Terminating Condominiums & Amending their Dedicatory Instruments

Question 1

Where are the termination provisions located in the Texas Property Code for condominiums?

Answer 1

Pre-TUCA- 81.110

Post-TUCA- 82.068

Question 2

What are the Termination requirements for a Pre-TUCA condominium under 81.110?

Answer 2

i. 100% approval of owners & lienholders; or
ii. If Declaration provides for termination, vote percentage is 67% or the percentage required in the declaration, whichever is higher.

Question 3

May a pre-TUCA association amend its declaration to change the percentage required to terminate?

Answer 3

No

Question 4

After termination, what type of interest does a pre-TUCA owner own in the common elements?

Answer 4

The owner owns the same undivided interest previously owned in the common elements.

Question 5

What are the requirements for Termination for a Post-TUCA condominium under 82.068?

Answer 5

i. 100% approval of owners; or
ii. If Declaration provides for termination, use percentage required by Declaration, but it cannot be less than 80% if restricted to residential use.

Question 6

What type of agreement must TUCA condos prepare after termination?

Answer 6

Termination Agreement. Pre-TUCA condos do not need one.

It must be prepared and signed by the requisite number of unit owners.

Question 7

Must the Termination Agreement be filed in the county clerk’s office?

Answer 7

Yes

Question 8

If a property is to be sold after termination, must the termination agreement set forth the terms of the sale?

Answer 8

Yes.

Question 9

In a TUCA Condominium is to be sold, who is the Trustee for the owners?

Answer 9

The Association.

Question 10

What trustee rights and responsibilities does the Association have in a sale?

Answer 10

If condominium is terminated and the be sold, the Association acts as trustee for holders of those with interests in the units.

It has the following powers:

a. All powers necessary to effect the sale.
b. May convey interests of nonconsenting owners.
c. Trustee powers terminate after sale is concluded.

Question 11

May the association contract to sell the property?

Answer 11

Yes, but it is not binding on unit owners unle approved under a termination agreement.

Question 12

How are sale proceeds to be distributed after a sale of a condominium?

Answer 12

Sale proceeds shall be distrusted to owners and lienholders in accordance with their interests in proportion to the fair market value of their units against the fair market value of all units. Assets of the sale of the property are not association assets but assets of the owners.

Question 13

What is the appraiser and appriaser report?

How long do owners have to contest the report?

Answer 13

When a TUCA condo is terminated-

Association must hire appraiser to appraise property and units. Appraiser shall distribute its report to unit owners and becomes final more than 25% of unit owners disapprove within 30 days. If unit is destroyed prior to appraisal, then the appraisal should be the units common element interest.

Question 14

Do owners have a right to occupy their units after termination?

Answer 14

TUCA unit owners do-

Unless termination agreement provides otherwise, owners may occupy their units as long as the association holds title to real property. Occupying owners may also be required to pay assessments prior to termination.

Question 15

If a condominium is terminated with no sale, what interest do TUCA owners have in the common elements?

Answer 15

They are tenants in common.

Question 16

If a condominium is terminated with no sale, do owners have the right to occupy their units?

Answer 16

Yes

Question 17

May TUCA owners rescind a termination of a condominium?

Answer 17

Yes. They may rescind in the same manner- by written agreement that is signed by the same percentage of owners required to terminate.

Question 18

Must the rescinding of termination be filed in the county clerk’s office?

Answer 18

yes.

Question 19

What is the effect of foreclosure of a mortgage lien on the common elements of a TUCA condo?

Does it withdraw property from the condominium?

Answer 19

Foreclosure of a lien against the entire condominium does not withdraw that portion against the entire condominium unless it is withdrawable real property or the mortgage was recorded prior to the declaration and the mortgagee did not consent in writing to the declaration.

Question 20

Where are the amendment provisions located in the Texas Property Code for condominiums?

Answer 20

Pre-TUCA- 81.111

Post-TUCA- 82.067

Question 21

What is the Pre-TUCA general rule for amendment of Declarations?

Answer 21

Declarations may not be amended except at a meeting of the apartment owners at which the amendment is approved by the holders of at least 67% of the ownership interests in the condominium.

Question 22

Does 82.111 include provisions for the unilateral amendment of a declaration by other parties or the declarant?

Answer 22

No. The are no declarant amendment exceptions like there are under TPC 82.067.

Question 23

What is the Post-TUCA general rule for amendment of Declarations?

Answer 23

Declarations may not be amended except at a meeting of the apartment owners at which the amendment is approved by the holders of at least 67% of the ownership interests in the condominium or any larger percentage the declaration specifies.

Question 24

What are the exceptions to general rule allowing for amendment of codominium declarations under TPC 82.067?

Answer 24

a. If declaration requires more than 67%, then you must use number in declaration.
b. Declaration may specify smaller number if all units are restricted to non-residential use.

c. TUCA condos may amend their declarations in limited circumstances without approval of owners. Pre-TUCA condos require owner approval to do this. Examples include:
i. Reallocation of limited common elements.
ii. Reallocation of unit boundaries;
iii. Subdividing units.

Question 25

What are the methods by which TUCA condos may vote on an amendment to the declaration?

Answer 25

1. Written Absentee Ballot- Must state exact wording or substance of amendment and date which ballot must be received to be counted.
2. Meeting Vote- Meeting of members. Must notify each unit owner in writing that purpose of meeting is to vote on declaration amendment; or
3. Any Method Permitted by Declaration

Question 26

What notice is required for TUCA condos of an amendment to a declaration?

Answer 26

1. Copy of Proposed Amendment- Must give each unit owner a copy of the proposed amendment. Via mail or hand delivery with receipt.
2. 10-20 Days- Must send copy at least 10-20 days prior to the meeting.

Question 27

Unless otherwise allowed by TUCA, a declaration may not be amended for the following reasons without 100% of a unit owner’s vote:

Answer 27

1. Increase special declarant rights;
2. Increase number of units;
3. Change boundaries of a unit;
4. Alter or destroy a unit;
5. Alter or destroy limited common elements; and
6. Change the allocated interest.

Question 28

Under what circumstances may a TUCA declarant amend the declaration unilaterally?

Answer 28

1. Curing a defect w/ proper execution of Declaration; or

2. Records new plats for exercising developmental rights.

Question 29

May a TUCA board or declarant unilaterally amend to comply with FHA, FNMA, or VA qualifications?

Answer 29

Yes, if:

1. Declaration permits such an amendment; and
2. Declarant may amend if declarant owns unit that has never been occupied.

Question 30

Who signs a TUCA amendment to the declaration?

Answer 30

Designated officer for that purpose. If no officer is designated, then the President.

Question 31

What there amendments to the declaration are specifically allowed by TUCA?

Answer 31

1. Evict Tenant for Violations- may amend to evict tenant of unit owner for violations of dedicatory instruments.
2. Evict Tenant for not Paying Costs of Repairs- If tenant damages common elements and owner does not pay to repair, the association may amend to evict the tenant.
3. Collect Rent from Tenant of Delinquent Unit- if owner is 60 days delinquent in payment of any amount due, then association may amend to collect rent from the tenant.