By Pitts H.B. No. 2033
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to requiring notice to purchasers of real property located
1-3 in a certificated service area of a utility service provider
1-4 regarding the cost or availability of water or sewer service.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter G, Chapter 13, Water Code, is amended
1-7 by adding Section 13.257 to read as follows:
1-8 Sec. 13.257. NOTICE TO PURCHASERS. (a) In this section,
1-9 "utility service provider" means a utility, a water supply or sewer
1-10 service corporation, or a special utility district organized and
1-11 operating under Chapter 65.
1-12 (b) If a person proposes to sell or convey unimproved real
1-13 property located in a certificated service area of a utility
1-14 service provider, the person must give to the purchaser written
1-15 notice as prescribed by this section. An executory contract for
1-16 the purchase and sale of real property that has a performance
1-17 period of more than six months is considered a sale of real
1-18 property under this section.
1-19 (c) This section does not apply to:
1-20 (1) a transfer of title under any type of lien
1-21 foreclosure;
1-22 (2) a transfer of title by deed in cancellation of
1-23 indebtedness secured by a lien on the property conveyed;
1-24 (3) a transfer of title by reason of a will or probate
2-1 proceeding;
2-2 (4) a transfer of title to or from a governmental
2-3 entity;
2-4 (5) a transfer of title to property located within the
2-5 corporate limits of a municipality;
2-6 (6) a transfer of title to property that receives
2-7 water or sewer service from a utility service provider on the date
2-8 the property is transferred;
2-9 (7) a transfer of title by a trustee in bankruptcy;
2-10 (8) a transfer of title by a mortgagee or beneficiary
2-11 under a deed of trust who acquired the property:
2-12 (A) at a sale conducted under a power of sale
2-13 conferred by a deed of trust or other contract lien;
2-14 (B) at a sale under a court judgment foreclosing
2-15 a lien; or
2-16 (C) by a deed in lieu of foreclosure;
2-17 (9) a transfer of title from one co-owner to another
2-18 co-owner;
2-19 (10) a transfer of title between spouses or to a
2-20 person in the lineal line of consanguinity of the transferor; or
2-21 (11) a transfer of a mineral interest, leasehold
2-22 interest, or security interest.
2-23 (d) The notice must be executed by the seller and read as
2-24 follows:
2-25 "The real property, described below, that you are about to
2-26 purchase is located in the water or sewer service area of
2-27 ___________________, which is the utility service provider
3-1 authorized by law to provide water or sewer service to your
3-2 property. No other retail public utility is authorized to provide
3-3 water or sewer service to your property. There may be special
3-4 costs or charges that you will be required to pay before you can
3-5 receive water or sewer service. There may be a period required to
3-6 construct lines or other facilities necessary to provide water or
3-7 sewer service to your property. You are advised to contact the
3-8 utility service provider to determine the cost that you will be
3-9 required to pay and the period, if any, that is required to provide
3-10 water or sewer service to your property.
3-11 "The undersigned purchaser hereby acknowledges receipt of the
3-12 foregoing notice at or before the execution of a binding contract
3-13 for the purchase of the real property described in the notice or at
3-14 closing of purchase of the real property.
3-15 ______________________
3-16 Date
3-17 _______________________________
3-18 Signature of Purchaser
3-19 "(Note: Correct name of utility service provider is to be
3-20 placed in the appropriate space.) Except for notices included as
3-21 an addendum to or paragraph of a purchase contract, the notice must
3-22 be executed by the seller and purchaser, as indicated."
3-23 (e) The notice must be given to the prospective purchaser
3-24 before the execution of a binding contract of purchase and sale.
3-25 The notice may be given separately or as an addendum to or
3-26 paragraph of the contract. If the seller fails to provide the
3-27 notice required by this section, the purchaser may terminate the
4-1 contract. If the seller provides the notice at or before the
4-2 closing of the purchase and sale contract and the purchaser elects
4-3 to close even though the notice was not timely provided before the
4-4 execution of the contract, it is conclusively presumed that the
4-5 purchaser has waived all rights to terminate the contract and
4-6 recover damages or pursue other remedies or rights under this
4-7 section. Notwithstanding any provision of this section to the
4-8 contrary, a seller, title insurance company, real estate broker, or
4-9 examining attorney, or an agent, representative, or person acting
4-10 on behalf of the seller, company, broker, or attorney, is not
4-11 liable for damages under Subsection (m) or (n) or liable for any
4-12 other damages to any person for:
4-13 (1) failing to provide the notice required by this
4-14 section to a purchaser before the execution of a binding contract
4-15 of purchase and sale or at or before the closing of the purchase
4-16 and sale contract if:
4-17 (A) the utility service provider did not file
4-18 the map of the certificated service area in the real property
4-19 records of the county in which the service area is located and with
4-20 the commission depicting the boundaries of the service area of the
4-21 utility service provider as shown in the real property records of
4-22 the county in which the service area is located; and
4-23 (B) the commission did not maintain an accurate
4-24 map of the certificated service area of the utility service
4-25 provider as required by this chapter; or
4-26 (2) unintentionally providing a notice required by
4-27 this section that is incorrect under the circumstances before the
5-1 execution of a binding contract of purchase and sale or at or
5-2 before the closing of the purchase and sale contract.
5-3 (f) The purchaser shall sign the notice or the purchase and
5-4 sale contract that includes the notice to evidence the purchaser's
5-5 receipt of the notice.
5-6 (g) At the closing of the purchase and sale contract, a
5-7 separate copy of the notice with current information shall be
5-8 executed by the seller and purchaser, acknowledged, and
5-9 subsequently recorded in the real property records of the county in
5-10 which the property is located. In completing the notice to be
5-11 executed by the seller and purchaser at the closing of the purchase
5-12 and sale contract, any seller, title insurance company, real estate
5-13 broker, or examining attorney, or any agent, representative, or
5-14 person acting on behalf of the seller, company, broker, or
5-15 attorney, may rely on the accuracy of the information required by
5-16 this chapter that is last filed in the real property records by the
5-17 utility service provider and the accuracy of the map of the
5-18 certificated service area of the utility service provider. Any
5-19 information taken from the map is, for purposes of this section,
5-20 conclusively presumed to be correct as a matter of law. Any
5-21 subsequent seller, purchaser, title insurance company, real estate
5-22 broker, examining attorney, or lienholder may rely on the map of
5-23 the certificated service area filed in the real property records by
5-24 the utility service provider.
5-25 (h) In completing the notice required to be given to a
5-26 prospective purchaser before the execution of a binding contract of
5-27 purchase and sale, any seller, and any person completing the notice
6-1 on behalf of the seller, may rely on the information contained in
6-2 the map of the certificated service area filed in the real property
6-3 records by the utility service provider. Any subsequent seller,
6-4 purchaser, title insurance company, real estate broker, examining
6-5 attorney, or lienholder may rely on the map of the certificated
6-6 service area filed in the real property records by the utility
6-7 service provider.
6-8 (i) If the notice is given at closing as provided by
6-9 Subsection (g), a purchaser, or the purchaser's heirs, successors,
6-10 or assigns, may not maintain an action for damages or maintain an
6-11 action against a seller, title insurance company, real estate
6-12 broker, or lienholder, or any agent, representative, or person
6-13 acting on behalf of the seller, company, broker, or lienholder, by
6-14 reason of the seller's use of the information filed with the
6-15 commission by the utility service provider or the seller's use of
6-16 the map of the certificated service area of the utility service
6-17 provider filed in the real property records to determine whether
6-18 the property to be purchased is within the certificated service
6-19 area of the utility service provider. An action may not be
6-20 maintained against a title insurance company for the failure to
6-21 disclose that the described real property is included within the
6-22 certificated service area of a utility service provider if the
6-23 utility service provider did not file in the real property records
6-24 or with the commission the map of the certificated service area.
6-25 (j) Any purchaser who purchases real property in a
6-26 certificated service area of a utility service provider and who
6-27 subsequently sells or conveys the property is conclusively
7-1 considered on the closing of the subsequent sale to have waived any
7-2 previous right to damages under this section.
7-3 (k) It is the express intent of this section that any
7-4 seller, title insurance company, examining attorney, vendor of
7-5 property and tax information, real estate broker, or lienholder, or
7-6 any agent, representative, or person acting on behalf of the
7-7 seller, company, attorney, vendor, broker, or lienholder, may rely
7-8 for the purpose of completing the notice required by this section
7-9 on the accuracy of the map of the certificated service area of the
7-10 utility service provider filed in the real property records by the
7-11 utility service provider.
7-12 (l) Except as otherwise provided by Subsection (e), if any
7-13 sale or conveyance of real property within the certificated service
7-14 area of a utility service provider fails to comply with this
7-15 section, the purchaser may file a suit for damages under Subsection
7-16 (m) or (n).
7-17 (m) If the sale or conveyance of real property fails to
7-18 comply with this section, the purchaser may file a suit for damages
7-19 in the amount of all costs related to the purchase of the property
7-20 plus interest and reasonable attorney's fees. The suit for damages
7-21 may be filed jointly or severally against the individual or entity
7-22 that sold or conveyed the property to the purchaser. Following the
7-23 recovery of damages under this subsection, the amount of the
7-24 damages shall be paid first to satisfy all unpaid obligations on
7-25 each outstanding lien on the property and the remainder of the
7-26 damage amount shall be paid to the purchaser. On payment of all
7-27 damages respectively to each lienholder and the purchaser, the
8-1 purchaser shall reconvey the property to the seller.
8-2 (n) If the sale or conveyance of the property fails to
8-3 comply with this section, the purchaser may file a suit for damages
8-4 in an amount not to exceed $5,000, plus reasonable attorney's fees.
8-5 (o) A purchaser may not recover damages under both
8-6 Subsections (m) and (n). An entry of a final decision awarding
8-7 damages to the purchaser under either Subsection (m) or (n)
8-8 precludes the purchaser from recovering damages under the other
8-9 subsection. Notwithstanding general or special law or the common
8-10 law of this state to the contrary, the relief provided under
8-11 Subsections (m) and (n) provides the exclusive remedy for a
8-12 purchaser aggrieved by the seller's failure to comply with this
8-13 section. Any action for damages under this section does not apply
8-14 to, affect, alter, or impair the validity of any existing vendor's
8-15 lien, mechanic's lien, or deed of trust lien on the property.
8-16 (p) A suit for damages under this section must be filed by
8-17 the earlier of:
8-18 (1) a date on or before the 90th day after the date
8-19 the purchaser discovers:
8-20 (A) the cost the purchaser is required to pay to
8-21 the utility service provider to obtain water or sewer service; or
8-22 (B) the period required by the utility service
8-23 provider to provide water or sewer service; or
8-24 (2) the fourth anniversary of the date the property
8-25 was sold or conveyed to the purchaser.
8-26 (q) Notwithstanding any other provision of this section to
8-27 the contrary, a purchaser may not recover damages under this
9-1 section if the person:
9-2 (1) purchases an equity interest in real property and,
9-3 in conjunction with the purchase, assumes any liens, including a
9-4 purchase money lien; and
9-5 (2) does not require proof of title by abstract, title
9-6 insurance policy, or any other method.
9-7 SECTION 2. (a) This Act takes effect September 1, 2001.
9-8 (b) The change in law made by this Act applies only to a
9-9 transfer of property that occurs on or after the effective date of
9-10 this Act. For purposes of this section, a transfer of property
9-11 occurs before the effective date of this Act if the contract of
9-12 purchase and sale binding the purchaser to purchase the property
9-13 was executed before that date.
9-14 (c) Property transferred before the effective date of this
9-15 Act is covered by the law in effect when the property was
9-16 transferred, and the former law is continued in effect for that
9-17 purpose.