TEXAS UNIFORM CONDOMINIUM ACT Overview …

1 TEXAS UNIFORM CONDOMINIUM ACT. Overview of Chapter 82, TEXAS Property Code, with emphasis on drafting documents required by new law SHARON REULER. (since November 2002). Settle & Pou, 4131 N. Central Expressway, Suite 1000. Dallas, TEXAS 75204. Tel: (214) 560-4243. Fax: (214) 560-4025. STATE BAR OF TEXAS . ADVANCED REAL ESTATE DRAFTING COURSE. San Antonio, TEXAS February 3-4, 1994. T. TEXAS UNIFORM CONDOMINIUM Act T-1. Table of Contents I. INTRODUCTION .. 5. II. FROM WHENCE COMETH TUCA? .. 5. A. TEXAS ' Old Condo Law .. 5. B. Three Generations of Model Acts .. 6. C. Thirteen Year History of TUCA .. 6. III. Overview OF TUCA .. 7. A. Purpose .. 7. B. Format .. 7. C. Affect on Existing Condominiums .. 7. D. Some Interesting Features .. 7. E. Development Rights v. Special Declarant Rights.

2 8. F. Failure to Comply .. 8. IV. COMPARING TUCA AND UCA .. 9. A. Why Compare? .. 9. B. Overview Comparison .. 9. C. Section by Section Comparison .. 9. V. DRAFTING DOCUMENTS .. 14. A. Drafting Philosophy .. 14. B. TUCA's Provisos .. 15. C. Drafting Considerations .. 15. D. Resources for Drafting Attorney .. 15. VI. DOCUMENTS REQUIRED OR INDICATED BY TUCA .. 16. A. Plats and Plans .. 16. 1. PLATS AND PLANS .. 16. 2. CERTIFICATION OF PLATS AND PLANS .. 16. 3. CONSTRUCTION PLANS AND SPECIFICATIONS .. 16. B. Governing Documents .. 16. 1. DECLARATION .. 16. a. TUCA Provisions Pertinent to Declaration .. 16. b. Required Contents of Declaration .. 16. c. Nonresidential Provisos .. 16. d. Development and Declarant Provisos .. 16. e. Leasehold Provisos .. 17. f. Physical Property Provisos.

3 17. g. Money Provisos .. 18. h. Provisos - Governance/Administration .. 18. i. Insurance Provisos .. 19. j. Miscellaneous Provisos .. 19. k. Declaration Forms .. 20. 2. AMENDMENTS TO DECLARATION .. 20. a. Applicability of TUCA .. 20. b. Correcting Defective Execution .. 20. c. Declarant Exercising Development Right .. 20. d. Declarant Exercising Development Right .. 20. e. Declarant Complying with Lender Requirements .. 20. f. Declarant Adding Real Property to CONDOMINIUM .. 20. g. Declarant Converting Unit to Common Element .. 20. h. Declarant Subdividing Unit .. 20. i. Allocation of Limited Common Element .. 20. j. Reallocation of Limited Common Element .. 20. k. Reallocation of Interests After Partial Loss .. 20. l. Reallocation of Interests After Condemnation .. 20. m. Reallocation of Interests After Expiration of Leasehold.

4 20. n. Relocating Boundary Between Units .. 20. o. Owner Subdividing Unit .. 20. p. Enforcement Against Tenants .. 20. q. Termination of CONDOMINIUM .. 20. 3. BYLAWS .. 20. 4. RULES .. 20. 5. ARTICLES OF INCORPORATION .. 20. 6. CERTIFICATE OF INCORPORATION .. 21. C. Declarant Documents .. 21. 1. CONSENT TO DECLARATION BY PRIOR MORTGAGEE .. 21. 2. DECLARATION AMENDMENT TO EXERCISE DEVELOPMENT RIGHT .. 21. 3. DECLARANT'S CONSENT TO MODIFICATION OF RIGHTS OR OBLIGATIONS.. 21. 4. TRANSFER OF SPECIAL DECLARATION RIGHTS .. 21. 5. MORTGAGE INSTRUMENT OR DEED OF TRUST .. 21. 6. JUDGMENT OR INSTRUMENT CONVEYING TITLE .. 21. 7. SUCCESSOR DECLARANT'S NOTICE OF INTENT TO HOLD SPECIAL. DECLARANT RIGHTS .. 21. 8. SUCCESSOR DECLARANT'S NOTICE OF INTENT TO EXERCISE SPECIAL. DECLARANT RIGHTS.

5 21. 9. DECLARANT'S CONTRACTS AND LEASES .. 21. 10. PUBLIC OFFERING STATEMENT .. 21. 11. WARRANTIES .. 21. 12. INTEREST ON ESCROW AGREEMENT .. 21. 13. RELEASE OF LIENS .. 21. 14. PROMOTIONAL MATERIAL .. 21. D. Conversion-Related Documents .. 21. 1. CONVERSION CONDITION STATEMENT .. 21. 2. NOTICE OF CONVERSION .. 21. E. Declarant Sale Documents .. 21. 1. CONDOMINIUM INFORMATION STATEMENT .. 21. F. Unit Resale Documents .. 22. 1. RESALE CERTIFICATE .. 22. 2. SELLER'S RESALE AFFIDAVIT .. 22. 3. WAIVER OF RESALE CERTIFICATE .. 22. G. Insurance Documents .. 22. 1. UNAVAILABLE INSURANCE NOTICE .. 22. 2. INSURANCE CANCELLATION NOTICE .. 22. H. Budget Documents .. 22. 1. BUDGETS .. 22. I. Assessment Lien Foreclosure Documents .. 22. 1. APPOINTMENT TO EXERCISE POWER OF SALE .. 22. 2.

6 REDEMPTION DEED .. 22. 3. REDEMPTION AFFIDAVIT .. 22. 4. MORTGAGEE'S REQUEST FOR NOTIFICATION .. 22. 5. DEED IN LIEU OF FORECLOSURE .. 22. J. Documents Related to Association Operations .. 22. 1. MANAGEMENT CERTIFICATE .. 22. 2. TERMINATION AGREEMENT .. 22. 3. RESCISSION AGREEMENT .. 22. 4. VIOLATION NOTICE .. 22. 5. NOTICE OF INTENT TO TERMINATE DECLARANT CONTRACTS AND. LEASES .. 23. 6. NOTICE TO ENTER UNIT .. 23. 7. NOTICE OF ASSOCIATION MEETINGS .. 23. 8. PROXY .. 23. 9. ANNUAL AUDIT .. 23. 10. OWNER INFORMATION .. 23. VII. APPENDICES .. 24. INDEXES .. 25. INDEX 1 - TUCA PROVISIONS PERTAINING TO PLATS & PLANS .. 25. INDEX 2 - TUCA PROVISIONS PERTAINING TO DECLARATION .. 26. TEXAS UNIFORM CONDOMINIUM Act T-3. INDEX 3 - TUCA PROVISIONS PERTAINING TO BYLAWS .. 29. INDEX 4 - TUCA PROVISIONS PERTAINING TO RULES.

7 31. INDEX 5 - TUCA PROVISIONS PERTAINING TO CONDOMINIUM INFORMATION. STATEMENT .. 32. CHECKLISTS .. 33. CHECKLIST 1 - CHECKLIST FOR NEW PROJECT .. 33. CHECKLIST 2 - CHECKLIST FOR PREPARING CONDOMINIUM INFORMATION. STATEMENT .. 37. FORMS .. 41. FORM 1 - MODEL SHORT FORM DECLARATION .. 41. FORM 2 - CONDOMINIUM BYLAWS .. 50. FORM 3 - SAMPLE INITIAL RULES .. 67. FORM 4 - ARTICLES OF INCORPORATION .. 76. FORM 5 - SAMPLE CONDOMINIUM INFORMATION STATEMENT .. 80. FORM 6 - AFFIDAVIT OF PURCHASER .. 89. FORM 7 - ACKNOWLEDGEMENT OF RECEIPT OF CONDOMINIUM INFORMATION. STATEMENT .. 91. FORM 8 - ACKNOWLEDGEMENT OF RECEIPT OF CONDOMINIUM INFORMATION. STATEMENT .. 92. FORM 9 - CONDOMINIUM MANAGEMENT CERTIFICATE .. 93. SELECT ("RETROACTIVE") TUCA PROVISIONS .. 95. FANNIE MAE SELLING GUIDE - PART VIII - PROJECT STANDARDS.

8 111. T-4 TEXAS UNIFORM CONDOMINIUM Act TEXAS UNIFORM CONDOMINIUM Act T-5. TEXAS UNIFORM CONDOMINIUM ACT. by Sharon Reuler 4. "UCA". Throughout this paper, the T-less "UCA". I. INTRODUCTION is used to refer to the model UNIFORM CONDOMINIUM TEXAS ' UNIFORM CONDOMINIUM Act became Act, published in 1980 by the National Conference of effective on January 1, 1994, as Chapter 82 of the Commissioners on UNIFORM State Laws. Property Code. Although this long and comprehensive statute is based on a model act, at least one-third of the II. FROM WHENCE COMETH TUCA? new law was written in TEXAS , by Texans, for TEXAS . The bill's drafters are as curious as anyone to see how A. TEXAS ' Old Condo Law the new law "works." We are actively compiling Once upon a time, TEXAS had not a CONDOMINIUM questions and problems that may warrant amendment nor a CONDOMINIUM law.

9 Seeing the plight of TEXAS , an of the new law during the next legislative session. Arizona developer decided to convert a Houston Please send me your suggestions. highrise apartment building to CONDOMINIUM ownership. The year was 1962. His lender said A. Work in Progress "Whoa! TEXAS air is might fine, and your building is There are many ways of approaching a major new darn good, but we don't think air space is real property law. Because this paper is prepared for a document in TEXAS . Show us a law saying it's so.". drafting course, it focuses on the documents indicated or required by the new law - of which there are at least The Arizona developer's timing was perfect. In 65. Instead of focusing on a select number of 1962, the Federal Housing Administration had just documents, this paper tries to provide some pertinent published the Model Act for the Creation of Apartment information about each of the 65 documents.

10 The Ownership, based on Puerto Rico's 1958 statute. Using paper was intentionally prepared as a "work in the FHA Model Act as a base, the developer got an progress," to be expanded as time, resources, and enabling statute through the 1963 TEXAS legislature. publication opportunities permit. (Beginner's luck!). To help the attorney drafting documents under In 1963, no one in TEXAS knew what a TUCA, this paper tries to identify every TUCA CONDOMINIUM looked like. So, our Old TCA. reference pertinent to each of the 65 documents. The specifically describes the type of structure that was declaration, for example, has 67 references. then being condominiumized - a high rise apartment building with janitor lodgings, garbage incinerators, To assist the drafter who has access to documents elevators, basements, flat roofs, central heat and air, or forms prepared for use in a UCA or UCIOA-state, sanitary services, balconies, and terraces.