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. (a) 1-8 A seller of residential real property comprising not fewer than one 1-9 or more than four dwelling units located in this state shall give 1-10 to the purchaser of the property a written notice as prescribed by 1-11 this section or a written notice substantially similar to the 1-12 notice prescribed by this section which contains, at a minimum, all 1-13 of the items in the 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. Seller has not received any notice, either oral or written, 2-5 regarding the need for repair or replacement of any portion of 2-6 the Property from any governmental agency, appraiser, 2-7 inspector, mortgage lender, repair service, or others, except 2-8 _______________________________________________________________ 2-9 _______________________________________________________________ 2-10 _______________________________________________________________ 2-11 ______________________________________________________________. 2-12 2. The Property has the items checked below: 2-13 Write Yes (Y), No (N), or Unknown (U). 2-14 ____ Range ____ Oven ____ Microwave 2-15 ____ Dishwasher ____ Trash Compactor ____ Disposal 2-16 ____ Wash/Dry ____ Window Screens ____ Rain Gutters 2-17 Hookups 2-18 ____ Security System ____ Fire Detect ____ Intercom 2-19 Equip Sys 2-20 ____ TV Antenna ____ Cable TV Wiring ____ Satell. 2-21 Dish 2-22 ____ Ceiling Fan(s) ____ Attic Fan(s) ____ Exhaust 2-23 Fan 2-24 ____ Central A/C ____ Central Heating ____ Window A/C 2-25 ____ Plumbing System ____ Septic System ____ Public Sewer 3-1 ____ Patio/Decking ____ Outdoor Grill ____ Fences 3-2 ____ Pool ____ Sauna ___Spa __ Hot Tub 3-3 ____ Pool Equipment ____ Pool Heater ____ Auto. Lawn 3-4 Sprink. Sys 3-5 ____ Fireplace(s) & Chimney ____ Fireplace(s) 3-6 (Woodburning) & Chim. Mock 3-7 ____ Gas Lines (Nat./LP) ____ Gas Fixtures 3-8 Garage: ___ Attached ____ Not Attached ____ Carport 3-9 Garage Door Opener(s): ____ Electronic ____ Control(s) 3-10 Water Heater: ____ Gas ____ Electric 3-11 Water Supply: ___ City ____ Well ____ MUD ____ Co-op 3-12 Roof Type: ______________________ Age: _____________ (approx) 3-13 Are you (Seller) aware of any of the above items that are not in 3-14 working condition, that have known defects, or that are in need or 3-15 repair? ___ Yes ___ No ____ Unknown. 3-16 If yes, then describe. (Attach additional sheets if necessary): 3-17 ___________________________________________________________________ 3-18 ___________________________________________________________________ 3-19 __________________________________________________________________. 3-20 3. Are you (Seller) aware of any known defects/malfunctions in any 3-21 of the following? 3-22 Write Yes (Y), No (N), or Unknown (U). 3-23 ____ Interior Walls ____ Ceilings ____ Floors 3-24 ____ Exterior Walls ____ Doors ____ Windows 3-25 ____ Roof ____ Foundation/ ____ Basement 4-1 Slab(s) 4-2 ____ Walls/Fences ____ Driveways ____ Sidewalks 4-3 ____ Plumbing/Sewers/ ____ Elect ____ Lighting 4-4 Septics System Fixtures 4-5 ____ Other Structural Components (Describe): _____________________ 4-6 ___________________________________________________________________ 4-7 __________________________________________________________________. 4-8 If any of the above is checked, explain. (Attach additional sheets 4-9 if necessary): ___________________________________________________ 4-10 ___________________________________________________________________ 4-11 __________________________________________________________________. 4-12 4. Are you (Seller) aware of any of the following conditions? 4-13 Write Yes (Y), No (N), or Unknown (U). 4-14 ____ Active Termites ____ Previous Structural 4-15 (includes wood-destroying or Roof Repair 4-16 insects) 4-17 ____ Termite or Wood Rot Damage ____ Hazardous or Toxic 4-18 Needing Repair Waste 4-19 ____ Previous Termite Damage ____ Asbestos 4-20 ____ Previous Termite Treatment ____ Urea formaldehyde 4-21 Insulation 4-22 ____ Previous Flooding ____ Radon Gas 4-23 ____ Improper Drainage ____ Lead Based Paint 4-24 ____ Water Penetration ____ Aluminum Wiring 4-25 ____ Located in 100-Year ____ Previous Fires 5-1 Floodplain 5-2 ____ Present Flood Insurance ____ Unplatted Easements 5-3 Coverage 5-4 ____ Landfill, Settling, Soil ____ Subsurface 5-5 Movement, Fault Lines Structure or Pits 5-6 If the answer to any of the above is yes, explain. (Attach 5-7 additional sheets if necessary): _________________________ 5-8 ___________________________________________________________________ 5-9 ___________________________________________________________________ 5-10 __________________________________________________________________. 5-11 5. Are you (Seller) aware of any of the following? 5-12 Write Yes (Y), No (N), or Unknown (U). 5-13 ____ Room additions, structural modifications, or other 5-14 alterations or repairs made without necessary permits or not 5-15 in compliance with building codes in effect at that time. 5-16 ____ Homeowners' Association or maintenance fees or assessments. 5-17 ____ Any "common area" (facilities such as pools, tennis courts, 5-18 walkways, or other areas) co-owned in undivided interest with 5-19 others. 5-20 ____ Any notices of violations of deed restrictions or 5-21 governmental ordinances affecting the condition or use of the 5-22 Property. 5-23 ____ Any lawsuits directly or indirectly affecting the Property. 5-24 ____ Any condition of the Property which materially affects the 5-25 physical health or safety of an individual. 6-1 If the answer to any of the above is yes, explain. (Attach 6-2 additional sheets if necessary): _________________________ 6-3 ___________________________________________________________________ 6-4 ___________________________________________________________________ 6-5 __________________________________________________________________. 6-6 ___________________________ _____________________________ 6-7 Date Signature of Seller 6-8 The undersigned purchaser hereby acknowledges receipt of the 6-9 foregoing notice. 6-10 ___________________________ _____________________________ 6-11 Date Signature of Purchaser 6-12 (c) A seller or seller's agent shall have no duty to make a 6-13 disclosure or release information related to whether a death or an 6-14 assault, of any kind or nature, occurred on the property except 6-15 that a seller or a seller's agent with personal knowledge that a 6-16 death or assault, other than a death caused by AIDS, HIV-related 6-17 illnesses, or HIV infection, occurred on the property shall 6-18 disclose that knowledge to a purchaser only upon receiving a 6-19 specific request in writing from the purchaser. A seller or 6-20 seller's agent shall have no duty to disclose or release 6-21 information related to whether a previous occupant had, may have 6-22 had, has, or may have AIDS, HIV related illnesses, or HIV infection 6-23 as defined by the Centers for Disease Control of the U.S. Public 6-24 Health Service. 6-25 (d) The notice shall be completed to the best of seller's 7-1 belief and knowledge as of the date the notice is completed and 7-2 signed by the seller. If the information required by the notice is 7-3 unknown to the seller, the seller shall indicate that fact on the 7-4 notice, and by that act is in compliance with this section. 7-5 (e) This section does not apply to a transfer: 7-6 (1) pursuant to a court order or foreclosure sale; 7-7 (2) by a trustee in bankruptcy; 7-8 (3) to a mortgage by a mortgagor or successor in 7-9 interest, or to a beneficiary of a deed of trust by a trustor or 7-10 successor in interest; 7-11 (4) by a mortgagee or a beneficiary under a deed of 7-12 trust who has acquired the real property at a sale conducted 7-13 pursuant to a power of sale under a deed of trust or a sale 7-14 pursuant to a court ordered foreclosure or has acquired the real 7-15 property by a deed in lieu of foreclosure; 7-16 (5) by a fiduciary in the course of the administration 7-17 of a decedent's estate, guardianship, conservatorship, or trust; 7-18 (6) from one co-owner to one or more other co-owners; 7-19 (7) made to a spouse or to a person or persons in the 7-20 lineal line of consanguinity of one or more of the transferors; 7-21 (8) between spouses resulting from a decree of 7-22 dissolution of marriage or a decree of legal separation or from a 7-23 property settlement agreement incidental to such a decree; 7-24 (9) to or from any governmental entity; or 7-25 (10) transfers of new residences of not less than one 8-1 or more than four dwelling units which have not previously been 8-2 occupied for residential purposes. 8-3 (f) The notice shall be delivered by the seller to the 8-4 purchaser or the purchaser's agent on or before the effective date 8-5 of an executory contract binding the purchaser to purchase the 8-6 property. In the event a contract of purchase and sale is entered 8-7 into without the seller providing the notice required by this 8-8 section, the purchaser shall be entitled to terminate the contract. 8-9 If however, the seller furnishes the required notice at or prior to 8-10 closing the purchase and sale contract and the purchaser elects to 8-11 close even though such notice was not timely furnished prior to 8-12 execution of the contract, it shall be conclusively presumed that 8-13 the purchaser has waived all rights to terminate the contract and 8-14 recover damages or other remedies or rights under this section, 8-15 except for any remedies or rights the purchaser may be entitled to 8-16 receive for an error, inaccuracy, or omission by the seller in the 8-17 notice. 8-18 (g) An agent for the seller is not liable for any error, 8-19 inaccuracy, or omission of any information in a notice delivered by 8-20 the seller under this section unless the agent had personal 8-21 knowledge of the error, inaccuracy or omission. 8-22 (h) If a conveyance of real property is made without the 8-23 seller providing the notice prescribed by this section, the 8-24 purchaser has a cause of action against the seller and may recover: 8-25 (1) actual damages not less than $1,000; 9-1 (2) costs of court; and 9-2 (3) reasonable attorneys' fees. 9-3 (i) The cause of action created by Subsection (h) is in 9-4 addition to any other cause of action the purchaser may have. 9-5 SECTION 2. This Act takes effect January 1, 1994. 9-6 SECTION 3. The importance of this legislation and the 9-7 crowded condition of the calendars in both houses create an 9-8 emergency and an imperative public necessity that the 9-9 constitutional rule requiring bills to be read on three several 9-10 days in each house be suspended, and this rule is hereby suspended.