Sec. 204.007.  EFFECT ON LIENHOLDERS.  (a)  Extensions of, additions to, or modifications of restrictions under this chapter are binding on a lienholder, excluding restrictions relating to regular or special assessment increases if the assessment is not subordinated to purchase money or home improvement liens.
(b)  If the assessment lien of the property owners' association is subordinate to purchase money or home improvement liens, the lienholder is not entitled to notice of the proposed dedicatory instrument and the lienholder is bound by the instrument if the instrument is approved.  If the assessment lien is not subordinated, a lienholder who is not a signatory to the dedicatory instrument and whose lien was established before the effective date of the dedicatory instrument is not bound by the portion of the dedicatory instrument that increases the amount of the regular or special assessment during any period of ownership by the lienholder.
(c)  A person who acquires title to the property at a foreclosure sale or by deed from a foreclosing lienholder is bound by the assessment increase.
Added by Acts 1995, 74th Leg., ch. 1040, Sec. 2, eff. Aug. 28, 1995.