HBA-MPM, CCH H.B. 879 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 879
By: Dutton
Business & Industry
4/5/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, a homeowners' association may foreclose on a homeowners'
property if the homeowner fails to pay certain fees assessed  by the
association.  Litigation can increase the homeowner's costs by adding legal
fees to the fee already owed.  Foreclosures may also cause a homeowner to
seek protection under bankruptcy law.  Many disputes between homeowners and
associations could possibly be resolved without resorting to litigation,
conserving the resources of both parties as well as the courts. House Bill
879 prohibits a homeowners' association from filing a lien against the real
property of a homeowner without both parties first engaging in an
arbitration process. 

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. 

ANALYSIS

House Bill 879 amends the Property Code to prohibit 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 any debt.  The bill provides that an association must give
written notice of its intention to initiate arbitration proceedings by
certified mail with return receipt requested to the property owner's last
known mailing address.  The property owner is required to notify the
association within 10 days after receiving the notice as to whether the
owner will participate in arbitration proceedings.  If the property owner
refuses to participate or fails to provide notice to the association within
the 10-day period, the association is not required to withhold filing a
lien on the owner's property.  The bill authorizes the association and
property owner to agree on the appointment of an arbitrator.  If the
parties fail to reach an agreement before the 30th day after the
association notifies the property owner of its intention to initiate
arbitration proceedings, either party is authorized to file a petition in a
district court in the appropriate county requesting the court to appoint a
qualified arbitrator.  The bill requires the court to appoint an arbitrator
before the 31st day after the date the petition is filed.  The cost of
arbitration is required to be paid as provided by the arbitrator. 

EFFECTIVE DATE

September 1, 2001.