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