Bill Text: TX SB639 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the operation and management of certain condominium unit owners' associations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-03-01 - Referred to Business & Commerce [SB639 Detail]
Download: Texas-2019-SB639-Introduced.html
86R4908 PMO-D | ||
By: Huffman | S.B. No. 639 |
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relating to the operation and management of certain condominium | ||
unit owners' associations. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 82.002(c), Property Code, is amended to | ||
read as follows: | ||
(c) This section and the following sections apply to a | ||
condominium in this state for which the declaration was recorded | ||
before January 1, 1994: Sections 82.005, 82.006, 82.007, 82.053, | ||
82.054, 82.102(a)(1)-(7), (a)(12)-(21), (f), and (g), 82.1031, | ||
82.1032, 82.1051, 82.108, 82.1081 through 82.1087, 82.111, 82.113, | ||
82.114, 82.1141, 82.116, 82.118, 82.157, and 82.161. The | ||
definitions prescribed by Section 82.003 apply to a condominium in | ||
this state for which the declaration was recorded before January 1, | ||
1994, to the extent the definitions do not conflict with the | ||
declaration. The sections listed in this subsection apply only | ||
with respect to events and circumstances occurring on or after | ||
January 1, 1994, and do not invalidate existing provisions of the | ||
declaration, bylaws, or plats or plans of a condominium for which | ||
the declaration was recorded before January 1, 1994. | ||
SECTION 2. Section 82.067, Property Code, is amended by | ||
adding Subsection (a-1) to read as follows: | ||
(a-1) A unit owner may cast or give a vote to adopt an | ||
amendment to a declaration under Subsection (a) by any method | ||
authorized by Section 82.1085. | ||
SECTION 3. Section 82.102(g), Property Code, is amended to | ||
read as follows: | ||
(g) If a dedicatory instrument requires a vote of members of | ||
the association to borrow money or assign the association's right | ||
to future income or the association's lien rights, the loan or | ||
assignment must be approved as provided by the dedicatory | ||
instrument. The [ |
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purpose may be cast as provided by Section 82.1085 [ |
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that purpose[ |
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threshold is not provided by the dedicatory instrument, approval | ||
requires the consent of owners holding 67 percent of all voting | ||
interests. | ||
SECTION 4. Subchapter C, Chapter 82, Property Code, is | ||
amended by adding Sections 82.1031, 82.1032, and 82.1051 to read as | ||
follows: | ||
Sec. 82.1031. ELECTION OF BOARD MEMBERS. (a) | ||
Notwithstanding any provision in a dedicatory instrument, any board | ||
member whose term has expired must be elected by unit owners who are | ||
members of the association. A board member may be appointed by the | ||
board to fill a vacancy on the board. A board member appointed to | ||
fill a vacant position shall serve for the remainder of the | ||
unexpired term of the position. | ||
(b) At least 10 days before the date an association | ||
disseminates absentee ballots or other ballots to association | ||
members for purposes of voting in a board member election, the | ||
association must provide notice to the association members | ||
soliciting candidates interested in running for a position on the | ||
board. The notice must contain instructions for an eligible | ||
candidate to notify the association of the candidate's request to | ||
be placed on the ballot and the deadline to submit the candidate's | ||
request. The deadline may not be earlier than the 10th day after | ||
the date the association provides the notice required by this | ||
subsection. | ||
(c) The notice required by Subsection (b) must be: | ||
(1) mailed to each unit owner; or | ||
(2) provided by: | ||
(A) posting the notice in a conspicuous manner | ||
reasonably designed to provide notice to unit owners: | ||
(i) in a place located on the common | ||
elements or, with the unit owner's consent, on other conspicuously | ||
located privately owned property in or on the condominium; or | ||
(ii) on any Internet website maintained by | ||
the association or other Internet media; and | ||
(B) sending the notice by e-mail to each unit | ||
owner who has registered an e-mail address with the association. | ||
(d) An association shall include on each absentee ballot or | ||
other ballot for a board member election the name of each eligible | ||
candidate from whom the association received a request to be placed | ||
on the ballot in accordance with this section. | ||
(e) The board of an association may amend the bylaws of the | ||
association to provide for elections to be held as required by | ||
Subsection (a). | ||
(f) The appointment of a board member in violation of this | ||
section is void. | ||
(g) This section does not apply to the appointment of a | ||
board member during a period of declarant control. | ||
Sec. 82.1032. BOARD MEMBERSHIP. (a) Except as provided by | ||
this section, a provision in a dedicatory instrument that restricts | ||
a unit owner's right to run for a position on the board of the | ||
association is void. | ||
(b) Notwithstanding any other provision of this chapter, an | ||
association's bylaws may require one or more board members to | ||
reside in the condominium subject to the dedicatory instruments but | ||
may not require all board members to reside in the condominium. A | ||
requirement described by this subsection is not applicable during | ||
the period of declarant control. | ||
(c) If a board is presented with written, documented | ||
evidence from a database or other record maintained by a | ||
governmental law enforcement authority that a board member was | ||
convicted of a felony or crime involving moral turpitude not more | ||
than 20 years before the date the board is presented with the | ||
evidence, the board member is immediately ineligible to serve on | ||
the board of the association, automatically considered removed from | ||
the board, and prohibited from future service on the board. | ||
Sec. 82.1051. ASSOCIATION CONTRACTS. (a) This section | ||
does not apply to a contract entered into by an association during a | ||
period of declarant control. | ||
(b) An association may enter into an enforceable contract | ||
with a current association board member, a person related to a | ||
current association board member within the third degree by | ||
consanguinity or affinity, as determined under Chapter 573, | ||
Government Code, a company in which a current association board | ||
member has a financial interest in at least 51 percent of profits, | ||
or a company in which a person related to a current association | ||
board member within the third degree by consanguinity or affinity, | ||
as determined under Chapter 573, Government Code, has a financial | ||
interest in at least 51 percent of profits only if the following | ||
conditions are satisfied: | ||
(1) the board member, relative, or company bids on the | ||
proposed contract and the association has received at least two | ||
other bids for the contract from persons not associated with the | ||
board member, relative, or company, if reasonably available in the | ||
community; | ||
(2) the board member: | ||
(A) is not given access to the other bids; | ||
(B) does not participate in any board discussion | ||
regarding the contract; and | ||
(C) does not vote on the award of the contract; | ||
(3) the material facts regarding the relationship or | ||
interest with respect to the proposed contract are disclosed to or | ||
known by the association board and the board, in good faith and with | ||
ordinary care, authorizes the contract by an affirmative vote of | ||
the majority of the board members who do not have an interest | ||
governed by this subsection; and | ||
(4) the association board certifies that the other | ||
requirements of this subsection have been satisfied by a resolution | ||
approved by an affirmative vote of the majority of the board members | ||
who do not have an interest governed by this subsection. | ||
SECTION 5. Section 82.108(b), Property Code, is amended to | ||
read as follows: | ||
(b) Meetings of the association and board must be open to | ||
unit owners as provided by Section 82.1081[ |
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SECTION 6. Subchapter C, Chapter 82, Property Code, is | ||
amended by adding Sections 82.1081 through 82.1087 to read as | ||
follows: | ||
Sec. 82.1081. OPEN MEETINGS. (a) In this section, "board | ||
meeting": | ||
(1) means a deliberation between a quorum of the | ||
association board, or between a quorum of the board and another | ||
person, during which association business is considered and the | ||
board takes formal action; and | ||
(2) does not include the gathering of a quorum of the | ||
board 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, ceremonial event, or press | ||
conference, if formal action is not taken and any discussion of | ||
association business is incidental to the social function, | ||
convention, ceremonial event, or press conference. | ||
(b) Meetings of the association and regular and special | ||
board meetings must be open to unit owners, subject to the right of | ||
the board to adjourn a board meeting and reconvene in closed | ||
executive session to consider actions involving personnel, pending | ||
or threatened litigation, contract negotiations, enforcement | ||
actions, confidential communications with the association's | ||
attorney, matters involving the invasion of privacy of individual | ||
unit owners, or matters that are to remain confidential by request | ||
of the affected parties and agreement of the board. Following an | ||
executive session, any decision made in the executive session must | ||
be summarized orally and placed in the minutes, in general terms, | ||
without breaching the privacy of individual unit owners, violating | ||
any privilege, or disclosing information that was to remain | ||
confidential at the request of the affected parties. The oral | ||
summary must include a general explanation of expenditures approved | ||
in executive session. | ||
(c) Except for a meeting held by electronic or telephonic | ||
means under Subsection (d), a board meeting must be held in a county | ||
in which all or any part of the condominium is located or in a county | ||
adjacent to that county. | ||
(d) A board meeting may be held by electronic or telephonic | ||
means provided that: | ||
(1) each board member may hear and be heard by every | ||
other board member; | ||
(2) except for any portion of the meeting conducted in | ||
executive session: | ||
(A) all unit owners in attendance at the meeting | ||
may hear all board members; and | ||
(B) unit owners are allowed to listen using any | ||
electronic or telephonic communication method used or expected to | ||
be used by a board member to participate; and | ||
(3) the notice of the meeting includes instructions | ||
for unit owners to access any communication method required to be | ||
accessible under Subdivision (2)(B). | ||
(e) The board shall keep a record of each regular or special | ||
board meeting in the form of written minutes of the meeting. The | ||
board shall make meeting records, including approved minutes, | ||
available to a unit owner for inspection and copying on the unit | ||
owner's written request to the association's managing agent at the | ||
address appearing on the most recently filed management certificate | ||
or, if there is not a managing agent, to the board. | ||
(f) Unit owners shall be given notice of the date, hour, | ||
place, and general subject of a meeting of the association or a | ||
regular or special board meeting, including a general description | ||
of any matter to be brought up for deliberation in executive | ||
session. Except as provided by Section 82.070, the notice shall be: | ||
(1) mailed to each unit owner not later than the 10th | ||
day or earlier than the 60th day before the date of the meeting; or | ||
(2) provided at least 72 hours before the start of the | ||
meeting by: | ||
(A) posting the notice in a conspicuous manner | ||
reasonably designed to provide notice to unit owners: | ||
(i) in a place located on the common | ||
elements or, with the unit owner's consent, on other conspicuously | ||
located privately owned property in or on the condominium; or | ||
(ii) on any Internet website maintained by | ||
the association or other Internet media; and | ||
(B) sending the notice by e-mail to each unit | ||
owner who has registered an e-mail address with the association. | ||
(g) It is a unit owner's duty to keep an updated e-mail | ||
address registered with the association under Subsection | ||
(f)(2)(B). | ||
(h) If the board recesses a regular or special board meeting | ||
to continue the following regular business day, the board is not | ||
required to post notice of the continued meeting if the recess is | ||
taken in good faith and not to circumvent this section. If a | ||
regular or special board meeting is continued to the following | ||
regular business day, and on that following day the board continues | ||
the meeting to another day, the board shall give notice of the | ||
continuation in at least one manner prescribed by Subsection | ||
(f)(2)(A) not later than two hours after adjourning the meeting | ||
being continued. | ||
(i) Except as provided by this subsection, a board may take | ||
action outside of a meeting, including voting by electronic or | ||
telephonic means, without prior notice to unit owners under | ||
Subsection (f), if each board member is given a reasonable | ||
opportunity to express the board member's opinion to all other | ||
board members and to vote. Any action taken without notice to unit | ||
owners under Subsection (f) must be summarized orally, including an | ||
explanation of any known actual or estimated expenditures approved | ||
at the meeting, and documented in the minutes of the next regular or | ||
special board meeting. The board may not, unless done in an open | ||
meeting for which prior notice was given to unit owners under | ||
Subsection (f), consider or vote on: | ||
(1) fines; | ||
(2) damage assessments; | ||
(3) initiation of foreclosure actions; | ||
(4) initiation of enforcement actions, excluding | ||
temporary restraining orders or violations involving a threat to | ||
health or safety; | ||
(5) increases in assessments; | ||
(6) levying of special assessments; | ||
(7) appeals from a denial of a request for approval of | ||
an alteration of a unit under Section 82.061; | ||
(8) a suspension of a right of a particular unit owner | ||
before the unit owner has an opportunity to attend a board meeting | ||
to present the unit owner's position, including any defense, on the | ||
issue; | ||
(9) lending or borrowing money; | ||
(10) the adoption or amendment of a dedicatory | ||
instrument; | ||
(11) the approval of an annual budget or the approval | ||
of an amendment of an annual budget that increases the budget by | ||
more than 10 percent; | ||
(12) the sale or purchase of real property; | ||
(13) the filling of a vacancy on the board; | ||
(14) the construction of capital improvements other | ||
than the repair, replacement, or enhancement of existing capital | ||
improvements; or | ||
(15) the election of an officer. | ||
(j) This section applies to a meeting of an association | ||
board during a period of declarant control only if the meeting is | ||
conducted for the purpose of: | ||
(1) adopting or amending the governing documents, | ||
including declarations, bylaws, rules, and regulations of the | ||
association; | ||
(2) increasing the amount of regular assessments of | ||
the association or adopting or increasing a special assessment; | ||
(3) electing non-declarant board members of the | ||
association or establishing a process by which those members are | ||
elected; or | ||
(4) changing the voting rights of members of the | ||
association. | ||
Sec. 82.1082. NOTICE OF ELECTION OR ASSOCIATION VOTE. (a) | ||
Except as provided in Section 82.070, for an election or vote taken | ||
at a meeting of the unit owners, not later than the 10th day or | ||
earlier than the 60th day before the date of the election or vote, | ||
an association shall give written notice of the election or vote to: | ||
(1) each unit owner in the association, for purposes | ||
of an association-wide election or vote; or | ||
(2) each unit owner in the association entitled under | ||
the dedicatory instruments to vote in a particular representative | ||
election, for purposes of a vote that involves election of | ||
representatives of the association who are vested under the | ||
dedicatory instruments of the association with the authority to | ||
elect or appoint board members of the association. | ||
(b) For an election or vote of unit owners not taken at a | ||
meeting, the association shall give notice of the election or vote | ||
to all unit owners entitled to vote on any matter under | ||
consideration. The notice shall be given not later than the 20th | ||
day before the latest date on which a ballot may be submitted to be | ||
counted. | ||
(c) This section supersedes any contrary requirement in a | ||
dedicatory instrument. | ||
Sec. 82.1083. RIGHT TO VOTE. A provision in a dedicatory | ||
instrument that would disqualify a unit owner from voting in an | ||
association election of board members or on any matter concerning | ||
the rights or responsibilities of the unit owner is void. | ||
Sec. 82.1084. BALLOTS. (a) Except as provided by | ||
Subsection (d), any vote cast in an election or vote by an | ||
association member must be in writing and signed by the member. | ||
(b) Electronic votes cast under Section 82.1085 constitute | ||
written and signed ballots. | ||
(c) In an association election, written and signed ballots | ||
are not required for uncontested races. | ||
(d) An association may adopt rules to allow voting by secret | ||
ballot by members of the association. The association must take | ||
measures to reasonably ensure that: | ||
(1) a member cannot cast more votes than the member is | ||
eligible to cast in an election or vote; and | ||
(2) the association counts every vote cast by a member | ||
that is eligible to cast a vote. | ||
Sec. 82.1085. VOTING METHODS; ABSENTEE OR ELECTRONIC | ||
BALLOTS. (a) Subject to Subsection (b), the voting rights of a | ||
unit owner may be cast or given: | ||
(1) in person or by proxy at a meeting of the | ||
association; | ||
(2) by absentee ballot in accordance with this | ||
section; | ||
(3) by electronic ballot in accordance with this | ||
section; or | ||
(4) by any method of representative or delegated | ||
voting provided by a dedicatory instrument. | ||
(b) Except as provided by this subsection, unless a | ||
dedicatory instrument provides otherwise, an association is not | ||
required to provide a unit owner with more than one voting method. | ||
A unit owner must be allowed to vote by absentee ballot or proxy. | ||
(c) An absentee or electronic ballot: | ||
(1) may be counted as a unit owner present and voting | ||
for the purpose of establishing a quorum only for items appearing on | ||
the ballot; | ||
(2) may not be counted, even if properly delivered, if | ||
the unit owner attends any meeting to vote in person, so that any | ||
vote cast at a meeting by a unit owner supersedes any vote submitted | ||
by absentee or electronic ballot previously submitted for that | ||
proposal; and | ||
(3) may not be counted on the final vote of a proposal | ||
if the motion was amended at the meeting to be different from the | ||
exact language on the absentee or electronic ballot. | ||
(d) For purposes of Subsection (c), a nomination taken from | ||
the floor in a board member election is not considered an amendment | ||
to the proposal for the election. | ||
(e) A solicitation for votes by absentee ballot must | ||
include: | ||
(1) an absentee ballot that contains each proposed | ||
action and provides an opportunity to vote for or against each | ||
proposed action; | ||
(2) instructions for delivery of the completed | ||
absentee ballot, including the delivery location; and | ||
(3) the following language: "By casting your vote via | ||
absentee ballot you will forgo the opportunity to consider and vote | ||
on any action from the floor on these proposals, if a meeting is | ||
held. This means that if there are amendments to these proposals | ||
your votes will not be counted on the final vote on these measures. | ||
If you desire to retain this ability, please attend any meeting in | ||
person. You may submit an absentee ballot and later choose to | ||
attend any meeting in person, in which case any in-person vote will | ||
prevail." | ||
(f) For the purposes of this section, "electronic ballot" | ||
means a ballot: | ||
(1) given by: | ||
(A) e-mail; | ||
(B) facsimile; or | ||
(C) posting on an Internet website; | ||
(2) for which the identity of the unit owner | ||
submitting the ballot can be confirmed; and | ||
(3) for which the unit owner may receive a receipt of | ||
the electronic transmission and receipt of the unit owner's ballot. | ||
(g) If an electronic ballot is posted on an Internet | ||
website, a notice of the posting shall be sent to each unit owner | ||
that contains instructions on obtaining access to the posting on | ||
the website. | ||
(h) This section supersedes any contrary provision in a | ||
dedicatory instrument. | ||
Sec. 82.1086. TABULATION OF AND ACCESS TO BALLOTS. (a) | ||
Notwithstanding any other provision of this chapter or any other | ||
law, a person who is a candidate in an association election or who | ||
is otherwise the subject of an association vote, or a person related | ||
to that person within the third degree by consanguinity or | ||
affinity, as determined under Chapter 573, Government Code, may not | ||
tabulate or otherwise be given access to the ballots cast in that | ||
election or vote except as provided by this section. | ||
(b) A person other than a person described by Subsection (a) | ||
may tabulate votes in an association election or vote. | ||
(c) A person who tabulates votes under Subsection (b) or who | ||
performs a recount under Section 82.1087 may not disclose to any | ||
other person how an individual voted. | ||
(d) Notwithstanding any other provision of this chapter or | ||
any other law, only a person who tabulates votes under Subsection | ||
(b) or who performs a recount under Section 82.1087 may be given | ||
access to the ballots cast in the election or vote. | ||
(e) This section may not be construed to affect a person's | ||
obligation to comply with a court order for the release of ballots | ||
or other voting records. | ||
Sec. 82.1087. RECOUNT OF VOTES. (a) Any unit owner may, | ||
not later than the 15th day after the later of the date of any | ||
meeting of unit owners at which the election or vote was held or the | ||
date of the announcement of the results of the election or vote, | ||
require a recount of the votes. A demand for a recount must be | ||
submitted in writing either: | ||
(1) by verified mail or by delivery by the United | ||
States Postal Service with signature confirmation service to the | ||
association's mailing address as reflected on the latest management | ||
certificate filed under Section 82.116; or | ||
(2) in person to the association's managing agent as | ||
reflected on the latest management certificate filed under Section | ||
82.116 or to the address to which absentee and proxy ballots are | ||
mailed. | ||
(b) The association must estimate the costs for performance | ||
of the recount by a person qualified to tabulate votes under | ||
Subsection (f) and must send an invoice for the estimated costs to | ||
the requesting unit owner at the unit owner's last known address | ||
according to association records not later than the 20th day after | ||
the date the association receives the unit owner's demand for the | ||
recount. | ||
(c) The unit owner demanding a recount under this section | ||
must pay the invoice described by Subsection (b) in full to the | ||
association on or before the 30th day after the date the invoice is | ||
sent to the unit owner. | ||
(d) If the invoice described by Subsection (b) is not paid | ||
by the deadline prescribed by Subsection (c), the unit owner's | ||
demand for a recount is considered withdrawn and a recount is not | ||
required. | ||
(e) If the estimated costs under Subsection (b) are lesser | ||
or greater than the actual costs, the association must send a final | ||
invoice to the unit owner on or before the 30th business day after | ||
the date the results of the recount are provided. If the final | ||
invoice includes additional amounts owed by the unit owner, any | ||
additional amounts not paid to the association before the 30th | ||
business day after the date the invoice is sent to the unit owner | ||
may be added to the unit owner's account as an assessment. If the | ||
estimated costs exceed the final invoice amount, the unit owner is | ||
entitled to a refund. The refund shall be paid to the unit owner at | ||
the time the final invoice is sent under this subsection. | ||
(f) Following receipt of payment under Subsection (c), the | ||
association shall, at the expense of the unit owner requesting the | ||
recount, retain for the purpose of performing the recount the | ||
services of a person qualified to tabulate votes under this | ||
subsection. The association shall enter into a contract for the | ||
services of a person who: | ||
(1) is not a member of the association or related to a | ||
member of the association board within the third degree by | ||
consanguinity or affinity, as determined under Chapter 573, | ||
Government Code; and | ||
(2) is: | ||
(A) a current or former: | ||
(i) county judge; | ||
(ii) county elections administrator; | ||
(iii) justice of the peace; or | ||
(iv) county voter registrar; or | ||
(B) a person agreed on by the association and | ||
each person requesting the recount. | ||
(g) On or before the 30th day after the date of receipt of | ||
payment for a recount in accordance with Subsection (c), the | ||
recount must be completed and the association must provide each | ||
unit owner who requested the recount with notice of the results of | ||
the recount. If the recount changes the results of the election, | ||
the association shall reimburse the requesting unit owner for the | ||
cost of the recount not later than the 30th day after the date the | ||
results of the recount are provided. Any action taken by the board | ||
in the period between the initial election vote tally and the | ||
completion of the recount is not affected by any recount. | ||
SECTION 7. Section 82.114(b), Property Code, is amended to | ||
read as follows: | ||
(b) All financial and other records of the association shall | ||
be reasonably available at its registered office or its principal | ||
office in this state for examination and production in accordance | ||
with Section 82.1141 [ |
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SECTION 8. Subchapter C, Chapter 82, Property Code, is | ||
amended by adding Section 82.1141 to read as follows: | ||
Sec. 82.1141. ACCESS TO ASSOCIATION RECORDS. (a) This | ||
section applies to all associations governed by this chapter and | ||
controls over other law not specifically applicable to an | ||
association. | ||
(b) Notwithstanding a provision in a dedicatory instrument, | ||
an association shall make the books and records of the association, | ||
including financial records, open to and reasonably available for | ||
examination by a unit owner, or a person designated in a writing | ||
signed by the unit owner as the unit owner's agent, attorney, or | ||
certified public accountant, in accordance with this section. A | ||
unit owner is entitled to obtain from the association copies of | ||
information contained in the books and records. | ||
(c) Except as provided by this subsection, an attorney's | ||
files and records relating to the association, excluding invoices | ||
requested by a unit owner for attorney's fees and other costs | ||
relating only to a matter for which the association seeks | ||
reimbursement of fees and costs, are not records of the association | ||
and are not subject to inspection by the unit owner or production in | ||
a legal proceeding. If a document in an attorney's files and | ||
records relating to the association would be responsive to a | ||
legally authorized request to inspect or copy association | ||
documents, the document shall be produced by using the copy from the | ||
attorney's files and records if the association has not maintained | ||
a separate copy of the document. This subsection does not require | ||
production of a document that constitutes attorney work product or | ||
that is privileged as an attorney-client communication. | ||
(d) A unit owner or the unit owner's authorized | ||
representative described by Subsection (b) must submit a written | ||
request for access or information under Subsection (b) by certified | ||
mail, with sufficient detail describing the association's books and | ||
records requested, to the mailing address of the association or | ||
authorized representative as reflected on the most current | ||
management certificate filed under Section 82.116. The request | ||
must contain an election either to inspect the books and records | ||
before obtaining copies or to have the association forward copies | ||
of the requested books and records and: | ||
(1) if an inspection is requested, the association, on | ||
or before the 10th business day after the date the association | ||
receives the request, shall send written notice of dates during | ||
normal business hours that the unit owner may inspect the requested | ||
books and records to the extent those books and records are in the | ||
possession, custody, or control of the association; or | ||
(2) if copies of identified books and records are | ||
requested, the association shall, to the extent those books and | ||
records are in the possession, custody, or control of the | ||
association, produce the requested books and records for the | ||
requesting party on or before the 10th business day after the date | ||
the association receives the request, except as otherwise provided | ||
by this section. | ||
(e) If the association is unable to produce the books or | ||
records requested under Subsection (d) on or before the 10th | ||
business day after the date the association receives the request, | ||
the association must provide to the requestor written notice that: | ||
(1) informs the requestor that the association is | ||
unable to produce the information on or before the 10th business day | ||
after the date the association received the request; and | ||
(2) states a date by which the information will be sent | ||
or made available for inspection to the requesting party that is not | ||
later than the 15th business day after the date notice under this | ||
subsection is given. | ||
(f) If an inspection is requested or required, the | ||
inspection shall take place at a mutually agreed on time during | ||
normal business hours, and the requesting party shall identify the | ||
books and records for the association to copy and forward to the | ||
requesting party. | ||
(g) An association may produce books and records requested | ||
under this section in hard copy, electronic, or other format | ||
reasonably available to the association. | ||
(h) An association board must adopt a records production and | ||
copying policy that prescribes the costs the association will | ||
charge for the compilation, production, and reproduction of | ||
information requested under this section. The prescribed charges | ||
may include all reasonable costs of materials, labor, and overhead | ||
but may not exceed costs that would be applicable for an item under | ||
1 T.A.C. Section 70.3. The policy required by this subsection must | ||
be recorded as a dedicatory instrument in accordance with Section | ||
202.006. An association may not charge a unit owner for the | ||
compilation, production, or reproduction of information requested | ||
under this section unless the policy prescribing those costs has | ||
been recorded as required by this subsection. A unit owner is | ||
responsible for costs related to the compilation, production, and | ||
reproduction of the requested information in the amounts prescribed | ||
by the policy adopted under this subsection. The association may | ||
require advance payment of the estimated costs of compilation, | ||
production, and reproduction of the requested information. If the | ||
estimated costs are lesser or greater than the actual costs, the | ||
association shall submit a final invoice to the unit owner on or | ||
before the 30th business day after the date the information is | ||
delivered. If the final invoice includes additional amounts due | ||
from the unit owner, the additional amounts, if not reimbursed to | ||
the association before the 30th business day after the date the | ||
invoice is sent to the unit owner, may be added to the unit owner's | ||
account as an assessment. If the estimated costs exceeded the final | ||
invoice amount, the unit owner is entitled to a refund, and the | ||
refund shall be issued to the unit owner not later than the 30th | ||
business day after the date the invoice is sent to the unit owner. | ||
(i) An association must estimate costs under this section | ||
using amounts prescribed by the policy adopted under Subsection | ||
(h). | ||
(j) Except as provided by Subsection (k) and to the extent | ||
the information is provided in the meeting minutes, the association | ||
is not required to release or allow inspection of any books or | ||
records that identify the dedicatory instrument violation history | ||
of an individual unit owner of an association, a unit owner's | ||
personal financial information, including records of payment or | ||
nonpayment of amounts due the association, a unit owner's contact | ||
information, other than the unit owner's address, or information | ||
related to an employee of the association, including personnel | ||
files. Information may be released in an aggregate or summary | ||
manner that would not identify an individual unit owner. | ||
(k) The books and records described by Subsection (j) shall | ||
be released or made available for inspection if: | ||
(1) the express written approval of the unit owner | ||
whose records are the subject of the request for inspection is | ||
provided to the association; or | ||
(2) a court orders the release of the books and records | ||
or orders that the books and records be made available for | ||
inspection. | ||
(l) In addition to retaining records as necessary for | ||
compliance with Section 82.114 an association shall adopt and | ||
comply with a document retention policy that includes, at a | ||
minimum, the following requirements: | ||
(1) certificates of formation, bylaws, dedicatory | ||
instruments, and all amendments to the certificates of formation, | ||
bylaws, and dedicatory instruments shall be retained permanently; | ||
(2) financial books and records shall be retained for | ||
seven years; | ||
(3) account records of current unit owners shall be | ||
retained for five years; | ||
(4) contracts with a term of one year or more shall be | ||
retained for four years after the expiration of the contract term; | ||
(5) minutes of meetings of the unit owners and the | ||
board shall be retained for seven years; and | ||
(6) tax returns and audit records shall be retained | ||
for seven years. | ||
(m) A member of an association who is denied access to or | ||
copies of association books or records to which the member is | ||
entitled under this section may file a petition with the justice of | ||
the peace of a justice precinct in which all or part of the | ||
condominium is located requesting relief in accordance with this | ||
subsection. If the justice of the peace finds that the member is | ||
entitled to access to or copies of the records, the justice of the | ||
peace may grant one or more of the following remedies: | ||
(1) a judgment ordering the association to release or | ||
allow access to the books or records; | ||
(2) a judgment against the association for court costs | ||
and attorney's fees incurred in connection with seeking a remedy | ||
under this section; or | ||
(3) a judgment authorizing the unit owner or the unit | ||
owner's assignee to deduct the amounts awarded under Subdivision | ||
(2) from any future regular or special assessments payable to the | ||
association. | ||
(n) If the association prevails in an action under | ||
Subsection (m), the association is entitled to a judgment for court | ||
costs and attorney's fees incurred by the association in connection | ||
with the action. | ||
(o) On or before the 10th business day before the date a | ||
person brings an action against an association under this section, | ||
the person must send written notice to the association of the | ||
person's intent to bring the action. The notice must: | ||
(1) be sent certified mail, return receipt requested, | ||
or delivered by the United States Postal Service with signature | ||
confirmation service to the mailing address of the association or | ||
authorized representative as reflected on the most current | ||
management certificate filed under Section 82.116; and | ||
(2) describe with sufficient detail the books and | ||
records being requested. | ||
(p) For the purposes of this section, "business day" means a | ||
day other than Saturday, Sunday, or a state or federal holiday. | ||
SECTION 9. Sections 82.108(c), (d), (e), and (f), Property | ||
Code, are repealed. | ||
SECTION 10. (a) Section 82.1051, Property Code, as added by | ||
this Act, applies only to a contract entered into on or after the | ||
effective date of this Act. | ||
(b) The changes in law made by this Act apply only to an | ||
election or vote held on or after the effective date of this Act. | ||
(c) Section 82.1141, Property Code, as added by this Act, | ||
applies only to a request for association records or information | ||
made on or after the effective date of this Act. | ||
SECTION 11. This Act takes effect September 1, 2019. |