HBA-ATS H.B. 2224 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2224 By: Solomons Business & Industry 3/25/1999 Introduced BACKGROUND AND PURPOSE A purchaser of a home may be unaware that the seller is a member of a homeowners' association and that the purchase of the home obligates the seller to be a member of the association. Even if a purchaser is aware of this fact, the purchaser may not be aware of the extent of the restrictions governing the maintenance and use of the property and of the responsibilties associated with membership in the association. H.B. 2224 requires a seller of residential real property that is subject to membership in a property owners' association to give to the purchaser, before the transfer of the property, a written notice that informs the purchaser of the restrictions and obligations associated with a purchase of this kind of home. This bill sets forth the required form for the notice and specifies that it must be conspicuous and printed in 14-point bold-faced type. The purchaser is entitled to cancel and rescind the purchase contract and receive a full refund of any purchase payment made to the seller if the seller fails to provide the notice. In addition, this bill requires each county clerk to maintain suitable records called "Property Owners' Association Records" in which the clerk is required to record dedicatory instruments governing property owners' associations. A property owners' association is required to file the dedicatory instrument in the real property records of each county in which the property to which the dedicatory instrument relates is located. 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 Subchapter A, Chapter 5, Property Code, by adding Section 5.012, as follows: Sec. 5.012. NOTICE OF OBLIGATIONS RELATED TO MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION. Requires a seller of residential real property that is subject to membership in a property owners' association and that comprises not more than one dwelling unit located in this state to give to the purchaser before the transfer of the property a written notice as prescribed by this section. Specifies that the written notice must be conspicuous and printed in 14-point bold-faced type. Sets forth the required form for the notice, which informs the purchaser of the restrictions and obligations associated with a purchase of a home that is subject to membership in a property owners' association. Entitles the purchaser to cancel and rescind the purchase contract and receive a full refund of any purchase payment made to the seller if the seller fails to provide the notice required by this section. SECTION 2. Amends Chapter 202, Property Code, by adding Section 202.006, as follows: Sec. 202.006. PUBLIC RECORDS. Requires each county clerk to maintain suitable records called "Property Owners' Association Records" in which the clerk is required to record dedicatory instruments governing property owners' associations. Requires a property owners' association to file the dedicatory instrument in the real property records of each county in which the property to which the dedicatory instrument relates is located. SECTION 3. Effective date: September 1, 1999, except for Section 5.012, Property Code, which takes effect January 1, 2000. Makes application of Section 5.012 prospective, beginning January 1, 2000. SECTION 4. Requires the county clerk of each county to establish the "Property Owners' Association Records" for the county on or before December 1, 1999. Requires each property owners' association to present for recording with the county clerk each dedicatory instrument governing the association that has not been previously recorded in the real property records of the county by January 1, 2000. SECTION 5. Emergency clause.