Tex. Prop. Code Section 81.206
Disposition of Insurance Proceeds

(a)

Except as provided by Subsection (b), if a building in a condominium regime is damaged by a casualty against which it is insured, the proceeds of the insurance policy shall be used to reconstruct the building. The council of owners or the bylaws of the condominium regime govern the conduct of the reconstruction.

(b)

If more than two-thirds of a building in a condominium regime requires reconstruction because of a casualty against which it is insured, the council of owners may elect not to reconstruct the building. Unless the council of owners unanimously agrees otherwise, the insurance proceeds shall be paid to the individual apartment owners or their mortgagees, as their interest may appear, in proportion to the interest of an apartment owner in the condominium regime as established by the declaration.
Acts 1983, 68th Leg., p. 3622, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Source: Section 81.206 — Disposition of Insurance Proceeds, https://statutes.­capitol.­texas.­gov/Docs/PR/htm/PR.­81.­htm#81.­206 (accessed May 26, 2025).

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§ 81.206. Disposition of Ins. Proceeds's source at texas​.gov