Prop. Code- Section 82

Question 1

To what does Chapter 82 apply?

To what does Chapter 81 apply?

Answer 1

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.

Question 2

Under what circumstances does Chapter 82 apply to a Condominium whose declaration was recorded prior to 1/1/94?

Answer 2

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.

Question 3

If an Association votes to adopt Chapter 82, does this ever impose extra duties upon the declarant?

Answer 3

No. The declarant cannot have greater duties than are greater than before the day of the vote.

Question 4

What Definitions do we use- Chapter 81 or Chapter 82?

Answer 4

Chapter 82. The definitions prescribed by TUCA apply to Chapter 81 condominiums to the extent they do not conflict with the Declaration.

Question 5

May TUCA invalidate a provision in a Declaration for a condominium that existed prior to 1/1/94?

Answer 5

No.

Question 6

Define “Common Elements”

Answer 6

All portions of a condominium other than the units. This includes general and limited common elements.

Question 7

Define “Condominium”

Answer 7

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.

Question 8

Is a property a condominium if one or more of the common elements are directly owned in undivided interest by the unit owners?

Answer 8

Yes

Question 9

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?

Answer 9

No.

Question 10

Define “Declarant”

Answer 10

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.

Question 11

Define “Declaration”

Answer 11

an instrument that creates a condominium or any amendment thereto.

Question 12

Define “Dedicatory Instruments”

Answer 12

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.

Question 13

Define “Developmental Rights”

Answer 13

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.

Question 14

Define “General Common Elements”

Answer 14

common elements that are not limited common elements.

Question 15

Define “Limited Common Elements”

Answer 15

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.

Question 16

Define “Unit”

Answer 16

physical portion of the condominium designated for separate ownership. The unit boundaries are described within the Declaration.

Question 17

Define “Unit Owner”

Answer 17

person who owns a unit, but does nto include a lienholder.

Question 18

May the provisions of Chapter 82 be waived or varied by agreement of the unit owners?

Answer 18

No.

Further, a person may not act under a power of attorney to evade the limitations or prohibitions in the chapter.

Question 19

Is each unit of a condominium a separate parcel of real property?

Answer 19

Yes. Along with its interest in real property.

Question 20

Must units be taxes separately?

Answer 20

Yes

Question 21

How do we determine who is responsible for payment of property taxes on the common elements?

Answer 21

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.

Question 22

Are condominium units entitled to homestead exemptions?

Answer 22

Yes, so long as the owner of a single family dwelling would qualify.

Question 23

May a zoning ordinance, building code, or other real property use law prohibit the condominium form of ownership?

Answer 23

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.

Question 24

If a condominium unit is condemned (partially, or wholly), must the unit owner be compensated?

Answer 24

Yes. He must be compensated for both his interest in the unit and the common property, even if the common property was not condemned.

Question 25

Upon condemnation, what happens to a condemned units interest in the common elements?

Answer 25

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.

Question 26

If a condominium and reallocation occurs, what action must a condominium take?

Answer 26

It must prepare, execute, and record an amendment to the declaration reflecting the reallocation.

Question 27

What if a remnant to a unit exists after a reallocation?

Answer 27

The remant will become a common element.

Question 28

What if only part of a unit is condemned?

Answer 28

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.

Question 29

What if part of the common elements is condemned?

Answer 29

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.

Question 30

What if part of the limited common elements are condemned?

Answer 30

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.

Question 31

Where must a condomination decree be recorded?

Answer 31

In the county records of each county where the power of the condominium is located.

Question 32

Where is the proper venue to enforce a right or obligation arising under the Dedicatory Instruments of the Association?

Answer 32

In any county in which each part of the condominium is located.

Question 33

How is a condominium created?

Answer 33

By recording a declaration executed by all persons who have an interest in the real property that will be conveyed to unit owners.

Question 34

What if a Declarant wants to convey an interest in a condominium but there is a mortgage on the condomium property?

Answer 34

Each holder of a mortgage must consent in writing and the consent must be filed.

Question 35

What if a declarant fails to properly execute the Declaration?

Answer 35

The defect may be cured by a subsequent execution.

The declaration will then be retroactively effective on all units.

Question 36

Where must the county clerk record condominum declarations and amendments?

Answer 36

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.

Question 37

Does TUCA affect the rights of municipalities/counties to approve plats of subdivisions and enforce building codes?

Answer 37

No.

However, they may not treat any property under the condominium form of ownership any differently that other like properties.

Question 38

What must be attached to any recorded plat, replat, amended plat of any condominium unit?

Answer 38

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.

Question 39

What if a plat, replat, or amended plat is filed after September 1st?

Answer 39

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.

Question 40

May a municipality require that a replat when a golf course is involved?

Answer 40

yes.

Question 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)?

Answer 41

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.

Question 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?

Answer 42

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.

Question 43

Is the space, interior, partitions, and other fixtures and improvements within the boundaries of a unit part of a unit?

Answer 43

Yes.

Question 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?

Answer 44

Limited common elements allocated exclusively to that unit.

Question 45

May the rule against perpetuities be applied to defeat any provision in the Declaration, Bylaws, or Rules & Regulations?

Answer 45

No

Question 46

If there is a conflict between provisions of the Declaration and Bylaws, what prevails?

Answer 46

The Declaration.

Question 47

If there is a conflict between the Declaration & TUCA, what prevails?

Answer 47

TUCA

Question 48

May title to a Unit be impaired by failure to record Bylaws?

Answer 48

No.

Question 49

What is required to be in a legal description of a Unit?

Answer 49

1) Name of condominium;
2) Recording data for Declaration and any amendments or supplements
3) County;
4) Unit number.

Question 50

What must be contained in a Condominium Declaration (17 Items) TPC 82.055

Answer 50

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.

Question 51

What is a “leasehold condominium” (TPC 82.056)

Answer 51

any lease, the termination of which may terminate the condominium or reduce its size.

Question 52

Must a leasehold condominium be recorded?

Answer 52

Yes.

Question 53

What must be in a leasehold condominium declaration, apart from the requirements of a regular condominium declaration?

Answer 53

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.

Question 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?

Answer 54

No.

Question 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?

Answer 55

No.

If the Unit owner pays rent and abides by the covenants, then you may not terminate their interest.

Question 56

If a unit lease expires or is terminated, what happens to that owner’s interest in the common elements?

Answer 56

The interest is reallocated to the owner unit owners as if the unit was condemned.

An amended declaration must be prepared, executed, and filed.

Question 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?

Answer 57

Yes.

Question 58

May a formula allocating an interest in the common elements discriminate in favor of units owned by the declarant?

Answer 58

No.

Question 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?

Answer 59

Yes.

Question 60

May a condominium declaration provide for class voting?

Answer 60

Yes.

Question 61

May units constitute a class because they are owned by the declarant?

Answer 61

No.

Question 62

May a declarant use class voting to evade a limitation or requirement under TUCA?

Answer 62

No.

Question 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?

Answer 63

The allocated interest prevails.

Question 64

Are common elements subject to partition?

Answer 64

No.

Any conveyance or sale, voluntary or involuntary, of the common elements without a unit, is void.

Question 65

May the Association amend the Dedicatory Instruments to affect an owner’s right to use limited common elements?

Answer 65

No.

Not without the unit owner’s consent and the consent of each lienholder on the property.

Question 66

May unit owners agree amongst themselves to reallocate interest in the limited common elements?

Answer 66

Yes.

If they do so they must execute and deliver an amendment to the Declaration at their own expense.

Question 67

May a general common element be allocated by agreement amongst the unit owners?

Answer 67

No.

Question 68

Are plats and plans part of the Declaration?

Answer 68

Yes. They may be recorded as part of the declaration or separately.

Question 69

What must a declarant do in order to exercise developmental rights?

Answer 69

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

Question 70

If a declarant exercises developmental rights, who is the owner of the new units?

Answer 70

The declarant.

Question 71

May development rights be reserved if the declaration does not comply with TPC 82.055 and 82.056 (requirements for condominium declarations)?

Answer 71

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.

Question 72

May a declarant exercise developmental rights to subdivide a previously created unit or convert it to general common elements?

Answer 72

Yes

Question 73

What happens to allocated interests in the common elements when a declarant exercises those developmental rights to turn the unit into common property?

Answer 73

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.

Question 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?

Answer 74

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.

Question 75

May a declaration state that all or a portion of a unit is subject to a developmental right of withdrawal?

Answer 75

Yes.

Question 76

Under what circumstances may a declarant not withdraw property under a developmental right?

Answer 76

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.

Question 77

May a unit owner make improvements to their unit that do not alter the structural integrity of the unit?

Answer 77

Yes.

Question 78

May a unit owner change the appearance of the common elements or the exterior of a unit?

Answer 78

No. Not without prior written approval of the Association.

Question 79

After acquiring an adjoining unit, may a unit owner create an aperture between the two units?

Answer 79

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.

Question 80

Does an aperture between two units change the legal boundaries between the units?

Answer 80

No.

Question 81

May unit owners reallocate the boundaries between their units?

Answer 81

Yes.

Question 82

How may unit owners reallocate boundaries between units? (describe the process- TPC 82.062)

Answer 82

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.

Question 83

May a unit be subdivided into two or more units?

Answer 83

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).

Question 84

What must be done if a unit owner wants to subdivide his unit and the declaration expressly allows such a division?

Answer 84

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.

Question 85

If a common element or part of a unit encroaches upon another does, does an easement exist?

Answer 85

Yes, but simply for the encroachment.

Question 86

May a declaration permit a declarant to maintain a sales, leasing, or management office?

Answer 86

Yes. So long as the number, size, and location are specified in the declaration.

Question 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?

Answer 87

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.

Question 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?

Answer 88

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.

Question 89

What happens to a leasing/sales office or model after the declarant ceases to become an owner?

Answer 89

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.

Question 90

May a declarant maintain sales or lease signs on the common elements?

Answer 90

Yes, subject to any restrictions on such in the declaration.

Question 91

What easement rights does the declarant have in the common elements?

Answer 91

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.

Question 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?

Answer 92

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.

Question 93

What is the statute of limitations to challenge an amendment to a condominium Declaration?

Answer 93

1 year after the date it was recorded.

Question 94

What types of amendments to the Declaration require the approval of 100% of the owners within the Association.

Answer 94

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

Question 95

May an amendment increase or modify the obligations of the declarant?

Answer 95

No. Not unless agreed to by the declarant.

Question 96

Who must sign amendments to the Declarantion?

Answer 96

1) Officer of the Association designated for that purpose; or
2) President of Association.

Question 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:

Answer 97

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.

Question 98

May an association place a provision in a dedicatory instrument that requires membership in a private club?

Answer 98

Yes.

However, it is not valid after the 10th anniversary of the date the Declaration is recorded or renewed.

Question 99

What is the vote requirement to terminate a condominium?

Answer 99

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.

Question 100

What are the requirements of a termination agreement to terminate a condominium?

Answer 100

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.

Question 101

May the association, on behalf of the unit owners, contract for the sale of real property in the condominium?

Answer 101

Yes, but it is not effective until voted upon and ratified by the owners.

Question 102

If a condominium terminates and the property is to be sold, who has title to the property?

Answer 102

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.

Question 103

How are proceeds of a sale distributed?

Answer 103

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.

Question 104

At what point may a unit owner no longer occupy their unit after a termination of a condominium unit?

Answer 104

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.

Question 105

Is an owner responsible for assessment payments between the termination of a condominium and sale?

Answer 105

Yes. He is also responsible for all other obligations imposed by the declaration or Texas law.

Question 106

I a condominium terminates and the property is not to be sold, who holds title to the general common elements?

Answer 106

Title vests in the unit owners as tenants in common in proportion to their respective interest.

Question 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?

Answer 107

The unit owner who owns the unit has the exclusive right to occupy the unit.

Question 108

What is done with the assets of an association after termination of a condominium if the real property is not sold?

Answer 108

1) Assets are sold.
2) All creditors are paid.
3) Remaining assets are distributed to the unit owners in proportion to their respective interests.

Question 109

If an appraiser determines value of a unit and the owners disagree, how may an appraisers valuation of a unit be contested?

Answer 109

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.

Question 110

What if a unit is destroyed and the condominium is terminated? How does the appraiser determine the fair market value of the condominium?

Answer 110

The interest of the unit owner is the owner’s common element interest immediately before the termination.

Question 111

Does foreclosure or enforcement of a lien against the entire condominium termination the condominium?

Answer 111

No.

Question 112

Does foreclosure or enforcement of a lien against a portion of the condominium withdraw that portion from the condominium?

Answer 112

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.

Question 113

How may unit owners rescind a termination of a condominium?

Answer 113

By agreement of the same percentage of unit owners as is required to terminate the condominium.

Question 114

What are the requirements of a rescission of termination of a condominium?

Answer 114

1) In wriring;
2) Executed by unit owners;
3) Recorded in county deed records.

Question 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?

Answer 115

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.

Question 116

Before an Association or Board meets to adopt an amendment or other change to a dedicatory instruments, what must they first do?

Answer 116

They must give each unit owner a document showing the specific amendment or change that would be made to the dedicatory instrument.

Question 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?

Answer 117

Notice must be given to the unit owners between 10-20 days before the meeting.

Question 118

What methods are acceptable to give notice to unit owners of an amendment to a dedicatory instruments?

Answer 118

It must be in writing, via:

1) Hand delivery and the unit owner signs a receipt; or
2) USPS First Class mail.

Question 119

Must a condominium be incorporated?

Answer 119

Yes. They may be a nonprofit or for profit corporation.

Question 120

What must the declarant do (regarding incorporation) prior to conveying a unit?

Answer 120

He must obtain a Certificate of Incorporation from the Secretary of State stating they are either a non-profit or for profit Association.

Question 121

May someone other than a unit owner be a member of the Association?

Answer 121

No.

Question 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?

Answer 122

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

Question 123

Pursuant to TPC 82.102, may both pre and post Tuca condos borrow money?

Answer 123

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.

Question 124

What may an association use as collateral for a loan?

Answer 124

1) The associations right to future income from assessments (or other sources).
2) They may also assign any lien rights held by the association.

Question 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?

Answer 125

The board may allow any of the following:

1) In person,
2) Proxy
3) Absentee
4) Electronic
5) Written consent

Question 126

If the association wants to borrow money, and the dedicatory instruments require a vote of the members what percentage is required?

Answer 126

67% Max.

If a lower percentage is allowed in the Dedicatory Instruments then go with the lower threshold.

Question 127

What powers are granted to Condominiums under 82.102 but only to Post-Tuca condominiums?

Answer 127

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)

Question 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?

Answer 128

No.

Question 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?

Answer 129

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.

Question 130

May the Associaiton give a copy of the written notice of violation to the occupant of the unit?

Answer 130

Yes.

Question 131

If an Association gives pre-fine notice, and then institutes a fine, when must the Association notify the owner of the fine?

Answer 131

Within 30 days of the fine being levied.

Question 132

Are board members in TUCA associations liable as fiduciaries?

Answer 132

Yes.

They must act with good faith on behalf of the Association if the action is reasonable.

Question 133

Must all acts be done through the Board?

Answer 133

Yes, unless otherwise provided by the Dedicatory Instruments.

Question 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?

Answer 134

No. Except as provided by other provisions of TUCA.

Question 135

What if there is a vancancy on the Board?

Answer 135

The board may unilaterally elect a board member to fill the unexpired term.

Question 136

Regardless of the period provided for in the Declaration, when must the period of declarant control end?

Answer 136

Not later than the 120th day after conveyance of 75% of the units that may be created to unit owners other than the declarant.

Question 137

May the declarant voluntarily surrender his right to appoint and remove officers and members of the board before the termination period?

Answer 137

Yes.

However- the declarant may reserve that certain actions of the Association or board be approved by the declarant before they become effective.

Question 138

When must at least 1/3 of the board members be elected by unit owners other than the declarant?

Answer 138

Not later than the 120th day after conveyance of 50% of the units that may be created to unit owners other than the declarant.

Question 139

What is the minium number of board members?

Answer 139

3

Question 140

Must board members be unit owners?

Answer 140

No.

Question 141

After the declarant control period ends, must unit owners elect a board?

Answer 141

Yes.

Must be at least 3 board members who need not be unit owners.

Question 142

When must the board elect officers?

Answer 142

Within 31 days of the ending of declarant control.

Question 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?

Answer 143

No.

Question 144

When may a board member or officer be held liable to the association or a unit owner? (Exception to the General Rule)

Answer 144

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.

Question 145

May a declarant transfer his special declarant rights? If so, how?

Answer 145

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.

Question 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)?

Answer 146

No.

Question 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?

Answer 147

No.

Question 148

What happens to the declarants rights under a foreclosure sale, tax sale, or sale by trustee under the bankruptcy code or receivership?

Answer 148

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.

Question 149

When may a residential condominium association terminate contracts or leases with the declarant or affiliate of the declarant?

Answer 149

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.

Question 150

What are the requirements of Association bylaws?

Answer 150

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.

Question 151

Who is responsible for the maintenance, repair, and replacement of the common elements?

Answer 151

The Association

Question 152

Who is responsible for the maintenance, repair, and replacement of the Unit?

Answer 152

The owner

Question 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?

Answer 153

Yes.

Question 154

If damage is inflicted upon the common elements or on any unit, who is responsible for the repair of the damage?

Answer 154

Whoever is liable is responsible for the prompt repair of the damage.

Question 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?

Answer 155

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

Question 156

Who is solely responsible for the cost of the maintenance, repair, and replacement of doors and windows serving only the owner’s unit?

Answer 156

The unit owner. Unless expressly provided otherwise in the declaration.

Question 157

May an association enter a unit to prevent or termination waste of water purchased by the Association as a common expense?

Answer 157

Yes, but only after giving notice to the owner and occupant.

Exception- Declaration provides otherwise.

Question 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?

Answer 158

Yes, but only after giving notice to the owner and occupant.

Exception- Declaration provides otherwise.

Question 159

TPC- 82.108- Meetings-
Applicable to both Pre- and Post- TUCA condos

How often must Associations hold annual meetings?

Answer 159

At least once per year.

Question 160

Who may call special meetings of the Association?

Answer 160

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.

Question 161

Must annual meetings and board meetings be open to unit owner?

Answer 161

Yes, subject to the right of the board to adjourne and reconvene in executive session.

Question 162

What matters may be discussed in executive session?

Answer 162

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.

Question 163

If a board is going to consider a matter in executive session, how must it be handled?

Answer 163

They must announce the general nature of any business to be considered in executive session at the open meeting.

Question 164

What are the prerequisies to hold a board meeting via electronic or telephonic means?

Answer 164

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

Question 165

When may the board act by unanimous written consent?

Answer 165

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

Question 166

How must notice of board meetings be given to board members?

Answer 166

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.

Question 167

How may a unit owner obtain the time and place of the next regular or special board meeting?

Answer 167

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.

Question 168

TPC 82.109- Quorum
Post-TUCA Only

What are the requirements for quorum for a meeting of the members?

Answer 168

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%

Question 169

What are the quorum requirements for a meeting of the board?

Answer 169

Unless the Bylaws specify a larger percentage:

1) 50% of the votes on the board

Question 170

If only one unit owner is present at a meeting, who may cast that vote for the unit?

Answer 170

The unit owner present at the meeting?

Question 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?

Answer 171

No. The unit owners must have unanimous consent to vote on an issue unless the declaration provides otherwise.

Question 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?

Answer 172

Yes

Question 173

May owners cast votes by proxy?

Answer 173

Yes

Question 174

What are the requirements of a proxy?

Answer 174

1) In writing
2) Signed by the owner
3) Dated

Question 175

May a proxy be revocable without notice?

Answer 175

No

Question 176

How may an owner revoke a proxy?

Answer 176

Giving notice of the revocation to the presiding over a meeting of the association.

Question 177

When does a proxy terminate?

Answer 177

One year after its date unless it specifices a shorter or longer time.

Question 178

Is cumulative voting allowed?

Answer 178

no. (Cumulative voting is where each owner has as many votes are there are candidates)

Question 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?

Answer 179

It must be obtained before the first conveyance of a unit to an owner other than the declarant.

Question 180

What types of insurance must a Condominium maintain?

Answer 180

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

Question 181

What is the amount of insurance that the Association must maintain?

Answer 181

At least 80 percent of the replacement cost or actual cash value of the insured property as of the effective date of the policy.

Question 182

If a condominium contains horizontal boundaries, (one unit on top of another) must the units themselves be insured by the Association?

Answer 182

Yes, but not the improvements installed by the owners within the units.

Question 183

What must the Association do if insurance is not reasonably available?

Answer 183

Association must notify in writing all owners and lienholders that insurance is not reasonably available.

Question 184

May the Association carry any other insurance the board considers appropriate?

Answer 184

Yes.

They may carry and insurance the board considers appropriate to protect the condominium, common elements, or unit owners.

Question 185

May insurance policies purchased by the board require reasonable deductibles?

Answer 185

Yes.

Question 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?

Answer 186

Yes.

Question 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?

Answer 187

Yes.

Question 188

Must insurers waive their right of subrogation under the policy against a unit owner?

Answer 188

Yes.

Question 189

May the insurance policy state that an action of an owner voids the policy or be a condition of recovery?

Answer 189

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).

Question 190

If both the association and unit owner have separate insurance policies that cover thse same property, which policy provides primary insurance?

Answer 190

The Association’s policy.

Question 191

Who must submit the claim?

Answer 191

The claim must be submitted by the Association and adjusted with the Association.

Question 192

To whom must the insurance proceeds be paid?

Answer 192

1) An insurance trustee if designated by the Board of Directors; or
2) The Association if no insurance trustee is designated.

Question 193

May insurance proceeds be paid directly to a unit owner or lienholder?

Answer 193

No.

Question 194

What must the Association or Insurance Trustee do with the insurance proceeds?

Answer 194

Hold them in trust for the unit owner and lienholders as their interests may appear.

Question 195

To whom must the insurance proceeds be first distributed?

Answer 195

To the Assocation for the repair and restoration of the common elements and units.

Question 196

Under what circumstances are unit owners and lienholders entitled to receive payment of a portion of the insurance proceeds?

Answer 196

1) Only after the general and limited common elements have been been completely restored; or
2) The condominium has been terminated

Question 197

Does TUCA prevent an owner from obtaining insurance for the owner’s own benefit?

Answer 197

No.

Question 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?

Answer 198

30 days.

The written notice must be mailed to the Association.

Question 199

If a portion of the condominium that is required to be insured is damaged or destroyed, must it be repaired or replaced?

Answer 199

Yes.

There are some exceptions though.

Question 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?

Answer 200

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)

Question 201

How may owners vote on whether to rebuild or replace?

Answer 201

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

Question 202

If owners vote to not rebuild, may that increase the insurers liability?

Answer 202

No

Question 203

If owners vote not to rebuild, does that cause a presumption of total loss?

Answer 203

No.

Question 204

What if the insurance proceeds do not fully repair and replace the damage?

Answer 204

The shortage is a common expense.

The board may levy an assessment to pay the expenses in accordance with each owners common expense liability.

Question 205

If the entire condominium is not repaired or replaced what must be done with any insuranced proceeds atributable to the damaged common elements?

Answer 205

They must be used to resort the damaged area to a condition compatible with the remainder of the condominium.

Question 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?

Answer 206

Those proceeds shall be distributed to those unit owners and their mortgagees as their interests may appear.

Question 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?

Answer 207

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.

Question 208

If unit owners vote not to rebuild a unit, what happens to that unit owners allocated interest in the common elements?

Answer 208

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.

Question 209

If a condominium is terminated after a casualty, how are the insurance proceeds to be distributed?

Answer 209

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.

Question 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?

Answer 210

The party who would be responsible in the absence of insurance.

Question 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?

Answer 211

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.

Question 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?

Answer 212

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.

Question 213

If a condominium is wholly commercial, may the provisions of 82.111 (Insurance) be varied or waived?

Answer 213

Yes

Question 214

If a condominium is residential or mixed use, may the provisions of 82.111 (Insurance) be varied or waived?

Answer 214

No

Question 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?

Answer 215

The Declarant.

Question 216

What is the longest time that a condominium may have between each assessment?

Answer 216

Assessments must be at least annually.

Question 217

What must assessments be based upon?

Answer 217

A budget adopted at least annually by the Association

Question 218

May the Association use reserves and working capital expenses to pay for operational expenses?

Answer 218

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.

Question 219

At what point must the declarant begin paying for operational expenses or assessments?

Answer 219

The earlier of:

1) Termination of declarant control; or
2) 3 years from the declarants first conveyance of a unit.

Question 220

Once the declarant must begin paying for operational expenses, what must he pay?

Answer 220

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.

Question 221

Must common expenses be assessed against units used by the declarant as models or offices?

Answer 221

Yes. But only after termination of declarant control or 3 years after conveyance of the first unit.

Question 222

Who is responsible for the maintenance, repair, or replacement of a limited common element?

Answer 222

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.

Question 223

If common expense liabilities are reallocated, what happens to assessments not yet due?

Answer 223

They must be reallocated in accordance with each unit owners new interest.

Question 224

May a declaration allow for the accumulation of reserve funds?

Answer 224

Yes.

Question 225

May a declarant pay expenses for an Association (e.g. insurance and taxes) and then collect it from a purchaser at closing?

Answer 225

Yes.

Question 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?

Answer 226

Yes

Question 227

How is a levied assessment secured?

Answer 227

By a continuing assessment lien on the unit.

Question 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?

Answer 228

Yes.

Question 229

Define “Assessment” pursuant to TPC 82.113.

Answer 229

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.

Question 230

What liens have priority over an assessment lien?

Answer 230

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.

Question 231

What creates the assessment lien?

What perfects the assessment lien?

Answer 231

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.

Question 232

Does an association have a statutory power of sale?

Answer 232

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.

Question 233

Does an association have a statutory power to appoint a trustee or substitute trustee?

Answer 233

Yes. By written resolution, the board may appoint an officer, agent, trustee, or attorney to exercise the condominium’s power of sale.

Question 234

How must an association exercise its power of sale?

Answer 234

Unless otherwise provided in the Declaration, the power of sale must be exercised in accordance with Section 51.002 of the Texas Property Code.

Question 235

Does an Association have a right to foreclose its statutory assessment lien via judical or non-judical foreclosure?

Answer 235

Yes.

Question 236

May a condominium association foreclose a lien which consists solely of fines?

Answer 236

No.

Question 237

May costs of the assessment lien sale be added to the amount owed by the unit owner to the Association?

Answer 237

Yes.

Question 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?

Answer 238

No.

Question 239

May the association bid for an purchase the unit at foreclosure sale?

Answer 239

Yes. It may be bid upon as a common expense.

Question 240

If the association purchases the unit at foreclosure sale, what may they do with the unit?

Answer 240

They may lease, encumber, exchange, sell, or convey the unit.

Question 241

How long does a unit owner who’s unit was foreclosed have to redeem the unit?

Answer 241

90 days after the date of the foreclosure sale.

Question 242

If the association is the purchaser at foreclosure sale, what must be paid by the owner to redeem the unit from the association?

Answer 242

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.

Question 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?

Answer 243

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.

Question 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?

Answer 244

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.

Question 245

Upon redemption, what must the purchaser at foreclosure sale provide to the redeeming unit owner?

Answer 245

A deed with no warranty.

Question 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?

Answer 246

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.

Question 247

Is a unit that has been redeemed subject to all liens and encumbrances that existed prior to the date of foreclosure?

Answer 247

Yes.

Question 248

What happens to rents and income collected from the unit by the purchaser at foreclosure sale during the redemption period?

Answer 248

They belong to the purchaser at foreclosure sale, however, they must be credited against the redemption amount.

Question 249

May a purchaser at foreclosuer sale transfer ownership of the unit during the redemption period?

Answer 249

No.

Question 250

If a unit owner defaults in the payment of his assessments, may the association communicate such to other lienholders on the unit?

Answer 250

Yes.

The association may also notify the other lienholders of their intent to foreclose.

Question 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?

Answer 251

Yes.

The request from the lienholder for such information must be in writing.

Question 252

May an association take a deed in lieu of foreclosure?

Answer 252

Yes.

Question 253

May an association simply file suit against an owner seeking a personal judgment?

Answer 253

Yes.

Question 254

Is there any point prior to a foreclosure that an owner may not avoid foreclosure by simply paying all amount due the association?

Answer 254

No. All it takes is payment in full to stop the foreclosure.

Question 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?

Answer 255

When the unit ceases to be homestead of the person owning it on 1/1/94.

Question 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?

Answer 256

No.

Question 257

If a unit owner is delinquent is payment of assessments may a lienholder provide the association with information about lien and debt?

Answer 257

Yes.

The Association may also furnish the lienholder with information about the assessment lien and condominium.

Question 258

TPC- 82.114- Association Records
Pre- and Post- TUCA

Must an Association keep detailed financial records?

Answer 258

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.

Question 259

In addition to detailed financial records, what other records must be retained by a condominium? (Pre- and Post TUCA)

Answer 259

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.

Question 260

Are records of a condominium available for inspection by a unit owner or their agent?

Answer 260

Yes. All financial records and other records must be available.

Question 261

Where must a condominium records inspection take place?

Answer 261

At the registered office or principal office of the condominium.

Question 262

Are attorney’s files records of the association and subject to inspection or discovery?

Answer 262

No.

Question 263

Must an association obtain an annual independent audit?

Answer 263

Yes.

Question 264

Who has access to the audit results?

Answer 264

Copies of the audit must be made available to unit owners.

Question 265

Who must perform the audit?

Answer 265

An independent CPA if:

1) Required by the Bylaws, 
2) Vote of the Board; or 
3) Majority vote of the members.

Question 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?

Answer 266

When declarant sells the first unit.

Question 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)

Answer 267

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

Question 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?

Answer 268

30 days from the date the owner has notice of a change.

Question 269

May the association require that a unit owner periodically update their information on file with the association?

Answer 269

Yes.

Question 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?

Answer 270

No.

Question 271

TPC 82.116- Management Certificate
Pre- and Post- TUCA

Must an association record a management certificate?

Answer 271

Yes.

One must be recorded in each county where a portion of the condominium is located.

Question 272

Who must sign the managment certificate?

Answer 272

Officer of the Association.

Question 273

What must be in a condominium management certificate?

Answer 273

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.

Question 274

How must the county clerk in each county index each condominium management certificate?

Answer 274

as “Condominium Association Management Certificate”

Question 275

If information within a managment certifcate changes, how long does a condominium association have to record an updated management certificate?

Answer 275

30 days after the date the association has notice of the change.

Question 276

Is an association, its officers, directors, employees, or agents liable for any delay or failure to record a management certificate?

Answer 276

No.

Not unless the failure was wilfully or caused by gross negligence.

Question 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:

Answer 277

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

Question 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?

Answer 278

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.

Question 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?

Answer 279

Not more than 3 days after the date the notice was deposited in the USPS.

Question 280

How long does a Houston condominium owner have to update their mailing address with CAD after the mailing address has been changed?

Answer 280

90 days

Question 281

TPC 82.119- Design Claims
Post TUCA Only

To use the design claim procedures in TUCA, how many units must a condominium have?

Answer 281

at least 8

Question 282

Is the Design Claim procedure outlined in TUCA mandatory?

Answer 282

Yes. It must be done prior to filing suit or initiating an arbitration proceeding under the Declaration.

Question 283

Must a condominium obtain an inspection and written report from a licensed professional engineer as part of the Design Claim procedure?

Answer 283

Yes.

Question 284

What are the contents of the Inspection Report prepared by the licensed professional engineer?

Answer 284

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

Question 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?

Answer 285

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.

Question 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?

Answer 286

a. Identify licensed professional engineer preparing report
b. Identify units or common elements being inspected
c. Date and time inspection will occur

Question 287

Who may attend the inspection by the licensed professional engineer inspecting for the engineer?

Answer 287

Each party subject to a claim may attend the inspection, either in person or through an agent.

Question 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?

Answer 288

It must be sent to each member subject to the claim and give them time to correct the report.

Question 289

How long do members subject to a design claim have to correct an inspection report?

Answer 289

90 days after it has been prepared.

Question 290

What percentage of members must approve proceeding forward with a design claim at a special or regular meeting of the members?

Answer 290

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.

Question 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?

Answer 291

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.

Question 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)

Answer 292

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.

Question 293

What happens to the statute of limitations if the design claim procedure is initiated in the last year of the statutor of limitations?

Answer 293

It is tolled for one year from the date the design claim procedure is initiated.

Question 294

Is binding arbitration for design claims allowed in declarations?

Answer 294

Yes.

The Declaration may provide the process for binding arbitration as well.

Question 295

May a condominium retroactively remove or modify arbitration requirements for construction defects?

Answer 295

Yes.

However, they may not be retroactively applied regarding an act or omission that occurred prior to the date of the amendment.

Question 296

TPC- 82.151- Condominium Information Statement

Under what circumstances does a Condominium Information Statement not need to be prepared?

Answer 296

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.

Question 297

Who is responsible for the preparation of a Condominium Information Statement?

Answer 297

The Declarant.

Question 298

By what time must a condominium information statement be prepared?

Answer 298

Before offering any interest in a unit.

Question 299

May a declarant transfer responsiblity for the preparation of the condominium information statement?

If yes, to whom may it be transferred?

Answer 299

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.

Question 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?

Answer 300

Any information necessary to enable the 3rd party to prepare the condominium information statement.

Question 301

Does the person preparing the condominium information statement have any liability for errors?

Answer 301

Yes. They are liable for:

1) Any false or misleading statement; or
2) Omission of material fact

Question 302

If the declarant did not prepare the condominium information statement and it contains an error, is the declarant liable?

Answer 302

No. Only the person preparing the condominium information statement.

Question 303

What are the required contents of a condominium information statement:

Answer 303

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.

Question 304

For condominiums located in Houston, what must a condominium information statement also include?

Answer 304

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.

Question 305

Who must prepare a budget that is included in a condominium information statement?

Answer 305

There is not requirement that it be prepared by a CPA.

Question 306

How must a budge be prepared that is included in a condominium information statement?

Answer 306

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.

Question 307

What must a budget included in a condominium information statement include?

Answer 307

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

Question 308

Must a declarant amend a condominium information statement?

Answer 308

Yes. It must be done promptly to reflect any “material and substantive” change in its contents.

Question 309

If a declarant amends a condominium information statement and he has already provided a copy to potential purchasers, what mut the declarant do?

Answer 309

He must promply provide a copy to the potential puchasers prior to closing.

Question 310

What is a “conversion building”?

Answer 310

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.

Question 311

Must a condominium contain any information about it being a conversion building?

Answer 311

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.)

Question 312

If a condominium information statement must contain iformation on conversion buildings, what must it contain?

Answer 312

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.

Question 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?

Answer 313

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.

Question 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?

Answer 314

6 days from the date the purchaser receives the documents or the resale certificate.

Question 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?

Answer 315

5 days from the date the purchaser receives the condominium information statement.

Question 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?

Answer 316

5 days from the date the purchaser receives the condominium information statement.

Question 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.

Answer 317

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.

Question 318

May a declarant require a purchaser to close prior to the purchaser being given a condominium information statement?

Answer 318

No.

Question 319

May a seller require a purchaser to close prior to the purchaser being given a copy of the Dedicatory Instruments?

Answer 319

No.

Question 320

TPC- 82.157- Resale Certificates
Pre- and Post- TUCA

Who must provide a resale certificate?

Answer 320

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.

Question 321

If a resale certfiicate was prepare before it was delivered to the purchaser, what is the earliest it may have been prepared?

Answer 321

3 months before the date it is delivered to the purchaser.

Question 322

What must accompany the resale certificate?

Answer 322

A copy of the dedicatory instruments of the association.

Question 323

When must the resale certificate be issued by?

Answer 323

Before the conveyance of a unit.

Question 324

What must be contained in a condominium resale certificate?

Answer 324

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.

Question 325

Who must sign a resale certificate?

Answer 325

Officer or authorized agent of the Association.

Question 326

How long does an association have to prepare a resale certificate after a request?

Answer 326

10 days from the date of the request.

Question 327

To whom must the association provide a copy of the resale certificate?

Answer 327

Seller or seller’s agent.

Question 328

Is a selling unit owner or sellers agent liably to the purchaser for errors contained in the resale certificate?

Answer 328

No.

Question 329

What if the association does not furnish the resale certificate to the seller within the 10 day period?

Answer 329

The unit owner may provide the purchaser with an affidavit signed by the unit owner in lieu of the resale certificate.

Question 330

What must be contained in the seller affidavit in lieu of the resale certificate?

Answer 330

The unit owner requested the resale certificate and it was not timely provided by the association.

Question 331

May the buyer and seller agree to waive the requirement to provide a resale if the seller furnishes an affidavit to the buyer?

Answer 331

Yes.

The waiver must be in writing.

Question 332

Is the association or association’s agent liable to a selling unit owner for delay or failure to furnish a resale certificate?

Answer 332

No.

Exception- Failure to provide was due to-

1) Gross negligence; or
2) Willful

Question 333

Does failure to provide a resale certificate void a deed to a purchaser?

Answer 333

No.

Question 334

What if a resale certificate incorrectly states the total amount of delinquent assessments?

Answer 334

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

Question 335

Is a unit owner or owner’s agent liable to a seller for failure of an association to provide a resale certificate?

Answer 335

No.

Question 336

Does the failure of a resale certificate affect an association’s lien securing payment of future assessments?

Answer 336

No.

Question 337

May a purchaser, lender, or title company rely upon a statement in a resale certificate?

Answer 337

Yes. They may not be held liable for any debt or claim that is not disclosed in a resale.

Question 338

May an association deny the validy of a statement in a resale?

Answer 338

No.

Question 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?

Answer 339

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.

Question 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?

Answer 340

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.

Question 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?

Answer 341

No.

Question 342

If a declarant is converting an apartment to condominiums, how much time must the declarant give to tenants to vacate?

Answer 342

at least 60 days

Question 343

What must the vacate notice that the declarant sends to tenants state?

How may it be delivered?

Answer 343

1) Rights of tenants under TUCA

2) Hand delivered or delivered via CM/RRR

Question 344

Is the faiure to give this required notice a defense in a complaint for forcible entry and detainer?

Answer 344

Yes

Question 345

Under what circumstances may the tenat not have to give the 60 day notice?

Answer 345

1) Nonpayment of rent
2) waste
3) Conduct that violates rental agreement or is illegal

Question 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?

Answer 346

Yes

Question 347

May a declarant make substantial alterations to a leased unit for purposes of a condominium conversion?

Answer 347

No. Not unless expressly provided by the lease.

Question 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?

Answer 348

Any person or class of persons adversely affected by the violation has a claim for relief.

Question 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?

Answer 349

Yes.

Question 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?

Answer 350

No.

Not unless it is conspicuously advertised on the promotional material as “NEED NOT BE BUILT”

Question 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?

Answer 351

Yes.

Question 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?

Answer 352

Yes.

Question 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?

Answer 353

Yes

Question 354

Does a condominiums lien for assessments make a condominium unit ineligible for a mortgage loan for which it would otherwise qualify?

Answer 354

No.