Bill Text: TX HB1228 | 2011-2012 | 82nd Legislature | Enrolled
Bill Title: Relating to payment and collection of assessments and other charges owed to a property owners' association and foreclosure of a property owners' association assessment lien.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2011-06-17 - See remarks for effective date [HB1228 Detail]
Download: Texas-2011-HB1228-Enrolled.html
H.B. No. 1228 |
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relating to payment and collection of assessments and other charges | ||
owed to a property owners' association and foreclosure of a | ||
property owners' association assessment lien. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. 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 2. Chapter 209, Property Code, is amended by adding | ||
Sections 209.0062, 209.0063, 209.0064, 209.0091, 209.0092, | ||
209.0093, and 209.0094 to read as follows: | ||
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN | ||
ASSESSMENTS. (a) 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. | ||
(b) The minimum term for a payment plan offered by a | ||
property owners' association is three months. | ||
(c) 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. | ||
(d) A property owners' association shall file the | ||
association's guidelines under this section in the real property | ||
records of each county in which the subdivision is located. | ||
(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 | ||
(a). | ||
Sec. 209.0063. PRIORITY OF PAYMENTS. (a) Except as | ||
provided by Subsection (b), 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 or third party collection | ||
costs incurred by the association associated solely with | ||
assessments or any other charge that could provide the basis for | ||
foreclosure; | ||
(4) any attorney's fees incurred by the association | ||
that are not subject to Subdivision (3); | ||
(5) any fines assessed by the association; and | ||
(6) any other amount owed to the association. | ||
(b) If, at the time the property owners' association | ||
receives a payment from a property owner, the owner is in default | ||
under a payment plan entered into with the association: | ||
(1) the association is not required to apply the | ||
payment in the order of priority specified by Subsection (a); and | ||
(2) in applying the payment, a fine assessed by the | ||
association may not be given priority over any other amount owed to | ||
the association. | ||
Sec. 209.0064. THIRD PARTY COLLECTIONS. (a) In this | ||
section, "collection agent" means a debt collector, as defined by | ||
Section 803 of the federal Fair Debt Collection Practices Act (15 | ||
U.S.C. Section 1692a). | ||
(b) A property owners' association may not hold an owner | ||
liable for fees of a collection agent retained by the property | ||
owners' association unless the association first provides written | ||
notice to the owner by certified mail, return receipt requested, | ||
that: | ||
(1) specifies each delinquent amount and the total | ||
amount of the payment required to make the account current; | ||
(2) describes the options the owner has to avoid | ||
having the account turned over to a collection agent, including | ||
information regarding availability of a payment plan through the | ||
association; and | ||
(3) provides a period of at least 30 days for the owner | ||
to cure the delinquency before further collection action is taken. | ||
(c) An owner is not liable for fees of a collection agent | ||
retained by the property owners' association if: | ||
(1) the obligation for payment by the association to | ||
the association's collection agent for fees or costs associated | ||
with a collection action is in any way dependent or contingent on | ||
amounts recovered; or | ||
(2) the payment agreement between the association and | ||
the association's collection agent does not require payment by the | ||
association of all fees to a collection agent for the action | ||
undertaken by the collection agent. | ||
(d) The agreement between the property owners' association | ||
and the association's collection agent may not prohibit the owner | ||
from contacting the association board or the association's managing | ||
agent regarding the owner's delinquency. | ||
(e) A property owners' association may not sell or otherwise | ||
transfer any interest in the association's accounts receivables for | ||
a purpose other than as collateral for a loan. | ||
Sec. 209.0091. PREREQUISITES TO FORECLOSURE: NOTICE AND | ||
OPPORTUNITY TO CURE FOR CERTAIN OTHER LIENHOLDERS. (a) A property | ||
owners' association may not foreclose a property owners' | ||
association assessment lien on real property by giving notice of | ||
sale under Section 51.002 or commencing a judicial foreclosure | ||
action unless the association has: | ||
(1) provided written notice of the total amount of the | ||
delinquency giving rise to the foreclosure to any other holder of a | ||
lien of record on the property whose lien is inferior or subordinate | ||
to the association's lien and is evidenced by a deed of trust; and | ||
(2) provided the recipient of the notice an | ||
opportunity to cure the delinquency before the 61st day after the | ||
date the recipient receives the notice. | ||
(b) Notice under this section must be sent by certified | ||
mail, return receipt requested, to the address for the lienholder | ||
shown in the deed records relating to the property that is subject | ||
to the property owners' association assessment lien. | ||
Sec. 209.0092. JUDICIAL FORECLOSURE REQUIRED. (a) Except | ||
as provided by Subsection (c) and subject to Section 209.009, a | ||
property owners' association may not foreclose a property owners' | ||
association assessment lien unless the association first obtains a | ||
court order in an application for expedited foreclosure under the | ||
rules adopted by the supreme court under Subsection (b). A property | ||
owners' association may use the procedure described by this | ||
subsection to foreclose any lien described by the association's | ||
dedicatory instruments. | ||
(b) The supreme court, as an exercise of the court's | ||
authority under Section 74.024, Government Code, shall adopt rules | ||
establishing expedited foreclosure proceedings for use by a | ||
property owners' association in foreclosing an assessment lien of | ||
the association. The rules adopted under this subsection must be | ||
substantially similar to the rules adopted by the supreme court | ||
under Section 50(r), Article XVI, Texas Constitution. | ||
(c) Expedited foreclosure is not required under this | ||
section if the owner of the property that is subject to foreclosure | ||
agrees in writing at the time the foreclosure is sought to waive | ||
expedited foreclosure under this section. A waiver under this | ||
subsection may not be required as a condition of the transfer of | ||
title to real property. | ||
Sec. 209.0093. REMOVAL OR ADOPTION OF FORECLOSURE | ||
AUTHORITY. A provision granting a right to foreclose a lien on real | ||
property for unpaid amounts due to a property owners' association | ||
may be removed from a dedicatory instrument or adopted in a | ||
dedicatory instrument by a vote of at least 67 percent of the total | ||
votes allocated to property owners in the property owners' | ||
association. Owners holding at least 10 percent of all voting | ||
interests in the property owners' association may petition the | ||
association and require a special meeting to be called for the | ||
purposes of taking a vote for the purposes of this section. | ||
Sec. 209.0094. ASSESSMENT LIEN FILING. A lien, lien | ||
affidavit, or other instrument evidencing the nonpayment of | ||
assessments or other charges owed to a property owners' association | ||
and filed in the official public records of a county is a legal | ||
instrument affecting title to real property. | ||
SECTION 3. (a) 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. | ||
(b) Section 209.0063, Property Code, as added by this Act, | ||
applies only to a payment received by a property owners' | ||
association on or after the effective date of this Act. A payment | ||
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. | ||
(c) Section 209.0091, Property Code, as added by this Act, | ||
applies only to a notice of sale given under Section 51.002, | ||
Property Code, on or after the effective date of this Act or a | ||
judicial foreclosure action commenced on or after the effective | ||
date of this Act. | ||
(d) Section 209.0092, Property Code, as added by this Act, | ||
applies only to a foreclosure sale conducted on or after the | ||
effective date of this Act. A foreclosure sale conducted 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. | ||
(e) Section 209.0094, Property Code, as added by this Act, | ||
applies only to an instrument filed on or after January 1, 2012. An | ||
instrument filed before January 1, 2012, is governed by the law in | ||
effect on the date the instrument was filed, and that law is | ||
continued in effect for that purpose. | ||
SECTION 4. Not later than January 1, 2012, the Supreme Court | ||
of Texas shall adopt rules of civil procedure under Section | ||
209.0092, Property Code, as added by this Act. | ||
SECTION 5. (a) Except as provided by Subsection (b) of | ||
this section, this Act takes effect January 1, 2012. | ||
(b) Subsection (b), Section 209.0092, Property Code, as | ||
added by this Act, takes effect September 1, 2011. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 1228 was passed by the House on May | ||
11, 2011, by the following vote: Yeas 142, Nays 0, 2 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 1228 on May 26, 2011, by the following vote: Yeas 133, Nays 7, | ||
3 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 1228 was passed by the Senate, with | ||
amendments, on May 23, 2011, by the following vote: Yeas 30, Nays | ||
1. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |