Texas Property Code 82.119 – Procedures for Filing Suit or Initiating Arbitration Proceedings for Defect or Design Claims for Certain Associations
(a) This section does not apply to an association with less than eight units.
(b) In addition to any preconditions to filing suit or initiating an arbitration proceeding included in the declaration, an association, before filing suit or initiating an arbitration proceeding to resolve a claim pertaining to the construction or design of a unit or the common elements, must:
(1) obtain an inspection and a written independent third-party report from a licensed professional engineer that:
(A) identifies the specific units or common elements subject to the claim;
(B) describes the present physical condition of the units or common elements subject to the claim; and
(C) describes any modifications, maintenance, or repairs to the units or common elements performed by the unit owners or the association; and
(2) obtain approval from unit owners holding more than 50 percent of the total votes allocated under the declaration, voting in person or by proxy as provided by § 82.110, at a regular, annual, or special meeting called in accordance with the declaration or bylaws, as applicable.
Terms Used In Texas Property Code 82.119
- Association: means the unit owners' association organized under § 82. See Texas Property Code 82.003
- Board: means the board of directors or the body, regardless of name, designated to act on behalf of the association. See Texas Property Code 82.003
- Common elements: means all portions of a condominium other than the units and includes both general and limited common elements. See Texas Property Code 82.003
- Contract: A legal written agreement that becomes binding when signed.
- Declaration: means an instrument, however denominated, that creates a condominium, and any amendment to that instrument. See Texas Property Code 82.003
- Lawsuit: A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Signed: includes any symbol executed or adopted by a person with present intention to authenticate a writing. See Texas Government Code 311.005
- Unit: means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described by the declaration. See Texas Property Code 82.003
- Unit owner: means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold condominium whose lease expires simultaneously with any lease the expiration or termination of which will remove the unit from the condominium, but does not include a person having an interest in a unit solely as security for an obligation. See Texas Property Code 82.003
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) The association must provide written notice of the inspection to be conducted by the engineer to each party subject to a claim not later than the 10th day before the date the inspection occurs. The notice must:
(1) identify the party engaged to prepare the report required by Subsection (b)(1);
(2) identify the specific units or common elements to be inspected; and
(3) include the date and time the inspection will occur.
(d) Each party subject to a claim may attend the inspection conducted by the engineer, either personally or through an agent.
(e) Before providing the notice of the meeting under Subsection (f), an association must:
(1) on completion of the independent third-party report, provide the report to each unit owner and each party subject to a claim; and
(2) allow each party subject to a claim at least 90 days after the date of completion of the report to inspect and correct any condition identified in the report.
(f) Not later than the 30th day before the date the meeting described by Subsection (b)(2) is held, the association must provide each unit owner with written notice of the date, time, and location of the meeting. The notice must also include:
(1) a description of the nature of the claim, the relief sought, the anticipated duration of prosecuting the claim, and the likelihood of success;
(2) a copy of the report required by Subsection (b)(1);
(3) a copy of the contract or proposed contract between the association and the attorney selected by the board to assert or provide assistance with the claim;
(4) a description of the attorney’s fees, consultant fees, expert witness fees, and court costs, whether incurred by the association directly or for which the association may be liable as a result of prosecuting the claim;
(5) a summary of the steps previously taken by the association to resolve the claim;
(6) a statement that initiating a lawsuit or arbitration proceeding to resolve a claim may affect the market value, marketability, or refinancing of a unit while the claim is prosecuted; and
(7) a description of the manner in which the association proposes to fund the cost of prosecuting the claim.
(g) The notice required by Subsection (f) must be prepared and signed by a person who is not:
(1) the attorney who represents or will represent the association in the claim;
(2) a member of the law firm of the attorney who represents or will represent the association in the claim; or
(3) employed by or otherwise affiliated with the law firm of the attorney who represents or will represent the association in the claim.
(h) The period of limitations for filing a suit or initiating an arbitration proceeding for a claim described by Subsection (b) is tolled until the first anniversary of the date the procedures are initiated by the association under that subsection if the procedures are initiated during the final year of the applicable period of limitation.