Bill Text: TX SB1204 | 2011-2012 | 82nd Legislature | Introduced
Bill Title: Relating to the procedures for collection of assessments and other debts, including foreclosure of an assessment lien, by a property owners' association.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-03-16 - Referred to Intergovernmental Relations [SB1204 Detail]
Download: Texas-2011-SB1204-Introduced.html
82R9269 TJS-F | ||
By: West | S.B. No. 1204 |
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relating to the procedures for collection of assessments and other | ||
debts, including foreclosure of an assessment lien, by a property | ||
owners' association. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 209, Property Code, is amended by adding | ||
Sections 209.0062, 209.0063, and 209.0064 to read as follows: | ||
Sec. 209.0062. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN | ||
ASSESSMENTS. (a) A property owners' association 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) For any approved special assessment in an amount greater | ||
than the equivalent of the sum of all regular assessments payable in | ||
the year the special assessment is approved, a property owners' | ||
association shall allow partial payments of the special assessment | ||
for 12 months unless the property owner requests a shorter payment | ||
period in writing at the time the property owner requests an | ||
alternative payment plan. A property owners' association may offer | ||
a reasonable discount for an owner making a one-time lump sum | ||
payment of the special assessment. | ||
(c) For any approved special assessment in an amount greater | ||
than the equivalent of one-half the sum of all regular assessments | ||
payable in the year the special assessment is approved, a property | ||
owners' association shall allow partial payments of the special | ||
assessment for six months unless the property owner requests a | ||
shorter payment period in writing at the time the property owner | ||
requests an alternative payment plan. A property owners' | ||
association may offer a reasonable discount to an owner making a | ||
one-time lump sum payment of the special assessment. | ||
(d) A property owners' association is not required to allow | ||
a payment plan for any amount that extends more than 12 months from | ||
the date of the owner's request for a payment plan or to enter into a | ||
payment plan with an owner who failed to honor the terms of a | ||
previous payment plan during the five years following the owner's | ||
default under the previous payment plan. | ||
(e) 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. | ||
(f) 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. 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. 209.0064. COLLECTIONS. A property owners' association | ||
must bring suit or otherwise initiate against an owner a collection | ||
action authorized by the dedicatory instruments or other law on or | ||
before the 10th anniversary of the date on which the cause of action | ||
for collection of the debt accrues. Section 16.004, Civil Practice | ||
and Remedies Code, does not apply to the collection of a debt owed | ||
by an owner to a property owners' association. | ||
SECTION 2. Chapter 209, Property Code, is amended by adding | ||
Sections 209.0091 and 209.0092 to read as follows: | ||
Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except | ||
as provided by Subsection (c), 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. 209.0092. 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 51 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. | ||
SECTION 3. Section 209.010(a), Property Code, is amended to | ||
read as follows: | ||
(a) A property owners' association that conducts a | ||
foreclosure sale of an owner's lot must send to the lot owner and to | ||
each lienholder of record, not later than the 30th day after the | ||
date of the foreclosure sale: | ||
(1) [ |
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sale occurred and informing the lot owner and each lienholder of | ||
record of the right of the lot owner and lienholder to redeem the | ||
property under Section 209.011; and | ||
(2) a copy of Section 209.011. | ||
SECTION 4. (a) Sections 209.0062 and 209.0064, Property | ||
Code, as added by this Act, apply 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) Sections 209.0091 and 209.0092, Property Code, as added | ||
by this Act, apply only to a foreclosure sale that occurs after | ||
January 1, 2012. A foreclosure sale that occurs on or before | ||
January 1, 2012, 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 209.010(a), Property Code, as amended 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. | ||
SECTION 5. Not later than January 1, 2012, the Supreme Court | ||
of Texas shall adopt rules of civil procedure under Section | ||
209.0091, Property Code, as added by this Act. | ||
SECTION 6. (a) Except as provided by Subsection (b) of this | ||
section, this Act takes effect September 1, 2011. | ||
(b) Sections 209.0091(a) and (c), Property Code, as added by | ||
this Act, take effect January 1, 2012. |