By Solomons H.B. No. 2605 76R8371 PAM-D 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 SECTION 2. Subchapter K, Chapter 53, Property Code, is 1-22 amended by adding Section 53.2551 to read as follows: 1-23 Sec. 53.2551. ADDITIONAL DISCLOSURE STATEMENT REQUIRED FOR 1-24 CERTAIN RESIDENTIAL CONSTRUCTION CONTRACTS. (a) This section 2-1 applies only to a residential construction contract for the repair 2-2 or renovation of homestead property if the contract is executed at 2-3 the homestead property by the owner or by either spouse in the case 2-4 of a family homestead. 2-5 (b) This section does not apply if: 2-6 (1) the owner or, in the case of a family homestead, 2-7 both spouses are represented by a licensed attorney; or 2-8 (2) the residential construction contract is 2-9 negotiated by a licensed real estate broker. 2-10 (c) A contract subject to this section must contain a 2-11 disclosure statement as prescribed by Chapter 39, Business & 2-12 Commerce Code. 2-13 (d) The failure of a contractor to comply with this section 2-14 does not invalidate a lien under this chapter. 2-15 (e) A purchaser, lender, or assignee for value without 2-16 actual knowledge may conclusively rely on a statement in a 2-17 residential construction contract initialed by the owner or, in 2-18 the case of a family homestead, both spouses acknowledging that the 2-19 contract was not signed at the homestead property. 2-20 SECTION 3. This Act takes effect January 1, 2000, but only 2-21 if the constitutional amendment proposed by the 76th Legislature, 2-22 Regular Session, 1999, prescribing requirements for imposing a lien 2-23 for work and material used in the construction, repair, or 2-24 renovation of improvements on homestead property, takes effect. If 2-25 that amendment is not approved by the voters, this Act has no 2-26 effect. 2-27 SECTION 4. The importance of this legislation and the 3-1 crowded condition of the calendars in both houses create an 3-2 emergency and an imperative public necessity that the 3-3 constitutional rule requiring bills to be read on three several 3-4 days in each house be suspended, and this rule is hereby suspended.