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AN ACT
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relating to timeshare owners' associations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. This Act shall be known as the Texas Timeshare |
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Owners' Association Act. |
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SECTION 2. Chapter 221, Property Code, is amended by adding |
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Subchapter I to read as follows: |
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SUBCHAPTER I. TIMESHARE OWNERS' ASSOCIATIONS |
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Sec. 221.081. APPLICABILITY. (a) Except as provided by |
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this section, this subchapter applies to a timeshare plan, the |
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project instrument governing the timeshare property subject to the |
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timeshare plan, and the association related to the timeshare plan, |
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regardless of the date on which the timeshare plan was created. |
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(b) Except as provided by Section 221.083(f), this |
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subchapter applies to a timeshare plan, the project instrument |
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governing the timeshare property subject to the timeshare plan, |
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and the association related to the timeshare plan, created before |
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September 1, 2013, unless the project instrument is amended |
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before September 1, 2013, to provide that this subchapter does |
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not apply. |
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Sec. 221.082. POWERS AND LIMITATIONS OF BOARD. (a) An |
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association may be governed by a board of directors. Except as |
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provided in the project instrument, or this chapter, the board may |
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act in all instances on behalf of the association. |
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(b) Except as expressly authorized in the project |
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instrument or otherwise permitted by the association, the board may |
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not act on behalf of the association to: |
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(1) amend the project instrument; |
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(2) terminate the timeshare plan; |
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(3) elect or remove board members; or |
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(4) determine the qualifications, powers, duties, or |
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terms of office of board members. |
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(c) Subject to the project instrument, the board may appoint |
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a member to fill a vacancy on the board and the member appointed |
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serves for the unexpired portion of the term of the predecessor |
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board member. |
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Sec. 221.083. PERIOD OF DEVELOPER CONTROL. (a) Except as |
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otherwise provided in this section, the project instrument may |
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provide for a period of developer control of an association during |
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which the developer, or a person designated by the developer, may |
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appoint and remove board members and officers of the association. |
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(b) Regardless of the period of developer control provided |
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in the project instrument, that period expires not later than the |
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earlier of: |
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(1) the 120th day after the date that at least 95 |
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percent of the timeshare interests that were created by the |
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timeshare instrument are conveyed to owners other than the |
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developer; or |
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(2) the fifth anniversary of the date the developer |
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ceased to offer timeshare interests for sale in the ordinary course |
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of business under the timeshare plan or under another timeshare |
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plan in which the timeshare interests are included, whichever date |
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is later. |
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(c) A developer may voluntarily surrender the developer's |
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right to appoint and remove board members and officers of the |
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association during the period of developer control by executing a |
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written instrument stating that the developer's rights are |
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surrendered and providing a copy of the instrument to the owners. |
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The developer may provide in the surrender instrument that, during |
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the remaining period otherwise designated for developer control, |
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specified actions of the association or board as described in the |
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project instrument are effective only on approval of the developer. |
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The surrender instrument must be recorded in the real property |
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records of the county in which the timeshare property is located. |
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(d) If the project instrument provides for a developer |
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control period of shorter duration than any period prescribed by |
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this section, the project instrument controls. |
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(e) During the period of developer control and subject to |
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the project instrument, the developer may determine all matters |
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governing the association, including the occurrence of special or |
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regular meetings of the members and the notice requirements and |
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rules for those meetings. |
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(f) This section applies to a timeshare plan created before |
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September 1, 2013, and to the project instrument governing the |
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timeshare property subject to the timeshare plan only if the |
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developer and the association agree to the application in writing |
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and the project instrument is amended to provide for that |
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application. If the conditions provided by this subsection are not |
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satisfied, a timeshare plan created before September 1, 2013, and |
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the timeshare property subject to the timeshare plan are governed |
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by any developer control provisions provided in the project |
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instrument, notwithstanding any other law. |
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Sec. 221.084. ELECTION OF INITIAL BOARD MEMBERS AND |
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OFFICERS. (a) Not later than the termination, by expiration or |
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surrender, of any period of developer control, the owners, |
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including the developer to the extent of any developer-owned |
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timeshare interests, must elect a board of at least three members. |
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The board may include one or more representatives of the developer. |
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(b) The board shall elect the officers of the association. |
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(c) The board members and officers of the association take |
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office on election. |
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Sec. 221.085. REMOVAL OF BOARD MEMBERS. Notwithstanding |
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any provision of a project instrument to the contrary, the owners, |
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by a vote of at least two-thirds of the voting rights of persons |
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entitled to vote and voting in person or by proxy at any meeting of |
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the owners, may remove a member of the board, with or without cause, |
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other than a member appointed by the developer during the period of |
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developer control under Section 221.083, provided that the |
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developer remains in control of the association. |
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Sec. 221.086. QUORUM. (a) Unless the project instrument |
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provides for a larger quorum requirement, the percentage of voting |
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interests constituting a quorum at a meeting of the members of an |
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association is 10 percent of the voting interests of owners who are |
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not delinquent in assessments, voting in person or by proxy. |
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(b) If a quorum is not present at any meeting of the |
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association at which board members will be elected, the meeting may |
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be adjourned and reconvened not later than the 90th day after the |
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date of adjournment for the sole purpose of electing board members. |
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Unless the project instrument provides for a larger quorum |
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requirement, the quorum for the reconvened meeting is 10 percent of |
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the voting interests of owners who are not delinquent in |
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assessments, voting in person or by proxy. |
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(c) Unless the project instrument provides otherwise, a |
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quorum of the board is considered present throughout a board |
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meeting if the members entitled to cast a majority of the votes are |
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present at the beginning of the meeting. |
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Sec. 221.087. VOTES. (a) If only one of the multiple |
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owners of a timeshare interest is present at a meeting of the |
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association, that owner may cast all votes allocated to that |
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timeshare interest. If more than one of the multiple owners are |
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present, the votes allocated to that timeshare interest may be cast |
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only in accordance with the agreement of a majority of the timeshare |
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interest held by the multiple owners unless the timeshare |
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instrument expressly provides otherwise. For purposes of this |
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subsection, there is a majority agreement if any one of the multiple |
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owners casts the votes allocated to that timeshare interest and no |
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protest is made promptly to the person presiding over the meeting by |
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any of the other owners of the timeshare interest. |
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(b) Votes allocated to a timeshare interest may be cast |
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under a proxy duly executed by an owner. A proxy must expressly |
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state the dates of execution and termination. An owner may only |
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revoke a proxy given under this section by actual notice of |
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revocation to the person presiding over a meeting of the |
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association. A proxy is revoked on presentation of a later dated |
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proxy or other written revocation executed by the same owner. A |
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proxy terminates the 25th month after the date the proxy is |
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executed, unless the proxy specifies a shorter period or states |
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that the proxy is coupled with an interest and is irrevocable. |
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(c) The project instrument for a timeshare plan may |
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authorize votes of members of an association to be cast by mail only |
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if: |
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(1) mail ballots are mailed or sent to each member in |
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the manner prescribed for a notice of a special meeting under |
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Section 221.089; |
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(2) the period for return of mail ballots is not later |
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than the 30th day after the date the ballots are mailed or sent to |
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members; and |
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(3) the required minimum number of ballots that must |
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be returned by members for the vote to be effective represents at |
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least the percentage of voting interests required for a quorum as |
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prescribed by Section 221.086(a). |
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(d) Only timeshare interests included in the timeshare plan |
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have voting rights. |
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(e) Unless the project instrument provides otherwise, |
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owners who are delinquent in assessments do not have the right to |
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cast a vote. The right to cast a vote is also subject to any |
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additional limitations provided in the project instrument. |
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Sec. 221.088. OPEN MEETINGS; EXCEPTIONS. |
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(a) Notwithstanding any provision in the project instrument to the |
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contrary and except as provided in this section, after the period of |
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developer control under Section 221.083, all meetings of the |
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association and board are open to all members of the association and |
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all members must be permitted to attend and listen to the |
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deliberations and proceedings. Meetings must be conducted as |
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provided in the project instrument. The board may adjourn a board |
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meeting and reconvene in a closed executive session to consider: |
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(1) legal advice from an attorney for the board or the |
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association; |
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(2) pending or contemplated litigation; |
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(3) financial information about an individual member |
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of the association, an individual employee of the association, an |
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individual employee of the managing entity, or an individual |
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employee of a contractor for the association or managing entity; or |
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(4) matters relating to the job performance of, |
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compensation of, health records of, or specific complaints against |
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an individual employee of the association, an individual employee |
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of the managing entity, or an individual employee of a contractor of |
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the association or managing entity who works under the direction of |
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the association or the managing entity. |
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(b) If a board meeting is closed as provided by Subsection |
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(a)(1) or (2), the board, on final resolution of any matter for |
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which the board received legal advice or that concerned pending or |
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contemplated litigation, may disclose information about that |
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matter in an open meeting, except to the extent that those matters |
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are required to remain confidential by the terms of a settlement |
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agreement or judgment. |
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Sec. 221.089. NOTICE. (a) A meeting of the members of the |
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association must be held annually after the termination of the |
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period of developer control under Section 221.083. Special |
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meetings of the members of the association may be called by the |
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president, by a majority of the board, or by owners having at least |
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25 percent of the votes allocated to timeshare interests in the |
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association or any lower percentage specified in the project |
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instrument. |
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(b) Unless the project instrument provides otherwise, the |
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association or managing entity must send notice of the meeting to |
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the mailing address of each owner on record with the association: |
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(1) not later than the 30th day or earlier than the |
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90th day before the date of an annual meeting; and |
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(2) not later than the 10th day or earlier than the |
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60th day before the date of a special meeting. |
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(c) The notice of a meeting of the owners must state the |
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date, time, and place of the meeting. The notice of a special |
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meeting of the owners must also state the purpose of the meeting. A |
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notice of a meeting may be included in a list of upcoming meetings |
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sent to owners, and the list is not required to be specific to one |
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meeting. The failure of an owner to receive actual notice of a |
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meeting of the owners does not affect the validity of any action |
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taken at that meeting. |
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(d) Unless the project instrument provides otherwise, the |
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association or managing entity must send notice of a board meeting |
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held after the date the developer control period terminates to the |
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mailing address of each owner on record with the association not |
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later than the 10th day before the date of the meeting. Notice to |
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owners of a board meeting is not required if emergency |
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circumstances require action by the board before notice can be |
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given. A notice of a board meeting must state the date, time, and |
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place of the meeting. A notice of a meeting may be included in a |
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list of upcoming meetings sent to owners, and the list is not |
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required to be specific to one meeting. The failure of an owner to |
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receive actual notice of a board meeting does not affect the |
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validity of any action taken at that meeting. |
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(e) A notice may be provided in a newsletter or a similar |
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mailing. Notice may be provided by prepaid United States mail, |
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e-mail for those owners who have provided an e-mail address, or any |
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other reasonable method selected by the board. |
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(f) Notwithstanding Subsections (a)-(d) or any other law |
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related to notice by an association, a notice to an owner may be |
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provided by conspicuous disclosure on the association's website if |
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the owner has consented to that alternative notice. Consent to that |
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alternative notice must be in writing and may be revoked by the |
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owner at any time. |
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(g) An affidavit of notice by an officer of the association |
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or the managing entity is prima facie evidence that notice was |
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provided under this section. |
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Sec. 221.090. DUTIES; LIST OF OWNERS. (a) The association |
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or managing entity of the association must maintain among its |
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records a complete and current list of the names and addresses of |
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all owners of timeshare interests in the timeshare plan. The |
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association or managing entity must update this list not less than |
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quarterly. |
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(b) The association or managing entity may not publish the |
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owners list or provide a copy of the list to any owner or to any |
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third party, except: |
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(1) as reasonably required to conduct legitimate |
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association business; or |
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(2) as authorized or required by law. |
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(c) On the termination of the period of developer control |
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under Section 221.083 and on the written request of an owner, the |
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association or managing entity shall send by first class mail to |
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owners on the list described by Subsection (a) any materials |
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provided by any owner if the purpose of the mailing is for |
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legitimate association business, including a proxy solicitation |
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for the recall of a board member elected by the owners or the |
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discharge of the managing entity. The use of the solicited proxies |
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must comply with the project instrument and this chapter. |
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Materials required to be provided under this subsection must be |
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mailed not later than the 30th day after the date the request is |
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received from an owner. |
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(d) The board or the managing entity is responsible for |
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determining the appropriateness of a mailing requested under |
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Subsection (c) and establishing reasonable procedures for |
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exercising rights under this section. The association or managing |
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entity does not have an obligation to mail an item that the board or |
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managing entity reasonably believes based on advice of legal |
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counsel may be libelous or otherwise actionable. An owner who |
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requests the mailing of materials under Subsection (c) must |
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reimburse the association or managing entity in advance for the |
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actual costs of performing the mailing or a proportionate share of |
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actual costs if the mailing is included in a mailing with other |
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items. |
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(e) After the termination of the period of developer control |
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under Section 221.083, it is a violation of this subchapter to |
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refuse to mail material provided by a requesting owner who has |
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complied with the reasonable procedures established by the board or |
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managing entity, if: |
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(1) the sole purpose of the materials is to advance |
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legitimate association business; and |
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(2) the requesting owner has: |
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(A) tendered to the association or managing |
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entity payment of the cost under Subsection (d); or |
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(B) requested an invoice for that cost and has |
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not received the invoice before the 10th day after the date the |
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request was delivered to the association or managing entity. |
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(f) Except as otherwise authorized or required by law, the |
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association or other managing entity may not furnish the name, |
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address, telephone number, or e-mail address of any owner to any |
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other owner or authorized agent of an owner unless the owner whose |
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name, address, phone number, or e-mail address is requested first |
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approves the disclosure in writing. |
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SECTION 3. Section 221.002, Property Code, is amended by |
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adding Subdivision (5-a) to read as follows: |
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(5-a) "Board" means the governing body of a timeshare |
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association designated in a project instrument to act on behalf of |
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the association. |
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SECTION 4. Subsection (d), Section 221.003, Property Code, |
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is amended to read as follows: |
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(d) A timeshare property subject to this chapter is not |
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subject to: |
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(1) Section 5.008 or 5.012; |
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(2) Chapter 202; |
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(3) Chapter 207; or |
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(4) Chapter 209, unless an individual timeshare owner |
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continuously occupies a single timeshare property as the owner's |
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primary residence 12 months of the year. |
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SECTION 5. Subchapter A, Chapter 221, Property Code, is |
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amended by adding Section 221.004 to read as follows: |
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Sec. 221.004. CONFLICTS OF LAW. (a) The provisions of |
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this chapter prevail over a conflicting or inconsistent provision |
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of law applicable to timeshare owners' associations. |
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(b) Provisions of this code relating to property owners' |
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associations do not apply to an association subject to this |
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chapter. |
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SECTION 6. Subsections (a) and (b), Section 221.011, |
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Property Code, are amended to read as follows: |
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(a) The developer of a timeshare plan any part of which is |
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located in this state must record the timeshare instrument in this |
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state. When a person expressly declares an intent to subject the |
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property to a timeshare plan through the recordation of a timeshare |
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instrument that sets forth the information provided in Subsection |
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[Subsections] (b) [and (c)], that property shall be established |
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thenceforth as a timeshare plan. |
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(b) The declaration made in a timeshare instrument recorded |
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under this section must include: |
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(1) a legal description of the timeshare property, |
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including a ground plan indicating the location of each existing or |
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proposed building included in the timeshare plan; |
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(2) a description of each existing or proposed |
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accommodation, including the location and square footage of each |
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unit and an interior floor plan of each existing or proposed |
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building; |
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(3) a description of any amenities furnished or to be |
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furnished to the purchaser; |
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(4) a statement of the fractional or percentage part |
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that each timeshare interest bears to the entire timeshare plan; |
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(5) if applicable, a statement that the timeshare |
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property is part of a multisite timeshare plan; [and] |
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(6) any additional provisions that are consistent with |
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this section; and |
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(7) the provisions required by Subchapter I to be |
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included in a project instrument unless the provisions are included |
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in one or more other project instruments. |
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SECTION 7. Section 221.025, Property Code, is amended by |
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amending Subsection (c) and adding Subsection (c-1) to read as |
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follows: |
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(c) A timeshare plan subject to Chapter 82 that complies |
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with this chapter is exempt from the requirements of: |
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(1) Section 82.0675 relating to club membership; and |
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(2) Sections 82.103(c)-(e) relating to declarant |
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control. |
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(c-1) The exemption provided by Subsection (c)(2) applies |
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to a timeshare plan created before September 1, 2013, and to the |
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project instrument governing the timeshare property subject to the |
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timeshare plan only if the developer and the association agree to |
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the application of the exemption in writing and the project |
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instrument is amended to provide for the application of the |
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exemption. If the conditions provided by this subsection are not |
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satisfied, a timeshare plan created before September 1, 2013, and |
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the timeshare property subject to the timeshare plan are governed |
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by any developer control provisions provided in the project |
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instrument, notwithstanding any other law. |
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SECTION 8. Section 221.071, Property Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) A person, other than an owner of a timeshare interest |
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who purchased the interest from a developer for the person's own |
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personal use and occupancy, commits a false, misleading, or |
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deceptive act or practice within the meaning of Sections 17.46(a) |
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and (b), Business & Commerce Code, and an unconscionable action or |
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course of action as defined by Section 17.45, Business & Commerce |
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Code, by knowingly participating, for consideration or with the |
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expectation of consideration, in any plan or scheme a purpose of |
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which is to transfer a timeshare interest to a transferee who does |
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not have the ability, means, or intent to pay all assessments and |
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taxes for the timeshare interest. An association or other managing |
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entity does not commit an act or action as described by this |
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subsection by performing administrative acts and collecting fees or |
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expenses as customary or required by law or under the project |
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instruments in connection with a transfer by an owner of a timeshare |
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interest in the timeshare property. |
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SECTION 9. 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 hereby certify that S.B. No. 1372 passed the Senate on |
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April 18, 2013, by the following vote: Yeas 31, Nays 0; and that |
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the Senate concurred in House amendments on May 20, 2013, by the |
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following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1372 passed the House, with |
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amendments, on May 16, 2013, by the following vote: Yeas 142, |
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Nays 2, two present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |