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  H.B. No. 1821
 
 
 
 
AN ACT
  relating to certain information or guidelines provided by or
  concerning a property owners' association or concerning
  subdivisions that are subject to restrictive covenants.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 5.012, Property Code, is amended by
  amending Subsection (a) and adding Subsections (a-1), (f), and (g)
  to read as follows:
         (a)  A seller of residential real property that is subject to
  membership in a property owners' association and that comprises not
  more than one dwelling unit located in this state shall give to the
  purchaser of the property a written notice that reads substantially
  similar to the following:
  NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION CONCERNING THE
  PROPERTY AT (street address) (name of residential community)
         As a purchaser of property in the residential community in
  which this property is located, you are obligated to be a member of
  a property owners' association. Restrictive covenants governing
  the use and occupancy of the property and all [a] dedicatory
  instruments [instrument] governing the establishment, maintenance,
  or [and] operation of this residential community have been or will
  be recorded in the Real Property Records of the county in which the
  property is located. Copies of the restrictive covenants and
  dedicatory instruments [instrument] may be obtained from the county
  clerk.
         You are obligated to pay assessments to the property owners'
  association. The amount of the assessments is subject to change.
  Your failure to pay the assessments could result in enforcement of
  the association's [a] lien on and the foreclosure of your property.
         Section 207.003, Property Code, entitles an owner to receive
  copies of any document that governs the establishment, maintenance,
  or operation of a subdivision, including, but not limited to,
  restrictions, bylaws, rules and regulations, and a resale
  certificate from a property owners' association. A resale
  certificate contains information including, but not limited to,
  statements specifying the amount and frequency of regular
  assessments and the style and cause number of lawsuits to which the
  property owners' association is a party, other than lawsuits
  relating to unpaid ad valorem taxes of an individual member of the
  association. These documents must be made available to you by the
  property owners' association or the association's agent on your
  request.
  Date: ____________________________________________
         Signature of Purchaser             
         (a-1)  The second paragraph of the notice prescribed by
  Subsection (a) must be in bold print and underlined.
         (f)  On the purchaser's request for a resale certificate from
  the property owners' association or the association's agent, the
  association or its agent shall promptly deliver a copy of the most
  recent resale certificate issued for the property under Chapter 207
  so long as the resale certificate was prepared not earlier than the
  60th day before the date the resale certificate is delivered to the
  purchaser and reflects any special assessments approved before and
  due after the resale certificate is delivered.  If a resale
  certificate that meets the requirements of this subsection has not
  been issued for the property, the seller shall request the  
  association or its agent to issue a resale certificate under
  Chapter 207, and the association or its agent shall promptly
  prepare and deliver a copy of the resale certificate to the
  purchaser.
         (g)  The purchaser shall pay the fee to the property owners' 
  association or its agent for issuing the resale certificate unless
  otherwise agreed by the purchaser and seller of the property.  The
  property owners' association may require payment before beginning
  the process of providing a resale certificate requested under
  Chapter 207 but may not process a payment for a resale certificate
  until the certificate is available for delivery.  The association
  may not charge a fee if the certificate is not provided in the time
  prescribed by Section 207.003(a).
         SECTION 2.  Subdivision (1), Section 202.001, Property Code,
  is amended to read as follows:
               (1)  "Dedicatory instrument" means each document
  governing [instrument covering] the establishment, maintenance, or
  [and] operation of a residential subdivision, planned unit
  development, condominium or townhouse regime, or any similar
  planned development. The term includes a declaration or similar
  instrument subjecting real property to:
                     (A)  restrictive covenants, bylaws, or similar
  instruments governing the administration or operation of a property
  owners' association;
                     (B)[, to]  properly adopted rules and regulations
  of the property owners' association; or
                     (C)[, or to]  all lawful amendments to the
  covenants, bylaws, instruments, rules, or regulations.
         SECTION 3.  Section 202.006, Property Code, is amended to
  read as follows:
         Sec. 202.006.  PUBLIC RECORDS.  (a)  A property owners'
  association shall file all [the] dedicatory instruments
  [instrument] in the real property records of each county in which
  the property to which the dedicatory instruments relate [instrument
  relates] is located.
         (b)  A dedicatory instrument has no effect until the
  instrument is filed in accordance with this section.
         SECTION 4.  Section 207.003, Property Code, is amended by
  amending Subsections (a), (b), and (f) and adding Subsections (a-1)
  and (c-1) to read as follows:
         (a)  Not later than the 10th business day after the date a
  written request for subdivision information is received from an
  owner or the[,] owner's agent, a purchaser of property in a
  subdivision or the purchaser's agent, or a title insurance company
  or its agent acting on behalf of the owner or purchaser and the
  evidence of the requestor's authority to order a resale certificate
  under Subsection (a-1) is received and verified, the property
  owners' association shall deliver to the owner or the[,] owner's
  agent, the purchaser or the purchaser's agent, or the title
  insurance company or its agent:
               (1)  a current copy of the restrictions applying to the
  subdivision;
               (2)  a current copy of the bylaws and rules of the
  property owners' association; and
               (3)  a resale certificate prepared not earlier than the
  60th day before the date the certificate is delivered that complies
  with Subsection (b).
         (a-1)  For a request from a purchaser of property in a
  subdivision or the purchaser's agent, the property owners'
  association may require the purchaser or purchaser's agent to
  provide to the association, before the association begins the
  process of preparing or delivers the items listed in Subsection
  (a), reasonable evidence that the purchaser has a contractual or
  other right to acquire property in the subdivision.
         (b)  A resale certificate under Subsection (a) must contain:
               (1)  a statement of any right of first refusal, other
  than a right of first refusal that is prohibited by statute, and any
  [or] other restraint contained in the restrictions or restrictive
  covenants that restricts the owner's right to transfer the owner's
  property;
               (2)  the frequency and amount of any regular
  assessments;
               (3)  the amount and purpose of any special assessment
  that has been approved before and is due after [the date] the resale
  certificate is delivered [prepared];
               (4)  the total of all amounts due and unpaid to the
  property owners' association that are attributable to the owner's
  property;
               (5)  capital expenditures, if any, approved by the
  property owners' association for the property owners' association's
  current fiscal year;
               (6)  the amount of reserves, if any, for capital
  expenditures;
               (7)  the property owners' association's current
  operating budget and balance sheet;
               (8)  the total of any unsatisfied judgments against the
  property owners' association;
               (9)  the style and cause number of any pending lawsuit
  in which the property owners' association is a party, other than a
  lawsuit relating to unpaid ad valorem taxes of an individual member
  of the association [defendant];
               (10)  a copy of a certificate of insurance showing the
  property owners' association's property and liability insurance
  relating to the common areas and common facilities;
               (11)  a description of any conditions on the owner's
  property that the property owners' association board has actual
  knowledge are in violation of the restrictions applying to the
  subdivision or the bylaws or rules of the property owners'
  association;
               (12)  a summary or copy of notices received by the
  property owners' association from any governmental authority
  regarding health or housing code violations existing on the
  preparation date of the certificate relating to the owner's
  property or any common areas or common facilities owned or leased by
  the property owners' association;
               (13)  the amount of any administrative transfer fee
  charged by the property owners' association for a change of
  ownership of property in the subdivision;
               (14)  the name, mailing address, and telephone number
  of the property owners' association's managing agent, if any; [and]
               (15)  a statement indicating whether the restrictions
  allow foreclosure of a property owners' association's lien on the
  owner's property for failure to pay assessments; and
               (16)  a statement of all fees associated with the
  transfer of ownership, including a description of each fee, to whom
  each fee is paid, and the amount of each fee.
         (c-1)  The property owners' association may require payment
  before beginning the process of providing a resale certificate but
  may not process a payment for a resale certificate until the
  certificate is available for delivery. The association may not
  charge a fee if the certificate is not provided in the time
  prescribed by Subsection (a).
         (f)  Not later than the seventh business day after the date a
  written request for an update of [to] a resale certificate
  delivered under Subsection (a) is received from an owner, owner's
  agent, or title insurance company or its agent acting on behalf of
  the owner, the property owners' association shall deliver to the
  owner, owner's agent, or title insurance company or its agent an
  updated resale certificate that contains the following
  information:
               (1)  if a right of first refusal or other restraint on
  sale is contained in the restrictions, a statement of whether the
  property owners' association waives the restraint on sale;
               (2)  the status of any unpaid special assessments,
  dues, or other payments attributable to the owner's property; and
               (3)  any changes to the information provided in the
  resale certificate issued under Subsection (a).
         SECTION 5.  Chapter 207, Property Code, is amended by adding
  Section 207.006 to read as follows:
         Sec. 207.006.  ONLINE SUBDIVISION INFORMATION REQUIRED. A
  property owners' association shall make dedicatory instruments
  relating to the association or subdivision and filed in the county
  deed records available on a website if the association has, or a
  management company on behalf of the association maintains, a
  publicly accessible website.
         SECTION 6.  Section 209.003, Property Code, is amended by
  adding Subsection (e) to read as follows:
         (e)  Section 209.0062 does not apply to a property owners'
  association that is a mixed-use master association that existed
  before January 1, 1974, and that does not have the authority under a
  dedicatory instrument or other governing document to impose fines.
         SECTION 7.  Chapter 209, Property Code, is amended by adding
  Section 209.0062 to read as follows:
         Sec. 209.0062.  ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
  ASSESSMENTS. (a)  A property owners' association shall file the
  association's alternative payment schedule guidelines adopted
  under this section in the real property records of each county in
  which the subdivision is located.
         (b)  A property owners' association composed of more than 14
  lots shall adopt reasonable guidelines to establish an alternative
  payment schedule by which an owner may make partial payments to the
  property owners' 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.
         (c)  The minimum term for a payment plan offered by a
  property owners' association is three months.
         (d)  A property owners' association may not allow a payment
  plan for any amount that extends more than 18 months from the date
  of the owner's request for a payment plan.  The association is not
  required
  to enter into a payment plan with an owner who failed to
  honor the terms of a previous payment plan during the two years
  following the owner's default under the previous payment plan.
         (e)  A property owners' association's failure to file as
  required by this section the association's guidelines in the real
  property records of each county in which the subdivision is located
  does not prohibit a property owner from receiving an alternative
  payment schedule by which the owner may make partial payments to the
  property owners' association for delinquent regular or special
  assessments or any other amount owed to the association without
  accruing additional monetary penalties, as defined by Subsection
  (b).
         SECTION 8.  (a)  Section 5.012, Property Code, as amended by
  this Act, applies only to a sale of property that occurs on or after
  the effective date of this Act. For the purposes of this
  subsection, a sale of property occurs before the effective date of
  this Act if the executory contract binding the purchaser to
  purchase the property is executed before that date. A sale of
  property that occurs before the effective date of this Act is
  governed by the law in effect immediately before that date, and that
  law is continued in effect for that purpose.
         (b)  Section 202.006, Property Code, as amended by this Act,
  applies to a provision in a dedicatory instrument or a restrictive
  covenant enacted before, on, or after the effective date of this
  Act, except that any action taken before the effective date of this
  Act based on an unfiled dedicatory instrument is not invalidated by
  Section 202.006, Property Code, as amended by this Act.
         (c)  Section 207.003, Property Code, as amended by this Act,
  applies only to a request for information received by a property
  owners' association on or after the effective date of this Act. A
  request for information received by a property owners' association
  before the effective date of this Act is governed by the law in
  effect immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
         (d)  Section 209.0062, Property Code, as added by this Act,
  applies only to an assessment or other debt that becomes due on or
  after the effective date of this Act. An assessment or other debt
  that becomes due before the effective date of this Act is governed
  by the law in effect immediately before the effective date of this
  Act, and that law is continued in effect for that purpose.
         SECTION 9.  Not later than January 1, 2012, each property
  owners' association shall present for recording with the county
  clerk as prescribed by Section 202.006, Property Code, as amended
  by this Act, each dedicatory instrument governing the association
  that has not been previously recorded in the real property records
  of the county.
         SECTION 10.  This Act takes effect January 1, 2012.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1821 was passed by the House on May 5,
  2011, by the following vote:  Yeas 145, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1821 on May 25, 2011, by the following vote:  Yeas 139, Nays 4,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1821 was passed by the Senate, with
  amendments, on May 23, 2011, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor