By Patterson S.B. No. 107
75R914 PAM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a notice of homestead foreclosure information required
1-3 for the sale of certain residential real property.
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 5.010 to read as follows:
1-7 Sec. 5.010. NOTICE OF HOMESTEAD FORECLOSURE INFORMATION.
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 before the transfer of the property a written
1-11 notice as prescribed by this section.
1-12 (b) The notice must be conspicuous and printed in 14-point
1-13 bold-faced type and read substantially similar to the following:
1-14 NOTICE OF HOMESTEAD FORECLOSURE INFORMATION
1-15 CONCERNING THE PROPERTY AT (street address and city)
1-16 WARNING: UNDER TEXAS LAW, YOU MAY LOSE THIS PROPERTY THROUGH
1-17 FORECLOSURE, EVEN IF IT IS DESIGNATED AS HOMESTEAD PROPERTY, IF YOU
1-18 FAIL TO TIMELY PAY ANY OF THE FOLLOWING OBLIGATIONS:
1-19 (1) a purchase money obligation secured by a lien on
1-20 this property;
1-21 (2) a home improvement contract obligation secured by
1-22 a lien on this property;
1-23 (3) a property owners' association assessment and
1-24 certain related costs secured by a lien on this property, including
2-1 a lien provided for in restrictive covenants applicable to this
2-2 property;
2-3 (4) ad valorem property taxes assessed against this
2-4 property;
2-5 (5) federal income taxes owed by you; or
2-6 (6) a lien on this property that preexists your
2-7 purchase of this property and that was not paid at the time you
2-8 purchased this property.
2-9 Depending on state law or the terms of the agreement relating
2-10 to the financial obligation, a financial obligation listed above
2-11 may be foreclosed by judicial foreclosure, which would require the
2-12 filing of a lawsuit against you, or by nonjudicial foreclosure,
2-13 which would require notifying you but would not require the filing
2-14 of a lawsuit against you. In certain circumstances, attorney's
2-15 fees and other costs associated with the foreclosure may be added
2-16 to the original obligation, which would increase the amount of the
2-17 debt owed.
2-18 If you cease using this home as your primary residence or
2-19 otherwise lose your homestead exemption, the failure to timely pay
2-20 financial obligations other than those listed above may result in
2-21 the foreclosure of this property.
2-22 I UNDERSTAND THAT I CAN LOSE THIS PROPERTY THROUGH
2-23 FORECLOSURE FOR THE REASONS STATED ABOVE.
2-24 Date:__________ ________________________________________
2-25 Signature of Purchaser
2-26 Print Name:_________________________
2-27 Property Address:_____________________
3-1 (c) The seller's failure to provide the notice required by
3-2 this section:
3-3 (1) is a false, misleading, or deceptive act or
3-4 practice within the meaning of Section 17.46, Business & Commerce
3-5 Code, and is actionable in a public or private suit brought under
3-6 Subchapter E, Chapter 17, Business & Commerce Code; and
3-7 (2) entitles the purchaser to cancel and rescind the
3-8 purchase contract and receive a full refund of any purchase payment
3-9 made to the seller.
3-10 SECTION 2. This Act takes effect September 1, 1997. The
3-11 change in law made by this Act applies only to a real property
3-12 transaction described by this Act in which the transfer of the
3-13 property occurs on or after the effective date of this Act.
3-14 SECTION 3. The importance of this legislation and the
3-15 crowded condition of the calendars in both houses create an
3-16 emergency and an imperative public necessity that the
3-17 constitutional rule requiring bills to be read on three several
3-18 days in each house be suspended, and this rule is hereby suspended.