334	334	from the date of the owner's request for a payment plan. The
335	335	association is not required to enter into a payment plan with an
336	336	owner who failed to honor the terms of a previous payment plan
337	337	during the two years following the owner's default under the
338	338	previous payment plan. The association is not required to make a
339	339	payment plan available to an owner after the period for cure
340	340	described by Section 209.0064(b)(3) expires. The association is
341	341	not required to allow an owner to enter into a payment plan more
342	342	than once in any 12-month period.
343	343	SECTION 16. Section 209.0063, Property Code, is amended by
344	344	amending Subsection (a) and adding Subsection (c) to read as
345	345	follows:
346	346	(a) Except as provided by Subsections [Subsection] (b) and
347	347	(c), a payment received by a property owners' association from the
348	348	owner shall be applied to the owner's debt in the following order of
349	349	priority:
350	350	(1) any delinquent assessment;
351	351	(2) any current assessment;
352	352	(3) any attorney's fees or third party collection
353	353	costs incurred by the association associated solely with
354	354	assessments or any other charge that could provide the basis for
355	355	foreclosure;
356	356	(4) any attorney's fees incurred by the association
357	357	that are not subject to Subdivision (3);
358	358	(5) any fines assessed by the association; and
359	359	(6) any other amount owed to the association.
360	360	(c) This section does not apply to a payment made pursuant
361	361	to a final judgment, another binding court order, or any mutual
362	362	agreement of the parties entered into after the 30-day period
363	363	described in Section 209.0064(b)(3).
364	364	SECTION 17. Section 209.0064(b), Property Code, is amended
365	365	to read as follows:
366	366	(b) A property owners' association may not hold an owner
367	367	liable for fees of a collection agent retained by the property
368	368	owners' association unless the association first provides written
369	369	notice to the owner by certified mail, return receipt requested,
370	370	that:
371	371	(1) specifies each delinquent amount and the total
372	372	amount of the payment required to make the account current;
373	373	(2) if the property owners' association is subject to
374	374	Section 209.0062, describes the options the owner has to avoid
375	375	having the account turned over to a collection agent, including
376	376	information regarding availability of a payment plan through the
377	377	association; and
378	378	(3) provides a period of at least 30 days for the owner
379	379	to cure the delinquency before further collection action is taken.
380	380	SECTION 18. Section 209.0091, Property Code, is amended to
381	381	read as follows:
382	382	Sec. 209.0091. PREREQUISITES TO FORECLOSURE: NOTICE AND
383	383	OPPORTUNITY TO CURE FOR CERTAIN OTHER LIENHOLDERS. (a) A property
384	384	owners' association may not sell a property pursuant to a
385	385	foreclosure right [foreclose a property owners' association
386	386	assessment lien on real property by giving notice of sale under
387	387	Section 51.002 or commencing a judicial foreclosure action] unless
388	388	the association has:
389	389	(1) provided written notice of the total amount of the
390	390	delinquency giving rise to the foreclosure to any other holder of a
391	391	lien of record on the property whose lien is inferior or subordinate
392	392	to the association's lien and is evidenced by a deed of trust; and
393	393	(2) provided the recipient of the notice an
394	394	opportunity to cure the delinquency before the 61st day after the
395	395	date the association mails [recipient receives] the notice
396	396	described in Subdivision (1).
397	397	(b) Notice under this section must be sent by verified
398	398	[certified] mail[, return receipt requested,] to the address for
399	399	the lienholder shown in the deed records relating to the property
400	400	that is subject to the property owners' association assessment
401	401	lien.
402	402	(c) Notwithstanding any other law, notice under this
403	403	section may be provided to any holder of a lien of record on the
404	404	property.
405	405	SECTION 19. Section 209.0092, Property Code, is amended by
406	406	amending Subsection (a) and adding Subsection (d) to read as
407	407	follows:
408	408	(a) Except as provided by Subsection (c) or (d) and subject
409	409	to Section 209.009, a property owners' association may not
410	410	foreclose a property owners' association assessment lien unless the
411	411	association first obtains a court order in an application for
412	412	expedited foreclosure under the rules adopted by the supreme court
413	413	under Subsection (b). A property owners' association may use the
414	414	procedure described by this subsection to foreclose any lien
415	415	described by the association's dedicatory instruments and is
416	416	considered to have with respect to the lien any power of sale
417	417	required by law as a condition of using the procedure described by
418	418	this subsection.
419	419	(d) The association may in its discretion elect not to use
420	420	the expedited procedure described by Subsection (b) and instead
421	421	foreclose the association's assessment lien under court judgment
422	422	foreclosing the lien and ordering the sale, pursuant to Rules 309
423	423	and 646a, Texas Rules of Civil Procedure.
424	424	SECTION 20. Section 209.0041(a), Property Code, is
425	425	repealed.
426	426	SECTION 21. (a) The changes in law made by this Act to
427	427	Chapter 207, Property Code, apply only to a request for subdivision
428	428	information made on or after the effective date of this Act and any
429	429	resale certificate delivered in response to that request. A
430	430	request for subdivision information made before the effective date
431	431	of this Act, any resale certificate delivered in response to that
432	432	request, and any request for an update of that resale certificate
433	433	are governed by the law as it existed immediately before that date,
434	434	and that law is continued in effect for that purpose.
435	435	(b) Sections 209.0041, 209.0056, 209.0057, 209.0058,
436	436	209.00592, and 209.00594(c), Property Code, as amended by this Act,
437	437	apply only to an election or vote held on or after the effective
438	438	date of this Act. An election or vote held before the effective
439	439	date of this Act is governed by the law as it existed immediately
440	440	before that date, and that law is continued in effect for that
441	441	purpose.
442	442	(c) Section 209.006, Property Code, as amended by this Act,
443	443	applies only to an enforcement action taken on or after the
444	444	effective date of this Act. An enforcement action taken before the
445	445	effective date of this Act is governed by the law as it existed
446	446	immediately before that date, and that law is continued in effect
447	447	for that purpose.
448	448	(d) Section 209.0064, Property Code, as amended by this Act,
449	449	applies only to a collection action taken on or after the effective
450	450	date of this Act. A collection action taken before the effective
451	451	date of this Act is governed by the law as it existed immediately
452	452	before that date, and that law is continued in effect for that
453	453	purpose.
454	454	(e) Section 209.0091, Property Code, as amended by this Act,
455	455	applies only to a foreclosure sale that takes place on or after the
456	456	effective date of this Act. A foreclosure sale that takes place
457	457	before the effective date of this Act is governed by the law as it
458	458	existed immediately before that date, and that law is continued in
459	459	effect for that purpose.
460	460	SECTION 22. This Act takes effect September 1, 2015.