HBA-NIK H.B. 3298 76(R) BILL ANALYSIS
Office of House Bill AnalysisH.B. 3298
By: Coleman
Land & Resource Management
4/22/1999
Introduced
BACKGROUND AND PURPOSE
Property owners' associations were first formed in the mid-1800's as a
method of performing certain municipal functions funded by an assessment on
homeowners in a specified area. Currently, these associations may only
enforce existing deed restrictions in a specified area. H.B. 3298 permits
property owners' associations to petition to create deed restrictions on
property in an area and to reinstate lapsed deed restrictions in an area.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Sections 204.001 and 204.002, Property Code, to include
definitions of "unrestricted subdivision," "lapsed restrictions," "Chapter
201 subdivision," "subdivision," "residential real estate subdivision," and
"restrictions."
Sec. 204.002. APPLICATION. Includes a Chapter 201 subdivision and an
unrestricted subdivision in the application of this chapter. Adds the
provision that this chapter applies without regard to the prior use of
Chapter 201 (Restrictive Covenants Applicable to Certain Subdivisions) to
create, modify or extend restriction over a portion of a subdivision.
SECTION 2. Amends Section 204.004(c), Government Code, to provide that the
property owners' association's (association) board of directors or trustees
must be elected or appointed in accordance with the applicable provisions
of the restriction, if any, and the association's articles of incorporation
or bylaws.
SECTION 3. Amends Sections 204.005 through 204.009, Government Code, as
follows:
Sec. 204.005. New title: CREATION OF, EXTENSION OF, ADDITION TO, OR
MODIFICATION OF EXISTING RESTRICTIONS. Provides that an association that
circulates a petition must notify all record owners of property in the
subdivision in writing of the proposed creation of restrictions or,
extension, addition to, or modification of the existing restrictions.
Provides that notice may also be hand delivered to residences within the
subdivision or sent by regular mail to the owner's last known mailing
address as reflected in the records of the relevant central appraisal
district. Makes conforming changes.
Sec. 204.006. CREATION OF PROPERTY OWNERS' ASSOCIATION. Provides that
Subsections (a), (b) and (c) do not apply to unrestricted subdivisions or
Chapter 201 subdivisions. Provides that for the purpose of creating
restrictions in unrestricted subdivisions, an entity is deemed to be a
property owners' association with the powers under this chapter
(Restrictive Covenants Applicable to Certain Subdivisions) if: the entity
is a Texas nonprofit corporation; the articles of incorporation or bylaws
of the entity state that the entity is a designated representative of
owners of property in the unrestricted subdivision; or a "homeowner
association," "community association," "civic association," or "civic club"
for the unrestricted subdivision, membership in the entity is open to all
owners of property in the unrestricted subdivision, and as of the date the
entity exercises rights under this chapter, the entity has membership of
owners of at least a certain percentage of the unrestricted subdivision,
determined by either number of lots, number of separately owned parcels or
square footage, excluding streets and public areas. Makes a conforming
change.
Sec. 204.007. EFFECT ON LIENHOLDERS. Makes nonsubstantive and conforming
changes.
Sec. 204.008. METHOD OF ADOPTION. Makes nonsubstantive and conforming
changes.
Sec. 204.009. TEXAS NONPROFIT CORPORATIONS. Makes a conforming change.
SECTION 4. Amends Chapter 204, Government Code, by adding Section 204.012,
as follows:
Sec. 204.012. REINSTATEMENT OF LAPSED RESTRICTIONS. (a) Authorizes an
unrestricted subdivision to reinstate its lapsed restrictions if the
enumerated procedures concerning the petition process have been followed.
(b) Provides that if the circulated petition is not approved by the
required percentage of owners within one year of the creation of the
petition committee, the petition is void and authorizes another petition
committee to be formed.
(c) Provides that if the petition is approved, the petition is binding on
all properties in the subdivision or section, as applicable. Provides that
the provisions of Section 204.005 do not apply to reinstatement of lapsed
restrictions.
(d) Requires the reinstated restrictions to have an initial term of 10
years and automatic renewals of 10 years each, subject to a vote to amend
or terminate the restrictions of the owners of at least 60 percent of the
property in the subdivision.
(e) Prohibits the restrictions from being modified, other than reinstating
the lapsed restrictions for the term set forth in Section 204.012(d),
except to remove any illegal or unconstitutional provisions, including
those relating to race; to create a formal property owners' association
with mandatory membership and equivalent voting rights for each owner,
which voting rights may be subject to payment of applicable dues or
assessments but without any mandatory assessments; to provide that both use
and structures shall be residential; or to clarify any ambiguous provisions
as determined by the petition committee.
(f) Provides that this subsection also applies to a Chapter 201
subdivision which acted prior to the termination of its former restrictions
to extend, modify or create restrictions under Chapter 201, as if the
restrictions had lapsed. Requires the restrictions which would have
lapsed, but for the Chapter 201 petition, to be the restrictions to be
reinstated, not the Chapter 201 petition restrictions. Requires the Chapter
201 petition restrictions to continue in effect, unless provided to the
contrary in the petition provided to the contrary in the petition provided
for in Section 204.012(a) above.
SECTION 5. EMERGENCY. Emergency clause.
Effective date: upon passage.
The proposed amendments to the Government Code in this bill amend language
in the Property Code.