Texas 2015 - 84th Regular

Texas Senate Bill SB834 Compare Versions

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1	1	By: Creighton S.B. No. 834
2	2	(In the Senate - Filed February 26, 2015; March 3, 2015,
3	3	read first time and referred to Committee on State Affairs;
4	4	April 29, 2015, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 9, Nays 0; April 29, 2015,
6	6	sent to printer.)
7	7	Click here to see the committee vote
8	8	COMMITTEE SUBSTITUTE FOR S.B. No. 834 By: Creighton
9	9
10	10
11	11	A BILL TO BE ENTITLED
12	12	AN ACT
13	13	relating to procedures required before certain condominium
14	14	associations file a suit or initiate an arbitration proceeding for
15	15	a defect or design claim.
16	16	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	17	SECTION 1. Subchapter C, Chapter 82, Property Code, is
18	18	amended by adding Sections 82.119 and 82.120 to read as follows:
19	19	Sec. 82.119. PROCEDURES FOR FILING SUIT OR INITIATING
20	20	ARBITRATION PROCEEDINGS FOR DEFECT OR DESIGN CLAIMS FOR CERTAIN
21	21	ASSOCIATIONS. (a) This section does not apply to an association
22	22	with less than eight units.
23	23	(b) In addition to any preconditions to filing suit or
24	24	initiating an arbitration proceeding included in the declaration,
25	25	an association, before filing suit or initiating an arbitration
26	26	proceeding to resolve a claim pertaining to the construction or
27	27	design of a unit or the common elements, must:
28	28	(1) obtain an inspection and a written independent
29	29	third-party report from a licensed professional engineer that:
30	30	(A) identifies the specific units or common
31	31	elements subject to the claim;
32	32	(B) describes the present physical condition of
33	33	the units or common elements subject to the claim; and
34	34	(C) describes any modifications, maintenance, or
35	35	repairs to the units or common elements performed by the unit owners
36	36	or the association; and
37	37	(2) obtain approval from unit owners holding more than
38	38	50 percent of the total votes in the association, voting in person
39	39	or by proxy as provided by Section 82.110, at a regular, annual, or
40	40	special meeting called in accordance with the declaration or
41	41	bylaws, as applicable.
42	42	(c) The association must provide written notice of the
43	43	inspection to be conducted by the engineer to each party subject to
44	44	a claim not later than the 10th day before the date the inspection
45	45	occurs. The notice must:
46	46	(1) identify the party engaged to prepare the report
47	47	required by Subsection (b)(1);
48	48	(2) identify the specific units or common elements to
49	49	be inspected; and
50	50	(3) include the date and time the inspection will
51	51	occur.
52	52	(d) Each party subject to a claim may attend the inspection
53	53	conducted by the engineer, either personally or through an agent.
54	54	(e) Before providing the notice of the special meeting under
55	55	Subsection (f), an association must:
56	56	(1) on completion of the independent third-party
57	57	report, provide the report to each unit owner and each party subject
58	58	to a claim; and
59	59	(2) allow each party subject to a claim at least 90
60	60	days after the date of completion of the report to inspect and
61	61	correct any condition identified in the report.
62	62	(f) Not later than the 30th day before the date the special
63	63	meeting described by Subsection (b)(2) is held, the association
64	64	must provide each unit owner with written notice of the date, time,
65	65	and location of the meeting. The notice must also include:
66	66	(1) a description of the nature of the claim, the
67	67	relief sought, the anticipated duration of prosecuting the claim,
68	68	and the likelihood of success;
69	69	(2) a copy of the report required by Subsection
70	70	(b)(1);
71	71	(3) a copy of the contract or proposed contract
72	72	between the association and the attorney selected by the board to
73	73	assert or provide assistance with the claim;
74	74	(4) a description of the attorney's fees, consultant
75	75	fees, expert witness fees, and court costs, whether incurred by the
76	76	association directly or for which the association may be liable as a
77	77	result of prosecuting the claim;
78	78	(5) a summary of the steps previously taken by the
79	79	association to resolve the claim;
80	80	(6) a statement that initiating a lawsuit or
81	81	arbitration proceeding to resolve a claim may affect the market
82	82	value, marketability, or refinancing of a unit while the claim is
83	83	prosecuted; and
84	84	(7) a description of the manner in which the
85	85	association proposes to fund the cost of prosecuting the claim.
86	86	(g) The notice required by Subsection (f) must be prepared
87	87	and signed by a person who is not:
88	88	(1) the attorney who represents or will represent the
89	89	association in the claim;
90	90	(2) a member of the law firm of the attorney who
91	91	represents or will represent the association in the claim; or
92	92	(3) employed by or otherwise affiliated with the law
93	93	firm of the attorney who represents or will represent the
94	94	association in the claim.
95	95	Sec. 82.120. BINDING ARBITRATION FOR CERTAIN CLAIMS.
96	96	(a) A declaration may provide that a claim pertaining to the
97	97	construction or design of a unit or the common elements must be
98	98	resolved by binding arbitration and may provide for a process by
99	99	which the claim is resolved.
100	100	(b) An amendment to the declaration that modifies or removes
101	101	the arbitration requirement or the process associated with
102	102	resolution of a claim may not apply retroactively to a claim
103	103	regarding the construction or design of units or common elements
104	104	based on an alleged act or omission that occurred before the date of
105	105	the amendment.
106	106	SECTION 2. Section 82.119, Property Code, as added by this
107	107	Act, applies only to a claim filed on or after the effective date of
108	108	this Act. A claim filed before the effective date of this Act is
109	109	governed by the law applicable to the claim immediately before the
110	110	effective date of this Act, and that law is continued in effect for
111	111	that purpose.
112	112	SECTION 3. This Act takes effect September 1, 2015.
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