By Raymond H.B. No. 3243
75R7853 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the disclosure in a contract for the sale of real
1-3 property of information regarding the rights of the owner of a
1-4 mineral interest in the property.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter A, Chapter 5, Property Code, is
1-7 amended by adding Section 5.010 to read as follows:
1-8 Sec. 5.010. NOTICE OF CERTAIN RIGHTS OF MINERAL INTEREST
1-9 OWNER. (a) This section does not apply to a transfer described by
1-10 Sections 5.008(e)(1)-(9).
1-11 (b) A seller of an interest in real property who enters into
1-12 a contract for the sale of that interest shall include in the
1-13 contract the following notice in bold-faced type:
1-14 NOTICE OF CERTAIN RIGHTS OF OWNER OF MINERAL INTEREST
1-15 If the seller is reserving a mineral interest in the property
1-16 or if the property is subject to a prior conveyance or reservation
1-17 of a mineral interest, the owner of the mineral interest has
1-18 certain rights to the property. The owner of a mineral interest is
1-19 normally entitled to explore for, develop, and produce the minerals
1-20 under the property without the consent of the owner of the surface.
1-21 However, those rights are subject to the mineral interest owner's
1-22 obligation to accommodate surface uses that existed at the time the
1-23 mineral interest was conveyed or reserved. If the use of the
1-24 surface by the owner of the mineral interest would substantially
2-1 impair those uses, the owner of the mineral interest may be
2-2 required to use reasonable alternatives, if available. A
2-3 reservation of a mineral interest by the seller or a prior
2-4 conveyance or reservation of a mineral interest should be
2-5 specifically stated in the contract and title commitment. The
2-6 contract may or may not give the buyer the right to object to any
2-7 mineral reservation or conveyance revealed in the title commitment.
2-8 (c) If the seller fails to include in the contract the
2-9 notice described by Subsection (b) but furnishes the notice to the
2-10 purchaser before the seventh day preceding the closing date, the
2-11 purchaser may terminate the contract for any reason not later than
2-12 the seventh day after the date the purchaser receives the notice.
2-13 (d) If the seller fails to include in the contract the
2-14 notice described by Subsection (b) but furnishes the notice to the
2-15 purchaser within seven days before the closing date, the purchaser
2-16 may:
2-17 (1) without penalty, delay the closing for not more
2-18 than seven days after the date the purchaser receives the notice;
2-19 or
2-20 (2) terminate the contract for any reason not later
2-21 than the seventh day after the date the purchaser receives the
2-22 notice.
2-23 (e) If the seller fails to include in the contract or
2-24 furnish to the purchaser the notice described by Subsection (b)
2-25 before the purchaser closes on the property, the purchaser is
2-26 entitled to recover from the seller:
2-27 (1) an amount equal to the greater of:
3-1 (A) $500; or
3-2 (B) five percent of the consideration paid for
3-3 the property;
3-4 (2) reasonable attorney's fees; and
3-5 (3) court costs.
3-6 SECTION 2. This Act takes effect January 1, 1998, and
3-7 applies only to a contract of sale entered into on or after that
3-8 date. A contract of sale entered into before that date is governed
3-9 by the law as it existed immediately before the effective date of
3-10 this Act, and that law is continued in effect for that purpose.
3-11 SECTION 3. The importance of this legislation and the
3-12 crowded condition of the calendars in both houses create an
3-13 emergency and an imperative public necessity that the
3-14 constitutional rule requiring bills to be read on three several
3-15 days in each house be suspended, and this rule is hereby suspended.