S.B. No. 1168
AN ACT
relating to the operation of certain property owners' associations,
condominium unit owners' associations, and councils of owners.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 82.157(a), Property Code, is amended to
read as follows:
(a) Except as provided by Subsection (c), if a unit owner
other than a declarant intends to sell a unit, before executing a
contract or conveying the unit, the unit owner must furnish to the
purchaser a current copy of the declaration, bylaws, any
association rules, and a resale certificate that must have been
prepared not earlier than three months before the date it is
delivered to the purchaser. The resale certificate must be issued
by the association and must contain the current operating budget of
the association and statements of:
(1) any right of first refusal or other restraint
contained in the declaration that restricts the right to transfer a
unit;
(2) the amount of the periodic common expense
assessment and the unpaid common expenses or special assessments
currently due and payable from the selling unit owner;
(3) other unpaid fees or amounts payable to the
association by the selling unit owner;
(4) capital expenditures, if any, approved by the
association for the next 12 months;
(5) the amount of reserves, if any, for capital
expenditures and of portions of those reserves designated by the
association for a specified project;
(6) any unsatisfied judgments against the
association;
(7) the nature of any pending suits against the
association;
(8) insurance coverage provided for the benefit of
unit owners;
(9) whether the board has knowledge that any
alterations or improvements to the unit or to the limited common
elements assigned to that unit violate the declaration, bylaws, or
association rules;
(10) whether the board has received notice from a
governmental authority concerning violations of health or building
codes with respect to the unit, the limited common elements
assigned to that unit, or any other portion of the condominium;
(11) the remaining term of any leasehold estate that
affects the condominium and the provisions governing an extension
or renewal of the lease; [and]
(12) the name, mailing address, and telephone number
of the association's managing agent, if any;
(13) the association's current operating budget and
balance sheet; and
(14) all fees payable to the association or an agent of
the association that are associated with the transfer of ownership,
including a description of each fee, to whom the fee is paid, and
the amount of the fee.
SECTION 2. Section 207.001(2), Property Code, is amended to
read as follows:
(2) "Dedicatory instrument," "property owners'
association," and "restrictive covenant" have the meanings
assigned by Section 209.002 [202.001].
SECTION 3. Section 207.002, Property Code, is amended to
read as follows:
Sec. 207.002. APPLICABILITY. (a) This chapter applies to
a subdivision with a property owners' association that is entitled
to levy regular or special assessments.
(b) This chapter does not apply to a condominium council of
owners governed by Chapter 81 or a condominium unit owners'
association governed by Chapter 82.
SECTION 4. Section 209.002, Property Code, is amended by
amending Subdivision (4-a) and adding Subdivision (13) to read as
follows:
(4-a) "Development period" means a period stated in a
declaration during which a declarant reserves:
(A) a right to facilitate the development,
construction, and marketing of the subdivision; or [and]
(B) a right to direct the size, shape, and
composition of the subdivision.
(13) "Verified mail" means any method of mailing for
which evidence of mailing is provided by the United States Postal
Service or a common carrier.
SECTION 5. Section 209.003(d), Property Code, is amended to
read as follows:
(d) This chapter does not apply to a condominium as defined
[development governed] by Section 81.002 or 82.003 [Chapter 82].
SECTION 6. Section 209.0041, Property Code, is amended by
amending Subsection (h) and adding Subsections (h-1) and (h-2) to
read as follows:
(h) Except as provided by Subsection (h-1) or (h-2) [this
subsection], a declaration may be amended only by a vote of 67
percent of the total votes allocated to property owners entitled to
vote on the amendment of the declaration [in the property owners'
association], in addition to any governmental approval required by
law.
(h-1) If the declaration contains a lower percentage than
prescribed by Subsection (h), the percentage in the declaration
controls.
(h-2) If the declaration is silent as to voting rights for
an amendment, the declaration may be amended by a vote of owners
owning 67 percent of the lots subject to the declaration.
SECTION 7. Chapter 209, Property Code, is amended by adding
Section 209.0042 to read as follows:
Sec. 209.0042. METHODS OF PROVIDING NOTICES TO OWNERS.
(a) Subject to this section, a property owners' association may
adopt a method that may be used by the association to provide a
notice from the association to a property owner.
(b) A property owners' association may use an alternative
method of providing notice adopted under this section to provide a
notice for which another method is prescribed by law only if the
property owner to whom the notice is provided has affirmatively
opted to allow the association to use the alternative method of
providing notice to provide to the owner notices for which another
method is prescribed by law.
(c) A property owners' association may not require an owner
to allow the association to use an alternative method of providing
notice adopted under this section to provide to the owner any notice
for which another method of providing notice is prescribed by law.
SECTION 8. Section 209.0051, Property Code, is amended by
amending Subsections (b), (c-1), and (h) and adding Subsection
(c-2) to read as follows:
(b) In this section, "board[:
[(1) "Board] meeting":
(1) [(A)] means a deliberation between a quorum of the
voting board of the property owners' association, or between a
quorum of the voting board and another person, during which
property owners' association business is considered and the board
takes formal action; and
(2) [(B)] does not include the gathering of a quorum
of the board at a social function unrelated to the business of the
association or the attendance by a quorum of the board at a
regional, state, or national convention, ceremonial event, or press
conference, if formal action is not taken and any discussion of
association business is incidental to the social function,
convention, ceremonial event, or press conference.
[(2) "Development period" means a period stated in a
declaration during which a declarant reserves:
[(A) a right to facilitate the development,
construction, and marketing of the subdivision; and
[(B) a right to direct the size, shape, and
composition of the subdivision.]
(c-1) Except for a meeting held by electronic or telephonic
means under Subsection (c-2) [(h)], a board meeting must be held in
a county in which all or part of the property in the subdivision is
located or in a county adjacent to that county.
(c-2) A board meeting may be held by electronic or
telephonic means provided that:
(1) each board member may hear and be heard by every
other board member;
(2) except for any portion of the meeting conducted in
executive session:
(A) all owners in attendance at the meeting may
hear all board members; and
(B) owners are allowed to listen using any
electronic or telephonic communication method used or expected to
be used by a board member to participate; and
(3) the notice of the meeting includes instructions
for owners to access any communication method required to be
accessible under Subdivision (2)(B).
(h) Except as provided by this subsection, a [A] board may
take action outside of a meeting [meet by any method of
communication], including voting by electronic or [and] telephonic
means, without prior notice to owners under Subsection (e), if each
board member is given a reasonable opportunity to express the board
member's opinion to all other board members and to vote [director
may hear and be heard by every other director, or the board may take
action by unanimous written consent to consider routine and
administrative matters or a reasonably unforeseen emergency or
urgent necessity that requires immediate board action]. Any action
taken without notice to owners under Subsection (e) must be
summarized orally, including an explanation of any known actual or
estimated expenditures approved at the meeting, and documented in
the minutes of the next regular or special board meeting. The board
may not, unless done in an open meeting for which [without] prior
notice was given to owners under Subsection (e), consider or vote
on:
(1) fines;
(2) damage assessments;
(3) initiation of foreclosure actions;
(4) initiation of enforcement actions, excluding
temporary restraining orders or violations involving a threat to
health or safety;
(5) increases in assessments;
(6) levying of special assessments;
(7) appeals from a denial of architectural control
approval; [or]
(8) a suspension of a right of a particular owner
before the owner has an opportunity to attend a board meeting to
present the owner's position, including any defense, on the issue;
(9) lending or borrowing money;
(10) the adoption or amendment of a dedicatory
instrument;
(11) the approval of an annual budget or the approval
of an amendment of an annual budget that increases the budget by
more than 10 percent;
(12) the sale or purchase of real property;
(13) the filling of a vacancy on the board;
(14) the construction of capital improvements other
than the repair, replacement, or enhancement of existing capital
improvements; or
(15) the election of an officer.
SECTION 9. Section 209.0056, Property Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) For an election or vote taken at a meeting of the owners,
not [Not] later than the 10th day or earlier than the 60th day
before the date of the [an] election or vote, a property owners'
association shall give written notice of the election or vote to:
(1) each owner of property in the property owners'
association, for purposes of an association-wide election or vote;
or
(2) each owner of property in the property owners'
association entitled under the dedicatory instruments to vote in a
particular representative election, for purposes of a vote that
involves election of representatives of the association who are
vested under the dedicatory instruments of the property owners'
association with the authority to elect or appoint board members of
the property owners' association.
(a-1) For an election or vote of owners not taken at a
meeting, the property owners' association shall give notice of the
election or vote to all owners entitled to vote on any matter under
consideration. The notice shall be given not later than the 20th
day before the latest date on which a ballot may be submitted to be
counted.
SECTION 10. Section 209.0057, Property Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsections
(b-1), (b-2), (b-3), and (b-4) to read as follows:
(b) Any owner may, not later than the 15th day after the
later of the date of any [the] meeting of owners at which the
election or vote was held or the date of the announcement of the
results of the election or vote, require a recount of the votes. A
demand for a recount must be submitted in writing either:
(1) by verified [certified] mail[, return receipt
requested,] or by delivery by the United States Postal Service with
signature confirmation service to the property owners'
association's mailing address as reflected on the latest management
certificate filed under Section 209.004; or
(2) in person to the property owners' association's
managing agent as reflected on the latest management certificate
filed under Section 209.004 or to the address to which absentee and
proxy ballots are mailed.
(b-1) The property owners' association must estimate the
costs for performance of the recount by a person qualified to
tabulate votes under Subsection (c) and must send an invoice for the
estimated costs to the requesting owner at the owner's last known
address according to association records not later than the 20th
day after the date the association receives the owner's demand for
the recount.
(b-2) The owner demanding a recount under this section must
pay the invoice described by Subsection (b-1) in full to the
property owners' association on or before the 30th day after the
date the invoice is sent to the owner.
(b-3) If the invoice described by Subsection (b-1) is not
paid by the deadline prescribed by Subsection (b-2), the owner's
demand for a recount is considered withdrawn and a recount is not
required.
(b-4) If the estimated costs under Subsection (b-1) are
lesser or greater than the actual costs, the property owners'
association must send a final invoice to the owner on or before the
30th business day after the date the results of the recount are
provided. If the final invoice includes additional amounts owed by
the owner, any additional amounts not paid to the association
before the 30th business day after the date the invoice is sent to
the owner may be added to the owner's account as an assessment. If
the estimated costs exceed the final invoice amount, the owner is
entitled to a refund. The refund shall be paid to the owner at the
time the final invoice is sent under this subsection.
(c) Following receipt of payment under Subsection (b-2),
the [The] property owners' association shall, at the expense of the
owner requesting the recount, retain for the purpose of performing
the recount[,] the services of a person qualified to tabulate votes
under this subsection. The association shall enter into a contract
for the services of a person who:
(1) is not a member of the association or related to a
member of the association board within the third degree by
consanguinity or affinity, as determined under Chapter 573,
Government Code; and
(2) is:
(A) a current or former:
(i) county judge;
(ii) county elections administrator;
(iii) justice of the peace; or
(iv) county voter registrar; or
(B) a person agreed on by the association and
each person [the persons] requesting the recount.
(d) On [Any recount under Subsection (b) must be performed
on] or before the 30th day after the date of receipt of [a request
and] payment for a recount in accordance with Subsection (b-2), the
recount must be completed and the property owners' association must
provide each owner who requested the recount with notice of the
results of the recount [Subsections (b) and (c)]. If the recount
changes the results of the election, the [property owners']
association shall reimburse the requesting owner for the cost of
the recount not later than the 30th day after the date the results
of the recount are provided. [The property owners' association
shall provide the results of the recount to each owner who requested
the recount.] Any action taken by the board in the period between
the initial election vote tally and the completion of the recount is
not affected by any recount.
SECTION 11. Section 209.0058, Property Code, is amended by
amending Subsections (a) and (c) and adding Subsections (a-1) and
(d) to read as follows:
(a) Except as provided by Subsection (d), a [Any] vote cast
[in an election or vote] by a member of a property owners'
association must be in writing and signed by the member if the vote
is cast:
(1) outside of a meeting;
(2) in an election to fill a position on the board;
(3) on a proposed adoption or amendment of a
dedicatory instrument;
(4) on a proposed increase in the amount of a regular
assessment or the proposed adoption of a special assessment; or
(5) on the proposed removal of a board member.
(a-1) If a property owners' association elects to use a
ballot for a vote on a matter other than a matter described by
Subsection (a), the ballot must be:
(1) in writing and signed by the member; or
(2) cast by secret ballot in accordance with
Subsection (d).
(c) In a property owners' association [an association-wide]
election, written and signed ballots are not required for
uncontested races.
(d) A property owners' association may adopt rules to allow
voting by secret ballot by association members. The association
must take measures to reasonably ensure that:
(1) a member cannot cast more votes than the member is
eligible to cast in an election or vote;
(2) the association counts each vote cast by a member
that the member is eligible to cast; and
(3) in any election for the board, each candidate may
name one person to observe the counting of the ballots, provided
that this does not entitle any observer to see the name of the
person who cast any ballot, and that any disruptive observer may be
removed.
SECTION 12. Section 209.0059, Property Code, is amended by
adding Subsection (c) to read as follows:
(c) In a residential development with 10 or fewer lots for
which the declaration was recorded before January 1, 2015, a person
may not vote in a property owners' association election unless the
person is subject to a dedicatory instrument governing the
association through which the association exercises its authority.
SECTION 13. Section 209.00591, Property Code, is amended by
adding Subsection (a-1) and amending Subsection (c) to read as
follows:
(a-1) Notwithstanding any other provision of this chapter,
a property owners' association's bylaws may require one or more
board members to reside in the subdivision subject to the
dedicatory instruments but may not require all board members to
reside in that subdivision. A requirement described by this
subsection is not applicable during the development period.
(c) The declaration may provide for a period of declarant
control of the association during which a declarant, or persons
designated by the declarant, may appoint and remove board members
and the officers of the association, other than board members or
officers elected by members of the property owners'
association. Regardless of the period of declarant control
provided by the declaration, on or before the 120th day after the
date 75 percent of the lots that may be created and made subject to
the declaration are conveyed to owners other than a declarant or a
builder in the business of constructing homes who purchased the
lots from the declarant for the purpose of selling completed homes
built on the lots, at least one-third of the board members must be
elected by owners other than the declarant. If the declaration
does not include the number of lots that may be created and made
subject to the declaration, at least one-third of the board members
must be elected by owners other than the declarant not later than
the 10th anniversary of the date the declaration was recorded.
SECTION 14. Section 209.00592, Property Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (b-1) to
read as follows:
(a) Subject to Subsection (a-1), the [The] voting rights of
an owner may be cast or given:
(1) in person or by proxy at a meeting of the property
owners' association;
(2) by absentee ballot in accordance with this
section;
(3) by electronic ballot in accordance with this
section; or
(4) by any method of representative or delegated
voting provided by a dedicatory instrument.
(a-1) Except as provided by this subsection, unless a
dedicatory instrument provides otherwise, a property owners'
association is not required to provide an owner with more than one
voting method. An owner must be allowed to vote by absentee ballot
or proxy.
(b-1) For purposes of Subsection (b), a nomination taken
from the floor in a board member election is not considered an
amendment to the proposal for the election.
SECTION 15. Section 209.00593, Property Code, is amended by
adding Subsections (a-1), (a-2), and (a-3) and amending Subsection
(d) to read as follows:
(a-1) At least 10 days before the date a property owners'
association composed of more than 100 lots disseminates absentee
ballots or other ballots to association members for purposes of
voting in a board member election, the association must provide
notice to the association members soliciting candidates interested
in running for a position on the board. The notice must contain
instructions for an eligible candidate to notify the association of
the candidate's request to be placed on the ballot and the deadline
to submit the candidate's request. The deadline may not be earlier
than the 10th day after the date the association provides the notice
required by this subsection.
(a-2) The notice required by Subsection (a-1) must be:
(1) mailed to each owner; or
(2) provided by:
(A) posting the notice in a conspicuous manner
reasonably designed to provide notice to association members:
(i) in a place located on the association's
common property or, with the property owner's consent, on other
conspicuously located privately owned property within the
subdivision; or
(ii) on any Internet website maintained by
the association or other Internet media; and
(B) sending the notice by e-mail to each owner
who has registered an e-mail address with the association.
(a-3) An association described by Subsection (a-1) shall
include on each absentee ballot or other ballot for a board member
election the name of each eligible candidate from whom the
association received a request to be placed on the ballot in
accordance with this section.
(d) This section does not apply to the appointment of a
board member during a development period. [In this subsection,
"development period" means a period stated in a declaration during
which a declarant reserves:
[(1) a right to facilitate the development,
construction, and marketing of the subdivision; and
[(2) a right to direct the size, shape, and
composition of the subdivision.]
SECTION 16. Section 209.00594, Property Code, is amended by
amending Subsections (b) and (c) and adding Subsections (b-1) and
(d) to read as follows:
(b) A person other than a person described by Subsection (a)
may tabulate votes in an association election or vote [but may not
disclose to any other person how an individual voted].
(b-1) A person who tabulates votes under Subsection (b) or
who performs a recount under Section 209.0057(c) may not disclose
to any other person how an individual voted.
(c) Notwithstanding any other provision of this chapter or
any other law, only a person [other than a person] who tabulates
votes under Subsection (b) or who performs a recount under Section
209.0057(c) [, including a person described by Subsection (a),] may
be given access to the ballots cast in the election or vote [only as
part of a recount process authorized by law].
(d) This section may not be construed to affect a person's
obligation to comply with a court order for the release of ballots
or other voting records.
SECTION 17. Section 209.006, Property Code, is amended to
read as follows:
Sec. 209.006. NOTICE REQUIRED BEFORE ENFORCEMENT ACTION.
(a) Before a property owners' association may suspend an owner's
right to use a common area, file a suit against an owner other than a
suit to collect a regular or special assessment or foreclose under
an association's lien, charge an owner for property damage, or levy
a fine for a violation of the restrictions or bylaws or rules of the
association, the association or its agent must give written notice
to the owner by certified mail[, return receipt requested].
(b) The notice must:
(1) describe the violation or property damage that is
the basis for the suspension action, charge, or fine and state any
amount due the association from the owner; [and]
(2) except as provided by Subsection (d), inform the
owner that the owner:
(A) is entitled to a reasonable period to cure
the violation and avoid the fine or suspension if the violation is
of a curable nature and does not pose a threat to public health or
safety [unless the owner was given notice and a reasonable
opportunity to cure a similar violation within the preceding six
months];
(B) may request a hearing under Section 209.007
on or before the 30th day after the date [the owner receives] the
notice was mailed to the owner; and
(C) may have special rights or relief related to
the enforcement action under federal law, including the
Servicemembers Civil Relief Act (50 U.S.C. App. [app.] Section 501
et seq.), if the owner is serving on active military duty;
(3) specify the date by which the owner must cure the
violation if the violation is of a curable nature and does not pose
a threat to public health or safety; and
(4) be sent by verified mail to the owner at the
owner's last known address as shown on the association records.
(c) The date specified in the notice under Subsection (b)(3)
must provide a reasonable period to cure the violation if the
violation is of a curable nature and does not pose a threat to
public health or safety.
(d) Subsections (a) and (b) do not apply to a violation for
which the owner has been previously given notice under this section
and the opportunity to exercise any rights available under this
section in the preceding six months.
(e) If the owner cures the violation before the expiration
of the period for cure described by Subsection (c), a fine may not
be assessed for the violation.
(f) For purposes of this section, a violation is considered
a threat to public health or safety if the violation could
materially affect the physical health or safety of an ordinary
resident.
(g) For purposes of this section, a violation is considered
uncurable if the violation has occurred but is not a continuous
action or a condition capable of being remedied by affirmative
action. For purposes of this subsection, the nonrepetition of a
one-time violation or other violation that is not ongoing is not
considered an adequate remedy.
(h) The following are examples of acts considered uncurable
for purposes of this section:
(1) shooting fireworks;
(2) an act constituting a threat to health or safety;
(3) a noise violation that is not ongoing;
(4) property damage, including the removal or
alteration of landscape; and
(5) holding a garage sale or other event prohibited by
a dedicatory instrument.
(i) The following are examples of acts considered curable
for purposes of this section:
(1) a parking violation;
(2) a maintenance violation;
(3) the failure to construct improvements or
modifications in accordance with approved plans and
specifications; and
(4) an ongoing noise violation such as a barking dog.
SECTION 18. Section 209.0062(c), Property Code, is amended
to read as follows:
(c) A property owners' association is [may] not required to
allow a payment plan for any amount that extends more than 18 months
from the date of the owner's request for a payment plan. The
association is not required to enter into a payment plan with an
owner who failed to honor the terms of a previous payment plan
during the two years following the owner's default under the
previous payment plan. The association is not required to make a
payment plan available to an owner after the period for cure
described by Section 209.0064(b)(3) expires. The association is
not required to allow an owner to enter into a payment plan more
than once in any 12-month period.
SECTION 19. Section 209.0064(b), Property Code, is amended
to read as follows:
(b) A property owners' association may not hold an owner
liable for fees of a collection agent retained by the [property
owners'] association unless the association first provides written
notice to the owner by certified mail[, return receipt requested,]
that:
(1) specifies each delinquent amount and the total
amount of the payment required to make the account current;
(2) if the association is subject to Section 209.0062
or the association's dedicatory instruments contain a requirement
to offer a payment plan, describes the options the owner has to
avoid having the account turned over to a collection agent,
including information regarding availability of a payment plan
through the association; and
(3) provides a period of at least 30 days for the owner
to cure the delinquency before further collection action is taken.
SECTION 20. Section 209.009, Property Code, is amended to
read as follows:
Sec. 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN
CIRCUMSTANCES. A property owners' association may not foreclose a
property owners' association's assessment lien if the debt securing
the lien consists solely of:
(1) fines assessed by the association;
(2) attorney's fees incurred by the association solely
associated with fines assessed by the association; or
(3) amounts added to the owner's account as an
assessment under Section 209.005(i) or 209.0057(b-4).
SECTION 21. Section 209.0091, Property Code, is amended to
read as follows:
Sec. 209.0091. PREREQUISITES TO FORECLOSURE: NOTICE AND
OPPORTUNITY TO CURE FOR CERTAIN OTHER LIENHOLDERS. (a) A property
owners' association may not file an application for an expedited
court order authorizing foreclosure of the association's
assessment lien as described by Section 209.0092(a) or a petition
for judicial foreclosure of the association's assessment lien as
described by Section 209.0092(d) [foreclose a property owners'
association assessment lien on real property by giving notice of
sale under Section 51.002 or commencing a judicial foreclosure
action] unless the association has:
(1) provided written notice of the total amount of the
delinquency giving rise to the foreclosure to any other holder of a
lien of record on the property whose lien is inferior or subordinate
to the association's lien and is evidenced by a deed of trust; and
(2) provided the recipient of the notice an
opportunity to cure the delinquency before the 61st day after the
date the association mails [recipient receives] the notice
described in Subdivision (1).
(b) Notice under this section must be sent by certified
mail[, return receipt requested,] to the address for the lienholder
shown in the deed records relating to the property that is subject
to the property owners' association assessment lien.
(c) Notwithstanding any other law, notice under this
section may be provided to any holder of a lien of record on the
property.
SECTION 22. Section 209.0092, Property Code, is amended by
amending Subsection (a) and adding Subsections (d) and (e) to read
as follows:
(a) Except as provided by Subsection (c) or (d) and subject
to Section 209.009, a property owners' association may not
foreclose a property owners' association assessment lien unless the
association first obtains a court order in an application for
expedited foreclosure under the rules adopted by the supreme court
under Subsection (b). A property owners' association may use the
procedure described by this subsection to foreclose any lien
described by the association's dedicatory instruments. A property
owners' association whose dedicatory instruments grant a right of
foreclosure is considered to have any power of sale required by law
as a condition of using the procedure described by this subsection.
(d) A property owners' association authorized to use the
procedure described by Subsection (a) may in its discretion elect
not to use that procedure and instead foreclose the association's
assessment lien under court judgment foreclosing the lien and
ordering the sale, pursuant to Rules 309 and 646a, Texas Rules of
Civil Procedure.
(e) This section does not affect any right an association
that is not authorized to use the procedure described by Subsection
(a) may have to judicially foreclose the association's assessment
lien as described by Subsection (d).
SECTION 23. Title 11, Property Code, is amended by adding
Chapter 213 to read as follows:
CHAPTER 213. MODIFICATION OR TERMINATION OF RESTRICTIONS IN
CERTAIN REAL ESTATE DEVELOPMENTS BY PROPERTY OWNERS' ASSOCIATION OR
PROPERTY OWNER PETITION
Sec. 213.001. DEFINITIONS. In this chapter:
(1) "Amenity property" means real property the use of
which is restricted by a dedicatory instrument to use as a golf
course or country club.
(2) "Council of owners" has the meaning assigned by
Section 81.002 as it relates to an existing condominium in a
development.
(3) "Dedicatory instrument" means a governing
instrument that:
(A) restricts amenity property to use as amenity
property;
(B) designates real property in the development,
other than amenity property, as a beneficiary of a restriction
described by Paragraph (A); and
(C) addresses the establishment, maintenance,
and operation of amenity property.
(4) "Development" means:
(A) amenity property; and
(B) all real property designated as beneficiary
property in the dedicatory instrument.
(5) "Owner" means a person, or the person's personal
representative, who holds record title to:
(A) a lot or parcel of real property in a
development; or
(B) a unit or apartment of a condominium in the
development.
(6) "Petition circulator" means a person authorized to
circulate a petition under Section 213.005.
(7) "Property owners' association" means an
incorporated or unincorporated association that:
(A) is designated as the representative of the
owners of lots or parcels of real property in a development;
(B) has a membership primarily consisting of
those owners; and
(C) manages or regulates all or part of the
development for the benefit of those owners.
(8) "Restrictions" means one or more restrictive
covenants contained or incorporated by reference in a properly
recorded map, plat, replat, declaration, or other instrument filed
in the real property records or map or plat records. The term
includes any amendment or extension of the restrictions.
(9) "Restrictive covenant" means any covenant,
condition, or restriction contained in a dedicatory instrument,
whether mandatory, prohibitive, permissive, or administrative.
(10) "Unit owners' association" means an association
of unit owners organized under Section 82.101 for a condominium in a
development.
Sec. 213.002. FINDINGS AND PURPOSE. (a) The legislature
finds that:
(1) a restriction on the use of an amenity property may
create uncertainty if the owners of an amenity property are
reluctant or unable to properly maintain or operate the amenity
property;
(2) such uncertainty may discourage investment and
negatively impact property values in the development;
(3) investors may be reluctant to or will not invest
funds to revitalize an amenity property burdened with a restriction
on its use;
(4) financial institutions may be reluctant to or will
not provide financing to revitalize an amenity property burdened
with a restriction on its use; and
(5) establishing a procedural option to allow for the
modification or termination of the restriction would alleviate the
uncertainty and encourage revitalization of the amenity property.
(b) The purpose of this chapter is to provide a procedural
option for the modification or termination of a restriction on the
use of an amenity property.
Sec. 213.003. MODIFICATION OR TERMINATION BY PETITION.
(a) Except as provided by Subsection (b), a restriction on the use
of an amenity property may be modified or terminated by petition in
accordance with this chapter.
(b) This chapter does not apply if:
(1) a dedicatory instrument includes a procedure to
modify or terminate a restriction on the use of an amenity property
on approval of the owners of less than 75 percent of, as applicable,
the lots or parcels of land and units or apartments of condominiums
in the development; or
(2) a restriction on the use of an amenity property may
be modified or terminated under the procedures of Chapter 81, 82,
201, or 209.
Sec. 213.004. PREREQUISITES FOR CIRCULATION. A petition
may not be circulated under this chapter unless:
(1) for a continuous period of at least 36 months, the
amenity property has not been in operation; and
(2) if zoning regulations apply to the amenity
property, the owner of the amenity property has received all
required zoning approvals for any proposed redevelopment of the
amenity property.
Sec. 213.005. PETITION CIRCULATOR. A petition authorized
by Section 213.003 may be circulated by:
(1) an owner;
(2) a property owners' association that owns and
manages the amenity property; or
(3) a unit owners' association or council of owners
that owns and manages the amenity property.
Sec. 213.006. CONTENTS OF PETITION. (a) The petition must
include all relevant information about the proposed modification or
termination, including:
(1) the name of the development, if any;
(2) the name of the amenity property, if any;
(3) the recording information of the restriction to be
modified or terminated;
(4) the text of the restriction subject to
modification or termination;
(5) the text of the restriction as modified or
terminated; and
(6) a comparison of the original language of the
restriction and the restriction as modified or terminated, showing
any insertion and deletion of language or punctuation.
(b) The petition must state:
(1) reasonable times and dates the petition circulator
will be available at a location in the development to receive a
signed statement required by Section 213.008;
(2) a mailing address, e-mail address, and facsimile
number to which a signed statement may be delivered; and
(3) the date by which a signed statement must be
received to be counted.
Sec. 213.007. CIRCULATION PROCEDURE. (a) A petition
circulator shall deliver a copy of the petition to:
(1) all owners of:
(A) each lot or parcel of real property in the
development; and
(B) each unit or apartment of each condominium,
if any, in the development; and
(2) each property owners' association, unit owners'
association, and council of owners in the development.
(b) The petition circulator may deliver a copy of the
petition in any reasonable manner, including:
(1) by regular mail or certified mail, return receipt
requested, to the last known address of the owners or entities
described by Subsections (a)(1) and (2);
(2) personal delivery to the owners or entities
described by Subsections (a)(1) and (2); or
(3) at a regular meeting of a property owners'
association, unit owners' association, or council of owners.
(c) If the petition circulator acts in good faith in
determining ownership and delivering copies of the petition as
required by this section, an owner's lack of receipt of a copy of
the petition does not affect the application of a modification or
termination of a restriction under this chapter to the amenity
property.
Sec. 213.008. VOTE ON PROPOSAL. (a) The modification or
termination of the restriction is adopted if the owners of at least
75 percent of the total number, as applicable, of the lots or
parcels of land and the units or apartments of condominiums in the
development, including the owner of the amenity property, vote in
favor of the modification or termination of the restriction.
(b) An owner may cast a vote only by delivering to the
petition circulator in accordance with Section 213.009 a signed
statement that includes:
(1) the owner's name, the legal description or street
address of the owner's property, and the owner's mailing address;
(2) a statement that the owner holds record title to
the property;
(3) if more than one person owns an interest in the
property, the name and mailing address of each co-owner; and
(4) a statement indicating whether the owner is in
favor of or against the modification or termination proposed by the
petition.
(c) An owner may vote only in favor of or against the
modification or termination as proposed in the petition.
(d) If more than one person owns an interest in a lot or
parcel of land or a unit or apartment of a condominium, the owners
may cast only one vote for that lot, parcel, unit, or apartment.
Except as otherwise provided by this subsection, the vote of
multiple owners in favor of or against the modification or
termination may be reflected by the signatures of a majority of the
co-owners who return a signed statement. The vote of owners who are
married may be reflected by the signature of only one of those
owners.
(e) A person whose only property interest in a lot or parcel
of land or unit or apartment of a condominium is that of a contract
purchaser, lienholder, or mineral interest holder may not cast a
vote for that property under this chapter.
(f) A vote may be counted only if the vote is received before
the deadline stated in the petition as required by Section
213.006(b).
(g) The signed statement of an owner conclusively
establishes that:
(1) the petition was received by the owner in
accordance with Section 213.007; and
(2) the statement accurately reflects the vote of the
owner.
Sec. 213.009. DELIVERY OF SIGNED STATEMENT. (a) The
petition circulator must accept a signed statement described by
Section 213.008 that is delivered:
(1) in person under Section 213.006(b) or otherwise;
(2) by first class mail to an address stated in the
petition;
(3) by e-mail to an address stated in the petition; or
(4) by facsimile to a facsimile number stated in the
petition.
(b) This section supersedes any contrary provision in a
dedicatory instrument.
Sec. 213.010. CERTIFICATION OF RESULTS BY RECORDED
AFFIDAVIT. (a) The petition circulator shall certify the result
of the votes by filing an affidavit with the county clerk of the
county in which the restriction modified or terminated is recorded.
(b) The affidavit required by Subsection (a) must state:
(1) the name of the development, if any;
(2) the name of the amenity property, if any;
(3) the recording information of the restriction that
was modified or terminated;
(4) the text of the restriction before modification or
termination;
(5) the text of the restriction as modified or
terminated;
(6) the number of votes in favor of and against the
proposed modification or termination;
(7) the name and address of the petition circulator;
and
(8) the name, address, and telephone number of the
person maintaining the documents in accordance with Section
213.013.
(c) The petition circulator must affirm in the affidavit
that the petition was delivered in accordance with Section 213.007.
Sec. 213.011. NOTICE. (a) The recording of the affidavit
required by Section 213.010 constitutes notice that the restriction
is modified or terminated.
(b) Notwithstanding Subsection (a), the petition circulator
must deliver to each person who resides within 200 feet of the
boundary of the amenity property a copy of the affidavit. The
affidavit may be delivered by regular mail, by certified mail,
return receipt requested, or by personal delivery.
Sec. 213.012. EFFECTIVE DATE OF MODIFICATION OR
TERMINATION. The modification or termination of the restriction
takes effect on the later of:
(1) the date the affidavit required by Section 213.010
is filed with the county clerk; or
(2) the date, if any, specified as the effective date
in the petition.
Sec. 213.013. DOCUMENTATION AVAILABLE. At least one year
after the date the affidavit is filed with the county clerk, the
petition circulator shall make available for inspection and copying
the original petition, the signed statements described by Section
213.008, and the affidavit required by Section 213.010.
Sec. 213.014. EXPIRATION. This chapter expires September
1, 2021.
SECTION 24. Section 209.0041(a), Property Code, is
repealed.
SECTION 25. (a) Section 82.157(a), Property Code, as
amended by this Act, applies only to a resale certificate issued on
or after the effective date of this Act. A resale certificate
issued before the effective date of this Act is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
(b) The changes in law made by this Act to Chapter 207,
Property Code, apply only to a request for subdivision information
made on or after the effective date of this Act and any resale
certificate delivered in response to that request. A request for
subdivision information made before the effective date of this Act,
any resale certificate delivered in response to that request, and
any request for an update of that resale certificate are governed by
the law as it existed immediately before that date, and that law is
continued in effect for that purpose.
(c) Sections 209.0041, 209.0056, 209.0057, 209.0058,
209.00592, 209.00593, and 209.00594(c), Property Code, as amended
by this Act, apply only to an election or vote held on or after the
effective date of this Act. An election or vote held before the
effective date of this Act is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
(d) Section 209.006, Property Code, as amended by this Act,
applies only to an enforcement action taken on or after the
effective date of this Act. An enforcement action taken before the
effective date of this Act is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
(e) Section 209.0064, Property Code, as amended by this Act,
applies only to a collection action taken on or after the effective
date of this Act. A collection action taken before the effective
date of this Act is governed by the law as it existed immediately
before that date, and that law is continued in effect for that
purpose.
(f) Section 209.0091, Property Code, as amended by this Act,
applies only to an application or petition filed on or after the
effective date of this Act. An application or petition filed before
the effective date of this Act is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 26. Chapter 213, Property Code, as added by this
Act, does not apply to a petition circulated before the effective
date of this Act.
SECTION 27. This Act takes effect September 1, 2015.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1168 passed the Senate on
May 6, 2015, by the following vote: Yeas 27, Nays 4; and that the
Senate concurred in House amendments on May 28, 2015, by the
following vote: Yeas 26, Nays 5.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1168 passed the House, with
amendments, on May 24, 2015, by the following vote: Yeas 142,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor