By Bonnen H.B. No. 2191
75R6820 SKB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the right to cancel the purchase of nursing home and
1-3 other residential services.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 4, Business & Commerce Code, is amended by
1-6 adding Chapter 42 to read as follows:
1-7 CHAPTER 42. CANCELLATION OF NURSING HOME AND CONTINUING
1-8 CARE SERVICES
1-9 Sec. 42.01. DEFINITIONS. In this chapter:
1-10 (1) "Institution" means:
1-11 (A) an establishment that:
1-12 (i) furnishes, in one or more facilities,
1-13 food and shelter to four or more persons who are unrelated to the
1-14 proprietor of the establishment; and
1-15 (ii) provides minor treatment under the
1-16 direction and supervision of a physician licensed by the Texas
1-17 State Board of Medical Examiners or other services that meet some
1-18 need beyond the basic provision of food, shelter, and laundry;
1-19 (B) a foster care type residential facility that
1-20 provides room and board to fewer than five persons who:
1-21 (i) are not related within the second
1-22 degree of consanguinity or affinity, as determined under Chapter
1-23 573, Government Code, to the proprietor; and
1-24 (ii) because of their physical or mental
2-1 limitation, or both, require a level of care and services suitable
2-2 to their needs that contributes to their health, comfort, and
2-3 welfare; or
2-4 (C) a continuing care facility that furnishes a
2-5 living unit, together with personal care services, nursing
2-6 services, medical services, or other health-related services,
2-7 regardless of whether the services and the living unit are provided
2-8 at the same location:
2-9 (i) to an individual who is not related by
2-10 consanguinity or affinity, as determined under Chapter 573,
2-11 Government Code, to the person furnishing the care; and
2-12 (ii) under a continuing care contract.
2-13 (2) "Purchaser" means a person who enters into a
2-14 contract for residential services with an institution.
2-15 (3) "Residential services" means the provision of a
2-16 room or other living quarters or residential shelter, together with
2-17 associated services, if any, for compensation.
2-18 Sec. 42.02. PURCHASER'S RIGHT TO CANCEL. In addition to any
2-19 rights or remedies available, a purchaser may cancel a contract for
2-20 residential services with an institution not later than midnight of
2-21 the third business day after the date the purchaser signs an
2-22 agreement or offer to purchase.
2-23 Sec. 42.03. NOTICE BY INSTITUTION. (a) An institution
2-24 shall provide a purchaser of residential services a copy of any
2-25 contract pertaining to the transaction at the time of its
2-26 execution.
2-27 (b) The document provided under Subsection (a) of this
3-1 section must contain in immediate proximity to the space reserved
3-2 in the contract for the signature of the purchaser a statement in
3-3 boldface type of a minimum size of 10 points in substantially the
3-4 following form:
3-5 "YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME
3-6 BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS
3-7 TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN
3-8 EXPLANATION OF THIS RIGHT."
3-9 (c) The institution shall attach to the document provided
3-10 under Subsection (a) of this section a completed notice of
3-11 cancellation form in duplicate. The form must:
3-12 (1) be easily detachable;
3-13 (2) be in the same language as the document provided
3-14 under Subsection (a) of this section; and
3-15 (3) contain in boldface type of a minimum size of 10
3-16 points the following information and statements:
3-17 "NOTICE OF CANCELLATION
3-18 "__________ (date of transaction)
3-19 "YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR
3-20 OBLIGATION, WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.
3-21 "IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THE CONTRACT
3-22 OR SALE, AND ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU, WILL BE
3-23 RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE
3-24 INSTITUTION OF YOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST
3-25 ARISING OUT OF THE TRANSACTION WILL BE CANCELED.
3-26 "TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND
3-27 DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE,
4-1 OR SEND A TELEGRAM, TO _______ (name of institution) AT _______
4-2 (address of institution) NOT LATER THAN MIDNIGHT OF _______ (date).
4-3 "I HEREBY CANCEL THIS TRANSACTION.
4-4 "_______ (date)
4-5 "_______ (buyer's signature)"
4-6 Sec. 42.04. VIOLATIONS. (a) An institution may not:
4-7 (1) fail, before furnishing to the purchaser copies of
4-8 the notice of cancellation under Section 42.03 of this code, to
4-9 complete both copies by entering the name of the institution, the
4-10 address of the institution, the date of the transaction, and the
4-11 date, not earlier than the third business day following the date of
4-12 the transaction, by which the purchaser may give notice of
4-13 cancellation;
4-14 (2) include in a contract for the purchase of
4-15 residential services a confession of judgment or a waiver of any of
4-16 the rights to which the purchaser is entitled under this chapter,
4-17 including specifically the purchaser's right to cancel the
4-18 transaction in accordance with this chapter;
4-19 (3) fail to inform each purchaser orally, at the time
4-20 the purchaser signs the contract or purchases the services, of the
4-21 purchaser's right to cancel;
4-22 (4) misrepresent in any manner the purchaser's right
4-23 to cancel;
4-24 (5) fail or refuse to honor a valid notice of
4-25 cancellation by a purchaser and, within 10 business days after the
4-26 receipt of the notice, fail to:
4-27 (A) refund all payments made under the contract
5-1 or sale; or
5-2 (B) cancel and return a negotiable instrument
5-3 executed by the purchaser in connection with the contract of sale
5-4 and take any action necessary or appropriate to terminate promptly
5-5 any security interest created in the transaction; or
5-6 (6) negotiate, transfer, sell, or assign a note or
5-7 other evidence of indebtedness to a finance company or other third
5-8 party before midnight of the fifth business day following the date
5-9 the contract was signed or the services were purchased.
5-10 (b) A sale or contract of sale of residential services in
5-11 relation to which an institution violates this chapter is void.
5-12 (c) An institution that violates this chapter is liable to
5-13 the purchaser for any actual damages suffered by the purchaser as a
5-14 result of the violation, attorney's fees reasonable in relation to
5-15 the amount of work done, and court costs.
5-16 (d) A violation of this chapter is a deceptive trade
5-17 practice for purposes of Subchapter E, Chapter 17, and is
5-18 actionable under that subchapter. The venue provisions and all
5-19 remedies available in that subchapter apply to and are cumulative
5-20 of the remedies provided by this chapter.
5-21 SECTION 2. This Act takes effect September 1, 1997, and
5-22 applies only to a contract entered into on or after that date.
5-23 SECTION 3. The importance of this legislation and the
5-24 crowded condition of the calendars in both houses create an
5-25 emergency and an imperative public necessity that the
5-26 constitutional rule requiring bills to be read on three several
5-27 days in each house be suspended, and this rule is hereby suspended.