Texas 2021 - 87th Regular

Texas Senate Bill SB1938 Compare Versions

Only one version of the bill is available at this time.

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1	1	87R3901 NC-F
2	2	By: Creighton S.B. No. 1938
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the representation of parties in justice court cases
8	8	and to the correction or removal of certain obsolete provisions of
9	9	the Property Code.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter A, Chapter 27, Government Code, is
12	12	amended by adding Section 27.007 to read as follows:
13	13	Sec. 27.007. REPRESENTATION OF PARTIES. (a) A party in a
14	14	justice court case is not required to be represented by an attorney.
15	15	A party who is:
16	16	(1) an individual may be represented by:
17	17	(A) the individual's self;
18	18	(B) an attorney; or
19	19	(C) an authorized agent who is not an attorney;
20	20	or
21	21	(2) a corporation or other entity may be represented
22	22	by:
23	23	(A) an employee, owner, officer, or partner of
24	24	the entity who is not an attorney;
25	25	(B) an attorney; or
26	26	(C) an authorized agent who is not an attorney.
27	27	(b) The court may, for good cause, allow an individual who
28	28	is representing the individual's self to be assisted in court by a
29	29	family member or other individual who is not being compensated.
30	30	SECTION 2. Sections 27.001(4), (5), and (8), Property Code,
31	31	are amended to read as follows:
32	32	(4) "Construction defect" [has the meaning assigned by
33	33	Section 401.004 for an action to which Subtitle D, Title 16, applies
34	34	and for any other action] means a matter concerning the design,
35	35	construction, or repair of a new residence, of an alteration of or
36	36	repair or addition to an existing residence, or of an appurtenance
37	37	to a residence, on which a person has a complaint against a
38	38	contractor. The term may include any physical damage to the
39	39	residence, any appurtenance, or the real property on which the
40	40	residence and appurtenance are affixed proximately caused by a
41	41	construction defect.
42	42	(5) "Contractor":
43	43	(A) means:
44	44	(i) a builder [, as defined by Section
45	45	401.003,] contracting with an owner for the construction or repair
46	46	of a new residence, for the repair or alteration of or an addition
47	47	to an existing residence, or for the construction, sale,
48	48	alteration, addition, or repair of an appurtenance to a new or
49	49	existing residence;
50	50	(ii) any person contracting with a
51	51	purchaser for the sale of a new residence constructed by or on
52	52	behalf of that person; or
53	53	(iii) a person contracting with an owner or
54	54	the developer of a condominium for the construction of a new
55	55	residence, for an alteration of or an addition to an existing
56	56	residence, for repair of a new or existing residence, or for the
57	57	construction, sale, alteration, addition, or repair of an
58	58	appurtenance to a new or existing residence; and
59	59	(B) includes:
60	60	(i) an owner, officer, director,
61	61	shareholder, partner, or employee of the contractor; and
62	62	(ii) a risk retention group registered
63	63	under Chapter 2201 [Article 21.54], Insurance Code, that insures
64	64	all or any part of a contractor's liability for the cost to repair a
65	65	residential construction defect.
66	66	(8) "Structural failure" [has the meaning assigned by
67	67	Section 401.002 for an action to which Subtitle D, Title 16, applies
68	68	and for any other action] means actual physical damage to the
69	69	load-bearing portion of a residence caused by a failure of the
70	70	load-bearing portion.
71	71	SECTION 3. Section 27.003(a), Property Code, is amended to
72	72	read as follows:
73	73	(a) In an action to recover damages or other relief arising
74	74	from a construction defect:
75	75	(1) a contractor is not liable for any percentage of
76	76	damages caused by:
77	77	(A) negligence of a person other than the
78	78	contractor or an agent, employee, or subcontractor of the
79	79	contractor;
80	80	(B) failure of a person other than the contractor
81	81	or an agent, employee, or subcontractor of the contractor to:
82	82	(i) take reasonable action to mitigate the
83	83	damages; or
84	84	(ii) take reasonable action to maintain the
85	85	residence;
86	86	(C) normal wear, tear, or deterioration;
87	87	(D) normal shrinkage due to drying or settlement
88	88	of construction components within the tolerance of building
89	89	standards; or
90	90	(E) the contractor's reliance on written
91	91	information relating to the residence, appurtenance, or real
92	92	property on which the residence and appurtenance are affixed that
93	93	was obtained from official government records, if the written
94	94	information was false or inaccurate and the contractor did not know
95	95	and could not reasonably have known of the falsity or inaccuracy of
96	96	the information; and
97	97	(2) if an assignee of the claimant or a person
98	98	subrogated to the rights of a claimant fails to provide the
99	99	contractor with the written notice and opportunity to inspect and
100	100	offer to repair required by Section 27.004 [or fails to request
101	101	state-sponsored inspection and dispute resolution under Chapter
102	102	428, if applicable,] before performing repairs, the contractor is
103	103	not liable for the cost of any repairs or any percentage of damages
104	104	caused by repairs made to a construction defect at the request of an
105	105	assignee of the claimant or a person subrogated to the rights of a
106	106	claimant by a person other than the contractor or an agent,
107	107	employee, or subcontractor of the contractor.
108	108	SECTION 4. Sections 27.004(a), (b), (c), and (d), Property
109	109	Code, are amended to read as follows:
110	110	(a) Before [In a claim not subject to Subtitle D, Title 16,
111	111	before] the 60th day preceding the date a claimant seeking from a
112	112	contractor damages or other relief arising from a construction
113	113	defect initiates an action, the claimant shall give written notice
114	114	by certified mail, return receipt requested, to the contractor, at
115	115	the contractor's last known address, specifying in reasonable
116	116	detail the construction defects that are the subject of the
117	117	complaint. On the request of the contractor, the claimant shall
118	118	provide to the contractor any evidence that depicts the nature and
119	119	cause of the defect and the nature and extent of repairs necessary
120	120	to remedy the defect, including expert reports, photographs, and
121	121	videotapes, if that evidence would be discoverable under Rule 192,
122	122	Texas Rules of Civil Procedure. During the 35-day period after the
123	123	date the contractor receives the notice, and on the contractor's
124	124	written request, the contractor shall be given a reasonable
125	125	opportunity to inspect and have inspected the property that is the
126	126	subject of the complaint to determine the nature and cause of the
127	127	defect and the nature and extent of repairs necessary to remedy the
128	128	defect. The contractor may take reasonable steps to document the
129	129	defect. [In a claim subject to Subtitle D, Title 16, a contractor is
130	130	entitled to make an offer of repair in accordance with Subsection
131	131	(b). A claimant is not required to give written notice to a
132	132	contractor under this subsection in a claim subject to Subtitle D,
133	133	Title 16.]
134	134	(b) Not later than the [15th day after the date of a final,
135	135	unappealable determination of a dispute under Subtitle D, Title 16,
136	136	if applicable, or not later than the] 45th day after the date the
137	137	contractor receives the notice under this section, [if Subtitle D,
138	138	Title 16, does not apply,] the contractor may make a written offer
139	139	of settlement to the claimant. The offer must be sent to the
140	140	claimant at the claimant's last known address or to the claimant's
141	141	attorney by certified mail, return receipt requested. The offer
142	142	may include either an agreement by the contractor to repair or to
143	143	have repaired by an independent contractor partially or totally at
144	144	the contractor's expense or at a reduced rate to the claimant any
145	145	construction defect described in the notice and shall describe in
146	146	reasonable detail the kind of repairs which will be made. The
147	147	repairs shall be made not later than the 45th day after the date the
148	148	contractor receives written notice of acceptance of the settlement
149	149	offer, unless completion is delayed by the claimant or by other
150	150	events beyond the control of the contractor. If a contractor makes
151	151	a written offer of settlement that the claimant considers to be
152	152	unreasonable:
153	153	(1) on or before the 25th day after the date the
154	154	claimant receives the offer, the claimant shall advise the
155	155	contractor in writing and in reasonable detail of the reasons why
156	156	the claimant considers the offer unreasonable; and
157	157	(2) not later than the 10th day after the date the
158	158	contractor receives notice under Subdivision (1), the contractor
159	159	may make a supplemental written offer of settlement to the claimant
160	160	by sending the offer to the claimant or the claimant's attorney.
161	161	(c) If [compliance with Subtitle D, Title 16, or] the giving
162	162	of the notice under Subsections (a) and (b) within the period
163	163	prescribed by those subsections is impracticable because of the
164	164	necessity of initiating an action at an earlier date to prevent
165	165	expiration of the statute of limitations or if the complaint is
166	166	asserted as a counterclaim, [compliance with Subtitle D, Title 16,
167	167	or] the notice is not required. However, the action or counterclaim
168	168	shall specify in reasonable detail each construction defect that is
169	169	the subject of the complaint. The [If Subtitle D, Title 16, applies
170	170	to the complaint, simultaneously with the filing of an action by a
171	171	claimant, the claimant must submit a request under Section 428.001.
172	172	If Subtitle D, Title 16, does not apply, the] inspection provided
173	173	for by Subsection (a) may be made not later than the 75th day after
174	174	the date of service of the suit, request for arbitration, or
175	175	counterclaim on the contractor, and the offer provided for by
176	176	Subsection (b) may be made not later than the [15th day after the
177	177	date the state-sponsored inspection and dispute resolution process
178	178	is completed, if Subtitle D, Title 16, applies, or not later than
179	179	the] 60th day after the date of service [, if Subtitle D, Title 16,
180	180	does not apply]. If, while an action subject to this chapter is
181	181	pending, the statute of limitations for the cause of action would
182	182	have expired and it is determined that the provisions of Subsection
183	183	(a) were not properly followed, the action shall be abated to allow
184	184	compliance with Subsections (a) and (b).
185	185	(d) The court or arbitration tribunal shall abate an action
186	186	governed by this chapter if Subsection (c) does not apply and the
187	187	court or tribunal, after a hearing, finds that the contractor is
188	188	entitled to abatement because the claimant failed to [comply with
189	189	the requirements of Subtitle D, Title 16, if applicable, failed to]
190	190	provide the notice or failed to give the contractor a reasonable
191	191	opportunity to inspect the property as required by Subsection (a),
192	192	or failed to follow the procedures specified by Subsection (b). An
193	193	action is automatically abated without the order of the court or
194	194	tribunal beginning on the 11th day after the date a motion to abate
195	195	is filed if the motion:
196	196	(1) is verified and alleges that the person against
197	197	whom the action is pending did not receive the written notice
198	198	required by Subsection (a), the person against whom the action is
199	199	pending was not given a reasonable opportunity to inspect the
200	200	property as required by Subsection (a), or the claimant failed to
201	201	follow the procedures specified by Subsection (b) [or Subtitle D,
202	202	Title 16]; and
203	203	(2) is not controverted by an affidavit filed by the
204	204	claimant before the 11th day after the date on which the motion to
205	205	abate is filed.
206	206	SECTION 5. Section 53.172, Property Code, is amended to
207	207	read as follows:
208	208	Sec. 53.172. BOND REQUIREMENTS. The bond must:
209	209	(1) describe the property on which the liens are
210	210	claimed;
211	211	(2) refer to each lien claimed in a manner sufficient
212	212	to identify it;
213	213	(3) be in an amount that is double the amount of the
214	214	liens referred to in the bond unless the total amount claimed in the
215	215	liens exceeds $40,000, in which case the bond must be in an amount
216	216	that is the greater of 1-1/2 times the amount of the liens or the sum
217	217	of $40,000 and the amount of the liens;
218	218	(4) be payable to the parties claiming the liens;
219	219	(5) be executed by:
220	220	(A) the party filing the bond as principal; and
221	221	(B) a corporate surety authorized and admitted to
222	222	do business under the law in this state and licensed by this state
223	223	to execute the bond as surety, subject to Subchapter A, Chapter
224	224	3503, Insurance Code [Section 1, Chapter 87, Acts of the 56th
225	225	Legislature, Regular Session, 1959 (Article 7.19-1, Vernon's Texas
226	226	Insurance Code)]; and
227	227	(6) be conditioned substantially that the principal
228	228	and sureties will pay to the named obligees or to their assignees
229	229	the amount that the named obligees would have been entitled to
230	230	recover if their claims had been proved to be valid and enforceable
231	231	liens on the property.
232	232	SECTION 6. Section 74.3013(h), Property Code, is amended
233	233	to read as follows:
234	234	(h) In this section, a nonprofit cooperative corporation
235	235	means a cooperative corporation organized under Chapters 51 and 52,
236	236	Agriculture Code, the Texas Nonprofit [Non-Profit] Corporation
237	237	Law, as described by Section 1.008(d), Business Organizations Code
238	238	[Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)],
239	239	the Texas Cooperative Association Law, as described by Section
240	240	1.008(i), Business Organizations Code [Act (Article 1396-50.01,
241	241	Vernon's Texas Civil Statutes)], and Chapter 161, Utilities Code.
242	242	SECTION 7. Sections 112.058(c) and (d), Property Code, are
243	243	amended to read as follows:
244	244	(c) The community trust may transfer assets of the trust to
245	245	a nonprofit corporation only if the nonprofit corporation is
246	246	organized under the Texas Nonprofit Corporation Law, as described
247	247	by Section 1.008(d), Business Organizations Code, [the Texas
248	248	Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
249	249	Texas Civil Statutes)] and organized for the same purpose as the
250	250	community trust. The charter of the nonprofit corporation must
251	251	describe the purpose of the corporation and the proposed use of the
252	252	assets transferred using language substantially similar to the
253	253	language used in the instrument creating the community trust.
254	254	(d) To transfer the assets of and terminate a community
255	255	trust under this section, the governing body of the community trust
256	256	must:
257	257	(1) file a petition in a probate court, county court,
258	258	or district court requesting:
259	259	(A) the transfer of the assets of the trust to a
260	260	nonprofit corporation established for the purpose of receiving and
261	261	administering the assets of the trust; and
262	262	(B) the termination of the trust;
263	263	(2) send by first class mail to each trust settlor and
264	264	each trustee of each component trust of the community trust who can
265	265	be located by the exercise of reasonable diligence a copy of the
266	266	governing body's petition and a notice specifying the time and
267	267	place of the court-scheduled hearing on the petition; and
268	268	(3) publish once in a newspaper of general circulation
269	269	in the county in which the proceeding is pending a notice that reads
270	270	substantially similar to the following:
271	271	TO ALL INTERESTED PERSONS:
272	272	(NAME OF COMMUNITY TRUST) HAS FILED A PETITION IN (NAME OF
273	273	COURT) OF (NAME OF COUNTY), TEXAS, REQUESTING PERMISSION TO CONVERT
274	274	TO A NONPROFIT CORPORATION. IF PERMITTED TO CONVERT:
275	275	(1) THE (NAME OF COMMUNITY TRUST) WILL BE TERMINATED;
276	276	AND
277	277	(2) THE ASSETS OF THE TRUST WILL BE:
278	278	(A) TRANSFERRED TO A NONPROFIT CORPORATION WITH
279	279	THE SAME NAME AND CREATED FOR THE SAME PURPOSE AS THE (NAME OF
280	280	COMMUNITY TRUST); AND
281	281	(B) HELD AND ADMINISTERED BY THE CORPORATION AS
282	282	PROVIDED BY THE TEXAS NONPROFIT [NON-PROFIT] CORPORATION LAW [ACT
283	283	(ARTICLE 1396-1.01 ET SEQ., VERNON'S TEXAS CIVIL STATUTES)].
284	284	THE PURPOSE OF THE CONVERSION IS TO ACHIEVE SAVINGS AND USE
285	285	THE MONEY SAVED TO FURTHER THE PURPOSES FOR WHICH THE (NAME OF
286	286	COMMUNITY TRUST) WAS CREATED.
287	287	A HEARING ON THE PETITION IS SCHEDULED ON (DATE AND TIME) AT
288	288	(LOCATION OF COURT).
289	289	FOR ADDITIONAL INFORMATION, YOU MAY CONTACT THE GOVERNING
290	290	BODY OF THE (NAME OF COMMUNITY TRUST) AT (ADDRESS AND TELEPHONE
291	291	NUMBER) OR THE COURT.
292	292	SECTION 8. Section 202.002(b), Property Code, is amended to
293	293	read as follows:
294	294	(b) This chapter does not affect the requirements of Chapter
295	295	123, Human Resources Code [the Community Homes for Disabled Persons
296	296	Location Act (Article 1011n, Vernon's Texas Civil Statutes)].
297	297	SECTION 9. Section 202.003(b), Property Code, is amended to
298	298	read as follows:
299	299	(b) In this subsection, "family home" is a residential home
300	300	that meets the definition of and requirements applicable to a
301	301	family home under Chapter 123, Human Resources Code [the Community
302	302	Homes for Disabled Persons Location Act (Article 1011n, Vernon's
303	303	Texas Civil Statutes)]. A dedicatory instrument or restrictive
304	304	covenant may not be construed to prevent the use of property as a
305	305	family home. However, any restrictive covenant that applies to
306	306	property used as a family home shall be liberally construed to give
307	307	effect to its purposes and intent except to the extent that the
308	308	construction would restrict the use as a family home.
309	309	SECTION 10. Section 204.004(b), Property Code, is amended
310	310	to read as follows:
311	311	(b) The association must be nonprofit and may be
312	312	incorporated as a Texas nonprofit corporation. An unincorporated
313	313	association may incorporate under the Texas Nonprofit [Non-Profit]
314	314	Corporation Law, as described by Section 1.008(d), Business
315	315	Organizations Code [Act (Article 1396-1.01 et seq., Vernon's Texas
316	316	Civil Statutes)].
317	317	SECTION 11. Section 204.010(a), Property Code, is amended
318	318	to read as follows:
319	319	(a) Unless otherwise provided by the restrictions or the
320	320	association's articles of incorporation or bylaws, the property
321	321	owners' association, acting through its board of directors or
322	322	trustees, may:
323	323	(1) adopt and amend bylaws;
324	324	(2) adopt and amend budgets for revenues,
325	325	expenditures, and reserves and collect regular assessments or
326	326	special assessments for common expenses from property owners;
327	327	(3) hire and terminate managing agents and other
328	328	employees, agents, and independent contractors;
329	329	(4) institute, defend, intervene in, settle, or
330	330	compromise litigation or administrative proceedings on matters
331	331	affecting the subdivision;
332	332	(5) make contracts and incur liabilities relating to
333	333	the operation of the subdivision and the property owners'
334	334	association;
335	335	(6) regulate the use, maintenance, repair,
336	336	replacement, modification, and appearance of the subdivision;
337	337	(7) make additional improvements to be included as a
338	338	part of the common area;
339	339	(8) grant easements, leases, licenses, and
340	340	concessions through or over the common area;
341	341	(9) impose and receive payments, fees, or charges for
342	342	the use, rental, or operation of the common area and for services
343	343	provided to property owners;
344	344	(10) impose interest, late charges, and, if
345	345	applicable, returned check charges for late payments of regular
346	346	assessments or special assessments;
347	347	(11) if notice and an opportunity to be heard are
348	348	given, collect reimbursement of actual attorney's fees and other
349	349	reasonable costs incurred by the property owners' association
350	350	relating to violations of the subdivision's restrictions or the
351	351	property owners' association's bylaws and rules;
352	352	(12) charge costs to an owner's assessment account and
353	353	collect the costs in any manner provided in the restrictions for the
354	354	collection of assessments;
355	355	(13) adopt and amend rules regulating the collection
356	356	of delinquent assessments and the application of payments;
357	357	(14) impose reasonable charges for preparing,
358	358	recording, or copying amendments to the restrictions, resale
359	359	certificates, or statements of unpaid assessments;
360	360	(15) purchase insurance and fidelity bonds, including
361	361	directors' and officers' liability insurance, that the board
362	362	considers appropriate or necessary;
363	363	(16) if the restrictions allow for an annual increase
364	364	in the maximum regular assessment without a vote of the membership,
365	365	assess the increase annually or accumulate and assess the increase
366	366	after a number of years;
367	367	(17) subject to the requirements of the Texas
368	368	Nonprofit [Non-Profit] Corporation Law, as described by Section
369	369	1.008(d), Business Organizations Code [Act (Article 1396-1.01 et
370	370	seq., Vernon's Texas Civil Statutes)] and by majority vote of its
371	371	board of directors, indemnify a director or officer of the property
372	372	owners' association who was, is, or may be made a named defendant or
373	373	respondent in a proceeding because the person is or was a director;
374	374	(18) if the restrictions vest the architectural
375	375	control authority in the property owners' association or if the
376	376	authority is vested in the property owners' association under
377	377	Section 204.011:
378	378	(A) implement written architectural control
379	379	guidelines for its own use or record the guidelines in the real
380	380	property records of the applicable county; and
381	381	(B) modify the guidelines as the needs of the
382	382	subdivision change;
383	383	(19) exercise other powers conferred by the
384	384	restrictions, its articles of incorporation, or its bylaws;
385	385	(20) exercise other powers that may be exercised in
386	386	this state by a corporation of the same type as the property owners'
387	387	association; and
388	388	(21) exercise other powers necessary and proper for
389	389	the governance and operation of the property owners' association.
390	390	SECTION 12. The following provisions are repealed:
391	391	(1) Section 27.031(d), Government Code;
392	392	(2) Section 5.018, Property Code;
393	393	(3) Sections 27.001(3) and (9), Property Code;
394	394	(4) Section 27.004(l), Property Code; and
395	395	(5) Section 27.007(c), Property Code.
396	396	SECTION 13. This Act takes effect immediately if it
397	397	receives a vote of two-thirds of all the members elected to each
398	398	house, as provided by Section 39, Article III, Texas Constitution.
399	399	If this Act does not receive the vote necessary for immediate
400	400	effect, this Act takes effect September 1, 2021.