Bill Text: TX SB834 | 2015-2016 | 84th Legislature | Comm Sub
Bill Title: Relating to procedures required before certain condominium associations file a suit or initiate an arbitration proceeding for a defect or design claim.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-05-08 - Removed from local & uncontested calendar [SB834 Detail]
Download: Texas-2015-SB834-Comm_Sub.html
By: Creighton | S.B. No. 834 | |
(In the Senate - Filed February 26, 2015; March 3, 2015, | ||
read first time and referred to Committee on State Affairs; | ||
April 29, 2015, reported adversely, with favorable Committee | ||
Substitute by the following vote: Yeas 9, Nays 0; April 29, 2015, | ||
sent to printer.) | ||
COMMITTEE SUBSTITUTE FOR S.B. No. 834 | By: Creighton |
|
||
|
||
relating to procedures required before certain condominium | ||
associations file a suit or initiate an arbitration proceeding for | ||
a defect or design claim. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter C, Chapter 82, Property Code, is | ||
amended by adding Sections 82.119 and 82.120 to read as follows: | ||
Sec. 82.119. PROCEDURES FOR FILING SUIT OR INITIATING | ||
ARBITRATION PROCEEDINGS FOR DEFECT OR DESIGN CLAIMS FOR CERTAIN | ||
ASSOCIATIONS. (a) This section does not apply to an association | ||
with less than eight units. | ||
(b) In addition to any preconditions to filing suit or | ||
initiating an arbitration proceeding included in the declaration, | ||
an association, before filing suit or initiating an arbitration | ||
proceeding to resolve a claim pertaining to the construction or | ||
design of a unit or the common elements, must: | ||
(1) obtain an inspection and a written independent | ||
third-party report from a licensed professional engineer that: | ||
(A) identifies the specific units or common | ||
elements subject to the claim; | ||
(B) describes the present physical condition of | ||
the units or common elements subject to the claim; and | ||
(C) describes any modifications, maintenance, or | ||
repairs to the units or common elements performed by the unit owners | ||
or the association; and | ||
(2) obtain approval from unit owners holding more than | ||
50 percent of the total votes in the association, voting in person | ||
or by proxy as provided by Section 82.110, at a regular, annual, or | ||
special meeting called in accordance with the declaration or | ||
bylaws, as applicable. | ||
(c) The association must provide written notice of the | ||
inspection to be conducted by the engineer to each party subject to | ||
a claim not later than the 10th day before the date the inspection | ||
occurs. The notice must: | ||
(1) identify the party engaged to prepare the report | ||
required by Subsection (b)(1); | ||
(2) identify the specific units or common elements to | ||
be inspected; and | ||
(3) include the date and time the inspection will | ||
occur. | ||
(d) Each party subject to a claim may attend the inspection | ||
conducted by the engineer, either personally or through an agent. | ||
(e) Before providing the notice of the special meeting under | ||
Subsection (f), an association must: | ||
(1) on completion of the independent third-party | ||
report, provide the report to each unit owner and each party subject | ||
to a claim; and | ||
(2) allow each party subject to a claim at least 90 | ||
days after the date of completion of the report to inspect and | ||
correct any condition identified in the report. | ||
(f) Not later than the 30th day before the date the special | ||
meeting described by Subsection (b)(2) is held, the association | ||
must provide each unit owner with written notice of the date, time, | ||
and location of the meeting. The notice must also include: | ||
(1) a description of the nature of the claim, the | ||
relief sought, the anticipated duration of prosecuting the claim, | ||
and the likelihood of success; | ||
(2) a copy of the report required by Subsection | ||
(b)(1); | ||
(3) a copy of the contract or proposed contract | ||
between the association and the attorney selected by the board to | ||
assert or provide assistance with the claim; | ||
(4) a description of the attorney's fees, consultant | ||
fees, expert witness fees, and court costs, whether incurred by the | ||
association directly or for which the association may be liable as a | ||
result of prosecuting the claim; | ||
(5) a summary of the steps previously taken by the | ||
association to resolve the claim; | ||
(6) a statement that initiating a lawsuit or | ||
arbitration proceeding to resolve a claim may affect the market | ||
value, marketability, or refinancing of a unit while the claim is | ||
prosecuted; and | ||
(7) a description of the manner in which the | ||
association proposes to fund the cost of prosecuting the claim. | ||
(g) The notice required by Subsection (f) must be prepared | ||
and signed by a person who is not: | ||
(1) the attorney who represents or will represent the | ||
association in the claim; | ||
(2) a member of the law firm of the attorney who | ||
represents or will represent the association in the claim; or | ||
(3) employed by or otherwise affiliated with the law | ||
firm of the attorney who represents or will represent the | ||
association in the claim. | ||
Sec. 82.120. BINDING ARBITRATION FOR CERTAIN CLAIMS. | ||
(a) A declaration may provide that a claim pertaining to the | ||
construction or design of a unit or the common elements must be | ||
resolved by binding arbitration and may provide for a process by | ||
which the claim is resolved. | ||
(b) An amendment to the declaration that modifies or removes | ||
the arbitration requirement or the process associated with | ||
resolution of a claim may not apply retroactively to a claim | ||
regarding the construction or design of units or common elements | ||
based on an alleged act or omission that occurred before the date of | ||
the amendment. | ||
SECTION 2. Section 82.119, Property Code, as added by this | ||
Act, applies only to a claim filed on or after the effective date of | ||
this Act. A claim filed before the effective date of this Act is | ||
governed by the law applicable to the claim immediately before the | ||
effective date of this Act, and that law is continued in effect for | ||
that purpose. | ||
SECTION 3. This Act takes effect September 1, 2015. | ||
* * * * * |