76R11695 PAM-F By Solomons H.B. No. 2605 Substitute the following for H.B. No. 2605: By Solomons C.S.H.B. No. 2605 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to providing a right of rescission for certain owners 1-3 executing residential construction contracts for improvements on 1-4 homestead property. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subchapter K, Chapter 53, Property Code, is 1-7 amended by adding Section 53.2541 to read as follows: 1-8 Sec. 53.2541. RIGHT OF RESCISSION. (a) This section 1-9 applies only to a residential construction contract for the repair 1-10 or renovation of homestead property if the contract is executed at 1-11 the homestead property by the owner or by either spouse in the case 1-12 of a family homestead. 1-13 (b) This section does not apply if: 1-14 (1) the owner or, in the case of a family homestead, 1-15 both spouses are represented by a licensed attorney; or 1-16 (2) the residential construction contract is 1-17 negotiated by a licensed real estate broker. 1-18 (c) The owner, or either spouse in the case of a family 1-19 homestead, may rescind a contract subject to this section as 1-20 provided by Chapter 39, Business & Commerce Code. 1-21 (d) A purchaser, lender, or assignee for value without 1-22 actual knowledge may conclusively rely on a statement in a 1-23 residential construction contract initialed by the owner or, in the 1-24 case of a family homestead, both spouses acknowledging that the 2-1 contract was not executed at the homestead property. 2-2 SECTION 2. Subchapter K, Chapter 53, Property Code, is 2-3 amended by adding Section 53.2551 to read as follows: 2-4 Sec. 53.2551. ADDITIONAL DISCLOSURE STATEMENT REQUIRED FOR 2-5 CERTAIN RESIDENTIAL CONSTRUCTION CONTRACTS. A contract subject to 2-6 Section 53.2541 must contain a disclosure statement as prescribed 2-7 by Chapter 39, Business & Commerce Code. 2-8 SECTION 3. This Act takes effect January 1, 2000, but only 2-9 if the constitutional amendment proposed by the 76th Legislature, 2-10 Regular Session, 1999, prescribing requirements for imposing a lien 2-11 for work and material used in the construction, repair, or 2-12 renovation of improvements on residential homestead property, takes 2-13 effect. If that amendment is not approved by the voters, this Act 2-14 has no effect. 2-15 SECTION 4. The importance of this legislation and the 2-16 crowded condition of the calendars in both houses create an 2-17 emergency and an imperative public necessity that the 2-18 constitutional rule requiring bills to be read on three several 2-19 days in each house be suspended, and this rule is hereby suspended.