87R3416 DRS-D
By: Sherman, Sr. H.B. No. 2387
A BILL TO BE ENTITLED
AN ACT
relating to suits to collect past due property owners' association
assessments.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 4, Property Code, is amended by adding
Chapter 31 to read as follows:
CHAPTER 31. SUITS TO COLLECT PROPERTY OWNERS' ASSOCIATION
ASSESSMENTS
Sec. 31.001. DEFINITIONS. In this chapter, a term defined
by Section 209.002 has the meaning assigned by that section.
Sec. 31.002. APPLICABILITY OF CHAPTER. This chapter
applies only to a property owners' association to which Chapter 209
applies.
Sec. 31.003. SUIT IN JUSTICE COURT; EXCLUSIVE JURISDICTION.
(a) A property owners' association that brings a suit to collect
past due assessments or interest or late fees associated with past
due assessments must bring the suit in a justice court.
(b) Notwithstanding Section 27.034(d), Government Code, a
justice court has exclusive jurisdiction of a suit under this
chapter.
Sec. 31.004. PETITION. The petition in a suit under this
chapter:
(1) must include a verified statement detailing:
(A) the basis for each amount sought by the
property owners' association, citing applicable provisions of the
association's dedicatory instruments; and
(B) the steps taken by the association to comply
with procedures required by Chapter 209 or other law, as
applicable, including procedures required by the association's
dedicatory instruments; and
(2) may not seek relief other than relief authorized
by Section 31.007 or 31.008.
Sec. 31.005. COUNTERCLAIMS; OFFSET. (a) A property owner's
answer in a suit under this chapter may not include a counterclaim
other than a claim that the property owners' association owes the
owner money and a request that any amount awarded to the association
be offset by the amount owed to the owner.
(b) A property owner's failure to assert a counterclaim
authorized by this section does not bar the owner from bringing a
separate suit on the claim, but the owner's failure to timely assert
the counterclaim in the answer bars consideration of the claim in
the suit brought against the owner under this chapter.
(c) This section does not affect the property owner's
ability to assert any lawful defense to the property owners'
association's claim.
Sec. 31.006. MEDIATION. (a) A justice court in a suit
under this chapter may order mediation of the dispute at no cost to
the property owner. Mediation ordered under this section shall be
conducted as provided by Chapter 154, Civil Practice and Remedies
Code.
(b) This section does not affect the justice court's
authority to order another method of alternative dispute resolution
under Section 27.034(c), Government Code, or the Texas Rules of
Civil Procedure.
Sec. 31.007. JUDGMENT; PAYMENT SCHEDULE. (a) A justice
court in a suit under this chapter shall:
(1) determine:
(A) whether the property owners' association is
entitled to all or part of the amounts requested in the
association's petition; and
(B) whether the property owner is entitled to any
offset requested in the owner's answer; and
(2) make an award as appropriate.
(b) The justice court's judgment must provide, if
applicable, that the property owner is not required to make a
payment to satisfy the award before the 30th day after the date the
judgment is signed or a later date specified in the judgment.
Subject to this subsection, the court may order that the property
owner be allowed to make partial payments toward satisfaction of
the award according to a payment schedule prescribed by the court.
Sec. 31.008. COSTS; ATTORNEY'S FEES. (a) The prevailing
party in a suit under this chapter is entitled to recover filing
fees and service costs incurred in connection with the suit.
(b) In addition to any amounts awarded under Subsection (a),
the justice court may award a party to the suit other costs and
reasonable and necessary attorney's fees as is equitable and just,
in an amount that does not exceed the greater of:
(1) 15 percent of the amount sought by the property
owners' association; or
(2) $500.
(c) The justice court may award a party to the suit
attorney's fees or other penalties or costs not specifically
authorized by this section only if:
(1) the court finds the other party to have acted in
bad faith in connection with the suit; or
(2) the sanction is authorized under Chapter 10, Civil
Practice and Remedies Code, or Rule 13, Texas Rules of Civil
Procedure.
(d) A court hearing an appeal or enforcing a judgment under
this chapter may award a party to the appeal or enforcement action
costs and reasonable and necessary attorney's fees as is equitable
and just.
Sec. 31.009. COLLECTION OF AMOUNTS NOT AWARDED. A judgment
under this chapter in favor of a property owners' association must
provide that the association or the association's agent may not
seek to impose or collect any additional penalty, cost, attorney's
fees, or other charge related to the assessments that are the
subject of the suit except in a proceeding to enforce the judgment.
Sec. 31.010. RECORDING OF CERTAIN INSTRUMENTS. (a) A
judgment under this chapter that has become final after the
exhaustion of appeals or after the expiration of the time for appeal
is the only basis to record a lien based on unpaid property owners'
association assessments and related charges.
(b) A lis pendens, notice of assessment lien, or similar
instrument may not be recorded with respect to any amount sought by
a property owners' association in a suit under this chapter:
(1) while the property owner is current under a
payment plan ordered under Section 31.007; or
(2) before the 30th day after the date the owner
becomes delinquent under the payment plan.
Sec. 31.011. FORECLOSURE. (a) A judgment in a suit under
this chapter may be enforced by foreclosure on the property with
respect to which the assessments that are the subject of the suit
were imposed only if the association:
(1) otherwise has authority to foreclose an assessment
lien on the property for the amount awarded by the judgment; and
(2) complies with Section 209.0092 and any other law
governing the foreclosure of the lien.
(b) The property owners' association may not initiate
foreclosure of an assessment lien for the amount awarded by the
judgment:
(1) while the property owner is current under a
payment plan ordered under Section 31.007; or
(2) before the 30th day after the date:
(A) the owner becomes delinquent under the
payment plan; or
(B) the owner becomes delinquent under an order
to pay the entire award if no payment plan is ordered.
SECTION 2. (a) Except as provided by Subsection (b) of this
section, this Act applies to assessments imposed under a dedicatory
instrument adopted before, on, or after the effective date of this
Act.
(b) This Act applies only to collection of property owners'
association assessments that become due on or after the effective
date of this Act and any interest, fees, or other costs related to
those assessments. Collection of property owners' association
assessments that became due before the effective date of this Act,
and any interest, fees, or other costs related to those
assessments, 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.
SECTION 3. This Act takes effect September 1, 2021.