                                              The Attorney         General of Texas
                                                              October 18, 1983
     JIM MATTOX
     Attorney General


     Supreme      Court Building            Honorable Chet Brooks                      Opinion No. JM-80
     P. 0. BOX 12546                        Chairman
     Austin,    TX. 76711. 2546                                                        Re:
                                            Committee on Health and Human Resources          Validity of Senate
     5121475-2501
     Telex    0101674-1367
                                            Texas State Senate                         Bill No. 1425 amending
     Telecopier     5121475-0266            Room 412, Archives Building                article 1301a. V.T.C.S.,
                                            Austin, Texas   78711                      the Condominium Act
     714 Jackson.    Suite 700
                                            Dear Senator Brooks:
     Dallas,   TX. 75202-4506
     2141742.6944
                                                 You inquire about the validity of Senate Bill No. 1425 of the
                                            Sixty-eighth Legislature. This bill amends article 1301a. V.T.C.S.,
     4624 Alberta       Ave., Suite   160   the Condominium Act. The new provisions in general require that
     El Paso, TX.       79905.2793          particular decisions about the governance of a condominium be made by
     9151533.3464
                                            a 67 percent or unanimous vote of the condominium ownership. Senate
r‘
                                            Bill No. 1425 "applies to all condominiums in the state regardless of
        101 Texas,    Suite 700             when the condominium was created." V.T.C.S. art. 1301a, 54, Acts
     tiousto”,     TX. 77002-3111           1983, 68th Leg., ch. 724, at 4487. This language did not appear in
     7131223-5666                           earlier versions of article 1301a. V.T.C.S. See Acts 1963, 58th Leg.,
                                            ch. 191 at 507. The amendments are thereforeretroactive.      Compare
                                            JM-75 (1983).
     606 Broadway.        Suite 312
     Lubbock,     TX.    794013479
     606/747.5236                                Your question raises the issue of whether Senate Bill No. 1425
                                            violates article I, section 16 of the Texas Constitution, which reads
                                            as follows:
     4309 N. Tenth, Suite 0
     McAIIB”,     TX. 76501-1665
     5121662.4547                                     No bill of attainder, ex post facto law,
                                                      retroactive law, or w         law impairing the
                                                      obligation of contracts, shall be made.
     200 Main Plaza, Suite 400
     San Antonio,  TX. 76205.2797
     5121225.4191
                                                 Article 1301a permits a property owner to establish condominium
                                            management on his land and building by recording with the county clerk
                                            the document described in section 7. _See V.T.C.S. art. 1301, 83. A
     An Equal      Opportunity/             master deed, lease or declaration, sets out provisions that locate and
     Atfirmative     Action     Employer    describe the land, each unit, other areas subject to individual
                                            ownership, and the common elements belonging to the project. The
                                            declaration must also state the percentage interest which each
                                            apartment bears to the entire project, and it 'may include other
                                            provisions or covenants. -Id. sec. 7.

                                                 Three of the four amendments included in Senate Bill No. 1425 add
                                            provisions to section 7. These are sections 7B(7), 7B(8), and 7D:




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Honorable Chet Brooks - Page 2         (m-80)




          Section 7.

             .   .   .   .

             (B) The declaration provided for in Section 3
          shall contain . . .

             .   .   .   .

                  (7) A provision that the declaration may
             only be amended at a meeting of the apartment
             owners at which the amendment is approved by
             the holders of at least 67 percent of the
             ownership interests in the condominium.

                 (8) A provision that an amendment of the
            declaration may not alter or destroy a unit or
            a limited common element without the consent of
            the owners affected and the owners’ first lien
            mortgagees.

                  (9) Any further provisions, matters, or
             covenants desired.

             (C)         [recording by county clerk1

             (D) After    a   condominium declaration    is
          recorded with a county clerk the declaration 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 percent of
          the ownership interests in the condominium.

Prior to these amendments, article 1301a contained no provisions for
amending declarations, although amending provisions could have been
included in the declaration itself. Board of Directors of By the Sea
Council of Co-Owners, Inc. v. Sondock, 644 S.W.Zd 774 (Tex. Civ.
Ann. - Cornus Christi 1982. writ ref’d n.r.e.): Bill Analysis to
Senate Bill No. 1425 prepared for House Committee on Business and
Commerce, Legislative Reference Library.

     The other amendment to article 1301a. V.T.C.S.. adds subsection
(b) to section 6, which now reads as follows:

          Section 6.

             (a) An apartment owner shall have an exclusive
          ownership to his apartment and shall have a common
          right to a share, with other co-owners, in the




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Honorable Chet Brooks - Page 3   (JM-80)




         common elements of the property. Each co-owner
         may use the elements held in common in accordance
         with the purpose for which they are intended, as
         shown on the plat or expressed in the declaration
         or the by-laws, without hindering or encroaching
         upon the lawful rights of the other co-owners.

             (b) A condominium association may not alter or
          destroy a unit or a limited common element without
          the consent of all owners affected and the first
          lien mortgagees of all affected owners.

A "limited common element" is space or a facility reserved for the use
of a certain number of apartments, such as a corridor. SEC.      2(m).
The condominium association includes all apartment owners. 15A Am.
Jur. 2d Condominiums §§13, 14 (citing Federal Housing Administration
Model Act).    Article 1301a elsewhere uses the term "council of
co-owners." -See §§Z(I). 13.

     Prior to the enactment of Senate Bill No. 1425, article 1301a
included provisions neither for the amendment of the declaration nor
for the vote required to alter or destroy a unit or limited common
element. "Destroy" presumably means to subdivide a unit or to merge
it with another, as well as to demolish it. If these matters were
addressed at all, it was in the declaration or the by-laws adopted for
the administration of the building by the owners. Board of Directors
of By the Sea Council of Co-Owners, Inc. v. Sondock, supra.

     The question arises as to whether Senate Bill No. 1425 may be
constitutionally applied to unit owners whose ownership contracts
incorporate different provisions on amending the declaration or on
altering condominium units than those imposed by the bill. Article I,
section 16 of the Texas Constitution prohibits the enactment of
statutes impairing the obligation of contract and retroactive statutes
impairing vested rights. McCain v. Yost, 284 S.W.Zd 898 (Tex. 1955);
Spires v. Mann, 173 S.W.Zd 200 (Tex. Civ. App. - Eastland 1943, writ
ref'd).

     The deed to each apartment must express all encumbrances against
the property. V.T.C.S. art. 1301a. 99. Purchasers of ,condominium
units purchase them subject to all the restrictions and conditions in
the declaration, including provisions on the vote needed to 'amend the
declaration or to alter or destroy a unit or common element. Board of
Directors of By the Sea Council of Co-Owners, Inc. v. Sondock, supra,
at 779-80.  Encumbrances in the declaration or by-laws become part of
the deed. Id. at 780; see Levine v. Turner, 264 S.W.Zd 478 (Tex. Civ.
APP. - El Paso 1954, writdism'd).   The deed is a contract, see Manley
v. Noblitt, 180 S.W. 1154 (Tex. Civ. App. - San Antonio 1915, writ
ref'd), and it is entitled to constitutional protection against




                                 p* 340
Honorable Chet Brooks - Page 4   (JM-80)




legislative changes of its provisions. See Hutchings v. Slemons, 174
S.W.Zd 487 (Tex. 1943). The substantive rights and duties of parties
are governed by the law that existed at the time the agreement was
made. Langevvr v. Miller, 76 S.W.2d 1025 (Tex. 1934), accord, Winder
Bros. v. Sterling, 12 S.W.Zd 127 (Tex. Comm'n App. 1929, -opinion
adopted). A sutGquent law that changes those rightsand duties'would
violate article I, section 16. Cape Conroe Limited v. Specht, 525
S.W.Zd 215 (Tex. Civ. App. - Houston 114th Dist.] 1975, no writ).

     Retroactive legislation which regulates property pursuant to the
police power is valid where the public health, safety, morals or
general welfare outweighs the interests of the individual property
owner. Southwestern Bell v. PUC, 615 S.W.Zd 947 (Tex. Civ. App. -
Austin 1981, writ ref'd n.r.e), pr curium, 622 S.W.Zd 82 (Tex. 1981);
Caruthers V. Board of Adjustment, 290 S.W.Zd 340 (Tex. Civ. App. -
Galveston 1956, no writ). No police power purpose is recited in
Senate Bill No. 1425, and it is difficult to find that the legislation
serves the public health, safety, morals or general welfare to an
extent that outweighs the interests and expectations of the individual
property owner. An existing declaration may for example include a
provision permitting amendment by vote of the holders of 51 percent of
the ownership interests. A change in the vote required to amend the
declaration would serve the public interest to a vary small degree, if
at all. The amendment instead affords protection to the smaller
ownership interests in the condominium, which could block change if a
two thirds or unanimous vote were required. See Scott v. Williams,
607 S.W.2d 267 (Tex. Civ. App. - Texarkana 1980, writ ref'd n.r.e.).

     We do not believe that Senate Bill No. 1425 is facially
unconstitutional since it will have constitutional applications. It
is, however, unconstitutional as applied to condominium deeds and
declarations which included contrary provisions prior to the effective
date of the bill.

                            SUMMARY

            Senate Bill No. 1425 of the Sixty-eighth
         Legislative Session amending article        1301a,
         V.T.C.S., the Condominium Act, is unconstitutional
         as applied retroactively to condominium deeds and
         declarations containing contrary provisions.

                                   dz&



                                                 MATTOX
                                         Attorney General of Texas




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Honorable Chet Brooks - Page 5     (JM-80)




TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

Prepared by Susan L. Garrison
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Jon Bible
David Brooks
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton




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