HBA-DMD S.B. 167 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 167 By: Carona Business & Industry 4/12/1999 Engrossed BACKGROUND AND PURPOSE Currently, a person selling real property is not required to deliver notice to purchasers regarding the possible annexation of the property. A person buying real estate that is located outside a city's limits may not be aware that the property lies within the city's extraterritorial jurisdiction and may be subject to future annexation. S.B. 167 requires a person who sells an interest in real property in this state to give to the purchaser of the property a written notice. This bill requires the seller to deliver the notice to the purchaser before the executory contract binds the purchaser to purchase the property. This bill authorizes the notice to be given separately, as part of the contract during negotiations, or as part of any other notice the seller delivers to the purchaser. This bill also provides that if the notice is delivered, the seller has no duty to provide additional information regarding the possible annexation of the property by a municipality. It also authorizes the purchaser, if an executory contract is entered into without the seller providing the notice, to terminate the contract for any reason within a specified time period. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter A, Chapter 5, Property Code, by adding Section 5.011, as follows: Sec. 5.011. SELLER'S DISCLOSURE REGARDING POTENTIAL ANNEXATION. (a) Requires a person who sells an interest in real property to give written notice to the person purchasing the property. Specifies the language for the written notice. (b) Requires the seller to deliver the written notice to the purchaser before the executory contract legally binds the purchaser to purchase the property. Authorizes the notice to be given separately, as part of the contract during negotiations, or as part of any other notice the seller delivers to the purchaser. (c) Specifies the transfers to which this section does not apply. (d) Provides that if the notice is delivered as provided by this section, the seller has no duty to provide additional information regarding the possible annexation of the property by a municipality. (e) Authorizes the purchaser, if an executory contract is entered into without the seller providing the notice required by this section, to terminate the contract for any reason within a specified time period. SECTION 2.Effective date: January 1, 2000. Makes application of this Act prospective. SECTION 3.Emergency clause.