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