Bill Text: TX HB2869 | 2011-2012 | 82nd Legislature | Enrolled
Bill Title: Relating to the powers and duties of certain master mixed-use property owners' associations.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-06-17 - Effective on 9/1/11 [HB2869 Detail]
Download: Texas-2011-HB2869-Enrolled.html
H.B. No. 2869 |
|
||
relating to the powers and duties of certain master mixed-use | ||
property owners' associations. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 11, Property Code, is amended by adding | ||
Chapter 215 to read as follows: | ||
CHAPTER 215. MASTER MIXED-USE PROPERTY OWNERS' ASSOCIATIONS | ||
Sec. 215.001. DEFINITIONS. In this chapter: | ||
(1) "Appraised value" means the property value | ||
determined by the appraisal district that establishes property | ||
values for taxing entities levying taxes on property in a mixed-use | ||
development. | ||
(2) "Property owners' association" or "association" | ||
means, unless otherwise indicated, a master mixed-use property | ||
owners' association. | ||
(3) "Dedicatory instrument" has the meaning assigned | ||
by Section 209.002. | ||
(4) "Self-help" means the process by which a property | ||
owners' association takes remedial action with regard to property | ||
governed by the association. | ||
Sec. 215.002. APPLICABILITY OF CHAPTER. (a) This chapter | ||
applies to a property owners' association that: | ||
(1) includes: | ||
(A) commercial properties, including hotel and | ||
retail properties, that constitute at least 35 percent of the total | ||
appraised property value of the mixed-use development governed by | ||
the association; | ||
(B) single-family attached and detached | ||
properties that constitute at least 25 percent of the total | ||
appraised property value of the mixed-use development governed by | ||
the association; and | ||
(C) multifamily properties that constitute at | ||
least 10 percent of the total appraised property value of the | ||
mixed-use development governed by the association; | ||
(2) governs at least 6,000 acres of deed-restricted | ||
property; | ||
(3) has at least 10 incorporated residential or | ||
commercial property owners' associations that are members of and | ||
subject to the dedicatory instruments of the master mixed-use | ||
property owners' association; | ||
(4) has at least 3,400 platted and developed | ||
single-family residential properties and at least 400 separately | ||
platted commercial properties, including office, industrial, | ||
hotel, and retail properties, which together constitute at least 30 | ||
million square feet of building area available for rental; and | ||
(5) participates in the maintenance of public space, | ||
including parks, medians, and lakefronts, owned by local, including | ||
county, or state governmental entities. | ||
(b) This chapter applies to property that is: | ||
(1) governed by a property owners' association | ||
described by Subsection (a); | ||
(2) located in a master mixed-use development; and | ||
(3) subject to a provision, including a restriction, | ||
in a declaration that: | ||
(A) requires mandatory membership in the | ||
association; and | ||
(B) authorizes the association to collect a | ||
regular or special assessment on all or a majority of the property | ||
in the development. | ||
(c) Except as otherwise provided by this chapter, this | ||
chapter applies only to a master mixed-use property owners' | ||
association and not to the independent property owners' | ||
associations that are members of the master mixed-use property | ||
owners' association. | ||
Sec. 215.003. APPLICABILITY OF CHAPTER 209. 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. | ||
Sec. 215.004. CONFLICTS OF LAW. Notwithstanding any other | ||
provision of law, the provisions of this chapter prevail over a | ||
conflicting or inconsistent provision of law relating to | ||
independent property owners' associations. | ||
Sec. 215.005. BOARD POWERS. In addition to any other powers | ||
provided by applicable law and this chapter, and unless otherwise | ||
provided by the dedicatory instruments of the property owners' | ||
association, the association, acting through its board of | ||
directors, may: | ||
(1) adopt and amend bylaws; | ||
(2) adopt and amend budgets for revenues, | ||
expenditures, and reserves and collect assessments for common | ||
expenses from property owners; | ||
(3) adopt reasonable rules; | ||
(4) hire and terminate managing agents and other | ||
agents, employees, and independent contractors; | ||
(5) institute, defend, intervene in, settle, or | ||
compromise litigation or administrative proceedings on matters | ||
affecting a property governed by the association; | ||
(6) make contracts and incur liabilities relating to | ||
the operation of the association; | ||
(7) regulate the use, maintenance, repair, | ||
replacement, modification, and appearance of the property governed | ||
by the association; | ||
(8) make improvements to be included as a part of the | ||
common area; | ||
(9) acquire, hold, encumber, and convey in its own | ||
name any right, title, or interest to real or personal property; | ||
(10) purchase an investment property that is not part | ||
of the common area; | ||
(11) grant easements, leases, licenses, and | ||
concessions through or over the common elements; | ||
(12) impose and receive payments, fees, or charges for | ||
the use, rental, or operation of the common area and for services | ||
provided to property owners; | ||
(13) impose interest, late charges, and, if | ||
applicable, returned check charges for late payments of regular | ||
assessments or special assessments; | ||
(14) charge costs to an owner's assessment account and | ||
collect the costs in any manner provided in the restrictions for the | ||
collection of assessments; | ||
(15) adopt and amend rules regulating the collection | ||
of delinquent assessments; | ||
(16) impose reasonable charges for preparing, | ||
recording, or copying amendments to resale certificates or | ||
statements of unpaid assessments; | ||
(17) purchase insurance and fidelity bonds, including | ||
directors' and officers' liability insurance, that the board | ||
considers appropriate or necessary; | ||
(18) subject to the requirements of the provisions | ||
described by Section 1.008(d), Business Organizations Code, and by | ||
majority vote of the board, indemnify a director or officer of the | ||
association who was, is, or may be made a named defendant or | ||
respondent in a proceeding because the person is or was a director | ||
or officer; | ||
(19) if the restrictions vest the architectural | ||
control authority in the association: | ||
(A) implement written architectural control | ||
guidelines for its own use, or record the guidelines in the real | ||
property records of the applicable county; and | ||
(B) modify the guidelines as the needs of the | ||
development change; | ||
(20) exercise self-help with regard to property | ||
governed by the association; | ||
(21) exercise other powers conferred by the dedicatory | ||
instruments; | ||
(22) exercise other powers necessary and proper for | ||
the governance and operation of the association; and | ||
(23) exercise any other powers that may be exercised | ||
in this state by a corporation of the same type as the association. | ||
Sec. 215.006. ANNUAL MEETING OF ASSOCIATION MEMBERS; NOTICE | ||
OF ANNUAL OR SPECIAL MEETING. (a) An annual meeting of members of a | ||
property owners' association must be conducted in accordance with | ||
the association's dedicatory instruments. | ||
(b) Unless otherwise provided by a dedicatory instrument, | ||
an annual meeting of the property owners' association members is | ||
open to association members and must be held in a county in which | ||
all or part of the property governed by the association is located | ||
or in a county adjacent to that county. | ||
(c) Unless otherwise provided by a dedicatory instrument, | ||
the board shall give members notice of the date, time, place, and | ||
subject of an annual or special meeting of the members. The notice | ||
must be delivered to each member not later than the 10th day and not | ||
earlier than the 60th day before the date of the meeting. | ||
(d) A notice under Subsection (c) must be posted in a | ||
conspicuous manner reasonably designed to provide notice to | ||
association members: | ||
(1) in a place located outside the corporate offices | ||
of the association that is accessible by the general membership | ||
during normal business hours; or | ||
(2) on any Internet website maintained by the | ||
association. | ||
(e) Unless otherwise provided by a dedicatory instrument, | ||
any number of the members may attend the meeting by use of | ||
videoconferencing or a similar telecommunication method for | ||
purposes of establishing full participation in the meeting. | ||
Sec. 215.007. BOARD MEETINGS. (a) A meeting of the board | ||
of directors of a property owners' association must be conducted in | ||
accordance with the association's dedicatory instruments. | ||
(b) Unless otherwise provided by a dedicatory instrument, | ||
elected directors who represent the commercial and residential | ||
membership attend and conduct the business of the property owners' | ||
association at a meeting under this section. | ||
(c) In this section, a board meeting has the meaning | ||
assigned by a dedicatory instrument. Notwithstanding this | ||
subsection, the term does not include the gathering of a quorum of | ||
the board at any other venue, including at a social function | ||
unrelated to the business of the association, or the attendance by a | ||
quorum of the board at a regional, state, or national convention, | ||
workshop, ceremonial event, or press conference, if formal action | ||
is not taken and any discussion of association business is | ||
incidental to the social function, convention, workshop, | ||
ceremonial event, or press conference. | ||
(d) Unless otherwise provided by a dedicatory instrument, | ||
the board shall keep a record of each regular, emergency, or special | ||
board meeting in the form of written minutes or an audio recording | ||
of the meeting. A record of a meeting must state the subject of each | ||
motion or inquiry, regardless of whether the board takes action on | ||
the motion or inquiry, and indicate each vote, order, decision, or | ||
other action taken by the board. The board shall make meeting | ||
records, including approved minutes, available to a member for | ||
inspection and copying, at the member's expense, during the normal | ||
business hours of the association on the member's written request | ||
to the board or the board's representative. The board shall approve | ||
the minutes of a board meeting not later than the next regular board | ||
meeting. | ||
(e) Unless otherwise provided by a dedicatory instrument, | ||
before the board calls an executive session, the board shall | ||
convene in a regular or special board meeting for which notice has | ||
been given as provided by this section. During that board meeting, | ||
the presiding board member may call an executive session by | ||
announcing that an executive session will be held to deliberate a | ||
matter described by Subsection (f) and identifying the specific | ||
subdivision of Subsection (f) under which the executive session | ||
will be held. A vote or other action item may not be taken in | ||
executive session. An executive session is not subject to the | ||
requirements of Subsection (d). | ||
(f) Unless otherwise provided by a dedicatory instrument, a | ||
property owners' association board may meet in executive session to | ||
deliberate: | ||
(1) anticipated or pending litigation, settlement | ||
offers, or interpretations of the law with the association's legal | ||
counsel; | ||
(2) complaints or charges against or issues regarding | ||
a board member or an agent, employee, contractor, or other | ||
representative of the association; | ||
(3) all financial matters concerning a specific | ||
property owner; | ||
(4) a payment plan for an association member who has a | ||
financial obligation to the association; | ||
(5) a foreclosure of a lien; | ||
(6) an enforcement action against an association | ||
member, including for nonpayment of amounts due; | ||
(7) the purchase, exchange, lease, or value of real | ||
property, if the board determines in good faith that deliberation | ||
in an open board meeting may have a detrimental effect on the | ||
association; | ||
(8) business and financial issues relating to the | ||
negotiation of a contract, if the board determines in good faith | ||
that deliberation in an open board meeting may have a detrimental | ||
effect on the position of the association; | ||
(9) matters involving the invasion of privacy of an | ||
individual owner; | ||
(10) an employee matter; and | ||
(11) any other matter the board considers necessary or | ||
reasonable to further assist the association's operation. | ||
Sec. 215.008. VOTING. (a) The number of votes to which an | ||
individual or corporation who is a member of a property owners' | ||
association is entitled is determined by the dedicatory instruments | ||
of the association. | ||
(b) Each corporation or individual who is a member of the | ||
property owners' association may vote by proxy as provided for | ||
nonprofit corporations under Sections 22.160(b) and (c), Business | ||
Organizations Code. | ||
(c) Notwithstanding any provision of the certificate of | ||
formation or bylaws to the contrary, a member vote on any matter may | ||
be conducted by mail, by facsimile transmission, by e-mail, or by | ||
any combination of those methods. | ||
Sec. 215.009. RESTRICTIVE COVENANTS. (a) A property | ||
owners' association may enforce its restrictive covenants as | ||
follows: | ||
(1) by exercising discretionary authority relating to | ||
a restrictive covenant unless a court has determined by a | ||
preponderance of the evidence that the exercise of discretionary | ||
authority was arbitrary, capricious, or discriminatory; and | ||
(2) by initiating, defending, or intervening in | ||
litigation or an administrative proceeding affecting the | ||
enforcement of a restrictive covenant or the protection, | ||
preservation, or operation of property subject to the association's | ||
dedicatory instruments. | ||
(b) If the association prevails in an action to enforce | ||
restrictive covenants, the association may recover reasonable | ||
attorney's fees and costs incurred. | ||
(c) An association may use self-help to enforce its | ||
restrictive covenants against a residential or commercial property | ||
owner as necessary to prevent immediate harm to a person or | ||
property, or as otherwise reasonable. If a property owner commits a | ||
subsequent repeat violation of the restrictive covenants within 12 | ||
months of the initial violation, the association is not required to | ||
provide the property owner with advance notice before the | ||
association implements self-help. | ||
(d) For purposes of Subsection (c), an advance, annual | ||
notice of maintenance requirements is considered notice to the | ||
extent notice is required. | ||
Sec. 215.010. ATTORNEY'S FEES IN BREACH OF RESTRICTIVE | ||
COVENANT ACTION. In an action based on breach of a restrictive | ||
covenant, the prevailing party is entitled to reasonable attorney's | ||
fees, costs, and actual damages. | ||
Sec. 215.011. COMMON AREAS. A property owners' association | ||
may adopt reasonable rules regulating common areas. | ||
Sec. 215.012. RESALE CERTIFICATES. A property owners' | ||
association shall provide resale certificates only for residential | ||
properties and in the manner provided by Section 207.003. | ||
Sec. 215.013. MANAGEMENT CERTIFICATE. (a) A property | ||
owners' association shall record in each county in which any | ||
portion of the development governed by the association is located a | ||
management certificate, signed and acknowledged by an officer of | ||
the association, stating: | ||
(1) the name of the development; | ||
(2) the name of the association; | ||
(3) the recording data for the declaration and all | ||
supplementary declarations; | ||
(4) the applicability of any supplementary | ||
declarations to residential communities; | ||
(5) the name and mailing address of the association; | ||
and | ||
(6) other information the association considers | ||
appropriate. | ||
(b) A property owners' association shall record an amended | ||
management certificate not later than the 30th day after the date | ||
the association has notice of a change in information in the | ||
recorded certificate required by Subsection (a). | ||
(c) The association and its officers, directors, employees, | ||
and agents are not liable to any person or corporation for delay in | ||
recording or failure to record a management certificate unless the | ||
delay or failure is willful or caused by gross negligence. | ||
Sec. 215.014. PRIORITY OF PAYMENTS. Unless otherwise | ||
provided in writing by the property owner at the time payment is | ||
made, a payment received by a property owners' association from the | ||
owner shall be applied to the owner's debt in the following order of | ||
priority: | ||
(1) any delinquent assessment; | ||
(2) any current assessment; | ||
(3) any attorney's fees incurred by the association | ||
associated solely with assessments or any other charge that could | ||
provide the basis for foreclosure; | ||
(4) any fines assessed by the association; | ||
(5) any attorney's fees incurred by the association | ||
that are not subject to Subdivision (3); and | ||
(6) any other amount owed to the association. | ||
Sec. 215.015. FORECLOSURE. A property owners' association | ||
may not foreclose an association assessment lien unless the | ||
association first obtains a court order of sale. | ||
SECTION 2. This Act takes effect September 1, 2011. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 2869 was passed by the House on April | ||
26, 2011, by the following vote: Yeas 148, Nays 0, 2 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 2869 on May 25, 2011, by the following vote: Yeas 145, Nays 0, | ||
3 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 2869 was passed by the Senate, with | ||
amendments, on May 24, 2011, by the following vote: Yeas 31, Nays | ||
0 | ||
. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |