By Ellis S.B. No. 319
76R3444 PAM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to disclosure notices required for the sale of certain
1-3 residential real property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 5, Property Code, is
1-6 amended by adding Sections 5.012 and 5.013 to read as follows:
1-7 Sec. 5.012. NOTICE OF HOMESTEAD FORECLOSURE INFORMATION.
1-8 (a) A seller of residential real property comprising not more than
1-9 one dwelling unit located in this state shall give to the purchaser
1-10 of the property before the transfer of the property a written
1-11 notice as prescribed by this section.
1-12 (b) The notice must be conspicuous and printed in 14-point
1-13 bold-faced type and read substantially similar to the following:
1-14 NOTICE OF HOMESTEAD FORECLOSURE INFORMATION
1-15 CONCERNING THE PROPERTY AT (street address and city)
1-16 WARNING: UNDER TEXAS LAW, YOU MAY LOSE THIS PROPERTY THROUGH
1-17 FORECLOSURE, EVEN IF IT IS DESIGNATED AS HOMESTEAD PROPERTY, IF YOU
1-18 FAIL TO TIMELY PAY ANY OF THE FOLLOWING OBLIGATIONS:
1-19 (1) a purchase money obligation secured by a lien on
1-20 this property;
1-21 (2) a home improvement contract obligation secured by
1-22 a lien on this property;
1-23 (3) a property owners' association assessment and
1-24 certain related costs secured by a lien on this property, including
2-1 a lien provided for in restrictive covenants applicable to this
2-2 property;
2-3 (4) ad valorem property taxes assessed against this
2-4 property;
2-5 (5) federal income taxes owed by you; or
2-6 (6) a lien on this property that preexists your
2-7 purchase of this property and that was not paid at the time you
2-8 purchased this property.
2-9 Depending on state law or the terms of the agreement relating
2-10 to the financial obligation, a financial obligation listed above
2-11 may be foreclosed by judicial foreclosure, which would require the
2-12 filing of a lawsuit against you, or by nonjudicial foreclosure,
2-13 which would require notifying you but would not require the filing
2-14 of a lawsuit against you. In certain circumstances, attorney's
2-15 fees and other costs associated with the foreclosure may be added
2-16 to the original obligation, which would increase the amount of the
2-17 debt owed.
2-18 If you cease using this home as your primary residence or
2-19 otherwise lose your homestead exemption, the failure to timely pay
2-20 financial obligations other than those listed above may result in
2-21 the foreclosure of this property.
2-22 I UNDERSTAND THAT I CAN LOSE THIS PROPERTY THROUGH
2-23 FORECLOSURE FOR THE REASONS STATED ABOVE.
2-24 Date:__________ ________________________________________
2-25 Signature of Purchaser
2-26 Print Name:_________________________
2-27 Property Address:_____________________
3-1 (c) The seller's failure to provide the notice required by
3-2 this section:
3-3 (1) is a false, misleading, or deceptive act or
3-4 practice within the meaning of Section 17.46, Business & Commerce
3-5 Code, and is actionable in a public or private suit brought under
3-6 Subchapter E, Chapter 17, Business & Commerce Code; and
3-7 (2) entitles the purchaser to cancel and rescind the
3-8 purchase contract and receive a full refund of any purchase payment
3-9 made to the seller.
3-10 Sec. 5.013. NOTICE OF OBLIGATIONS RELATED TO MEMBERSHIP IN
3-11 PROPERTY OWNERS' ASSOCIATION. (a) A seller of residential real
3-12 property that is subject to membership in a property owners'
3-13 association and comprising not more than one dwelling unit located
3-14 in this state shall give to the purchaser of the property before
3-15 the transfer of the property a written notice as prescribed by
3-16 this section.
3-17 (b) The notice must be conspicuous and printed in 14-point
3-18 bold-faced type and read substantially similar to the following:
3-19 NOTICE OF MEMBERSHIP IN PROPERTY OWNERS' ASSOCIATION
3-20 CONCERNING THE PROPERTY AT (street address)
3-21 (name of residential community)
3-22 As a purchaser of property in this residential community, you
3-23 are obligated to be a member of (name of property owners'
3-24 association).
3-25 Restrictive covenants governing the use and occupancy of
3-26 property located in this residential community and a dedicatory
3-27 instrument governing the establishment, maintenance, and operation
4-1 of this residential community have been or will be recorded in the
4-2 Real Property Records of (name of county). Copies of the
4-3 restrictive covenants and dedicatory instrument may be obtained
4-4 from the county clerk.
4-5 The restrictive covenants ________ may ________ may not be
4-6 amended without the approval of the members of the property owners'
4-7 association.
4-8 You are obligated to pay assessments to the property owners'
4-9 association. The amount of the assessments is subject to change.
4-10 Your failure to pay the assessments could result in a lien on and
4-11 the foreclosure of your property.
4-12 THE STATEMENTS CONTAINED IN THIS NOTICE ARE SUMMARY IN
4-13 NATURE. AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE
4-14 RESTRICTIVE COVENANTS AND THE DEDICATORY INSTRUMENT FOR FURTHER
4-15 DETAIL.
4-16 I UNDERSTAND MY OBLIGATIONS RELATING TO MEMBERSHIP IN THE
4-17 PROPERTY OWNERS' ASSOCIATION AS STATED ABOVE.
4-18 Date:__________ ________________________________________
4-19 Signature of Purchaser
4-20 Print Name:_________________________
4-21 Property Address:_____________________
4-22 (c) The seller's failure to provide the notice required by
4-23 this section:
4-24 (1) is a false, misleading, or deceptive act or
4-25 practice within the meaning of Section 17.46, Business & Commerce
4-26 Code, and is actionable in a public or private suit brought under
4-27 Subchapter E, Chapter 17, Business & Commerce Code; and
5-1 (2) entitles the purchaser to cancel and rescind the
5-2 purchase contract and receive a full refund of any purchase payment
5-3 made to the seller.
5-4 SECTION 2. This Act takes effect September 1, 1999. The
5-5 change in law made by this Act applies only to a real property
5-6 transaction described by this Act in which the transfer of the
5-7 property occurs on or after the effective date of this Act.
5-8 SECTION 3. The importance of this legislation and the
5-9 crowded condition of the calendars in both houses create an
5-10 emergency and an imperative public necessity that the
5-11 constitutional rule requiring bills to be read on three several
5-12 days in each house be suspended, and this rule is hereby suspended.