1-1 By: Solomons (Senate Sponsor - Shapleigh) H.B. No. 2605 1-2 (In the Senate - Received from the House May 10, 1999; 1-3 May 10, 1999, read first time and referred to Committee on Economic 1-4 Development; May 14, 1999, reported favorably by the following 1-5 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to providing a right of rescission for certain owners 1-9 executing residential construction contracts for improvements on 1-10 homestead property. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subchapter K, Chapter 53, Property Code, is 1-13 amended by adding Section 53.2541 to read as follows: 1-14 Sec. 53.2541. RIGHT OF RESCISSION. (a) This section 1-15 applies only to a residential construction contract for the repair 1-16 or renovation of homestead property if the contract is executed at 1-17 the homestead property by the owner or by either spouse in the case 1-18 of a family homestead. 1-19 (b) This section does not apply if: 1-20 (1) the owner or, in the case of a family homestead, 1-21 both spouses are represented by a licensed attorney; or 1-22 (2) the residential construction contract is 1-23 negotiated by a licensed real estate broker. 1-24 (c) The owner, or either spouse in the case of a family 1-25 homestead, may rescind a contract subject to this section as 1-26 provided by Chapter 39, Business & Commerce Code. 1-27 (d) A purchaser, lender, or assignee for value without 1-28 actual knowledge may conclusively rely on a statement in the 1-29 acknowledgement or the residential construction contract initialed 1-30 by the owner or, in the case of a family homestead, both spouses 1-31 acknowledging that the contract was not executed at the homestead 1-32 property. 1-33 SECTION 2. Subchapter K, Chapter 53, Property Code, is 1-34 amended by adding Section 53.2551 to read as follows: 1-35 Sec. 53.2551. ADDITIONAL DISCLOSURE STATEMENT REQUIRED FOR 1-36 CERTAIN RESIDENTIAL CONSTRUCTION CONTRACTS. A contract subject to 1-37 Section 53.2541 must contain a disclosure statement as prescribed 1-38 by Chapter 39, Business & Commerce Code. 1-39 SECTION 3. This Act takes effect January 1, 2000, but only 1-40 if the constitutional amendment proposed by the 76th Legislature, 1-41 Regular Session, 1999, prescribing requirements for imposing a lien 1-42 for work and material used in the construction, repair, or 1-43 renovation of improvements on residential homestead property, takes 1-44 effect. If that amendment is not approved by the voters, this Act 1-45 has no effect. 1-46 SECTION 4. The importance of this legislation and the 1-47 crowded condition of the calendars in both houses create an 1-48 emergency and an imperative public necessity that the 1-49 constitutional rule requiring bills to be read on three several 1-50 days in each house be suspended, and this rule is hereby suspended. 1-51 * * * * *