By Pitts H.B. No. 2033
77R3907 PAM-F
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 real property
1-13 located in a certificated service area of a utility service
1-14 provider, the person must give to the purchaser written notice as
1-15 prescribed by this section. An executory contract for the purchase
1-16 and sale of real property that has a performance period of more
1-17 than six months is considered a sale of real property under this
1-18 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; or
2-2 (4) a transfer of title to a governmental entity.
2-3 (d) The notice must be executed by the seller and read as
2-4 follows:
2-5 "The real property, described below, that you are about to
2-6 purchase is located in the water or sewer service area of
2-7 ___________________, which is the utility service provider
2-8 authorized by law to provide water or sewer service to your
2-9 property. No other retail public utility is authorized to provide
2-10 water or sewer service to your property. There may be special
2-11 costs or charges that you will be required to pay before you can
2-12 receive water or sewer service. There may be a period required to
2-13 construct lines or other facilities necessary to provide water or
2-14 sewer service to your property. You are advised to contact the
2-15 utility service provider to determine the cost that you will be
2-16 required to pay and the period, if any, that is required to provide
2-17 water or sewer service to your property.
2-18 "The undersigned purchaser hereby acknowledges receipt of the
2-19 foregoing notice at or before the execution of a binding contract
2-20 for the purchase of the real property described in the notice or at
2-21 closing of purchase of the real property.
2-22 ______________________
2-23 Date
2-24 _______________________________
2-25 Signature of Purchaser
2-26 "(Note: Correct name of utility service provider is to be
2-27 placed in the appropriate space.) Except for notices included as
3-1 an addendum to or paragraph of a purchase contract, the notice must
3-2 be executed by the seller and purchaser, as indicated."
3-3 (e) The notice must be given to the prospective purchaser
3-4 before the execution of a binding contract of purchase and sale.
3-5 The notice may be given separately or as an addendum to or
3-6 paragraph of the contract. If the seller fails to provide the
3-7 notice required by this section, the purchaser may terminate the
3-8 contract. If the seller provides the notice at or before the
3-9 closing of the purchase and sale contract and the purchaser elects
3-10 to close even though the notice was not timely provided before the
3-11 execution of the contract, it is conclusively presumed that the
3-12 purchaser has waived all rights to terminate the contract and
3-13 recover damages or pursue other remedies or rights under this
3-14 section. Notwithstanding any provision of this section to the
3-15 contrary, a seller, title insurance company, real estate broker, or
3-16 examining attorney, or an agent, representative, or person acting
3-17 on behalf of the seller, company, broker, or attorney, is not
3-18 liable for damages under Subsection (m) or (n) or liable for any
3-19 other damages to any person for:
3-20 (1) failing to provide the notice required by this
3-21 section to a purchaser before the execution of a binding contract
3-22 of purchase and sale or at or before the closing of the purchase
3-23 and sale contract if the utility service provider did not file the
3-24 information or the commission did not maintain an accurate map of
3-25 the certificated service area of the utility service provider as
3-26 required under this chapter; or
3-27 (2) unintentionally providing a notice required by
4-1 this section that is incorrect under the circumstances before the
4-2 execution of a binding contract of purchase and sale or at or
4-3 before the closing of the purchase and sale contract.
4-4 (f) The purchaser shall sign the notice or the purchase and
4-5 sale contract that includes the notice to evidence the purchaser's
4-6 receipt of the notice.
4-7 (g) At the closing of the purchase and sale contract, a
4-8 separate copy of the notice with current information shall be
4-9 executed by the seller and purchaser, acknowledged, and
4-10 subsequently recorded in the real property records of the county in
4-11 which the property is located. In completing the notice to be
4-12 executed by the seller and purchaser at the closing of the purchase
4-13 and sale contract, any seller, title insurance company, real estate
4-14 broker, or examining attorney, or any agent, representative, or
4-15 person acting on behalf of the seller, company, broker, or
4-16 attorney, may rely on the accuracy of the information required by
4-17 this chapter that is last filed with the commission by the utility
4-18 service provider and the accuracy of the map of the certificated
4-19 service area of the utility service provider maintained by the
4-20 commission. Any information taken from the information or map is,
4-21 for purposes of this section, conclusively presumed to be correct
4-22 as a matter of law. Any subsequent seller, purchaser, title
4-23 insurance company, real estate broker, examining attorney, or
4-24 lienholder may rely on the information filed with and the map
4-25 maintained by the commission under this chapter.
4-26 (h) In completing the notice required to be given to a
4-27 prospective purchaser before the execution of a binding contract of
5-1 purchase and sale, any seller, and any person completing the notice
5-2 on behalf of the seller, may rely on the information contained in
5-3 the maps of certificated service areas maintained by the commission
5-4 under this chapter. Any subsequent seller, purchaser, title
5-5 insurance company, real estate broker, examining attorney, or
5-6 lienholder may rely on the information and map filed by the utility
5-7 service provider.
5-8 (i) If the notice is given at closing as provided by
5-9 Subsection (g), a purchaser, or the purchaser's heirs, successors,
5-10 or assigns, may not maintain an action for damages or maintain an
5-11 action against a seller, title insurance company, real estate
5-12 broker, or lienholder, or any agent, representative, or person
5-13 acting on behalf of the seller, company, broker, or lienholder, by
5-14 reason of the seller's use of the information filed with the
5-15 commission by the utility service provider or the seller's use of
5-16 the map of the certificated service area of the utility service
5-17 provider maintained by the commission to determine whether the
5-18 property to be purchased is within the certificated service area of
5-19 the utility service provider. An action may not be maintained
5-20 against a title insurance company for the failure to disclose that
5-21 the described real property is included within the certificated
5-22 service area of a utility service provider if the utility service
5-23 provider did not file for record the information and map required
5-24 by this chapter or any other information required by the
5-25 commission.
5-26 (j) Any purchaser who purchases real property in a
5-27 certificated service area of a utility service provider and who
6-1 subsequently sells or conveys the property is conclusively
6-2 considered on the closing of the subsequent sale to have waived any
6-3 previous right to damages under this section.
6-4 (k) It is the express intent of this section that any
6-5 seller, title insurance company, examining attorney, vendor of
6-6 property and tax information, real estate broker, or lienholder, or
6-7 any agent, representative, or person acting on behalf of the
6-8 company, attorney, vendor, broker, or lienholder, may rely for the
6-9 purpose of completing the notice required by this section on the
6-10 accuracy of the information filed with the commission by the
6-11 utility service provider and the accuracy of the map of the
6-12 certificated service area of the utility service provider
6-13 maintained by the commission.
6-14 (l) Except as otherwise provided by Subsection (e), if any
6-15 sale or conveyance of real property within the certificated service
6-16 area of a utility service provider fails to comply with this
6-17 section, the purchaser may file a suit for damages under Subsection
6-18 (m) or (n).
6-19 (m) If the sale or conveyance of real property fails to
6-20 comply with this section, the purchaser may file a suit for damages
6-21 in the amount of all costs related to the purchase of the property
6-22 plus interest and reasonable attorney's fees. The suit for damages
6-23 may be filed jointly or severally against the individual or entity
6-24 that sold or conveyed the property to the purchaser. Following the
6-25 recovery of damages under this subsection, the amount of the
6-26 damages shall be paid first to satisfy all unpaid obligations on
6-27 each outstanding lien on the property and the remainder of the
7-1 damage amount shall be paid to the purchaser. On payment of all
7-2 damages respectively to each lienholder and the purchaser, the
7-3 purchaser shall reconvey the property to the seller.
7-4 (n) If the sale or conveyance of the property fails to
7-5 comply with this section, the purchaser may file a suit for damages
7-6 in an amount not to exceed $5,000, plus reasonable attorney's fees.
7-7 (o) A purchaser may not recover damages under both
7-8 Subsections (m) and (n). An entry of a final decision awarding
7-9 damages to the purchaser under either Subsection (m) or (n)
7-10 precludes the purchaser from recovering damages under the other
7-11 subsection. Notwithstanding general or special law or the common
7-12 law of this state to the contrary, the relief provided under
7-13 Subsections (m) and (n) provide the exclusive remedies for a
7-14 purchaser aggrieved by the seller's failure to comply with this
7-15 section. Any action for damages under this section does not apply
7-16 to, affect, alter, or impair the validity of any existing vendor's
7-17 lien, mechanic's lien, or deed of trust lien on the property.
7-18 (p) A suit for damages under this section must be filed by
7-19 the earlier of:
7-20 (1) a date on or before the 90th day after the date
7-21 the purchaser discovers:
7-22 (A) the cost the purchaser is required to pay to
7-23 the utility service provider to obtain water or sewer service; or
7-24 (B) the period required by the utility service
7-25 provider to provide water or sewer service; or
7-26 (2) the fourth anniversary of the date the property
7-27 was sold or conveyed to the purchaser.
8-1 (q) Notwithstanding any other provision of this section to
8-2 the contrary, a purchaser may not recover damages under this
8-3 section if the person:
8-4 (1) purchases an equity interest in real property and,
8-5 in conjunction with the purchase, assumes any liens, including a
8-6 purchase money lien; and
8-7 (2) does not require proof of title by abstract, title
8-8 insurance policy, or any other method.
8-9 SECTION 2. (a) This Act takes effect September 1, 2001.
8-10 (b) The change in law made by this Act applies only to a
8-11 transfer of property that occurs on or after the effective date of
8-12 this Act. For purposes of this section, a transfer of property
8-13 occurs before the effective date of this Act if the contract of
8-14 purchase and sale binding the purchaser to purchase the property
8-15 was executed before that date.
8-16 (c) Property transferred before the effective date of this
8-17 Act is covered by the law in effect when the property was
8-18 transferred, and the former law is continued in effect for that
8-19 purpose.