ADVERTISEMENTS

I wanted to take a few moments to reflect on the recently-departed entity that was the 80th Regular Session of the Texas Legislature. Every two years, Community Association managers, board members, legal counsel and lawmakers, friends and foes alike, gather 'round the "water cooler" (and the various committee podiums) to debate, craft legislation, and vote about issues of power, control, architectural guidelines, fine systems and homeowner foreclosures, to name a few.Thanks to the hard work and efforts of Community Association Institute Lobbyists and grass roots volunteers, there was no major legislation passed again this year that could be considered damaging to the operation of Community Associations in general.

However, one bill that passed muster (and that now awaits signature by the governor) actually echoed the sentiments from one of my earlier articles regarding developer-controlled associations: House Bill (HB) 2402, authored by Representative Vicki Truitt and Senator Kim Brimer, incorporated provisions from HB 3709 authored by Representative Bill Callegari which placed controls on developer governance of a community association after that developer has lost its controlling interest. The text of that bill is printed below and adds Section 209.013 to Chapter 209 of the Texas Property Code. Basically, this bill establishes: (1) once a developer has lost controlling voting rights in the association, then (2) the developer cannot modify the dedicatory instruments thereafter to retain authority or controlling interests, and (3) such documents can only be modified upon the election of new board of directors.

In my practice, I have crossed paths with developers who have tried to do this very thing and enact by-law resolutions and/or deed restriction amendments so that they could extend their power and authority over the association. The situation is inequitable at best, and so, this legislation could be a boost to beleaguered associations who are laboring under developer control long after the developer has "overstayed its welcome."

Chapter 209, Section 209.013(a) reads:

"Sec. 209.013. AUTHORITY OF ASSOCIATION TO AMEND DEDICATORY INSTRUMENT

(a) A dedicatory instrument created by a developer of a residential subdivision or by a property owners' association in which the developer has a majority of the voting rights or that the developer otherwise controls under the terms of the dedicatory instrument may not be amended during the period between the time the developer loses the majority of the voting rights or other form of control of the property owners' association and the time a new board of directors of the association assumes office following the loss of the majority of the voting rights or other form of control."

Governor Perry has until June 17th to sign the bill, veto it, or let the bill become law without his signature.

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