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AN ACT
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relating to the operation of master mixed-use property owners' |
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associations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 215.003, Property Code, is amended to |
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read as follows: |
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Sec. 215.003. APPLICABILITY OF CHAPTER 209. Chapter 209 |
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does not apply to [Sections 209.007, 209.008, 209.011, and 209.012
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apply only to single-family residential properties governed by] a |
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property owners' association subject to this chapter. |
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SECTION 2. Section 215.008, Property Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) Notwithstanding any provision of the certificate of |
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formation, declaration, or bylaws to the contrary, the declaration |
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and any supplementary declaration, including amendments, |
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modifications, or corrections, may be amended by a simple majority |
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of the eligible votes being cast in favor of the amendment. |
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SECTION 3. Chapter 215, Property Code, is amended by adding |
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Section 215.0135 to read as follows: |
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Sec. 215.0135. ASSOCIATION RECORDS. (a) To the extent of |
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any conflict or inconsistency, this section prevails over other |
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provisions of law and the dedicatory instruments of a property |
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owners' association subject to this chapter. This section is the |
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exclusive procedure for a property owner to inspect the books and |
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records of the association. |
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(b) Except as provided by Subsection (c) or (j), a property |
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owners' association shall, on written request as provided by this |
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section, make the books and records of the association open to and |
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reasonably available for examination by an owner or a person |
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designated in a written instrument signed by the owner as the |
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owner's agent, attorney, or certified public accountant. Except as |
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provided by Subsection (c) or (j), an owner is entitled to obtain |
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copies of the books and records from the association. |
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(c) An attorney's files and records relating to the property |
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owners' association, excluding invoices, are not records of the |
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association and are not subject to inspection by the owner or the |
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owner's authorized representative or to production in a legal |
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proceeding. This subsection does not require production of a |
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document that is covered by the attorney-client privilege. |
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(d) An owner or the owner's authorized representative |
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described by Subsection (b) must submit a written request by |
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certified mail to the mailing address of the property owners' |
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association or the association's authorized representative, as |
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reflected on the most current management certificate filed under |
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Section 215.013, for access to the books and records of the |
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association. The request must describe, in sufficient detail, the |
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association's books and records requested by the owner or the |
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owner's representative and: |
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(1) if an inspection is requested, the association |
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shall, on or before the l0th business day after the date the |
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association receives the request, send written notice of dates that |
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the owner may inspect, during normal business hours, the requested |
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books and records to the extent those books and records are in the |
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actual physical possession, custody, and control of the |
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association; or |
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(2) if copies of identified books and records are |
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requested, the association shall, to the extent those books and |
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records are in the actual physical possession, custody, and control |
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of the association, produce copies of the requested books and |
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records on or before the 10th business day after the date the |
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association receives the request, except as otherwise provided by |
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this section. |
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(e) If the property owners' association fails to produce the |
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books or records requested under Subsection (d) on or before the |
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l0th business day after the date the association receives the |
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request, the association must provide to the requestor written |
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notice that: |
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(1) informs the requestor that the association is |
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unable to produce the information and the specific reasons for that |
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inability on or before the 10th business day after the date the |
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association received the request; and |
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(2) if the association can produce the information, |
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notifies the requestor of the date by which the information will be |
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sent or made available for inspection to the requesting party, |
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which may not be later than the 15th day after the date notice under |
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this subsection is given. |
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(f) If an inspection is requested or required, the |
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inspection shall take place at a mutually agreed on time during |
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normal business hours of the property owners' association, and the |
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requesting party shall identify the books and records for the |
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association to copy and forward to the requesting party. |
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(g) A property owners' association may produce books and |
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records requested under this section in hard copy, electronic, or |
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other format reasonably available to the association. |
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(h) A property owners' association board must adopt a |
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records production and copying policy that prescribes the costs the |
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association will charge for the compilation, production, and |
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reproduction of information requested under this section. The |
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prescribed charges may include all reasonable costs of materials, |
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labor, and overhead. The policy required by this subsection must be |
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recorded as a dedicatory instrument. If the policy is not recorded, |
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the association may not charge an owner for the compilation, |
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production, or reproduction of information requested under this |
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section. If the policy is recorded, the requesting owner or the |
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owner's representative is responsible for all costs related to the |
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compilation, production, and reproduction of the requested |
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information based on the amounts prescribed by the policy. The |
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association may require advance payment of the estimated costs of |
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compilation, production, and reproduction of the requested |
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information. If the total of the estimated costs differs from the |
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total of the actual costs, the association shall submit a final |
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invoice to the owner on or before the 30th business day after the |
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date the requested copies are delivered. If the actual total cost |
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is higher than the estimated total cost, and the owner fails to |
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reimburse the association before the 30th business day after the |
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date the invoice is sent to the owner, the association may add the |
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amount due to the owner's account as an assessment. If the actual |
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total cost is less than the estimated total cost, the association |
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shall issue a refund to the owner not later than the 30th business |
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day after the date the requested copies are delivered. |
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(i) A property owners' association must estimate costs |
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under this section using amounts prescribed by the policy adopted |
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under Subsection (h). |
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(j) Information may be released in an aggregate or summary |
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manner that would not identify an individual property owner. Except |
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as provided by Subsection (k) and to the extent the information is |
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provided in the meeting minutes, the property owners' association |
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is not required to release or allow inspection of any books or |
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records that identify: |
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(1) the dedicatory instrument violation history of an |
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individual owner; |
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(2) an owner's personal financial information, |
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including records of payment or nonpayment of amounts due the |
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association; |
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(3) an owner's contact information, other than the |
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owner's address; |
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(4) an owner's property files or building plans; |
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(5) books or records described by Subsection (c); |
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(6) any information to which an owner objects to |
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releasing or has not granted approval for releasing; or |
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(7) information related to an employee of the |
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association, including personnel files. |
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(k) The books and records described by Subsection (j) shall |
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be released or made available for inspection if: |
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(1) the express written approval of the owner whose |
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records are the subject of the request for inspection is provided to |
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the property owners' association; or |
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(2) a court orders the release of the books and records |
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or orders that the books and records be made available for |
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inspection. |
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(l) A property owners' association shall adopt and comply |
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with a document retention policy that includes, at a minimum, the |
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following requirements: |
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(1) certificates of formation, bylaws, restrictive |
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covenants, and all amendments to the certificates of formation, |
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bylaws, and covenants shall be retained permanently; |
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(2) financial books and records shall be retained for |
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seven years; |
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(3) account records of current owners shall be |
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retained for five years; |
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(4) contracts with a term of one year or more shall be |
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retained for four years after the expiration of the contract term; |
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(5) minutes of meetings of the owners and the board |
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shall be retained for seven years; and |
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(6) tax returns and audit records shall be retained |
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for seven years. |
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(m) A member of a property owners' association who is denied |
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access to or copies of the association books or records to which the |
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member is entitled under this section may file a petition with the |
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county court at law in which all or part of the property that is |
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governed by the association is located requesting relief in |
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accordance with this subsection. If the county court at law finds |
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that the member is entitled to access to or copies of the records, |
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the county court at law may grant one or more of the following |
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remedies: |
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(1) a judgment ordering the association to release or |
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allow access to the books or records; |
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(2) a judgment against the association for court costs |
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and attorney's fees incurred in connection with seeking a remedy |
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under this section; or |
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(3) a judgment authorizing the owner or the owner's |
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assignee to deduct the amounts awarded under Subdivision (2) from |
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any future regular or special assessments payable to the |
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association. |
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(n) If the property owners' association prevails in an |
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action under Subsection (m), the association is entitled to a |
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judgment for court costs and attorney's fees incurred by the |
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association in connection with the action. |
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(o) On or before the 10th business day before the date a |
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person brings an action against a property owners' association |
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under this section, the person must send written notice to the |
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association of the person's intent to bring the action. The notice |
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must: |
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(1) be sent certified mail, return receipt requested, |
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or delivered by the United States Postal Service with signature |
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confirmation service, to the mailing address of the association or |
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the association's authorized representative as reflected on the |
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most current management certificate filed under Section 215.013; |
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and |
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(2) describe with sufficient detail the books and |
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records being requested. |
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(p) For the purposes of this section, "business day" means a |
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day other than Saturday, Sunday, or a state or federal holiday. |
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SECTION 4. Chapter 215, Property Code, is amended by adding |
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Sections 215.016, 215.017, and 215.018 to read as follows: |
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Sec. 215.016. NOTICE REQUIRED BEFORE CERTAIN ENFORCEMENT |
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ACTIONS. (a) Before a property owners' association may file a suit |
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against an owner, other than a suit to collect a regular or special |
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assessment or judicial foreclosure under the association's lien, or |
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charge an owner for property damage, the association or its agent |
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must give written notice sent to the owner by certified mail, return |
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receipt requested, to the property address of the owner. |
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(b) The notice must: |
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(1) describe the violation of the declaration or |
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property damage that is the basis for the suit or charge and state |
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any amount due to the association from the owner; and |
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(2) inform the owner that the owner: |
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(A) is entitled, as applicable, to a reasonable |
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period to cure the violation and avoid the suit unless the owner was |
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previously given notice and a reasonable opportunity to cure by the |
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association for the same or a similar violation within the |
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preceding six months; |
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(B) may request a hearing under Section 215.017 |
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on or before the 30th day after the date the owner receives the |
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notice; and |
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(C) may have special rights or relief related to |
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the suit or charge under federal law, including, without |
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limitation, the Servicemembers Civil Relief Act (50 U.S.C. app. |
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Section 501 et seq.), if the owner is serving on active military |
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duty. |
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Sec. 215.017. HEARING BEFORE BOARD. (a) Except as provided |
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by Section 215.009(c), if the owner is entitled to an opportunity to |
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cure a violation, the owner has the right to submit a written |
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request for a hearing to discuss and verify facts and resolve the |
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matter at issue before a committee appointed by the board of the |
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property owners' association or before the board if the board does |
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not appoint a committee. |
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(b) The association shall hold a hearing under this section |
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not later than the 30th day after the date the board receives the |
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owner's request for a hearing and shall notify the owner of the |
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date, time, and place of the hearing not later than the 10th day |
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before the date of the hearing. The board or committee or the owner |
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may request a postponement, and if requested, a postponement shall |
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be granted for a period of not more than 10 days. Additional |
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postponements may be granted by agreement of the parties. |
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(c) The notice and hearing provisions of this section and |
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Section 215.016 do not apply if the association files a suit seeking |
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a temporary restraining order or temporary injunctive relief or a |
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suit that includes foreclosure as a cause of action. |
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Sec. 215.018. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN |
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ASSESSMENTS. (a) A property owners' association shall adopt |
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reasonable guidelines to establish an alternative payment schedule |
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by which an owner may make partial payments to the association for |
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delinquent regular or special assessments or any other amount owed |
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to the association without accruing additional monetary penalties. |
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For purposes of this section, monetary penalties do not include |
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reasonable costs associated with administering the payment plan or |
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interest. |
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(b) A property owners' association is not required to enter |
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into a payment plan with an owner who failed to honor the terms of a |
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previous payment plan. |
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(c) A property owners' association shall file the |
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association's guidelines under this section in the real property |
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records of each county in which any portion of the subdivision is |
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located. |
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SECTION 5. This Act takes effect September 1, 2013. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1824 was passed by the House on May 4, |
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2013, by the following vote: Yeas 136, Nays 1, 2 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1824 was passed by the Senate on May |
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22, 2013, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |