HBA-PDH H.B. 901 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 901
By: Dutton
Business & Industry
2/23/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, a property owners' association may file a lien against real
property for the failure to pay certain fees or assessments.  H.B. 901
prohibits a property owners' association from filing a lien on real
property for an assessment levied by the association against real property
unless the association submits to binding arbitration to establish the
existence and amount of any debt owed.  The bill provides notice
requirements and establishes guidelines for the appointment of an
arbitrator. 

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 Chapter 202, Property Code, by adding Section 202.006,
as follows: 

Sec. 202.006.  ARBITRATION REQUIRED TO ESTABLISH LIEN FOR ASSESSMENTS. (a)
Prohibits a property owners' association (association) from filing a lien
on real property for an assessment levied by the association against the
real property unless the association submits to binding arbitration to
establish the existence and amount of the debt owed. Provides an exception. 

(b)  Provides that an association must provide written notice by certified
mail, return receipt requested, to the property owner's last known mailing
address, as reflected in the ownership records maintained by the
association, of the association's intention to initiate arbitration
proceedings.  Requires the property owner, within 10 days of receiving
notice, to notify the association as to whether the property owner intends
to or refuses to participate in the arbitration proceedings.  Provides that
the association is not required to comply with this section if the property
owner refuses to participate in the arbitration proceedings or fails to
provide timely notice to the association. 

(c)  Authorizes the association and the property owner to agree on the
appointment of an arbitrator.  Authorizes the association or the property
owner to file a petition in a district court in the county in which all or
part of the property is located requesting the court to appoint an
arbitrator if the parties fail to reach an agreement within 29 days after
the association notifies the property owner of the association's intention
to initiate arbitration proceedings.  Requires the court to appoint an
arbitrator within 30 days after the petition is filed. 

(d)  Requires the cost of arbitration to be paid as provided by the
arbitrator.  

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Emergency clause.