Texas Condo Due Diligence Checklist

Where Texas due diligence deserves the most attention

Legal Framework

Condominiums (post-1994): Governed by the Texas Uniform Condominium Act (TUCA), Tex. Prop. Code Ch. 82 (§§82.001 et seq.). TUCA, a version of the 1980 Uniform Condominium Act, applies to all condominiums created on or after January 1, 1994. It covers creation, declaration contents, unit boundaries, management/board powers (§82.102), insurance (§82.111), assessments and liens (§82.113), resale certificates (§82.157), purchaser protections/cancellation (§§82.151–82.158), and records (§82.114/§82.1141).; Condominiums (pre-1994): Governed by the older Texas…

Reserve Studies and Reserve Funding

No reserve study / no funding: Strong signal of deferred maintenance and likely future special assessments — especially in coastal, hail-belt, or older mid-/high-rise condos.; Very low reserve balance / % funded: Even if legal, a near-empty reserve relative to a building’s roof, envelope, garage, or elevator obligations means owners will likely be assessed.; Major components excluded: A study that omits roofs, structural elements, balconies, or garages understates true needs.; Budget omits reserves: Operating-only budgets with no reserve line are common…

Structural Inspections and Building Safety

Texas has no statewide mandate for periodic condominium structural, façade, balcony, or milestone inspections. There is no Texas equivalent of Florida’s SB-4D milestone/SIRS law, NYC Local Law 11, or California’s SB-326/SB-721 balcony laws. Building safety runs through ordinary local building and fire codes.

Insurance Requirements and Insurance-Market Risk

Property insurance on the insurable common elements against all risks of direct physical loss commonly insured against (fire + extended coverage), in an amount at least 80% of replacement cost or actual cash value. For buildings with horizontal (stacked) unit boundaries, the policy must include the units (but need not cover owner improvements/betterments) — i.e., a “bare-walls-plus” or “single-entity” master policy.; Commercial general liability (CGL) insurance, including medical payments, in an amount set by the board (≥ any amount in the declaration),…

Resale Disclosures and Buyer Cancellation Rights

Right of first refusal / transfer restraints in the declaration.; Periodic assessment amount and unpaid common expenses / special assessments currently due from the unit.; Other unpaid fees/amounts owed to the association by the seller.; Capital expenditures approved for the next 12 months.

Assessments, Special Assessments, and Borrowing

`special_assessment_pending` – Board approved/proposed a special assessment not in current budget.; `approved_capex_next_12mo` – §82.157 capital items approved (assessment proxy).; `budget_increased_over_threshold` – YoY assessment jump beyond a set threshold.; `assessment_increase_requires_vote` – Declaration requires owner approval; none documented.