SB1935 - Relating to the composition and operation of a property owners' association board.

  89R11319 RAL-F     By: Hinojosa of Hidalgo S.B. No. 1935       A BILL TO BE ENTITLED   AN ACT   relating to the composition and operation of a property owners'   association board.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 209.0051(c-1), Property Code, is amended   to read as follows:          (c-1)  Except for a meeting held by electronic or telephonic   means under Subsection (c-2), a board meeting must be held :                 (1)   in a county in which all or part of the property in   the subdivision is located or in a county adjacent to that county ;   and                 (2)     within 10 miles of the subdivision, if a majority   of the board members are not elected by owners other than the   declarant .          SECTION 2.  Section 209.00591, Property Code, is amended by   amending Subsection (c) and adding Subsections (d), (e), and (f) to   read as follows:          (c)  The declaration may provide for a period of declarant   control of the association during which a declarant, or persons   designated by the declarant, may appoint and remove board members   and the officers of the association, other than board members or   officers elected by members of the property owners' association.           (d)   Regardless of the period of declarant control provided   by the declaration :                 (1)     on or before the 120th day after the date a   majority of the lots that may be created and made subject to the   declaration are conveyed to owners other than a declarant or a   builder in the business of constructing homes who purchased the   lots from the declarant for the purpose of selling completed homes   built on the lots, at least one-third of the board members must be   elected by owners other than the declarant; and                 (2)   [ , ] on or before the 120th day after the date 75   percent of the lots that may be created and made subject to the   declaration are conveyed to owners other than a declarant or a   builder in the business of constructing homes who purchased the   lots from the declarant for the purpose of selling completed homes   built on the lots, at least a majority  [ one-third ] of the board   members must be elected by owners other than the declarant.           (e)   If the declaration does not include the number of lots   that may be created and made subject to the declaration, at least a   majority  [ one-third ] of the board members must be elected by owners   other than the declarant not later than the 10th anniversary of the   date the declaration was recorded.           (f)     Not later than the 30th day after the date a majority of   the lots that may be created and made subject to the declaration are   conveyed as described by Subsection(d)(1), the declarant shall give   notice to the owners that at least one-third of the board members   must be elected by owners other than the declarant. Notice required   under this subsection must be provided by:                 (1)     posting the notice on any Internet website   available to association members that is maintained by the   association or by a management company on behalf of the   association; and                 (2)     sending the notice by e-mail to each owner who has   registered an e-mail address with the association.          SECTION 3.  Section 209.0061, Property Code, is amended by   adding Subsection (e) to read as follows:           (e)     The amount of a fine assessed by the property owners'     association must be reasonable in the context of the nature and   frequency of the violation and the effect of the violation on the   subdivision as a whole.   If the association allows fines for a   continuing violation to accumulate against a lot or an owner, the   association must establish a reasonable maximum fine amount for a   continuing violation at which point the total fine amount is   capped.          SECTION 4.  Chapter 209, Property Code, is amended by adding   Section 209.018 to read as follows:           Sec.   209.018.     RESTRICTION ON INCREASE OF REGULAR   ASSESSMENT. Notwithstanding a provision in a dedicatory   instrument, a property owners' association may not increase the   amount of a regular assessment by an amount greater than or equal to   five percent per year unless the increase is approved by an   affirmative vote of at least a majority of the total votes allocated   to property owners entitled to vote on the proposed increase.          SECTION 5.  (a)  Section 209.00591, Property Code, as   amended by this Act, applies to a property owners' association   board regardless of whether the association's declaration was   adopted before, on, or after the effective date of this Act.          (b)  Notwithstanding Section 209.00591, Property Code, as   amended by this Act, at least one-third of the board members of a   property owners' association to which Chapter 209, Property Code,   applies must be elected by owners other than the declarant on or   before March 1, 2026, if the association reached the majority   conveyance threshold described by Section 209.00591(d)(1),   Property Code, as added by this Act, before the effective date of   this Act.          (c)  Notwithstanding Section 209.00591, Property Code, as   amended by this Act, at least a majority of the board members of a   property owners' association to which Chapter 209, Property Code,   applies must be elected by owners other than the declarant on or   before March 1, 2026, if:                (1)  the association reached the 75 percent conveyance   threshold described by Section 209.00591(d)(2), Property Code, as   added by this Act, before the effective date of this Act; or                (2)  the 10th anniversary of the date the association's   declaration was recorded occurred before the effective date of this   Act or occurs on or after the effective date of this Act and before   March 1, 2026.          SECTION 6.  Section 209.0061, Property Code, as amended by   this Act, applies only to a fine that becomes due on or after the   effective date of this Act. A fine that becomes due before the   effective date of this Act is governed by the law in effect   immediately before the effective date of this Act, and that law is   continued in effect for that purpose.          SECTION 7.  Section 209.018, Property Code, as added by this   Act, applies only to an increase of a regular assessment proposed by   a property owners' association on or after the effective date of   this Act.          SECTION 8.  This Act takes effect September 1, 2025.