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.
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