By Brimer H.B. No. 1081 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a seller's duty to disclose the condition of real 1-3 property to a purchaser. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter A, Chapter 5, Property Code, is 1-6 amended by adding Section 5.008 to read as follows: 1-7 Sec. 5.008. SELLER'S DISCLOSURE OF PROPERTY CONDITION. 1-8 (a) A seller of residential real property comprising not more than 1-9 one dwelling unit located in this state shall give to the purchaser 1-10 of the property a written notice as prescribed by this section or a 1-11 written notice substantially similar to the notice prescribed by 1-12 this section which contains, at a minimum, all of the items in the 1-13 notice prescribed by this section. 1-14 (b) The notice must be executed and must, at a minimum, read 1-15 substantially similar to the following: 1-16 SELLER'S DISCLOSURE NOTICE 1-17 CONCERNING THE PROPERTY AT 1-18 (Street Address and City) 1-19 THIS NOTICE IS A DISCLOSURE OF SELLER'S KNOWLEDGE OF 1-20 THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED BY 1-21 SELLER AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR 1-22 WARRANTIES THE PURCHASER MAY WISH TO OBTAIN. IT IS NOT 1-23 A WARRANTY OF ANY KIND BY SELLER OR SELLER'S AGENTS. 2-1 Seller _____ is _____ is not occupying the Property. 2-2 If unoccupied, how long since Seller has occupied the Property? 2-3 ______________________ 2-4 1. The Property has the items checked below: 2-5 Write Yes (Y), No (N), or Unknown (U). 2-6 ____ Range ____ Oven ____ Microwave 2-7 ____ Dishwasher ____ Trash Compactor ____ Disposal 2-8 ____ Washer/Dryer ____ Window Screens ____ Rain Gutters 2-9 Hookups 2-10 ____ Security System ____ Fire Detection ____ Intercom 2-11 Equipment System 2-12 ____ TV Antenna ____ Cable TV Wiring ____ Satellite 2-13 Dish 2-14 ____ Ceiling Fan(s) ____ Attic Fan(s) ____ Exhaust 2-15 Fan(s) 2-16 ____ Central A/C ____ Central Heating ____ Wall/Window Air 2-17 Conditioning 2-18 ____ Plumbing System ____ Septic System ____ Public Sewer 2-19 System 2-20 ____ Patio/Decking ____ Outdoor Grill ____ Fences 2-21 ____ Pool ____ Sauna ____ Spa ___ Hot Tub 2-22 ____ Pool Equipment ____ Pool Heater ____ Automatic Lawn 2-23 Sprinkler 2-24 System 2-25 ____ Fireplace(s) & Chimney ____ Fireplace(s) & 3-1 (Woodburning) Chimney (Mock) 3-2 ____ Gas Lines (Nat./LP) ____ Gas Fixtures 3-3 Garage: ___ Attached ____ Not Attached ____ Carport 3-4 Garage Door Opener(s): ____ Electronic ____ Control(s) 3-5 Water Heater: ____ Gas ____ Electric 3-6 Water Supply: ___ City ____ Well ____ MUD ____ Co-op 3-7 Roof Type: _____________________ Age: _______________(approx) 3-8 Are you (Seller) aware of any of the above items that are not in 3-9 working condition, that have known defects, or that are in need of 3-10 repair? _____ Yes _____ No _____ Unknown. 3-11 If yes, then describe. (Attach additional sheets if necessary): 3-12 ___________________________________________________________________ 3-13 ___________________________________________________________________ 3-14 ___________________________________________________________________ 3-15 ___________________________________________________________________ 3-16 2. Are you (Seller) aware of any known defects/malfunctions in any 3-17 of the following? 3-18 Write Yes (Y), No (N), or Unknown (U). 3-19 ____ Interior Walls ____ Ceilings ____ Floors 3-20 ____ Exterior Walls ____ Doors ____ Windows 3-21 ____ Roof ____ Foundation/ ____ Basement 3-22 Slab(s) 3-23 ____ Walls/Fences ____ Driveways ____ Sidewalks 3-24 ____ Plumbing/Sewers/ ____ Electrical ____ Lighting 3-25 Septics Systems Fixtures 4-1 ____ Other Structural Components (Describe): _____________________ 4-2 ___________________________________________________________________ 4-3 ___________________________________________________________________ 4-4 If the answer to any of the above is yes, explain. (Attach 4-5 additional sheets if necessary): _________________________________ 4-6 ___________________________________________________________________ 4-7 ___________________________________________________________________ 4-8 3. Are you (Seller) aware of any of the following conditions? 4-9 Write Yes (Y), No (N), or Unknown (U). 4-10 ____ Active Termites ____ Previous Structural 4-11 (includes wood-destroying or Roof Repair 4-12 insects) 4-13 ____ Termite or Wood Rot Damage ____ Hazardous or Toxic 4-14 Needing Repair Waste 4-15 ____ Previous Termite Damage ____ Asbestos Components 4-16 ____ Previous Termite Treatment ____ Urea formaldehyde 4-17 Insulation 4-18 ____ Previous Flooding ____ Radon Gas 4-19 ____ Improper Drainage ____ Lead Based Paint 4-20 ____ Water Penetration ____ Aluminum Wiring 4-21 ____ Located in 100-Year ____ Previous Fires 4-22 Floodplain 4-23 ____ Present Flood Insurance ____ Unplatted Easements 4-24 Coverage 4-25 ____ Landfill, Settling, Soil ____ Subsurface 5-1 Movement, Fault Lines Structure or Pits 5-2 If the answer to any of the above is yes, explain. (Attach 5-3 additional sheets if necessary): _________________________________ 5-4 ___________________________________________________________________ 5-5 ___________________________________________________________________ 5-6 ___________________________________________________________________ 5-7 4. Are you (Seller) aware of any item, equipment, or system in 5-8 or on the property that is in need of repair? _________ Yes 5-9 ________ No _________ Unknown. If yes, explain (attach additional 5-10 sheets if necessary). ____________________________________________ 5-11 ___________________________________________________________________ 5-12 ___________________________________________________________________ 5-13 ___________________________________________________________________ 5-14 5. Are you (Seller) aware of any of the following? 5-15 Write Yes (Y), No (N), or Unknown (U). 5-16 ____ Room additions, structural modifications, or other 5-17 alterations or repairs made without necessary permits or not 5-18 in compliance with building codes in effect at that time. 5-19 ____ Homeowners' Association or maintenance fees or assessments. 5-20 ____ Any "common area" (facilities such as pools, tennis courts, 5-21 walkways, or other areas) co-owned in undivided interest with 5-22 others. 5-23 ____ Any notices of violations of deed restrictions or 5-24 governmental ordinances affecting the condition or use of the 5-25 Property. 6-1 ____ Any lawsuits directly or indirectly affecting the Property. 6-2 ____ Any condition on the Property which materially affects the 6-3 physical health or safety of an individual. 6-4 ____ Any murder, sexual assault (rape), or other serious assault 6-5 that occurred on the Property in the last twelve (12) months. 6-6 If the answer to any of the above is yes, explain. (Attach 6-7 additional sheets if necessary): _________________________ 6-8 ___________________________________________________________________ 6-9 ___________________________________________________________________ 6-10 ___________________________________________________________________ 6-11 ___________________________ _____________________________ 6-12 Date Signature of Seller 6-13 The undersigned purchaser hereby acknowledges receipt of the 6-14 foregoing notice. 6-15 ___________________________ _____________________________ 6-16 Date Signature of Purchaser 6-17 NOTICE: Section 5.008 of the Texas Property Code provides that 6-18 this notice shall be delivered to the purchaser before the 6-19 effective date of a contract binding the purchaser to purchase the 6-20 property. In the event a contract is entered into without this 6-21 notice being provided, the purchaser may terminate the contract 6-22 prior to closing. If the notice is furnished to the purchaser at 6-23 or prior to closing and the purchaser does not elect to terminate 6-24 the contract within 48 hours after receipt of this notice or if the 6-25 purchaser elects to close within 48 hours after receipt of this 7-1 notice, the purchaser will waive all rights to terminate the 7-2 contract for failing to timely receive this notice. In any event, 7-3 a purchaser is not entitled to rescind the purchase of the property 7-4 after closing for failing to receive this notice. 7-5 (c) A seller or seller's agent shall have no duty to make a 7-6 disclosure or release information related to whether a death by 7-7 natural causes, suicide, or accident unrelated to the condition of 7-8 the property occurred on the property or whether a previous 7-9 occupant had, may have had, has, or may have AIDS, HIV related 7-10 illnesses, or HIV infection. 7-11 (d) The notice shall be completed to the best of seller's 7-12 belief and knowledge as of the date the notice is completed and 7-13 signed by the seller. If the information required by the notice is 7-14 unknown to the seller, the seller shall indicate that fact on the 7-15 notice, and by that act is in compliance with this section. 7-16 (e) This section does not apply to a transfer: 7-17 (1) pursuant to a court order or foreclosure sale; 7-18 (2) by a trustee in bankruptcy; 7-19 (3) to a mortgage by a mortgagor or successor in 7-20 interest, or to a beneficiary of a deed of trust by a trustor or 7-21 successor in interest; 7-22 (4) by a mortgagee or a beneficiary under a deed of 7-23 trust who has acquired the real property at a sale conducted 7-24 pursuant to a power of sale under a deed of trust or a sale 7-25 pursuant to a court ordered foreclosure or has acquired the real 8-1 property by a deed in lieu of foreclosure; 8-2 (5) by a fiduciary in the course of the administration 8-3 of a decedent's estate, guardianship, conservatorship, or trust; 8-4 (6) from one co-owner to one or more other co-owners; 8-5 (7) made to a spouse or to a person or persons in the 8-6 lineal line of consanguinity of one or more of the transferors; 8-7 (8) between spouses resulting from a decree of 8-8 dissolution of marriage or a decree of legal separation or from a 8-9 property settlement agreement incidental to such a decree; 8-10 (9) to or from any governmental entity; or 8-11 (10) transfers of new residences of not less than one 8-12 or more than four dwelling units which have not previously been 8-13 occupied for residential purposes. 8-14 (f) The notice shall be delivered by the seller to the 8-15 purchaser on or before the effective date of an executory contract 8-16 binding the purchaser to purchase the property. If a contract of 8-17 purchase and sale is entered into without the seller providing the 8-18 notice required by this section, the purchaser is entitled to 8-19 terminate the contract prior to the closing of the contract. If, 8-20 however, the seller furnishes the notice required by this section 8-21 at or before closing the purchase and sale contract and the 8-22 purchaser does not elect to terminate the contract within 48 hours 8-23 after receipt of the notice or if the purchaser elects to close the 8-24 purchase and sale contract within 48 hours after receipt of the 8-25 notice, the purchaser waives all rights to terminate the contract 9-1 for failing to timely receive the notice required by this section. 9-2 Notwithstanding any other provision of this subchapter, a purchaser 9-3 is not entitled to rescind the sale or purchase of a property after 9-4 closing the purchase and sale contract for failing to receive or 9-5 failing to timely receive the notice required by this section. 9-6 (g) A seller who provides the information required by this 9-7 section is not liable for any error, inaccuracy, or omission unless 9-8 the seller knew of same and such misinformation was intended to 9-9 induce the purchaser into a transaction into which the purchaser 9-10 would not have entered had the information been correct. An agent 9-11 for the seller shall not be liable for any error, inaccuracy, or 9-12 omission of any information provided by the seller under this 9-13 section unless the agent had personal knowledge of the error, 9-14 inaccuracy, or omission and such misinformation was intended to 9-15 induce the purchaser into a transaction into which the purchaser 9-16 would not have entered had the information been correct. 9-17 SECTION 2. This Act takes effect January 1, 1994. 9-18 SECTION 3. The importance of this legislation and the 9-19 crowded condition of the calendars in both houses create an 9-20 emergency and an imperative public necessity that the 9-21 constitutional rule requiring bills to be read on three several 9-22 days in each house be suspended, and this rule is hereby suspended.