S.B. No. 318
AN ACT
relating to the records of certain condominium unit owners'
associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 82.114(b), Property Code, is amended to
read as follows:
(b) All financial and other records of the association shall
be reasonably available at its registered office or its principal
office in this state for examination and production in accordance
with Section 82.1141 [by a unit owner and the owner's agents. An
attorney's files and records relating to the association are not
records of the association and are not subject to inspection by unit
owners or production in a legal proceeding].
SECTION 2. Subchapter C, Chapter 82, Property Code, is
amended by adding Section 82.1141 to read as follows:
Sec. 82.1141. ACCESS TO ASSOCIATION RECORDS. (a) This
section applies to all associations governed by this chapter and
controls over other law not specifically applicable to an
association.
(b) Notwithstanding a provision in a dedicatory instrument,
an association shall make the books and records of the association,
including financial records, open to and reasonably available for
examination by a unit owner, or a person designated in a writing
signed by the unit owner as the unit owner's agent, attorney, or
certified public accountant, in accordance with this section. A
unit owner is entitled to obtain from the association copies of
information contained in the books and records.
(c) Except as provided by this subsection, an attorney's
files and records relating to the association, excluding invoices
requested by a unit owner for attorney's fees and other costs
relating only to a matter for which the association seeks
reimbursement of fees and costs from the unit owner, are not records
of the association and are not subject to inspection by the unit
owner or production in a legal proceeding. If a document in an
attorney's files and records relating to the association would be
responsive to a legally authorized request to inspect or copy
association documents, the document shall be produced by using the
copy from the attorney's files and records if the association has
not maintained a separate copy of the document. This subsection
does not require production of a document that constitutes attorney
work product or that is privileged as an attorney-client
communication.
(d) A unit owner or the unit owner's authorized
representative described by Subsection (b) must submit a written
request for access or information under Subsection (b) by certified
mail, with sufficient detail describing the association's books and
records requested, to the mailing address of the association or
authorized representative as reflected on the most current
management certificate filed under Section 82.116. The request
must contain an election either to inspect the books and records
before obtaining copies or to have the association forward copies
of the requested books and records and:
(1) if an inspection is requested, the association, on
or before the 10th business day after the date the association
receives the request, shall send written notice of dates during
normal business hours that the unit owner may inspect the requested
books and records to the extent those books and records are in the
possession, custody, or control of the association; or
(2) if copies of identified books and records are
requested, the association shall, to the extent those books and
records are in the possession, custody, or control of the
association, produce the requested books and records for the
requesting party on or before the 10th business day after the date
the association receives the request, except as otherwise provided
by this section.
(e) If the association is unable to produce the books or
records requested under Subsection (d) on or before the 10th
business day after the date the association receives the request,
the association must provide to the requestor written notice that:
(1) informs the requestor that the association is
unable to produce the information on or before the 10th business day
after the date the association received the request; and
(2) states a date by which the information will be sent
or made available for inspection to the requesting party that is not
later than the 15th business day after the date notice under this
subsection is given.
(f) If an inspection is requested or required, the
inspection shall take place at a mutually agreed on time during
normal business hours, and the requesting party shall identify the
books and records for the association to copy and forward to the
requesting party.
(g) An association may produce books and records requested
under this section in hard copy, electronic, or other format
reasonably available to the association.
(h) An association board must adopt a records production and
copying policy that prescribes the costs the association will
charge for the compilation, production, and reproduction of
information requested under this section. The prescribed charges
may include all reasonable costs of materials, labor, and overhead
but may not exceed costs that would be applicable for an item under
1 T.A.C. Section 70.3 for an item produced by the association and
may not exceed actual costs for an item produced by a third party.
The policy required by this subsection must be recorded as a
dedicatory instrument in accordance with Section 202.006. An
association may not charge a unit owner for the compilation,
production, or reproduction of information requested under this
section unless the policy prescribing those costs has been recorded
as required by this subsection. A unit owner is responsible for
costs related to the compilation, production, and reproduction of
the requested information in the amounts prescribed by the policy
adopted under this subsection. The association may require advance
payment of the estimated costs of compilation, production, and
reproduction of the requested information. If the estimated costs
are lesser or greater than the actual costs, the association shall
submit a final invoice to the unit owner on or before the 30th
business day after the date the information is delivered. If the
final invoice includes additional amounts due from the unit owner,
the additional amounts, if not reimbursed to the association before
the 30th business day after the date the invoice is sent to the unit
owner, may be added to the unit owner's account as an assessment.
If the estimated costs exceeded the final invoice amount, the unit
owner is entitled to a refund, and the refund shall be issued to the
unit owner not later than the 30th business day after the date the
invoice is sent to the unit owner.
(i) An association must estimate costs under this section
using amounts prescribed by the policy adopted under Subsection
(h).
(j) Except as provided by Subsection (k) and to the extent
the information is provided in the meeting minutes, the association
is not required to release or allow inspection of any books or
records that identify the dedicatory instrument violation history
of an individual unit owner of an association, a unit owner's
personal financial information, including records of payment or
nonpayment of amounts due the association, a unit owner's contact
information, a unit owner's address, or information related to an
employee of the association, including personnel files.
Information may be released in an aggregate or summary manner that
would not identify an individual unit owner.
(k) The books and records described by Subsection (j) shall
be released or made available for inspection if:
(1) the express written approval of the unit owner
whose records are the subject of the request for inspection is
provided to the association; or
(2) a court orders the release of the books and records
or orders that the books and records be made available for
inspection.
(l) In addition to retaining records as necessary for
compliance with Section 82.114, an association composed of eight or
more units shall adopt and comply with a document retention policy
that includes, at a minimum, the following requirements:
(1) certificates of formation, bylaws, dedicatory
instruments, and all amendments to the certificates of formation,
bylaws, and dedicatory instruments shall be retained permanently;
(2) financial books and records shall be retained for
seven years;
(3) account records of current unit owners shall be
retained for five years;
(4) contracts with a term of one year or more shall be
retained for four years after the expiration of the contract term;
(5) minutes of meetings of the unit owners and the
board shall be retained for seven years; and
(6) tax returns and audit records shall be retained
for seven years.
(m) A member of an association who is denied access to or
copies of association books or records to which the member is
entitled under this section may file a petition with the justice of
the peace of a justice precinct in which all or part of the
condominium is located requesting relief in accordance with this
subsection. If the justice of the peace finds that the member is
entitled to access to or copies of the records, the justice of the
peace may grant one or more of the following remedies:
(1) a judgment ordering the association to release or
allow access to the books or records; or
(2) a judgment against the association for court costs
and attorney's fees incurred in connection with seeking a remedy
under this section.
(n) If the association prevails in an action under
Subsection (m), the association is entitled to a judgment for court
costs and attorney's fees incurred by the association in connection
with the action.
(o) On or before the 10th business day before the date a
person brings an action against an association under this section,
the person must send written notice to the association of the
person's intent to bring the action. The notice must:
(1) be sent certified mail, return receipt requested,
or delivered by the United States Postal Service with signature
confirmation service to the mailing address of the association or
authorized representative as reflected on the most current
management certificate filed under Section 82.116; and
(2) describe with sufficient detail the books and
records being requested.
(p) For the purposes of this section, "business day" means a
day other than Saturday, Sunday, or a state or federal holiday.
SECTION 3. Section 82.1141, Property Code, as added by this
Act, applies only to a request for association records or
information made on or after the effective date of this Act.
SECTION 4. This Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 318 passed the Senate on
May 5, 2021, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 318 passed the House on
May 26, 2021, by the following vote: Yeas 116, Nays 31, two
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor