Prop. Code- Section 82 Flashcards
1
Q
To what does Chapter 82 apply?
To what does Chapter 81 apply?
A
1) Chapter 82- Condominiums created on or after 1/1/94.
2) Chapter 81- Condominiums for which the declaration was recorded before 1/1/94. Chapter 81 does not apply to condos whose declarations were recorded after 1/1/94.
2
Q
Under what circumstances does Chapter 82 apply to a Condominium whose declaration was recorded prior to 1/1/94?
A
1) Certain Sections of Chapter 82 apply to pre-TUCA condos.
2) Owners from a Chapter 81 condominium may amend their declaration to be governed by Chapter 82.
3) The Declaration was recorded before 1/1/94, but specifically states TUCA will apply, then Chapter 82 will apply.
3
Q
If an Association votes to adopt Chapter 82, does this ever impose extra duties upon the declarant?
A
No. The declarant cannot have greater duties than are greater than before the day of the vote.
4
Q
What Definitions do we use- Chapter 81 or Chapter 82?
A
Chapter 82. The definitions prescribed by TUCA apply to Chapter 81 condominiums to the extent they do not conflict with the Declaration.
5
Q
May TUCA invalidate a provision in a Declaration for a condominium that existed prior to 1/1/94?
A
No.
6
Q
Define “Common Elements”
A
All portions of a condominium other than the units. This includes general and limited common elements.
7
Q
Define “Condominium”
A
A form of real property with portions of the property designated for separate ownership and the remainder designated for common ownership solely by the owners of the Units.
8
Q
Is a property a condominium if one or more of the common elements are directly owned in undivided interest by the unit owners?
A
Yes
9
Q
Is a property a condominium if the common elements are owned by a legal entity separate from the unit owners, such as a corporation, even if the legal entity is owned by the unit owner?
A
No.
10
Q
Define “Declarant”
A
person or group acting who, as part of a common promotional plan, offers to dispose of the persons interest in a unit not previously disposed of.
11
Q
Define “Declaration”
A
an instrument that creates a condominium or any amendment thereto.
12
Q
Define “Dedicatory Instruments”
A
each document that governs the establishment, maintenance, or operation of a condominium. This includes:
1) Declaration;
2) Bylaws;
3) Rules and Regulations; and
4) Any amendments to the above.
13
Q
Define “Developmental Rights”
A
Any rights reserved by a Declarant to:
1) Add property to a condominium;
2) Create units or common elements;
3) Subdivide units; or
4) Withdraw real property from a condominium.
14
Q
Define “General Common Elements”
A
common elements that are not limited common elements.
15
Q
Define “Limited Common Elements”
A
portion of the common elements that are allocated by the Declaration for the exclusive use of one or more but less than all of the Units.
16
Q
Define “Unit”
A
physical portion of the condominium designated for separate ownership. The unit boundaries are described within the Declaration.
17
Q
Define “Unit Owner”
A
person who owns a unit, but does nto include a lienholder.
18
Q
May the provisions of Chapter 82 be waived or varied by agreement of the unit owners?
A
No.
Further, a person may not act under a power of attorney to evade the limitations or prohibitions in the chapter.
19
Q
Is each unit of a condominium a separate parcel of real property?
A
Yes. Along with its interest in real property.
20
Q
Must units be taxes separately?
A
Yes
21
Q
How do we determine who is responsible for payment of property taxes on the common elements?
A
1) If Developmental Rights are Reserved- Declarant alone is responsible for payment. Taxes are separatly taxed and assessed.
2) If No Developmental Rights are Reserved-
No separate tax may be assessed for the common elements.
Developmental rights are-
Any rights reserved by a Declarant to:
1) Add property to a condominium;
2) Create units or common elements;
3) Subdivide units; or
4) Withdraw real property from a condominium.
22
Q
Are condominium units entitled to homestead exemptions?
A
Yes, so long as the owner of a single family dwelling would qualify.
23
Q
May a zoning ordinance, building code, or other real property use law prohibit the condominium form of ownership?
A
No.
They also may not impose other requirements on a condominium that it would not impose on a physically identical development under a different form of ownership.
24
Q
If a condominium unit is condemned (partially, or wholly), must the unit owner be compensated?
A
Yes. He must be compensated for both his interest in the unit and the common property, even if the common property was not condemned.
25
Upon condemnation, what happens to a condemned units interest in the common elements?
Unless the condemnation decree provides otherwise, the condemned units entire allocated interest are reallocated to the remaining units in proportion to their respective interest prior to the condemnation.
26
If a condominium and reallocation occurs, what action must a condominium take?
It must prepare, execute, and record an amendment to the declaration reflecting the reallocation.
27
What if a remnant to a unit exists after a reallocation?
The remant will become a common element.
28
What if only part of a unit is condemned?
The condemnation award must compensate the unit owner for the reduction in value of the unit and its common elements interest.
The portion of the interest divested from the partially condemned unit are automatically reallocated to all units (including the condemned unit) in proportion to their interest in the common property. The partially condemned unit takes only a portion based upon its newly reduced interest in the common elements.
The Texas Property Code does not make clear here, however, they most likely have to prepare, execute, and file an amendment to the declaration as would be done in a condemnation of a full unit.
29
What if part of the common elements is condemned?
The Associatoin must divide any part of the award not used for restoration or repair to the unit owners among the unit owners in accordance with their interest in the common elements.
30
What if part of the limited common elements are condemned?
The Association must divide the part of the award among the unit owners to which the limited common elements was allocated at the time of condemnation.
31
Where must a condomination decree be recorded?
In the county records of each county where the power of the condominium is located.
32
Where is the proper venue to enforce a right or obligation arising under the Dedicatory Instruments of the Association?
In any county in which each part of the condominium is located.
33
How is a condominium created?
By recording a declaration executed by all persons who have an interest in the real property that will be conveyed to unit owners.
34
What if a Declarant wants to convey an interest in a condominium but there is a mortgage on the condomium property?
Each holder of a mortgage must consent in writing and the consent must be filed.
35
What if a declarant fails to properly execute the Declaration?
The defect may be cured by a subsequent execution.
The declaration will then be retroactively effective on all units.
36
Where must the county clerk record condominum declarations and amendments?
In the real property records.
If a book is kept by the county clerk of condominium declarations, it must be the same size and type of book as is used for recording subdivision plats.
37
Does TUCA affect the rights of municipalities/counties to approve plats of subdivisions and enforce building codes?
No.
However, they may not treat any property under the condominium form of ownership any differently that other like properties.
38
What must be attached to any recorded plat, replat, amended plat of any condominium unit?
A Tax Certificate.
It must be from each taxing unit with jurisdition of the real property and indicate that no delinquent taxes are owed on the real property.
39
What if a plat, replat, or amended plat is filed after September 1st?
1) A tax receipt showing payment for the property taxes must be attached.
Exception- if taxes have not been calculated, then attach a statement from the tax collector stating that taxes have not been calculated.
40
May a municipality require that a replat when a golf course is involved?
yes.
41
What is part of the unit and what is part of the common elements (if walls, floors, and ceilings, are designated as unit boundaries)?
All material constitute part of the finished services are part of the unit-
Part of the Unit:
late, furring, wallboard, pain, finished plasterboard, plaster, paneling, tiles, wallpaper, paint, finished surfaces.
Part of the Common elements:
all other parts of the walls, floors, or ceiling.
42
What if a chute, flue, duct, wire, conduit, bearing wall, bearing column, or other fixture is partially within and partially outside the designated boundaries of a unit?
1) Limited common element- The portion serving only the unit allocated solely to that unit
2) General common elements- portions serving more than one unit or common elements.
43
Is the space, interior, partitions, and other fixtures and improvements within the boundaries of a unit part of a unit?
Yes.
44
What are shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, paties, and exterior doors and windows designated to serve a single unit but located outside the unit's boundaries?
Limited common elements allocated exclusively to that unit.
45
May the rule against perpetuities be applied to defeat any provision in the Declaration, Bylaws, or Rules & Regulations?
No
46
If there is a conflict between provisions of the Declaration and Bylaws, what prevails?
The Declaration.
47
If there is a conflict between the Declaration & TUCA, what prevails?
TUCA
48
May title to a Unit be impaired by failure to record Bylaws?
No.
49
What is required to be in a legal description of a Unit?
1) Name of condominium;
2) Recording data for Declaration and any amendments or supplements
3) County;
4) Unit number.
50
What must be contained in a Condominium Declaration (17 Items) TPC 82.055
1) Name of the Condominium. It must include the word (Condominium) somewhere in the name.
2) Name of each county where the condominium is located.
3) Description of real property where condominium is located.
4) Boundaries of each unit and each unit's identifying numbers
5) A statement of the maximum number of units the declarant reserves the right to create;
6) Description of limited common elements (other than those listed in TPC 82.052- "Unit Boundaries")
7) Description of real property that may be allocated subsequently as limited common elements
8) Each unit's allocated interest in the common elements.
9) Any restrictions on use or occupancy of units.
10) Description of and recording data for any easmenents that Condominium is currently subject to or may be subject.
11) Method of amending declaration.
12) Plat or recording data for Plat
13) Statement of the Association's obligation to repair after casualty pursuant to TPC 82.111.
14) Any developmental rights reserved by the Declarant, description of real property to which those rights apply, and time limit by which those rights must be exercised.
15) If Developmental Rights may be exercised to different parcels at different times, a statement further defining such.
16) All matters required by TUCA to be stated in Declaration.
17) Any other matter the Declarant considers appropriate.
51
What is a "leasehold condominium" (TPC 82.056)
any lease, the termination of which may terminate the condominium or reduce its size.
52
Must a leasehold condominium be recorded?
Yes.
53
What must be in a leasehold condominium declaration, apart from the requirements of a regular condominium declaration?
1) recording data for the lease
2) Date on which lease is set to expire
3) description of unit/property subject to the lease.
4) Any redemption rights of the unit owners.
5) Any rights of unit owners to remove improvements after termination of the lease, or a statement that they have no such rights.
6) Any rights that unit owners have to renew the lease or a statement that they have no such rights.
54
After a leasehold declaration has been recorded, may the lessor terminate the lease if the unit owner makes all lease payments and complies with the covenants?
No.
55
May a leasehold interest be affected by failure of any other unit owner to pay their rent or fulfill their obligation under the Condominium?
No.
If the Unit owner pays rent and abides by the covenants, then you may not terminate their interest.
56
If a unit lease expires or is terminated, what happens to that owner's interest in the common elements?
The interest is reallocated to the owner unit owners as if the unit was condemned.
An amended declaration must be prepared, executed, and filed.
57
When a declaration allocates the percentage of ownership in the common elements, liabilities for common expenses, and portion of the vote, must is state the formula for establishing that allocation?
Yes.
58
May a formula allocating an interest in the common elements discriminate in favor of units owned by the declarant?
No.
59
If a unit may be added to the Declaration, must the declaration state the formula to be used to reallocate interest amongst the units?
Yes.
60
May a condominium declaration provide for class voting?
Yes.
61
May units constitute a class because they are owned by the declarant?
No.
62
May a declarant use class voting to evade a limitation or requirement under TUCA?
No.
63
If a discrepancy exists between allocated interests to each unit and the formula for arriving at that interest stated in the declaration, what controls?
The allocated interest prevails.
64
Are common elements subject to partition?
No.
Any conveyance or sale, voluntary or involuntary, of the common elements without a unit, is void.
65
May the Association amend the Dedicatory Instruments to affect an owner's right to use limited common elements?
No.
Not without the unit owner's consent and the consent of each lienholder on the property.
66
May unit owners agree amongst themselves to reallocate interest in the limited common elements?
Yes.
If they do so they must execute and deliver an amendment to the Declaration at their own expense.
67
May a general common element be allocated by agreement amongst the unit owners?
No.
68
Are plats and plans part of the Declaration?
Yes. They may be recorded as part of the declaration or separately.
69
What must a declarant do in order to exercise developmental rights?
1) Record an amendment to the declaration. The amendment must:
a) assign an identifying number to each new unit.
b) reallocate interests amongst all units.
c) describe any limited common elements.
2) Record new plats and plans
70
If a declarant exercises developmental rights, who is the owner of the new units?
The declarant.
71
May development rights be reserved if the declaration does not comply with TPC 82.055 and 82.056 (requirements for condominium declarations)?
No.
In order to comply with developmental rights, the declarant must include all information as required of declarations under TPC 82.055 and TPC 82.056.
72
May a declarant exercise developmental rights to subdivide a previously created unit or convert it to general common elements?
Yes
73
What happens to allocated interests in the common elements when a declarant exercises those developmental rights to turn the unit into common property?
The amendment to the declaration must reallocated the allocated interests in the unit amongs the other units as if the unit had been taken by condemnation.
74
What happens to allocated interests in the common elements when a declarant exercises those developmental rights to subdivide the property into two or more units?
The allocated interest in the unit must be divided amongst the newly created interest.
The currently existing units that were not subject to the division do not take any interest.
75
May a declaration state that all or a portion of a unit is subject to a developmental right of withdrawal?
Yes.
76
Under what circumstances may a declarant not withdraw property under a developmental right?
1) If the Declaration does not describe separate portions of real property subject to the right, none of the property may be withdrawn after a unit has been conveyed to a purchaser.
2) If the Declaration describes portions of the property subject to withdrawal, no property may be withdrawn after a unit in that portion has been conveyed to a purchaser.
77
May a unit owner make improvements to their unit that do not alter the structural integrity of the unit?
Yes.
78
May a unit owner change the appearance of the common elements or the exterior of a unit?
No. Not without prior written approval of the Association.
79
After acquiring an adjoining unit, may a unit owner create an aperture between the two units?
Yes. However, to do so, the owner must:
1) Acquire written approval from the association; and
2) Ensure that the aperture does not impair the structural intergrity or mechanical systms of the condominium.
80
Does an aperture between two units change the legal boundaries between the units?
No.
81
May unit owners reallocate the boundaries between their units?
Yes.
82
How may unit owners reallocate boundaries between units? (describe the process- TPC 82.062)
1) Make a written application to the Association.
2) State the proposed reallocation of boundaires.
3) The Association has 30 days to consider the written application.
4) If they decide it is unreasonable, it may be rejected
5) If approved, at expense of owners, the Association will prepare an amendment to the Declaration that is signed by unit owners that shows altered boundaries and words of conveyance.
83
May a unit be subdivided into two or more units?
Only if the Declaration expressly allows such a subdivision.
The subdivision must be requested in writing by the owner (just like a request to reallocate boundaries between the units).
84
What must be done if a unit owner wants to subdivide his unit and the declaration expressly allows such a division?
At the owners expense, the Association shall prepare and record a declaration which:
1) Signed by the owner
2) Identify unit being subdivided
3) Provide new unit numbers for newly created units.
4) Reallocate interest in subdivided units to the newly created units. Reallocation can be proscribled by unit owner so long as it is reasonable.
85
If a common element or part of a unit encroaches upon another does, does an easement exist?
Yes, but simply for the encroachment.
86
May a declaration permit a declarant to maintain a sales, leasing, or management office?
Yes. So long as the number, size, and location are specified in the declaration.
87
What if the declaration does not state the number, size, and location of a sales, leasing, or management office, may the declarant have one?
Yes. However the declarant is limited to:
1) One unit as a model; and
2) One unit as an office for leasing, sales, and management.
88
If the declaration does not designate a sales, leasing, or management office, or model, but one is kept by the declarant, who owns the unit? Or is it a common element?
It is a common element that is subject to the exclusive use of the declarant until the earlier of:
1) Declarant no longer being an owner; or
2) Declarant no longer needs the unit.
89
What happens to a leasing/sales office or model after the declarant ceases to become an owner?
The declarant ceases to have any rights to the unit unless the declarant removes the unit from the condominium declaration in accordance with rights for removal reserved under the declaration.
90
May a declarant maintain sales or lease signs on the common elements?
Yes, subject to any restrictions on such in the declaration.
91
What easement rights does the declarant have in the common elements?
The declarant has an easment in the common elements as may be necessary for discharging his obligations or exercising his rights arising under Texas Law or the Declaration.
92
Amendment to Condominium Declaration- TPC 82.067.
How may a condominium declaration be amended?
What is the General Rule and Exceptions to the General Rule?
General Rule: it my only be amended by a vote of the unit owners who hold at least 67% of the vote within the Association.
Exceptions:
1) If Declaration requires larger percentage, then Declaration controls.
2) Commercial Use- If Declaration restricts condominium to commercial use, than declaration may specify smaller number.
3) Declarant amends by:
a) Curing a defect in a previously recorded declaration;
b) Exercises developmental rights.
c) Declarant amends to comply with FHA, FNMA, or VA. He must own a unit to do this.
4) Association amends by:
a) Condemnation of a unit.
b) Leasehold condominium is terminated.
c) Relocation of boundaries between adjacent units by written application of the the unit owners.
d) Subdivision of unit by written application of unit owner.
5) Owners amend by:
a) Limited common element reallocation executed by owners of units who are reallocating.
b) Relocation of boundaries between adjoining units by written application of unit owners.
c) Subdivision of unit by written application of unit owner. (owner must execute amendment as well as Association)
d) Terminating the condominium.
93
What is the statute of limitations to challenge an amendment to a condominium Declaration?
1 year after the date it was recorded.
94
What types of amendments to the Declaration require the approval of 100% of the owners within the Association.
1) Increase or create special declarant rights
2) Increase the number of units;
3) change the boundaries of a unit;
4) alter or destroy a unit or limited common elements;
5) Change restrictions on a unit;
6) Changes a units allocated interest
95
May an amendment increase or modify the obligations of the declarant?
No. Not unless agreed to by the declarant.
96
Who must sign amendments to the Declarantion?
1) Officer of the Association designated for that purpose; or
2) President of Association.
97
Under what circumstances may an Association amend a declaration allowing them to collect rents from the tenant of a unit owner or evict the tenant:
Condominium may amend to allow them to:
1) Evict tenant for tenants violation of the Dedicatory Instruments.
2) Evict tenant of a unit owner who fails to pay the association for costs of repairs to common elements damaged by tenant.
3) Collect rent from a tenant of a unit owner who is at least 60 days delinquent in the payment of any amount due the Association.
98
May an association place a provision in a dedicatory instrument that requires membership in a private club?
Yes.
However, it is not valid after the 10th anniversary of the date the Declaration is recorded or renewed.
99
What is the vote requirement to terminate a condominium?
You must have 100% of the owners and holders of deeds of trusts to terminate a condominum unless the Declaration calls for a lesser percentage.
The Declaration may not allow for a percentage less than 80% to terminate if it is restricted to residential use.
100
What are the requirements of a termination agreement to terminate a condominium?
1) Must be executed or ratified by the requisite number of unit members.
2) If property is to be sold, it must set forth the terms of the sale.
3) Must be recorded in the county records.
101
May the association, on behalf of the unit owners, contract for the sale of real property in the condominium?
Yes, but it is not effective until voted upon and ratified by the owners.
102
If a condominium terminates and the property is to be sold, who has title to the property?
If property is going to be sold- Title to the real property vests in the Association as trustee for the holders of all interest in the units.
The Association has all powers necessary to effect the sale, including the power to convey the interest of nonconsenting owners.
103
How are proceeds of a sale distributed?
Proceeds must be distributed to unit owners and lienholders as their interest of unit owners.
The interest of a unit is the fair market value of the owner's unit, limited common elements, and general common elements as determined by an independent appraiser selected by an association.
104
At what point may a unit owner no longer occupy their unit after a termination of a condominium unit?
Unless the termination agreement holds specifies differently, the unit owner may occupy his unit for so long as the Association holds title to the real property.
105
Is an owner responsible for assessment payments between the termination of a condominium and sale?
Yes. He is also responsible for all other obligations imposed by the declaration or Texas law.
106
I a condominium terminates and the property is not to be sold, who holds title to the general common elements?
Title vests in the unit owners as tenants in common in proportion to their respective interest.
107
If title vests in the unit owners as tenants in common and there is no plan to sell the property, who has the right to occupy a unit?
The unit owner who owns the unit has the exclusive right to occupy the unit.
108
What is done with the assets of an association after termination of a condominium if the real property is not sold?
1) Assets are sold.
2) All creditors are paid.
3) Remaining assets are distributed to the unit owners in proportion to their respective interests.
109
If an appraiser determines value of a unit and the owners disagree, how may an appraisers valuation of a unit be contested?
The decision of the appraisers is final unless disapproved by unit owners who have 25% of the votes of the Association not later than the 30th day after the date of the distribution.
110
What if a unit is destroyed and the condominium is terminated? How does the appraiser determine the fair market value of the condominium?
The interest of the unit owner is the owner's common element interest immediately before the termination.
111
Does foreclosure or enforcement of a lien against the entire condominium termination the condominium?
No.
112
Does foreclosure or enforcement of a lien against a portion of the condominium withdraw that portion from the condominium?
No,
Exceptions:
1) The property being foreclosed is withdrawable real property; or
2) The mortgage being foreclosed was recorded before the declaration and the mortgagee did not consent in writing to the declaration.
113
How may unit owners rescind a termination of a condominium?
By agreement of the same percentage of unit owners as is required to terminate the condominium.
114
What are the requirements of a rescission of termination of a condominium?
1) In wriring;
2) Executed by unit owners;
3) Recorded in county deed records.
115
May a declaration require all or a specified percentage of lenders (mortgagee) approve of specified actions of unit owners as a condition to the effectiveness of those actions?
If so, what are the exceptions?
Yes.
Exceptions: A requirement for approval may not operate to:
1) deny control over the administrative affairs of the association by the unit owners.
2) Prevent the association or board from:
a) commencing or intervening in litigation; or
b) receiving and distributing insurance proceeds.
116
Before an Association or Board meets to adopt an amendment or other change to a dedicatory instruments, what must they first do?
They must give each unit owner a document showing the specific amendment or change that would be made to the dedicatory instrument.
117
If the Board proposes a change to a dedicatory instrument, what is the time period for which it must give written notice of such change to the unit owners?
Notice must be given to the unit owners between 10-20 days before the meeting.
118
What methods are acceptable to give notice to unit owners of an amendment to a dedicatory instruments?
It must be in writing, via:
1) Hand delivery and the unit owner signs a receipt; or
2) USPS First Class mail.
119
Must a condominium be incorporated?
Yes. They may be a nonprofit or for profit corporation.
120
What must the declarant do (regarding incorporation) prior to conveying a unit?
He must obtain a Certificate of Incorporation from the Secretary of State stating they are either a non-profit or for profit Association.
121
May someone other than a unit owner be a member of the Association?
No.
122
TPC 82.102- Powers
Pre- TUCA and Post- TUCA
What powers do Condominium Association's have pursuant to TPC 82.102 that are applicable to both Pre- and Post- TUCA condominiums?
1) Bylaws- Adopt and amend
2) Budgets- adopt and amend
3) Assessments-
a) collect assessments for common expenses
b) impose interest and late charges for late payment & NSF fees
c) Adopt rules regarding collection and application of payment
d) Suspend voting privileges or use of common elements if delinquent in payment for more than 30 days.
4) Managers/Employees- hire and terminate managers and employees, agents, and independent contractors.
5) Litigation and Administrative Proceedings- Institute, defend, settle, compromise in its own name or two or more unit owners on matters affecting the condominium
6) Contracts- make contracts relating to condominiums
7) ) Liabilities- incur liabilities relating to the operation of the condominium
8) Regulation- of use, maintenance, repair, replacement, modification, and appearance of the condominium
9) Rules- adopt and amend rules regarding the following for units and common elements:
a) Use
b) Occupancy
c) Leasing or sale
d) Maintenance/repair/modification, and
e) Appearance
f) Termination of utility service if owner is delinquent in payment of assessment and assessment sare used, in whole or in part, to pay cost of the utility.
g) Records Production Costs- preparing, recording, or copying Dedicatory Instruments or ledgers.
h) Resale Certificate costs
i) Emergency Entry of Unit- may enter unit if imminent risk of harm to common elements, another unit, or occupants
10) Fines- Adopt fines for violations of Dedicatory Instruments of Association.
11) Insurance- purchase insurance and bonds
12) Exercise Powers-
a) Conferred by Declaration or Bylaws
b) That may be exercised in this state by the same type of Association
c) Any powers necessary for the government and operation of the Association
123
Pursuant to TPC 82.102, may both pre and post Tuca condos borrow money?
Yes, subject to any requirement of a member vote under the Dedicatory Instruments.
If borrowing money requires a vote of the members, you must comply with the voting requirements in the dedicatory instruments.
124
What may an association use as collateral for a loan?
1) The associations right to future income from assessments (or other sources).
2) They may also assign any lien rights held by the association.
125
If the association wants to borrow money, and the dedicatory instruments require a vote of the members, how may the Association allow the members to vote?
The board may allow any of the following:
1) In person,
2) Proxy
3) Absentee
4) Electronic
5) Written consent
126
If the association wants to borrow money, and the dedicatory instruments require a vote of the members what percentage is required?
67% Max.
If a lower percentage is allowed in the Dedicatory Instruments then go with the lower threshold.
127
What powers are granted to Condominiums under 82.102 but only to Post-Tuca condominiums?
1) Common Elements-
a) Cause additional improvements to be made
b) Grant easements or licensees over or through
c) impose and receive payment for use, rental, or operation of common elements and services to owners.
2) Real Property or Personal Property-
a) Acquire, hold, encumber, and convey right, title, or interest (with the exception of common elements)
128
May a Condominium Declaration place limitations on the power of the association to deal with the declarant that are more restrictive than limitations imposed on other persons?
No.
129
What must an association do prior to:
1) Levying a fine for violation of the Dedicatory Instruments; or
2) Charge a unit owner for property damage?
Give the unit owner written notice that:
1) Describes the violation or property damage
2) States the amount of proposed fine or charge
3) Unit owner may request hearing before the board not later than the 30th day after the date of the notice.
3) Allows owner a reasonable time to cure the violation (must specify date) and avoid a fine unless similar notice was given within the previous 12 months.
130
May the Associaiton give a copy of the written notice of violation to the occupant of the unit?
Yes.
131
If an Association gives pre-fine notice, and then institutes a fine, when must the Association notify the owner of the fine?
Within 30 days of the fine being levied.
132
Are board members in TUCA associations liable as fiduciaries?
Yes.
They must act with good faith on behalf of the Association if the action is reasonable.
133
Must all acts be done through the Board?
Yes, unless otherwise provided by the Dedicatory Instruments.
134
May the Board act unilaterally to:
(answer each individually)
1) Amend the Declaration
2) Terminate the condominium
3) Elect members of the board
4) Determine the qualifications, powers, and duties of board members?
No. Except as provided by other provisions of TUCA.
135
What if there is a vancancy on the Board?
The board may unilaterally elect a board member to fill the unexpired term.
136
Regardless of the period provided for in the Declaration, when must the period of declarant control end?
Not later than the 120th day after conveyance of 75% of the units that may be created to unit owners other than the declarant.
137
May the declarant voluntarily surrender his right to appoint and remove officers and members of the board before the termination period?
Yes.
However- the declarant may reserve that certain actions of the Association or board be approved by the declarant before they become effective.
138
When must at least 1/3 of the board members be elected by unit owners other than the declarant?
Not later than the 120th day after conveyance of 50% of the units that may be created to unit owners other than the declarant.
139
What is the minium number of board members?
3
140
Must board members be unit owners?
No.
141
After the declarant control period ends, must unit owners elect a board?
Yes.
Must be at least 3 board members who need not be unit owners.
142
When must the board elect officers?
Within 31 days of the ending of declarant control.
143
Is a board member or officer liable to the association or any unit owner for monetary damage for an act or omission occuring during that persons capacity as an officer or director?
No.
144
When may a board member or officer be held liable to the association or a unit owner? (Exception to the General Rule)
1) Breach of fiduciary duty to association or unit owner
2) improper benefit received by officer or director
3) Bad faith
4) Intentional misconduct
5) Liability is expressly provided by statute
6) Liability is expressly provided by the Dedicatory Instruments of the Association.
145
May a declarant transfer his special declarant rights? If so, how?
Yes. They may transfer special declarant rights.
They must have a written transfer instrument, executed by the transferee, recorded in the county clerk's office.
146
If special declarant rights are transferred to a new declarant, does the transfer relieve the first declarant of any obligation or liability before the transfer (e.g. Deed of Trust)?
No.
147
If the declarant transfers his rights to a new declarant, is the original declarant liable for an act or omission or breach of an obligation by the successor declarant?
No.
148
What happens to the declarants rights under a foreclosure sale, tax sale, or sale by trustee under the bankruptcy code or receivership?
1) Declarant ceases to have any special declarant rights;
2) The declarant period of control terminates unless the judgment provides for the transfer of the special declarant rights to a successor declarant.
149
When may a residential condominium association terminate contracts or leases with the declarant or affiliate of the declarant?
1) Contract is entered into during period of declarant control;
2) The contract or lease is terminated within one year after the new board is elected by the unit owners
3) The Association gives at least 90 days notice of its intent to terminate hte contract or lease.
150
What are the requirements of Association bylaws?
1) Board Members:
a) Manner of electing
b) Qualifications
c) Powers and Duties
d) Term of office
e) Manner of electing and removing
f) Filling vacancies
2) Officer:
a) Designation of Titles (President, treasurer, and secretary, at minimum)
b) Who is authorized to execute and record amendments to the Declaration
3) Powers or duties board may delegate to other persons or manager
4) Method of amending bylaws
5) Manner of notice of meetings
6) Any other matter desirable, necessary, or appropriate.
151
Who is responsible for the maintenance, repair, and replacement of the common elements?
The Association
152
Who is responsible for the maintenance, repair, and replacement of the Unit?
The owner
153
Must unit owners provide the Association and other unit owners and their agents/employees access reasonably necessary for the purpose of maintenance, repair, and replacement of their own units or the common elements?
Yes.
154
If damage is inflicted upon the common elements or on any unit, who is responsible for the repair of the damage?
Whoever is liable is responsible for the prompt repair of the damage.
155
Who is responsible for the maintenance, repair, and replacement of a utility or equipment serving only one owner's unit even if that equipment is located outside an owner's unit?
The unit owner, unless expressly provided otherwise by the declaration.
This includes, but is not limited to:
1) electrical
2) water
3) Sewage
4) Gas
5) Water heaters
6) Heating and air conditioning equipment
7) Television antennas
156
Who is solely responsible for the cost of the maintenance, repair, and replacement of doors and windows serving only the owner's unit?
The unit owner. Unless expressly provided otherwise in the declaration.
157
May an association enter a unit to prevent or termination waste of water purchased by the Association as a common expense?
Yes, but only after giving notice to the owner and occupant.
Exception- Declaration provides otherwise.
158
May an association enter a unit to perform maintenance or repairs that, if not performed, may result in damage to general or limited common elements?
Yes, but only after giving notice to the owner and occupant.
Exception- Declaration provides otherwise.
159
TPC- 82.108- Meetings-
Applicable to both Pre- and Post- TUCA condos
How often must Associations hold annual meetings?
At least once per year.
160
Who may call special meetings of the Association?
Unless otherwise provided by the declaration-
1) President;
2) Majority of the Board;
3) Unit owners having at least 20 percent of the votes in the Association.
161
Must annual meetings and board meetings be open to unit owner?
Yes, subject to the right of the board to adjourne and reconvene in executive session.
162
What matters may be discussed in executive session?
1) Personnell
2) Pending litigation
3) Contract negotiations
4) Enforcement actions
5) Matters involving invasion of privacy of unit owners
6) Matters that are to remain confidential by request of the affected parties and agreement of the board.
163
If a board is going to consider a matter in executive session, how must it be handled?
They must announce the general nature of any business to be considered in executive session at the open meeting.
164
What are the prerequisies to hold a board meeting via electronic or telephonic means?
Unless the Dedicatory Instruments provide otherwise:
1) Notice of the meeting must be given to the board meeting in accordance with the Bylaws or Texas Nonprofict Corporation Act.
2) Each director may hear and be heard by every other director
3) Meeting does not involve the the following of a unit owner before that unit owner has had an opportunity to attend a board meeting to present the member's position:
a) Fine
b) Damage assessment
c) Appeal of denial of ACC
d) Suspension of a right
165
When may the board act by unanimous written consent?
Unless the Dedicatory Instruments provide otherwise:
1) Record of the meeting is filed with teh minutes of board meetings; and
3) Meeting does not involve the the following of a unit owner before that unit owner has had an opportunity to attend a board meeting to present the member's position:
a) Fine
b) Damage assessment
c) Appeal of denial of ACC
d) Suspension of a right
166
How must notice of board meetings be given to board members?
As provided by the bylaws.
If the bylaws do not provide for a method of notice, then as provided by the Texas Non Profit Corporation Act.
167
How may a unit owner obtain the time and place of the next regular or special board meeting?
They may make a written request to the Association.
The Association must provide the information or inform the unit owner where the information may be obtained.
168
TPC 82.109- Quorum
Post-TUCA Only
What are the requirements for quorum for a meeting of the members?
Unless the Bylaws provide otherwise:
1) 20% of the votes to be cast for election present, in person, or by proxy.
However, the bylaws may not reduce the quorum requirement to less than 10%
169
What are the quorum requirements for a meeting of the board?
Unless the Bylaws specify a larger percentage:
1) 50% of the votes on the board
170
If only one unit owner is present at a meeting, who may cast that vote for the unit?
The unit owner present at the meeting?
171
If multiple owners of a unit are present at a meeting may they cast a vote on an issue if they disagree on an issue?
No. The unit owners must have unanimous consent to vote on an issue unless the declaration provides otherwise.
172
Are we to assume that multiple owners are in agreement on a vote if one owner casts a vote for the unit and the other owners do not protest?
Yes
173
May owners cast votes by proxy?
Yes
174
What are the requirements of a proxy?
1) In writing
2) Signed by the owner
3) Dated
175
May a proxy be revocable without notice?
No
176
How may an owner revoke a proxy?
Giving notice of the revocation to the presiding over a meeting of the association.
177
When does a proxy terminate?
One year after its date unless it specifices a shorter or longer time.
178
Is cumulative voting allowed?
no. (Cumulative voting is where each owner has as many votes are there are candidates)
179
TPC 82.111- Insurance
Applicable to Pre- and Post- TUCA
Both pre and post TUCA units must maintain insurance. When is the earliest that they must maintain it?
It must be obtained before the first conveyance of a unit to an owner other than the declarant.
180
What types of insurance must a Condominium maintain?
1) Property insurance on the common elements insuring against physical loss commonly insured against (fire and extended coverage)
2) General liability insurance on the common elements in an amount determined by the board, but not less than that specified in the Declaration. Including:
a) Medical insurance payments
b) Death
c) Bodily injury
d) Property damage
181
What is the amount of insurance that the Association must maintain?
At least 80 percent of the replacement cost or actual cash value of the insured property as of the effective date of the policy.
182
If a condominium contains horizontal boundaries, (one unit on top of another) must the units themselves be insured by the Association?
Yes, but not the improvements installed by the owners within the units.
183
What must the Association do if insurance is not reasonably available?
Association must notify in writing all owners and lienholders that insurance is not reasonably available.
184
May the Association carry any other insurance the board considers appropriate?
Yes.
They may carry and insurance the board considers appropriate to protect the condominium, common elements, or unit owners.
185
May insurance policies purchased by the board require reasonable deductibles?
Yes.
186
May the holder of a mortgage on a unit require the unit owner to acquire insurance in addition to that which is provided by the association?
Yes.
187
Must the Association insurance require that each unit owner is an insured person under the policy with respect to liablity arising out of the persons ownership of an undivided interst in the common elements?
Yes.
188
Must insurers waive their right of subrogation under the policy against a unit owner?
Yes.
189
May the insurance policy state that an action of an owner voids the policy or be a condition of recovery?
No.
Not unless within the scope of the unit owners authority to act on behalf of the Association (eg Unit owner is a Board Member).
190
If both the association and unit owner have separate insurance policies that cover thse same property, which policy provides primary insurance?
The Association's policy.
191
Who must submit the claim?
The claim must be submitted by the Association and adjusted with the Association.
192
To whom must the insurance proceeds be paid?
1) An insurance trustee if designated by the Board of Directors; or
2) The Association if no insurance trustee is designated.
193
May insurance proceeds be paid directly to a unit owner or lienholder?
No.
194
What must the Association or Insurance Trustee do with the insurance proceeds?
Hold them in trust for the unit owner and lienholders as their interests may appear.
195
To whom must the insurance proceeds be first distributed?
To the Assocation for the repair and restoration of the common elements and units.
196
Under what circumstances are unit owners and lienholders entitled to receive payment of a portion of the insurance proceeds?
1) Only after the general and limited common elements have been been completely restored; or
2) The condominium has been terminated
197
Does TUCA prevent an owner from obtaining insurance for the owner's own benefit?
No.
198
If an insurer wants to cancel an insurance policy with an Association, what is the minimum amount of written notice that must be given prior to cancellation?
30 days.
The written notice must be mailed to the Association.
199
If a portion of the condominium that is required to be insured is damaged or destroyed, must it be repaired or replaced?
Yes.
There are some exceptions though.
200
What are the exceptions to the general rule that if a portion of the condominium that is required to be insured is damaged or destroyed it be repaired or replaced?
1) Condominium is terminated
2) Repair or replacement woudl be illegal or any state or local statute
3) At least 80 percent of the unit owners vote to not rebuild (each owner may vote, regardless of whether their unit has been damaged or destroyed)
201
How may owners vote on whether to rebuild or replace?
If a meeting is not held for that purpose:
1) electronically; or
2) written ballot
If a meeting is called for that purpose
1) In person; or
2) By proxy
202
If owners vote to not rebuild, may that increase the insurers liability?
No
203
If owners vote not to rebuild, does that cause a presumption of total loss?
No.
204
What if the insurance proceeds do not fully repair and replace the damage?
The shortage is a common expense.
The board may levy an assessment to pay the expenses in accordance with each owners common expense liability.
205
If the entire condominium is not repaired or replaced what must be done with any insuranced proceeds atributable to the damaged common elements?
They must be used to resort the damaged area to a condition compatible with the remainder of the condominium.
206
If the entire condominium is not repaired or replaced what must be done with any insuranced proceeds atributable to the damaged units and the limited common elements that serve those units?
Those proceeds shall be distributed to those unit owners and their mortgagees as their interests may appear.
207
If the entire condominium is not repaired or replaced and:
1) Damaged common elements have been restored to be compatible with the remainder of the condominium; and
2) Proceeds have been distributed to unit owners and their mortgagees who have damaged units.
What is done with the remainder of the insurance proceeds?
The remainder of the proceeds shall be distributed to all of the unit owners in acordance with each unit owner's undivided interest in the Common Elements, unless other wise provided in the Declaration.
208
If unit owners vote not to rebuild a unit, what happens to that unit owners allocated interest in the common elements?
It shall be automatically reallocated as if it were condemned.
The Association shall prepare, execute, and record an amended declaration reflecting the reallocation of interest.
209
If a condominium is terminated after a casualty, how are the insurance proceeds to be distributed?
Per TPC 82.068- (Termination of a Condominium)
After payment of creditors, the assets of the association shall be distributed to unit owners in proportion to their respective interests.
210
If the cost to repair damage to a unit or common element covered by the Association's insurance is less than the amount of the deductible, who is responsible for the cost of repair?
The party who would be responsible in the absence of insurance.
211
If the Association's insurance covers the loss and the cost to repair the damage to a unit or common element is more than the deductible, who is responsible for the payment of the deductible?
1) First look to the Dedicatory Instruments of the Association;
2) If Dedicatory Instruments are silent, the Board of Directors shall determine payment of the costs by resolution. The resolution must be recorded as a dedicatory instrument;
3) If the Board does not approve a resolution determining responsibility for the costs then they are a common expense.
212
If damage to a unit is due wholly or partly to an act or omission of a unity owner or guest or invitee of the unit owner what may the association do?
They may individually assess the deductible expense any any other expenses in excess of the insurance proceeds against the owner and the owner's unit.
213
If a condominium is wholly commercial, may the provisions of 82.111 (Insurance) be varied or waived?
Yes
214
If a condominium is residential or mixed use, may the provisions of 82.111 (Insurance) be varied or waived?
No
215
TPC 82.112- Assessments for Common Expenses- Post TUCA Only
Who must pay all of the common expenses of the condominium until such time as an association levies an assessment?
The Declarant.
216
What is the longest time that a condominium may have between each assessment?
Assessments must be at least annually.
217
What must assessments be based upon?
A budget adopted at least annually by the Association
218
May the Association use reserves and working capital expenses to pay for operational expenses?
Not until the declarant control terminates.
The Association may not use reserves and working capital expenses to pay for operational expenses until the declarant control ends.
219
At what point must the declarant begin paying for operational expenses or assessments?
The earlier of:
1) Termination of declarant control; or
2) 3 years from the declarants first conveyance of a unit.
220
Once the declarant must begin paying for operational expenses, what must he pay?
Either:
1) All operational expenses minus an amount paid by the assessments collected from unit owners other than the declarant; or
2) the common expense liability allocated to each unit.
221
Must common expenses be assessed against units used by the declarant as models or offices?
Yes. But only after termination of declarant control or 3 years after conveyance of the first unit.
222
Who is responsible for the maintenance, repair, or replacement of a limited common element?
The Association.
The cost of repair is assessed against all units as if it were a general common element.
Exception- Damage done by owner to the limited common element. Then that owner is responsible.
223
If common expense liabilities are reallocated, what happens to assessments not yet due?
They must be reallocated in accordance with each unit owners new interest.
224
May a declaration allow for the accumulation of reserve funds?
Yes.
225
May a declarant pay expenses for an Association (e.g. insurance and taxes) and then collect it from a purchaser at closing?
Yes.
226
TPC 82.113- Association Lien for Assessments. Pre- and Post TUCA
Is an assessment levied by an association against a unit a personal obligation of a unit owner?
Yes
227
How is a levied assessment secured?
By a continuing assessment lien on the unit.
228
Is the assessment lien secured by rents and insurance proceeds received by the unit owner and collected by the unit owner and related to the owner's unit?
Yes.
229
Define "Assessment" pursuant to TPC 82.113.
1) regular and special assessments;
2) Dues, fees, charges;
3) Interest
4) Late fees;
5) Fines;
6) Collection costs;
7) Attorney's fees
8) Any other amount due the association by the unit owner or levied against the unit by the Association.
All of these are enforceable as assessments by using the assessment lien unless the declaration provides otherwise.
230
What liens have priority over an assessment lien?
1) Property tax lien;
2) First Vendors lien or Deed of Trust;
3) Lien recorded before the Declaration was recorded.
4) Unless the Declaration Provides otherwise- Lien for construction of improvements to the unit, or assignment of such lien, if the lien or assignment was record prior to the date the assessment sought to be enforced becomes delinquent.
231
What creates the assessment lien?
What perfects the assessment lien?
The recordation of the declaration.
No further recordation of a Notice of Lien is required for perfection of the lien unless the Declaration expressly states otherwise.
232
Does an association have a statutory power of sale?
Yes. By virtue of acquiring the lien, the owner grants the association a statutory power of sale in connection with the purchase of the unit.
233
Does an association have a statutory power to appoint a trustee or substitute trustee?
Yes. By written resolution, the board may appoint an officer, agent, trustee, or attorney to exercise the condominium's power of sale.
234
How must an association exercise its power of sale?
Unless otherwise provided in the Declaration, the power of sale must be exercised in accordance with Section 51.002 of the Texas Property Code.
235
Does an Association have a right to foreclose its statutory assessment lien via judical or non-judical foreclosure?
Yes.
236
May a condominium association foreclose a lien which consists solely of fines?
No.
237
May costs of the assessment lien sale be added to the amount owed by the unit owner to the Association?
Yes.
238
May a unit ower petition a court to set aside a foreclosure sale solely because the purchase price at the foreclosure sale was insufficient to fully satisfy the owner's debt?
No.
239
May the association bid for an purchase the unit at foreclosure sale?
Yes. It may be bid upon as a common expense.
240
If the association purchases the unit at foreclosure sale, what may they do with the unit?
They may lease, encumber, exchange, sell, or convey the unit.
241
How long does a unit owner who's unit was foreclosed have to redeem the unit?
90 days after the date of the foreclosure sale.
242
If the association is the purchaser at foreclosure sale, what must be paid by the owner to redeem the unit from the association?
1) all amounts due the association at the time of the foreclosure sale
2) Interest from the date of the sale to the date or redemption at a rate provided for in the Declaration
3) Attorney's fees and costs incurred
4) assessments levied after the foreclosure sale
5) Reasonable costs incurred, including costs of maintenance and leasing.
243
If a 3rd party is the purchaser at foreclosure sale, what must be paid by the owner to redeem the unit from the purchaser?
1) amount bid at the sale
2) 6% interest from date of foreclosure sale to date of redemption.
3) assessments paid by purchaser after date of foreclosure.
4) reasonable costs incurred including costs of maintenance and leasing.
244
If a 3rd party is the purchaser at foreclosure sale, what must be paid by the foreclosed upon owner to the association in order to redeem the unit?
1) all assessments that are due as of the date of the redemption
2) reasonable attorney's fees and costs incurred by the association in foreclosing the lien.
245
Upon redemption, what must the purchaser at foreclosure sale provide to the redeeming unit owner?
A deed with no warranty.
246
Is the exercising of the right of redemption effective against a BFP or lender without notice of the redemption after the redemption period expires?
No.
Exceptions-
1) The unit owner records the redemption deed; or
2) The unit owner records an affidavit stating that they have exercised their right of redemption.
247
Is a unit that has been redeemed subject to all liens and encumbrances that existed prior to the date of foreclosure?
Yes.
248
What happens to rents and income collected from the unit by the purchaser at foreclosure sale during the redemption period?
They belong to the purchaser at foreclosure sale, however, they must be credited against the redemption amount.
249
May a purchaser at foreclosuer sale transfer ownership of the unit during the redemption period?
No.
250
If a unit owner defaults in the payment of his assessments, may the association communicate such to other lienholders on the unit?
Yes.
The association may also notify the other lienholders of their intent to foreclose.
251
If a lienholder requests that the association provide notice of an owner's default or intent to foreclose, must it be provided by the association?
Yes.
The request from the lienholder for such information must be in writing.
252
May an association take a deed in lieu of foreclosure?
Yes.
253
May an association simply file suit against an owner seeking a personal judgment?
Yes.
254
Is there any point prior to a foreclosure that an owner may not avoid foreclosure by simply paying all amount due the association?
No. All it takes is payment in full to stop the foreclosure.
255
If a unit is a homestead prior to 1/1/94, and the declaration does not contain a valid assessment lien, when does the statutory assessment lien attach?
When the unit ceases to be homestead of the person owning it on 1/1/94.
256
Does foreclosure of a property tax lien discharge the association's assessment lien for amounts that become due after the date of foreclosure of the tax lien?
No.
257
If a unit owner is delinquent is payment of assessments may a lienholder provide the association with information about lien and debt?
Yes.
The Association may also furnish the lienholder with information about the assessment lien and condominium.
258
TPC- 82.114- Association Records
Pre- and Post- TUCA
Must an Association keep detailed financial records?
Yes. The records must:
1) Comply with generally accepted accounting principals; and
2) That are sufficiently detailed to enable the association to prepare a resale certificate.
259
In addition to detailed financial records, what other records must be retained by a condominium? (Pre- and Post TUCA)
1) Plans and specifications used to construct the condominium, unless the building was constructed prior to 1/1/94.
2) Condominium Information Statement pursuant to TPC 82.152
3) Name and Mailing address of each unit owner.
4) Voting records, proxies, and correspondence relating to amendments to the declaration; and
5) Board and annual meeting minutes.
260
Are records of a condominium available for inspection by a unit owner or their agent?
Yes. All financial records and other records must be available.
261
Where must a condominium records inspection take place?
At the registered office or principal office of the condominium.
262
Are attorney's files records of the association and subject to inspection or discovery?
No.
263
Must an association obtain an annual independent audit?
Yes.
264
Who has access to the audit results?
Copies of the audit must be made available to unit owners.
265
Who must perform the audit?
An independent CPA if:
1) Required by the Bylaws,
2) Vote of the Board; or
3) Majority vote of the members.
266
If the declarant is in possession of the financial records and other records of the association, when must they be turned over to the association?
When declarant sells the first unit.
267
What information must a unit owner provide to the Association and when must the unit owner provide that information to the Association? (Pre and Post TUCA)
No later than 30 days after acquiring an interest in a unit, a unit owner must provide the following to an association:
1) Unit owner's Info:
a) mailing address,
b) telephone number, and
c) drivers license number;
2) Lienholder info:
a) name and mailing address
b) loan number;
3) Unit Occupant:
a) Name; and
b) Telephone Number
4) Unit Property manager info:
a) Name and address
b) Telephone number
268
If information that a unit owner must provide the Association changes, how long does the unit owner have to contact the Association and update that information?
30 days from the date the owner has notice of a change.
269
May the association require that a unit owner periodically update their information on file with the association?
Yes.
270
TPC 82.115- Post TUCA Only
If an association is acting in its capacity as trustee and dealing with a third party, is the third party bound to ensure the proper application of trust assets paid or delivered to an association in its capacity as trustee?
No.
271
TPC 82.116- Management Certificate
Pre- and Post- TUCA
Must an association record a management certificate?
Yes.
One must be recorded in each county where a portion of the condominium is located.
272
Who must sign the managment certificate?
Officer of the Association.
273
What must be in a condominium management certificate?
1) Name of condominium
2) Name of association
3) Address of condominium
4) Recording data for declaration
5) Mailing address of association or Name and mailing address of manager of association.
6) Any other information the association considers appropriate.
274
How must the county clerk in each county index each condominium management certificate?
as "Condominium Association Management Certificate"
275
If information within a managment certifcate changes, how long does a condominium association have to record an updated management certificate?
30 days after the date the association has notice of the change.
276
Is an association, its officers, directors, employees, or agents liable for any delay or failure to record a management certificate?
No.
Not unless the failure was wilfully or caused by gross negligence.
277
TPC 82.117- Obligations of Unit Owners
Post- TUCA only
What are the basic requirements that an owner must do per TPC 82.117:
1) Pay assessments, interest, and other charges properly levied by the association against teh owner or owner's unit.
2) Comply with dedicatory instruments of the Association
3) Pay for damage to the condominium caused by the negligence or willful misconduct of the owner or their occupant, agent, guest, or invitee
4) Is liabile to the association for any violations of the Dedicatory Instruments, by the owner or their occupant, agent, guest, or invitee
278
TPC 82.118- Service of Process
Pre- and Post TUCA
HOUSTON ONLY!
How may a municipality serve a Houston Condominium owner with service of process?
By serving the unit owner at the unit owner's last known address according to the CAD records by any means permitted under TRCP 21a.
279
When is the last period of time that a Houston condominium owner may offer proof that an otherwise proper service by mail of a notice was not received?
Not more than 3 days after the date the notice was deposited in the USPS.
280
How long does a Houston condominium owner have to update their mailing address with CAD after the mailing address has been changed?
90 days
281
TPC 82.119- Design Claims
Post TUCA Only
To use the design claim procedures in TUCA, how many units must a condominium have?
at least 8
282
Is the Design Claim procedure outlined in TUCA mandatory?
Yes. It must be done prior to filing suit or initiating an arbitration proceeding under the Declaration.
283
Must a condominium obtain an inspection and written report from a licensed professional engineer as part of the Design Claim procedure?
Yes.
284
What are the contents of the Inspection Report prepared by the licensed professional engineer?
a. Identifies units or common elements subject to the claim
b. Describes their present physical condition
c. Describes modifications, maintenance,
or repairs to the units or common elements done by unit owners or the Association
285
How much time must be given to the unit owners of the inspection by the professional engineer who is inspecting for design claims?
Must it be in writing?
a. Condominium must provide written notice of inspection to unit owners subject to a claim.
b. Must send notice at least 10 days before the date of inspection.
286
What are the requirements of the contents of the written notice of the inspection by the licensed professional engineer that must be sent to owners inspecting for a design claim?
a. Identify licensed professional engineer preparing report
b. Identify units or common elements being inspected
c. Date and time inspection will occur
287
Who may attend the inspection by the licensed professional engineer inspecting for the engineer?
Each party subject to a claim may attend the inspection, either in person or through an agent.
288
What must be done with the inspection report prepared by the licensed professional engineer that must be sent to owners inspecting for a design claim?
It must be sent to each member subject to the claim and give them time to correct the report.
289
How long do members subject to a design claim have to correct an inspection report?
90 days after it has been prepared.
290
What percentage of members must approve proceeding forward with a design claim at a special or regular meeting of the members?
Must obtain approval of more than 50 percent of total votes of the association members at a regular, annual or special meeting called in accordance with the Declaration or Bylaws.
Members may vote in person or by proxy.
291
With regards to the meeting notice that goes to members who will vote on whether or not they will proceed forward with a design claim:
1) How long ahead of time must it be sent to members?
2) Who may NOT prepare the meeting notice?
1) Sent at least 30 days before the meeting to each member. Include time, date, location of the meeting.
2) May not be prepared or signed by a person who is a member of or affiliated with the laws firm who will represent the Association in the Claim.
292
With regards to the meeting notice that goes to members who will vote on whether or not they will proceed forward with a design claim:
1) What are its required contents (7)
a. Include description of the claim, relief sought, anticipated duration, and likelihood of success;
b. Include copy of inspection report.
c. Include copy of contract or proposed contract between Association and attorneys selected by the Board to assist with the claim
d. Description of fees incurred or for which the association may be liable as a result of the claim (attorney fees, consultant fees, expert witness fees, court costs)
e. Summary of steps taken by association to resolve the matter.
f. Statement that initiating a lawsuit or arbitration proceeding may affect the market value, marketability, or refinancing of a unit while the claim is prosecuted; and
g. How the association proposes to fund the cost of prosecuting the claim.
293
What happens to the statute of limitations if the design claim procedure is initiated in the last year of the statutor of limitations?
It is tolled for one year from the date the design claim procedure is initiated.
294
Is binding arbitration for design claims allowed in declarations?
Yes.
The Declaration may provide the process for binding arbitration as well.
295
May a condominium retroactively remove or modify arbitration requirements for construction defects?
Yes.
However, they may not be retroactively applied regarding an act or omission that occurred prior to the date of the amendment.
296
TPC- 82.151- Condominium Information Statement
Under what circumstances does a Condominium Information Statement not need to be prepared?
1) All units are restricted to commercial use and waived by the purchaser.
2) "Gratuitous Disposition" of a unit
3) Disposition pursuant to a court order.
4) Disposition by govenerment or government agency
5) Foreclosure or deed in lieu of foreclosure
6) A disposition that may be cancelled for any reason, at any time, and without penalty.
297
Who is responsible for the preparation of a Condominium Information Statement?
The Declarant.
298
By what time must a condominium information statement be prepared?
Before offering any interest in a unit.
299
May a declarant transfer responsiblity for the preparation of the condominium information statement?
If yes, to whom may it be transferred?
Yes.
1) Successor Declarant; or
2) Person in the business of selling real property who intends to offer units in the condominium for the person's own account.
300
If a declarant transfers responsibility for the preparation of a condominium information statement to a 3rd party, what must the declarant give to the 3rd party preparer of the condominium information statement?
Any information necessary to enable the 3rd party to prepare the condominium information statement.
301
Does the person preparing the condominium information statement have any liability for errors?
Yes. They are liable for:
1) Any false or misleading statement; or
2) Omission of material fact
302
If the declarant did not prepare the condominium information statement and it contains an error, is the declarant liable?
No. Only the person preparing the condominium information statement.
303
What are the required contents of a condominium information statement:
1) Name and address of the declarant and of the condominium;
2) General description of condominium, including types of units and max number of units.
3) Miniumum and max number of additional units that may be included.
4) Brief description of any developmental rights and any conditions or limitations upon them.
5) Copies of all dedicatory instruments of the association;
6) Copies of all documents required by declarant to be signed by purchasers at closing.
7) Projected budget for association for first year of association following date of first conveyance (must include name of person who prepared budget, budget assumptions concerning occupancy, and inflaction factors)
8) Description of each lien, lease, or encumbrance affecting title to the condominium after conveyance by the Declarant.
9) Copy of each written warranty provided by declarant.
10) Description of any unsatisfied judgments or pending suits to which the association is a party or are material to the land title and construction and to which the declarant has knowledge.
11) Description of insurance coverage provided for benefit of unit owners.
12) Current or expected fees or charges to be paid by unit owners for the use of common elements and other facilites related to the condominium.
304
For condominiums located in Houston, what must a condominium information statement also include?
Information related to personal service and changing of address related to the CAD:
1) Owner may be served pursuant to TRCP 21a at last known address of property per CAD address.
2) Owner must notify CAD of any update of their last known address within 90 days
3) Owner may not offer proof in a judicial proceeding that proper service by mail was not received not later than 3 days after it was deposited in the USPS mail.
305
Who must prepare a budget that is included in a condominium information statement?
There is not requirement that it be prepared by a CPA.
306
How must a budge be prepared that is included in a condominium information statement?
It must be prepared:
1) In accordance with generally accepted accounting principals; and
2) In consideration of the physical condition of the condominium
3) Be based upon reasonable assumptions.
307
What must a budget included in a condominium information statement include?
1) The amount included in the budget as a reserve (if zero, must state such).
2) Projected monthly comon expese assessment for each type of unit
308
Must a declarant amend a condominium information statement?
Yes. It must be done promptly to reflect any "material and substantive" change in its contents.
309
If a declarant amends a condominium information statement and he has already provided a copy to potential purchasers, what mut the declarant do?
He must promply provide a copy to the potential puchasers prior to closing.
310
What is a "conversion building"?
A building that any any time before the creation of the condominium was occupied wholly or partially by persons other than the unit owners.
They are occupants who occupied with the consent of the purchasers.
Often times it is an apartment association purchased by a declarant who wants to turn it into condominiums.
311
Must a condominium contain any information about it being a conversion building?
Yes, if:
1) It it contains units reserved for commercial use; and
2) It contains a conversion building (if it doesn contain a conversion building, dont need to include information on conversion buildings in condominium information statement.)
312
If a condominium information statement must contain iformation on conversion buildings, what must it contain?
Declarant must prepare addendum to condominium information statement based upon the report of a licensed architect or engineer.
Addendum must include:
1) Statement by the declarant of the present condition of all structural, electrical, and mechanical components in the building.
2) Useful life of each of the structural, electrical, or mechanical components (or a statement that no representations are made in that regard)
3) List of building code violations that declarant has received notice of but have not been cured.
313
TPC- 82.156- Purchasers Right to Cancel
Post- TUCA Only.
Regarding a resale certificate, under what circumstances may a buyer cancel their contract with a buyer?
If the following conditions are met:
Seller must be someone other than declarant, and either-
1) Dedicatory instrument have not been turned over to buyer before time buyer signs a contract; or
2) Contract does not contain a bold or underlined provision acknowledging purchasers receipt of thos documents and recommending purchaser read those documents before executing the contract.
3) Purchaser has not received a resale certificate pursuant to TPC 82.157 or executed a resale waiver.
314
How long does a purchaser have to cancel a contract for purchase of a unit if they did not receive the dedicatory instruments prior to execution of the contract or if they have not received a resale certificate?
6 days from the date the purchaser receives the documents or the resale certificate.
315
How long does a purchaser have to cancel a contract for purchase of a unit from the declarant if they have not received a copy of a condominium information certificate from the declarant?
5 days from the date the purchaser receives the condominium information statement.
316
How long does a purchaser have to cancel a contract for purchase of a unit from the declarant if their contract does not contain an underlined or bold-print provision acknowledging their recipt of the CIS and recommending that they read it?
5 days from the date the purchaser receives the condominium information statement.
317
How must a purchaser cancel a contract if they did not receive one of the below or in the 5 day window after receipt:
1) Condominium information statement;
2) Dedicatory Instruments pursuant to a Resale; or
3) Resale Certificate.
Written notice via-
1) Hand delivery to the declarant or seller; or
2) CM/RRR to seller or sellers agent
The cancellation is done without penalty.
All payments to the seller from the purchaser must be returned.
318
May a declarant require a purchaser to close prior to the purchaser being given a condominium information statement?
No.
319
May a seller require a purchaser to close prior to the purchaser being given a copy of the Dedicatory Instruments?
No.
320
TPC- 82.157- Resale Certificates
Pre- and Post- TUCA
Who must provide a resale certificate?
A unit owner who intends to sell a unit, other than declarant.
The declarant does not need to provide a resale certificate. The declarant provides the condominium information certificate.
321
If a resale certfiicate was prepare before it was delivered to the purchaser, what is the earliest it may have been prepared?
3 months before the date it is delivered to the purchaser.
322
What must accompany the resale certificate?
A copy of the dedicatory instruments of the association.
323
When must the resale certificate be issued by?
Before the conveyance of a unit.
324
What must be contained in a condominium resale certificate?
1) Budget of association and balance sheet
2) Right of first refusal or restraint on right to transfer unit.
3) Amount of assessments & special assessments due on unit.
4) Unpaid assessments and specials assessments due on unit
5) Reserves of association and if they are designated for a specified project.
6) Unsatified judgements against the association.
7) Pending lawsuits
8) Insurance coverage of association
9) Any alteration or improvements to the unit or limited common elements that violate the dedicatory instruments of the association.
10) Any violations of health or building codes for unit or limited common elements assigned to unit
11) Terms of an leasehold estates affecting the condominium
12) Name, mailing address, and number for association management company
13) Any transfer fees associated with transfer of the unit. Must describe each fee, to whom it is paid, and the amount.
325
Who must sign a resale certificate?
Officer or authorized agent of the Association.
326
How long does an association have to prepare a resale certificate after a request?
10 days from the date of the request.
327
To whom must the association provide a copy of the resale certificate?
Seller or seller's agent.
328
Is a selling unit owner or sellers agent liably to the purchaser for errors contained in the resale certificate?
No.
329
What if the association does not furnish the resale certificate to the seller within the 10 day period?
The unit owner may provide the purchaser with an affidavit signed by the unit owner in lieu of the resale certificate.
330
What must be contained in the seller affidavit in lieu of the resale certificate?
The unit owner requested the resale certificate and it was not timely provided by the association.
331
May the buyer and seller agree to waive the requirement to provide a resale if the seller furnishes an affidavit to the buyer?
Yes.
The waiver must be in writing.
332
Is the association or association's agent liable to a selling unit owner for delay or failure to furnish a resale certificate?
No.
Exception- Failure to provide was due to-
1) Gross negligence; or
2) Willful
333
Does failure to provide a resale certificate void a deed to a purchaser?
No.
334
What if a resale certificate incorrectly states the total amount of delinquent assessments?
Purchaser is not liable for the payment of additional amounts due on the date the certificate was prepared.
However, the association may recover on debts or claims that arise after the date the certificate is p
335
Is a unit owner or owner's agent liable to a seller for failure of an association to provide a resale certificate?
No.
336
Does the failure of a resale certificate affect an association's lien securing payment of future assessments?
No.
337
May a purchaser, lender, or title company rely upon a statement in a resale certificate?
Yes. They may not be held liable for any debt or claim that is not disclosed in a resale.
338
May an association deny the validy of a statement in a resale?
No.
339
TPC 82.158- Escrow of Deposits
Post TUCA only
If a deposit is made on a unit to purchaser a property from a declarant, where must those funds be held?
In an escrow with a real estate broker, attorney, title insurance company, or bonded escrow company.
The funds may not be delivered to the declarant until closing or upon purchasers default under the contract.
The funds may also refunded to the purchaser if the contract so provides.
340
TPC 82.159- Release of Liens
Post TUCA only
Before conveying a real property to an association, must a declarant release the property from all liens?
Yes. If foreclosure of the lien would deprive the unit owners of any right of access to or support of the owner's unit.
There may be liens, however, they may not allow foreclosure and they must be listed on the condominium information statement.
341
TPC 82.160- Conversion of Buildings
Post Tuca Only
If a declarant purchases an apartment and wants to convert it to condominiums, may he terminate a lease in violation of its terms?
No.
342
If a declarant is converting an apartment to condominiums, how much time must the declarant give to tenants to vacate?
at least 60 days
343
What must the vacate notice that the declarant sends to tenants state?
How may it be delivered?
1) Rights of tenants under TUCA
| 2) Hand delivered or delivered via CM/RRR
344
Is the faiure to give this required notice a defense in a complaint for forcible entry and detainer?
Yes
345
Under what circumstances may the tenat not have to give the 60 day notice?
1) Nonpayment of rent
2) waste
3) Conduct that violates rental agreement or is illegal
346
If a notice of conversion sent to tenanct complies with TUCA and also complies with the terms of a notice to vacate, does it constitute a notice to vacate?
Yes
347
May a declarant make substantial alterations to a leased unit for purposes of a condominium conversion?
No. Not unless expressly provided by the lease.
348
TPC 82.161- Attorney's fees
Pre- and Post- TUCA
If any person or association violates TUCA, or the declaration or bylaws of an association, who has a cause of action against them?
Any person or class of persons adversely affected by the violation has a claim for relief.
349
Is the prevailing party in an action to enforce the dedicatory instruments of the Association entitle to attorney's fees and costs of litigation from the non-prevailing party?
Yes.
350
TPC 82.162- Labeling of Promotiional Material
Post- TUCA only
If a contemplated improvement is labed on a plat as "NEED NOT BE BUILT" or is subject to a developmental right by the declarant, may it be displayed on promotional material?
No.
Not unless it is conspicuously advertised on the promotional material as "NEED NOT BE BUILT"
351
TPC 82.163- Declarant obligation to Complete
Post TUCA only
Is a declarant legally obligated to complete all improvements that are labeled "MUST BE BUILT" on a plat?
Yes.
352
If a portion of a condominium is damaged or destroyed during the developmental period, is the declarant legally obligated to restroe and promply repair the condominim to a condition compatible with the remainder of the condominim?
Yes.
353
TPC 82.164- Loans as Eligible Investments
Post- TUCA only
Is a bank or other mortgage holder entitled to make loans on condominium units and its interest in the common elements?
Yes
354
Does a condominiums lien for assessments make a condominium unit ineligible for a mortgage loan for which it would otherwise qualify?
No.
