By: Turner of Tarrant H.B. No. 3367
A BILL TO BE ENTITLED
AN ACT
relating to the powers and duties of property owners' associations;
authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsections (a) and (c), Section 204.002,
Property Code, are amended to read as follows:
Sec. 204.002. [APPLICATION] APPLICABILITY. (a) This
chapter applies [only] to [a] any residential real estate
subdivision governed by Chapter 209, Title 11, Property Code,
excluding a condominium [development] regime governed by Chapters
81 and 82, Title 7, Property Code[, that is located in whole or in
part:
(1) in a county with a population of 3.3 million or
more;
(2) in a county with a population of not less than
285,000 and not more than 300,000 that is adjacent to the Gulf of
Mexico and that is adjacent to a county having a population of 3.3
million or more; or
(3) in a county with a population of 275,000 or more
that:
(A) is adjacent to a county with a population of
3.3 million or more; and
(B) contains part of a national forest].
(c) This chapter does not apply to [portions of] a
subdivision property that [are] is zoned for [or that contain] a
commercial structure, an industrial structure, or an apartment
complex[, or a condominium development governed by Title 7,
Property Code]. For purposes of this subsection, "apartment
complex" means two or more dwellings in one or more buildings that
are owned by the same owner, located on the same lot or tract, and
managed by the same owner, agent, or management company.
SECTION 2. Subsections (b), (c) and (d), Section 204.003,
Property Code, are amended to read as follows:
(b) Notwithstanding Subsection (a), for a residential
subdivision [described by Subsection (c)], the provisions of this
chapter prevail over an express designation in a document described
by Subsection (a) if:
(1) the designated number of owners of real property
in the subdivision required for approval of an extension of,
addition to, or modification of the document is more than 75
percent; or
(2) the designation prohibits the extension of,
addition to, or modification of an existing restriction for a
certain time period and that time period has not expired.
(c) [Subsection (b) applies to a residential subdivision
that is located in a county described by Section 204.002(a)(3)
other than a gated community with private streets.
(d)] A document creating restrictions that provides for the
extension or renewal of restrictions and does not provide for
modification or amendment of restrictions may be modified under
this chapter, including modifying the provision that provides for
extension or renewal of the restrictions.
SECTION 3. Chapter 204, Property Code, is amended by adding
Section 204.012 to read as follows:
Sec. 204.012. RESTRICTIONS ON MEMBERSHIP OF ARCHITECTURAL
CONTROL COMMITTEE. A member or spouse of the board of directors or
trustees of a property owners' association, or a person in the
lineal line of consanguinity of a member of the board of directors
or trustees of a property owners' association may not be appointed
or elected to serve on an architectural control committee.
SECTION 4. Subsection (c), Section 207.003, Property Code,
is amended to read as follows:
(c) A property owners' association may charge a reasonable
and necessary fee, not to exceed $250, to assemble, copy, and
deliver the information required by this section and may charge a
reasonable and necessary fee, not to exceed $30, to prepare and
deliver an update of a resale certificate under Subsection (f).
SECTION 5. Subsection (b), Section 207.004, Property Code,
is amended to read as follows:
(b) If a property owners' association fails to deliver the
information required under Section 207.003 before the seventh
calendar day after the second request for the information was
mailed by certified mail, return receipt requested, or hand
delivered, evidenced by receipt, the owner:
(1) may seek one or any combination of the following:
(A) a court order directing the property owners'
association to furnish the required information;
(B) a judgment against the property owners'
association [for not more than $500];
(C) a judgment against the property owners'
association for court costs and attorney's fees; or
(D) a judgment authorizing the owner or the
owner's assignee to deduct the amounts awarded under Paragraphs (B)
and (C) from any future regular or special assessments payable to
the property owners' association; and
(2) may provide a buyer under contract to purchase the
owner's property an affidavit that states that the owner, owner's
agent, or title insurance company or its agent acting on behalf of
the owner made, in accordance with this chapter, two written
requests to the property owners' association for the information
described in Section 207.003 and that the association did not
timely provide the information.
SECTION 6. Section 207.006, Property Code, is amended to
read as follows:
Sec. 207.006. ONLINE SUBDIVISION INFORMATION REQUIRED. (a)
A property owners' association shall make the most recent versions
of its dedicatory instruments, including its amendments, relating
to the association or subdivision and filed in the county deed
records available on [a] the homepage of a publicly available
website [if] the association [has,] or [a] the management company
on behalf of the association maintains[, a publicly accessible
website].
SECTION 7. Section 209.002, Property Code, is amended by
adding a new subdivision (2-a) to read as follows:
(2-a) "Commission" has the meaning assigned by Chapter
1101, Title 7, Occupations Code.
SECTION 8. Sec. 209.004, Property Code, is amended to read
as follows:
MANAGEMENT CERTIFICATES. (a) A property owners' association
shall record in each county in which any portion of the residential
subdivision is located a management certificate, signed and
acknowledged by an officer or the managing agent of the
association, stating:
(1) the name of the subdivision;
(2) the name of the association;
(3) the recording data for the subdivision;
(4) the recording data for the declaration and its
amendments;
(5) the name and mailing address of the association;
(6) the name, [and] mailing address, phone number, and
email address of the person managing the association or the
association's designated representative; [and]
(7) the website address of a publicly available
website for the association; and
(8) other information the association considers
appropriate.
(b) Not later than July 1 of each calendar year, a property
owners' association currently formed and operating as of August 31,
2021 shall also electronically file a management certificate, or an
amended management certificate required under this chapter to the
commission. The commission may charge a fee for the electronic
filing of a management certificate, or an amended management
certificate. A fee adopted by the commission may not exceed the
amount charged by a property owners' association for a resale
certificate under Chapter 207, Title 11, Property Code.
(b-1) A property owners' association formed and operating
as of September 1, 2021 and after shall also electronically file a
management certificate, or an amended management certificate
required under this chapter to the commission within 10 calendar
days of filing the required management certificate with a county
clerk under this chapter. The commission may charge a fee for the
electronic filing of a management certificate, or an amended
management certificate. A fee adopted by the commission may not
exceed the amount charged by a property owners' association for a
resale certificate under Chapter 207, Title 11, Property Code.
[(a-1)] (c) The county clerk of each county in which a
management certificate is filed as required by this section shall
record the management certificate in the real property records of
the county and index the document as a "Property Owners'
Association Management Certificate."
[(b)] (d) The property owners' association shall record an
amended management certificate in each county in which any portion
of the residential subdivision is located not later than the 30th
day after the date the association has notice of a change in any
information in the recorded certificate required by Subsection (a).
[(c)] (e) Except as provided under Subsections (d) and (e),
the property owners' association and its officers, directors,
employees, and agents are not subject to liability to any person for
a delay in recording or failure to record with a county clerk's
office or with the commission a management certificate, unless the
delay or failure is [wilful] willful or caused by gross negligence.
[(d)] (f) If a property owners' association fails to record
a management certificate or an amended management certificate under
this section, the seller, the purchaser, lender, or title insurance
company or its agent in a transaction involving property in the
property owners' association is not liable to the property owners'
association for:
(1) any amount due to the association on the date of a
transfer to a bona fide purchaser; and
(2) any debt to or claim of the association that
accrued before the date of a transfer to a bona fide purchaser.
[(e)] (g) A lien of a property owners' association that
fails to file a management certificate or an amended management
certificate under this section is unenforceable [to secure an
amount due on the effective date of a transfer to a bona fide
purchaser is enforceable only for an amount incurred after the
effective date of sale].
[(f)] (h) For purposes of this section, "bona fide
purchaser" means:
(1) a person who pays valuable consideration without
notice of outstanding rights of others and acts in good faith; or
(2) a third-party lender who acquires a security
interest in the property under a deed of trust.
SECTION 9. Subsections (e) and (h), Section 209.0051,
Property Code, are amended to read as follows:
(e) Members shall be given notice of the date, hour, place,
and general subject of a regular or special board meeting,
including a general description of any matter to be brought up for
deliberation in executive session. The notice shall be:
(1) mailed to each property owner not later than the
10th day or earlier than the 60th day before the date of the
meeting; or
(2) provided at least [72] 144 hours before the start
of the meeting by:
(A) posting the notice in a conspicuous manner
reasonably designed to provide notice to property owners'
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 the homepage of an [any] Internet
website maintained by the association [or] and other Internet
media; and
(B) sending the notice by e-mail to each owner
who has registered an e-mail address with the association.
(h) Except as provided by this subsection, a board may take
action outside of a meeting, including voting by electronic or
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. 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
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;
(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 10. Subsection (a), Section 209.006, Property Code,
is amended to read as follows:
(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, or report any delinquency of an
owner to a credit reporting agency or bureau, the association or its
agent must give written notice to the owner by certified mail.
SECTION 11. Subsection (a), Section 209.0063, Occupations
Code, is amended to read as follows:
(a) Except as provided by Subsection (b), a payment received
by a property owners' association from the owner shall be applied to
the owner's debt in the following order of priority:
(1) any delinquent assessment;
(2) any current assessment;
(3) any reasonable attorney's fees or reasonable third
party collection costs incurred by the association associated
solely with assessments or any other charge that could provide the
basis for foreclosure;
(4) any reasonable attorney's fees incurred by the
association that are not subject to Subdivision (3);
(5) any reasonable fines assessed by the association;
and
(6) any other reasonable and necessary incurred amount
owed to the association.
SECTION 12. Subsection (b), Section 209.0064, 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 association
unless the association first provides written notice to the owner
by certified mail 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] 45 days for the
owner to cure the delinquency before further collection action is
taken.
SECTION 13. Chapter 209, Property Code, is amended by
adding a new Section 209.0065 to read as follows:
Sec. 209.0065. CREDIT REPORTING AGENCIES. (a) A property
owners' association or the association's collection agent may not
report any delinquent fines, fee, or assessments to a credit
reporting agency if the property owner has a pending dispute of the
charges with the property owners' association.
(b) A property owners' association may report delinquent
payment history assessments, fines, and fees of property owners
within its jurisdiction to a credit reporting agency or bureau only
if:
(1) the association has sent, via certified mail, hand
delivery, electronic delivery, or by other delivery means
acceptable between the parties, a detailed report of all delinquent
charges owed;
(2) a property owner has been given the opportunity to
enter into a payment plan; and
(2) the detailed report of delinquent charges was sent
to a property owner at least 45 business days before reporting to a
credit reporting agency or bureau.
SECTION 14. Section 209.007, Property Code, is amended to
read as follows:
Sec. 209.007. HEARING BEFORE BOARD; ALTERNATIVE DISPUTE
RESOLUTION. (a) [If the] An owner is entitled to appeal a violation,
an architectural control committee decision, or dispute any fines
or fees to the board of directors of a property owners' association
[an opportunity to cure the violation, the owner has the right to
submit a written request for a hearing to discuss and verify facts
and resolve the matter in issue before a committee appointed by the
board of the property owners' association or before the board if the
board does not appoint a committee].
(b) [If a hearing is to be held before a committee, the
notice prescribed by Section 209.006 must state that the owner has
the right to appeal the committee's decision to the board by written
notice to the board.
(c)] The association shall hold a hearing under this section
not later than the 30th day after the date the board receives the
owner's request for [a] an appeal hearing and shall notify the owner
of the date, time, and place of the hearing not later than the 10th
day before the date of the hearing. The board or the owner may
request a postponement, and, if requested, a postponement shall be
granted for a period of not more than 10 days. Additional
postponements may be granted by agreement of the parties. The
[owner or the] association [may] shall make an audio recording of
the meeting. An owner may make an audio recording of the meeting.
(c) No later than 10 days before the association holds a
hearing under this section, the association shall provide to an
owner an evidence packet containing all documents, photographs, or
communications relating to the matter in issue which the
association intends to introduce at the hearing.
(d) If an association does not provide a complete evidence
packet within the time frame described in subsection (c), an owner
is entitled to an automatic 15 day postponement of the hearing.
(e) During a hearing, a member of the board of directors or
their designated representative of the association shall present
the association's evidence against the owner first. A property
owner or their designated representative is entitled to rebut the
association's evidence, present their evidence, and present issues
relevant to the appeal.
(f) The notice and hearing provisions of Section 209.006 and
this section do not apply if the association files a suit seeking a
temporary restraining order or temporary injunctive relief or files
a suit that includes foreclosure as a cause of action. If a suit is
filed relating to a matter to which those sections apply, a party to
the suit may file a motion to compel mediation. The notice and
hearing provisions of Section 209.006 and this section do not apply
to a temporary suspension of a person's right to use common areas if
the temporary suspension is the result of a violation that occurred
in a common area and involved a significant and immediate risk of
harm to others in the subdivision. The temporary suspension is
effective until the board makes a final determination on the
suspension action after following the procedures prescribed by this
section.
[(e)] (g) An owner or property owners' association may use
alternative dispute resolution services.
SECTION 15. Subsection (a), Section 209.008, Property Code,
is amended to read as follows:
(a) A property owners' association may collect
reimbursement of reasonable attorney's fees and other reasonable
and necessary costs incurred by the association relating to
collecting amounts, including damages, due the association for
enforcing restrictions or the bylaws or rules of the association
only if the owner is provided a written notice that attorney's fees
and costs will be charged to the owner if the delinquency or
violation continues after a date certain.
SECTION 16. Subsection (a), Section 209.008, Property Code,
is amended to read as follows:
Sec. 209.016. REGULATION OF RESIDENTIAL LEASES OR RENTAL
AGREEMENTS. (a) [In this section, "sensitive personal information"
means an individual's:
(1) social security number;
(2) driver's license number;
(3) government-issued identification number; or
(4) account, credit card, or debit card number.
(b)] A property owners' association may not adopt or enforce
a provision in a dedicatory instrument that:
(1) requires a lease or rental applicant or a tenant to
be submitted to and approved for tenancy by the property owners'
association; or
(2) requires the following information to be submitted
to a property owners' association regarding a lease or rental
applicant or current tenant:
(A) a consumer or credit report; or
(B) a lease or rental application submitted by
the applicant, tenant, or that person's agent to the property owner
or property owner's agent when applying for tenancy.
[(c) If a copy of the lease or rental agreement is required
by the property owners' association, any sensitive personal
information may be redacted or otherwise made unreadable or
indecipherable.
(d) Except as provided by Subsection (b), nothing in this
section shall be construed to prohibit the adoption or enforcement
of a provision in a dedicatory instrument establishing a
restriction relating to occupancy or leasing.]
SECTION 17. Section 204.003(d), Property Code, is repealed.
SECTION 18. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2021.