By Moncrief S.B. No. 198
77R2934 PAM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to executory contracts for the conveyance of real
1-3 property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapters D and E, Chapter 5, Property Code, are
1-6 amended to consolidate the subchapters by amending and
1-7 redesignating Section 5.065 as Section 5.061, amending and
1-8 redesignating Section 5.091 as Section 5.062, amending and
1-9 redesignating Section 5.062 as Section 5.063, amending and
1-10 redesignating Section 5.061 as Section 5.064, amending and
1-11 redesignating Section 5.063 as Section 5.065, amending and
1-12 redesignating Section 5.101 as Section 5.066, redesignating Section
1-13 5.064 as Section 5.067, amending and redesignating Section 5.093 as
1-14 Section 5.068, amending and redesignating Section 5.094 as Section
1-15 5.069, adding Section 5.070, amending and redesignating Section
1-16 5.095 as Section 5.071, adding Section 5.072, amending and
1-17 redesignating Section 5.096 as Section 5.073, redesignating Section
1-18 5.097 as Section 5.074, amending and redesignating Section 5.098 as
1-19 Section 5.075, amending and redesignating Section 5.099 as Section
1-20 5.076, amending and redesignating Section 5.100 as Section 5.077,
1-21 adding Section 5.078, amending and redesignating Section 5.102 as
1-22 Section 5.079, and redesignating Section 5.103 as Section 5.080 to
1-23 read as follows:
1-24 Sec. 5.061 [5.065]. DEFINITION [DEFAULT]. In this
2-1 subchapter, "default" means the failure to:
2-2 (1) make a timely payment; or
2-3 (2) comply with a term of an executory contract.
2-4 Sec. 5.062 [5.091]. APPLICABILITY. (a) [This subchapter
2-5 applies only to an executory contract that covers real property
2-6 located in a county that, as determined by the Texas Department of
2-7 Housing and Community Affairs:]
2-8 [(1) has a per capita income that averaged 25 percent
2-9 below the state average for the most recent three consecutive years
2-10 for which statistics are available and an unemployment rate that
2-11 averaged 25 percent above the state average for the most recent
2-12 three consecutive years for which statistics are available; and]
2-13 [(2) is within 200 miles of an international border.]
2-14 [(b)] This subchapter applies only to a transaction
2-15 involving an executory contract for conveyance of real property
2-16 used or to be used as the purchaser's residence. For purposes of
2-17 this subchapter, a lot measuring one acre or less is presumed to be
2-18 residential property.
2-19 (b) [(c)] This subchapter does not apply to a transaction
2-20 involving a sale of land by the Veterans' Land Board under an
2-21 executory contract.
2-22 (c) [(d)] This subchapter does not apply to an executory
2-23 contract that provides for the delivery of a deed from the seller
2-24 to the purchaser within 180 days of the date of the final execution
2-25 of the executory contract.
2-26 Sec. 5.063 [5.062]. NOTICE. (a) Notice under Section 5.064
2-27 [5.061 of this code] must be in writing and [. If the notice is
3-1 mailed, it] must be delivered by registered or certified mail,
3-2 return receipt requested. The notice must be conspicuous and
3-3 printed in 14-point boldface type or 14-point uppercase typewritten
3-4 letters, and must include on a separate page the statement:
3-5 NOTICE
3-6 YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO
3-7 BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED
3-8 IN THIS NOTICE BY (date) THE SELLER HAS THE RIGHT TO
3-9 TAKE POSSESSION OF YOUR PROPERTY.
3-10 (b) The notice must also:
3-11 (1) identify and explain the remedy the seller intends
3-12 to enforce;
3-13 (2) if the purchaser has failed to make a timely
3-14 payment, specify:
3-15 (A) the delinquent amount, itemized into
3-16 principal and interest;
3-17 (B) any additional charges claimed, such as late
3-18 charges or attorney's fees; and
3-19 (C) the period to which the delinquency and
3-20 additional charges relate; and
3-21 (3) if the purchaser has failed to comply with a term
3-22 of the contract, identify the term violated and the action required
3-23 to cure the violation.
3-24 (c) Notice by mail is given when it is mailed to the
3-25 purchaser's residence or place of business. [Notice by other
3-26 writing is given when it is delivered to the purchaser at the
3-27 purchaser's residence or place of business.] The affidavit of a
4-1 person knowledgeable of the facts to the effect that notice was
4-2 given is prima facie evidence of notice in an action involving a
4-3 subsequent bona fide purchaser for value if the purchaser is not in
4-4 possession of the real property and if the stated time to avoid the
4-5 forfeiture has expired. A bona fide subsequent purchaser for value
4-6 who relies upon the affidavit under this subsection shall take
4-7 title free and clear of the contract.
4-8 Sec. 5.064 [5.061]. SELLER'S REMEDIES ON DEFAULT [AVOIDANCE
4-9 OF FORFEITURE AND ACCELERATION OR OF RESCISSION]. A seller may
4-10 enforce the remedy of rescission or of forfeiture and acceleration
4-11 against a purchaser in default under an executory contract for
4-12 conveyance of real property used or to be used as the purchaser's
4-13 residence only if:
4-14 (1) the seller notifies the purchaser of:
4-15 (A) [(1)] the seller's intent to enforce a
4-16 remedy under this section; and
4-17 (B) [(2)] the expiration of [the following
4-18 periods:]
4-19 [(A) if the purchaser has paid less than 10
4-20 percent of the purchase price, 15 days after the date notice is
4-21 given;]
4-22 [(B) if the purchaser has paid 10 percent or
4-23 more but less than 20 percent of the purchase price, 30 days after
4-24 the date notice is given; and]
4-25 [(C) if the purchaser has paid 20 percent or
4-26 more of the purchase price,] 60 days after the date notice is
4-27 given;
5-1 (2) the purchaser fails to cure the default within the
5-2 60-day period described by Subdivision (1); and
5-3 (3) Section 5.066 does not apply.
5-4 Sec. 5.065 [5.063]. RIGHT TO CURE DEFAULT. Notwithstanding
5-5 an agreement to the contrary, a purchaser in default under an
5-6 executory contract for the conveyance of real property used or to
5-7 be used as the purchaser's residence may[, at any time before
5-8 expiration of the applicable period provided by Section 5.061 of
5-9 this code,] avoid the enforcement of a remedy described by that
5-10 section by complying with the terms of the contract on or before
5-11 the 60th day after the date notice is given under Section 5.064 [up
5-12 to the date of compliance].
5-13 Sec. 5.066 [5.101]. EQUITY PROTECTION; SALE OF PROPERTY. (a)
5-14 If a purchaser defaults after the purchaser has paid 40 percent or
5-15 more of the amount due or the equivalent of 48 monthly payments
5-16 under the executory contract, the seller is granted the power to
5-17 sell, through a trustee designated by the seller, the purchaser's
5-18 interest in the property as provided by this section. The seller
5-19 may not enforce the remedy of rescission or of forfeiture and
5-20 acceleration.
5-21 (b) The seller shall notify a purchaser of a default under
5-22 the contract and allow the purchaser at least 60 days after the
5-23 date notice is given to cure the default. The notice must be
5-24 provided as prescribed by Section 5.063 [5.062] except that the
5-25 notice must substitute the following statement:
5-26 NOTICE
5-27 YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO
6-1 BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED
6-2 IN THIS NOTICE BY (date) A TRUSTEE DESIGNATED BY THE
6-3 SELLER HAS THE RIGHT TO SELL YOUR PROPERTY AT A PUBLIC
6-4 AUCTION.
6-5 (c) The trustee or a substitute trustee designated by the
6-6 seller must post, file, and serve a notice of sale and the county
6-7 clerk shall record and maintain the notice of sale as prescribed by
6-8 Section 51.002. A notice of sale is not valid unless it is given
6-9 after the period to cure has expired.
6-10 (d) The trustee or a substitute trustee designated by the
6-11 seller must conduct the sale as prescribed by Section 51.002. The
6-12 seller must:
6-13 (1) convey to a purchaser at a sale conducted under
6-14 this section fee simple title to the real property; and
6-15 (2) warrant that the property is free from any
6-16 encumbrance.
6-17 (e) The remaining balance of the amount due under the
6-18 executory contract is the debt for purposes of a sale under this
6-19 section. If the proceeds of the sale exceed the debt amount, the
6-20 seller shall disburse the excess funds to the purchaser under the
6-21 executory contract. If the proceeds of the sale are insufficient
6-22 to extinguish the debt amount, the seller's right to recover the
6-23 resulting deficiency is subject to Sections 51.003, 51.004, and
6-24 51.005 unless a provision of the executory contract releases the
6-25 purchaser under the contract from liability.
6-26 (f) The affidavit of a person knowledgeable of the facts
6-27 that states that the notice was given and the sale was conducted as
7-1 provided by this section is prima facie evidence of those facts [in
7-2 an action involving a bona fide purchaser at the sale or a
7-3 subsequent bona fide purchaser for value if the purchaser under the
7-4 executory contract is not in possession of the property and if the
7-5 period to cure the default has expired]. A [bona fide] purchaser
7-6 for value who relies on an affidavit under this subsection acquires
7-7 title to the property free and clear of the executory contract.
7-8 (g) If a purchaser defaults before the purchaser has paid 40
7-9 percent of the amount due or the equivalent of 48 monthly payments
7-10 under the executory contract, the seller may enforce the remedy of
7-11 rescission or of forfeiture and acceleration of the indebtedness if
7-12 the seller complies with the notice requirements of Sections 5.063
7-13 and 5.064 [5.061 and 5.062].
7-14 Sec. 5.067 [5.064]. PLACEMENT OF LIEN FOR UTILITY SERVICE.
7-15 Notwithstanding any terms of a contract to the contrary, the
7-16 placement of a lien for the reasonable value of improvements to
7-17 residential real estate for purposes of providing utility service
7-18 to the property shall not constitute a default under the terms of
7-19 an executory contract for the purchase of the real property.
7-20 Sec. 5.068 [5.093]. FOREIGN [SPANISH] LANGUAGE REQUIREMENT.
7-21 If the negotiations that precede the execution of an executory
7-22 contract are conducted primarily in a language other than English
7-23 [Spanish], the seller shall provide a copy in that language
7-24 [Spanish] of all written documents relating to the transaction,
7-25 including the contract, disclosure notices [notice], [and] annual
7-26 accounting statements, [required by this subchapter] and a notice
7-27 of default required by this subchapter [Subchapter D].
8-1 Sec. 5.069 [5.094]. SELLER'S DISCLOSURE OF PROPERTY
8-2 CONDITION. (a) Before an executory contract is signed by the
8-3 purchaser, the seller shall provide the purchaser with:
8-4 (1) a survey, which was completed within the past
8-5 year, or plat of a current survey of the real property;
8-6 (2) a legible copy of any document that describes an
8-7 encumbrance or other claim, including a restrictive covenant or
8-8 easement, that affects title to the real property; and
8-9 (3) a written notice, which must be attached to the
8-10 contract, informing the purchaser of the condition of the property
8-11 that must, at a minimum, be executed by the seller and purchaser
8-12 and read substantially similar to the following:
8-13 WARNING
8-14 IF ANY OF THE ITEMS BELOW HAVE NOT BEEN CHECKED, YOU MAY NOT BE
8-15 ABLE TO LIVE ON THE PROPERTY.
8-16 SELLER'S DISCLOSURE NOTICE
8-17 CONCERNING THE PROPERTY AT (street address or legal description and
8-18 city)
8-19 THIS DOCUMENT STATES CERTAIN APPLICABLE FACTS ABOUT THE PROPERTY
8-20 [LAND] YOU ARE CONSIDERING PURCHASING.
8-21 CHECK ALL THE ITEMS THAT ARE APPLICABLE OR TRUE:
8-22 ____ The property is in a recorded subdivision.
8-23 ____ The property has water service that provides potable water.
8-24 ____ The property has sewer service.
8-25 ____ The property has been approved by the appropriate municipal,
8-26 county, or state agency for installation of a septic system.
8-27 ____ The property has electric service.
9-1 ____ The property is not in a floodplain.
9-2 ____ The roads to the boundaries of the property are paved and
9-3 maintained by:
9-4 ____ the seller;
9-5 ____ the owner of the property on which the road exists;
9-6 ____ the municipality;
9-7 ____ the county; or
9-8 ____ the state.
9-9 ____ No individual or entity other than the seller:
9-10 (1) owns the property;
9-11 (2) has a claim of ownership to the property; or
9-12 (3) has an interest in the property.
9-13 ____ No individual or entity has a lien filed against the
9-14 property.
9-15 [____ There are no back taxes owed on the property.]
9-16 ____ There are no restrictive covenants, easements, or other title
9-17 exceptions or encumbrances that prohibit construction of a house on
9-18 the property.
9-19 NOTICE: SELLER ADVISES PURCHASER TO:
9-20 (1) OBTAIN A TITLE ABSTRACT OR TITLE COMMITMENT COVERING THE
9-21 PROPERTY AND HAVE THE ABSTRACT OR COMMITMENT REVIEWED BY AN
9-22 ATTORNEY BEFORE SIGNING A CONTRACT OF THIS TYPE; AND
9-23 (2) PURCHASE AN OWNER'S POLICY OF TITLE INSURANCE COVERING
9-24 THE PROPERTY.
9-25 ____________________________ ____________________________
9-26 (Date) (Signature of Seller)
9-27
10-1 ____________________________ ____________________________
10-2 (Date) (Signature of Purchaser)
10-3 (b) If the property is not located in a recorded
10-4 subdivision, the seller shall provide the purchaser with a separate
10-5 disclosure form stating that utilities may not be available to the
10-6 property until the subdivision is recorded as required by law.
10-7 (c) If the seller advertises property for sale under an
10-8 executory contract, the advertisement must disclose information
10-9 regarding the availability of water, sewer, and electric service.
10-10 (d) The seller's failure to provide information required by
10-11 this section:
10-12 (1) is a false, misleading, or deceptive act or
10-13 practice within the meaning of Section 17.46, Business & Commerce
10-14 Code, and is actionable in a public or private suit brought under
10-15 Subchapter E, Chapter 17, Business & Commerce Code; and
10-16 (2) entitles the purchaser to cancel and rescind the
10-17 executory contract and receive a full refund of all payments made
10-18 to the seller.
10-19 (e) Subsection (d) does not limit the purchaser's remedy
10-20 against the seller for other false, misleading, or deceptive acts
10-21 or practices actionable in a suit brought under Subchapter E,
10-22 Chapter 17, Business & Commerce Code.
10-23 Sec. 5.070. SELLER'S DISCLOSURE OF TAX PAYMENTS AND
10-24 INSURANCE COVERAGE. (a) Before an executory contract is signed by
10-25 the purchaser, the seller shall provide the purchaser with:
10-26 (1) a tax certificate from the collector for each
10-27 taxing unit that collects taxes due on the property as provided by
11-1 Section 31.08, Tax Code; and
11-2 (2) a legible copy of any insurance policy, binder, or
11-3 other evidence relating to the property that indicates:
11-4 (A) the name of the insurer;
11-5 (B) a description of the property insured; and
11-6 (C) the amount for which the property is
11-7 insured.
11-8 (b) The seller's failure to provide information required by
11-9 this section:
11-10 (1) is a false, misleading, or deceptive act or
11-11 practice within the meaning of Section 17.46, Business & Commerce
11-12 Code, and is actionable in a public or private suit brought under
11-13 Subchapter E, Chapter 17, Business & Commerce Code; and
11-14 (2) entitles the purchaser to cancel and rescind the
11-15 executory contract and receive a full refund of all payments made
11-16 to the seller.
11-17 (c) Subsection (b) does not limit the purchaser's remedy
11-18 against the seller for other false, misleading, or deceptive acts
11-19 or practices actionable in a suit brought under Subchapter E,
11-20 Chapter 17, Business & Commerce Code.
11-21 Sec. 5.071 [5.095]. SELLER'S DISCLOSURE OF FINANCING TERMS.
11-22 Before an executory contract is signed by the purchaser, the seller
11-23 shall provide to the purchaser a written statement that specifies:
11-24 (1) the purchase price of the property;
11-25 (2) the interest rate charged under the contract;
11-26 (3) the dollar amount, or an estimate of the dollar
11-27 amount if the interest rate is variable, of the interest charged
12-1 for the term of the contract;
12-2 (4) the total amount of principal and interest to be
12-3 paid under the contract;
12-4 (5) the late charge, if any, that may be assessed
12-5 under the contract; and
12-6 (6) the fact that the seller may not charge a
12-7 prepayment penalty or any similar fee if the purchaser elects to
12-8 pay the entire amount due under the contract before the scheduled
12-9 payment date under the contract.
12-10 Sec. 5.072. ORAL AGREEMENTS PROHIBITED. (a) An executory
12-11 contract is not enforceable unless the contract is in writing and
12-12 signed by the party to be bound or by that party's authorized
12-13 representative.
12-14 (b) The rights and obligations of the parties to a contract
12-15 are determined solely from the written contract, and any prior oral
12-16 agreements between the parties are superseded by and merged into
12-17 the contract.
12-18 (c) An executory contract may not be varied by any oral
12-19 agreements or discussions that occur before or contemporaneously
12-20 with the execution of the contract.
12-21 (d) The seller shall include in a separate document or in a
12-22 provision of the contract a statement printed in 14-point boldfaced
12-23 type or 14-point uppercase typewritten letters that reads
12-24 substantially similar to the following:
12-25 THIS EXECUTORY CONTRACT REPRESENTS THE FINAL AGREEMENT
12-26 BETWEEN THE SELLER AND PURCHASER AND MAY NOT BE
12-27 CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
13-1 SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
13-2 UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
13-3 _____________________ ____________________________
13-4 (Date) (Signature of Seller)
13-5 _____________________ ____________________________
13-6 (Date) (Signature of Purchaser)
13-7 (e) The seller's failure to provide the notice required by
13-8 this section:
13-9 (1) is a false, misleading, or deceptive act or
13-10 practice within the meaning of Section 17.46, Business & Commerce
13-11 Code, and is actionable in a public or private suit brought under
13-12 Subchapter E, Chapter 17, Business & Commerce Code; and
13-13 (2) entitles the purchaser to cancel and rescind the
13-14 executory contract and receive a full refund of all payments made
13-15 to the seller.
13-16 (f) Subsection (e) does not limit the purchaser's remedy
13-17 against the seller for other false, misleading, or deceptive acts
13-18 or practices actionable in a suit brought under Subchapter E,
13-19 Chapter 17, Business & Commerce Code.
13-20 Sec. 5.073 [5.096]. CONTRACT TERMS PROHIBITED. A seller may
13-21 not include as a term of the executory contract a provision that:
13-22 (1) imposes an additional late-payment fee that
13-23 exceeds the lesser of:
13-24 (A) eight percent of the monthly payment under
13-25 the contract; or
13-26 (B) the actual administrative cost of processing
13-27 the late payment;
14-1 (2) prohibits the purchaser from pledging the
14-2 purchaser's interest in the property as security to obtain a loan
14-3 to place improvements, including utility improvements or fire
14-4 protection improvements, on the property; or
14-5 (3) imposes a prepayment penalty or any similar fee if
14-6 the purchaser elects to pay the entire amount due under the
14-7 contract before the scheduled payment date under the contract.
14-8 Sec. 5.074 [5.097]. PURCHASER'S RIGHT TO CANCEL CONTRACT
14-9 WITHOUT CAUSE. (a) In addition to other rights or remedies
14-10 provided by law, the purchaser may cancel and rescind an executory
14-11 contract for any reason by sending by telegram or certified or
14-12 registered mail, return receipt requested, or by delivering in
14-13 person a signed, written notice of cancellation to the seller not
14-14 later than the 14th day after the date of the contract.
14-15 (b) If the purchaser cancels the contract as provided by
14-16 Subsection (a), the seller shall, not later than the 10th day after
14-17 the date the seller receives the purchaser's notice of
14-18 cancellation:
14-19 (1) return to the purchaser the executed contract and
14-20 any property exchanged or payments made by the purchaser under the
14-21 contract; and
14-22 (2) cancel any security interest arising out of the
14-23 contract.
14-24 (c) The seller shall include in immediate proximity to the
14-25 space reserved in the executory contract for the purchaser's
14-26 signature a statement printed in 14-point boldface type or 14-point
14-27 uppercase typewritten letters that reads substantially similar to
15-1 the following:
15-2 YOU, THE PURCHASER, MAY CANCEL THIS CONTRACT AT ANY
15-3 TIME DURING THE NEXT TWO WEEKS. THE DEADLINE FOR
15-4 CANCELING THE CONTRACT IS (date). THE ATTACHED NOTICE
15-5 OF CANCELLATION EXPLAINS THIS RIGHT.
15-6 (d) The seller shall provide a notice of cancellation form
15-7 to the purchaser at the time the purchaser signs the executory
15-8 contract that is printed in 14-point boldface type or 14-point
15-9 uppercase typewritten letters and that reads substantially similar
15-10 to the following:
15-11 NOTICE OF CANCELLATION
15-12 (date of contract)
15-13 YOU MAY CANCEL THE EXECUTORY CONTRACT FOR ANY
15-14 REASON WITHOUT ANY PENALTY OR OBLIGATION BY (date).
15-15 (1) YOU MUST SEND BY TELEGRAM OR CERTIFIED OR
15-16 REGISTERED MAIL, RETURN RECEIPT REQUESTED, OR DELIVER
15-17 IN PERSON A SIGNED AND DATED COPY OF THIS CANCELLATION
15-18 NOTICE OR ANY OTHER WRITTEN NOTICE TO (Name of Seller)
15-19 AT (Seller's Address) BY (date).
15-20 (2) THE SELLER SHALL, NOT LATER THAN THE 10TH
15-21 DAY AFTER THE DATE THE SELLER RECEIVES YOUR
15-22 CANCELLATION NOTICE:
15-23 (A) RETURN THE EXECUTED CONTRACT AND ANY
15-24 PROPERTY EXCHANGED OR PAYMENTS MADE BY YOU UNDER THE
15-25 CONTRACT; AND
15-26 (B) CANCEL ANY SECURITY INTEREST ARISING OUT OF
15-27 THE CONTRACT.
16-1 I ACKNOWLEDGE RECEIPT OF THIS NOTICE OF
16-2 CANCELLATION FORM.
16-3 _________________________ _______________________
16-4 (Date) (Purchaser's Signature)
16-5 I HEREBY CANCEL THIS CONTRACT.
16-6 _________________________ _______________________
16-7 (Date) (Purchaser's Signature)
16-8 (e) The seller may not request the purchaser to sign a
16-9 waiver of receipt of the notice of cancellation form required by
16-10 this section.
16-11 Sec. 5.075 [5.098]. PURCHASER'S RIGHT TO PLEDGE INTEREST IN
16-12 PROPERTY ON CONTRACTS ENTERED INTO BEFORE SEPTEMBER 1, 1995. (a)
16-13 On an executory contract entered into before September 1, 1995, a
16-14 purchaser may pledge the interest in the property, which accrues
16-15 pursuant to Section 5.066 [5.101], only to obtain a loan for
16-16 improving the safety of the property or any improvements on the
16-17 property.
16-18 (b) Loans that improve the safety of the property and
16-19 improvements on the property include loans for:
16-20 (1) improving or connecting a residence to water
16-21 service;
16-22 (2) improving or connecting a residence to a
16-23 wastewater system;
16-24 (3) building or improving a septic system;
16-25 (4) structural improvements in the residence; and
16-26 (5) improved fire protection.
16-27 Sec. 5.076 [5.099]. RECORDING REQUIREMENTS. (a) Except as
17-1 provided by Subsection (b), the seller shall record the executory
17-2 contract, including the attached disclosure statement required by
17-3 Section 5.069 [5.094], as prescribed by Title 3 on or before the
17-4 60th day after the date the contract is executed.
17-5 (b) Section 12.002(c) does not apply to an executory
17-6 contract filed for record under this section.
17-7 (c) If the executory contract is terminated for any reason,
17-8 the seller shall record the instrument that terminates the
17-9 contract.
17-10 (d) The county clerk shall collect the filing fee prescribed
17-11 by Section 118.011, Local Government Code.
17-12 Sec. 5.077 [5.100]. ANNUAL ACCOUNTING STATEMENT. (a) The
17-13 seller shall provide the purchaser with an annual statement in
17-14 January of each year for the term of the executory contract. If
17-15 the seller mails the statement to the purchaser, the statement must
17-16 be postmarked not later than January 31.
17-17 (b) The statement must include the following information:
17-18 (1) the amount paid under the contract;
17-19 (2) the remaining amount owed under the contract;
17-20 (3) the number of payments remaining under the
17-21 contract; [and]
17-22 (4) the amounts paid to taxing authorities on the
17-23 purchaser's behalf if collected by the seller;
17-24 (5) the amounts paid to insure the property on the
17-25 purchaser's behalf if collected by the seller;
17-26 (6) if the property has been damaged and the seller
17-27 has received insurance proceeds, an accounting of the proceeds
18-1 applied to the property; and
18-2 (7) if the seller has changed insurance coverage, a
18-3 legible copy of the current policy, binder, or other evidence that
18-4 satisfies the requirements of Section 5.070(a)(2).
18-5 (c) A [If the] seller who fails to comply with Subsection
18-6 (a)[,] is liable to the purchaser for [may]:
18-7 (1) liquidated damages in the amount of $250 a day for
18-8 each day after January 31 that [notify] the seller fails to provide
18-9 [that] the purchaser with [has not received] the statement [and
18-10 will deduct 15 percent of each monthly payment due until the
18-11 statement is received]; and
18-12 (2) reasonable attorney's fees [not earlier than the
18-13 25th day after the date the purchaser provides the seller notice
18-14 under this subsection, deduct 15 percent of each monthly payment
18-15 due until the statement is received by the purchaser.]
18-16 [(d) A purchaser who makes a deduction under Subsection (c)
18-17 is not required to reimburse the seller for the amount deducted].
18-18 Sec. 5.078. DISPOSITION OF INSURANCE PROCEEDS. (a) The
18-19 named insured under an insurance policy, binder, or other coverage
18-20 relating to property subject to an executory contract for the
18-21 conveyance of real property used or to be used as the purchaser's
18-22 residence shall inform the insurer, not later than the 10th day
18-23 after the date the coverage is obtained or the contract executed,
18-24 whichever is later, of:
18-25 (1) the executory contract for conveyance and the term
18-26 of the contract; and
18-27 (2) the name and address of the other party to the
19-1 contract.
19-2 (b) An insurer who disburses proceeds under an insurance
19-3 policy, binder, or other coverage relating to property that has
19-4 been damaged shall issue the proceeds jointly to the purchaser and
19-5 the seller designated in the contract.
19-6 (c) If proceeds under an insurance policy, binder, or other
19-7 coverage are disbursed, the purchaser and seller shall ensure that
19-8 the proceeds are used to repair or remedy the condition on the
19-9 property for which the proceeds were disbursed.
19-10 (d) The seller's failure to comply with Subsection (c):
19-11 (1) is a false, misleading, or deceptive act or
19-12 practice within the meaning of Section 17.46, Business & Commerce
19-13 Code, and is actionable in a public or private suit brought under
19-14 Subchapter E, Chapter 17, Business & Commerce Code; and
19-15 (2) entitles the purchaser to cancel and rescind the
19-16 executory contract and receive a full refund of all payments made
19-17 to the seller.
19-18 (e) The purchaser's failure to comply with Subsection (c):
19-19 (1) is a false, misleading, or deceptive act or
19-20 practice within the meaning of Section 17.46, Business & Commerce
19-21 Code, and is actionable in a public or private suit brought under
19-22 Subchapter E, Chapter 17, Business & Commerce Code; and
19-23 (2) entitles the seller to cancel and rescind the
19-24 executory contract and retain all payments made to the seller.
19-25 (f) Subsections (d) and (e) do not limit either party's
19-26 remedy for other false, misleading, or deceptive acts or practices
19-27 actionable in a suit brought under Subchapter E, Chapter 17,
20-1 Business & Commerce Code.
20-2 Sec. 5.079 [5.102]. TITLE TRANSFER. (a) The seller shall
20-3 transfer recorded, legal title of the property covered by the
20-4 executory contract to the purchaser not later than the 30th day
20-5 after the date the seller receives the purchaser's final payment
20-6 due under the contract.
20-7 (b) A seller who violates Subsection (a) is liable to the
20-8 purchaser for [subject to a penalty of]:
20-9 (1) liquidated damages in the amount of:
20-10 (A) $250 a day for each day the seller fails to
20-11 transfer the title to the purchaser during the period that begins
20-12 the 31st day and ends the 90th day after the date the seller
20-13 receives the purchaser's final payment due under the contract; and
20-14 (B) [(2)] $500 a day for each day the seller
20-15 fails to transfer title to the purchaser after the 90th day after
20-16 the date the seller receives the purchaser's final payment due
20-17 under the contract; and
20-18 (2) reasonable attorney's fees.
20-19 (c) In this section, "seller" includes a successor,
20-20 assignee, personal representative, executor, or administrator of
20-21 the seller.
20-22 Sec. 5.080 [5.103]. LIABILITY FOR DISCLOSURES. For purposes
20-23 of this subchapter, a disclosure required by this subchapter that
20-24 is made by a seller's agent is a disclosure made by the seller.
20-25 SECTION 2. The following are repealed:
20-26 (1) the heading to Subchapter E, Chapter 5, Property
20-27 Code; and
21-1 (2) Section 5.092, Property Code.
21-2 SECTION 3. (a) This Act takes effect September 1, 2001.
21-3 (b) The changes in law made by Sections 5.063, 5.064, 5.065,
21-4 and 5.066, Property Code, as amended and redesignated by this Act,
21-5 apply only to a purchaser who defaults under Subchapter D, Chapter
21-6 5, Property Code, as amended by this Act, on or after September 1,
21-7 2001, regardless of when the contract was entered into. A
21-8 purchaser who is in default before September 1, 2001, is covered by
21-9 the law in effect when the default occurred, and the former law is
21-10 continued in effect for that purpose.
21-11 (c) The changes in law made by Sections 5.068 and 5.069,
21-12 Property Code, as amended and redesignated by this Act, and Section
21-13 5.070, Property Code, as added by this Act, apply only to
21-14 transactions involving executory contracts for conveyance for which
21-15 negotiations begin on or after September 1, 2001. For purposes of
21-16 this subsection, negotiations begin on the date an offer to enter
21-17 into an executory contract for conveyance is made. Transactions
21-18 involving executory contracts for conveyance for which negotiations
21-19 begin before September 1, 2001, are covered by the law in effect
21-20 when the negotiations began, and the former law is continued in
21-21 effect for that purpose.
21-22 (d) The change in law made by the amendment of Section 5.091
21-23 and the repeal of Section 5.092, Property Code, by this Act and the
21-24 application of Sections 5.071 and 5.073, Property Code, as amended
21-25 and redesignated by this Act, and 5.080, Property Code, as
21-26 redesignated by this Act, applies only to transactions involving
21-27 executory contracts for conveyance for which negotiations begin on
22-1 or after September 1, 2001. For purposes of this subsection,
22-2 negotiations begin on the date an offer to enter into an executory
22-3 contract for conveyance is made.
22-4 (e) The change in law made by the amendment of Section 5.091
22-5 and the repeal of Section 5.092, Property Code, by this Act and the
22-6 application of Section 5.072, Property Code, as added by this Act,
22-7 Section 5.074, Property Code, as redesignated by this Act, and
22-8 Sections 5.073 and 5.076, Property Code, as amended and
22-9 redesignated by this Act, applies only to a contract entered into
22-10 on or after September 1, 2001.
22-11 (f) The change in law made by the amendment of Section 5.091
22-12 and the repeal of Section 5.092, Property Code, by this Act and the
22-13 application of Section 5.075, Property Code, as amended and
22-14 redesignated by this Act, applies to a purchaser on or after
22-15 September 1, 2001, who accrues interest as provided by that section
22-16 regardless of when the interest accrued.
22-17 (g) The changes in law made by the amendment of Section
22-18 5.091 and the repeal of Section 5.092, Property Code, by this Act
22-19 and the application of Section 5.077, Property Code, as amended and
22-20 redesignated by this Act, and Section 5.079(a), Property Code, as
22-21 redesignated by this Act, apply to an executory contract on or
22-22 after September 1, 2001, regardless of when the contract was
22-23 entered into.
22-24 (h) The change in law made by Sections 5.077(c) and
22-25 5.079(b), Property Code, as amended and redesignated by this Act,
22-26 applies only to a violation that occurs on or after September 1,
22-27 2001. A violation that occurs before September 1, 2001, is covered
23-1 by the law in effect when the violation occurred, and the former
23-2 law is continued in effect for that purpose.
23-3 (i) The change in law made by Section 5.078, Property Code,
23-4 as added by this Act, applies to an executory contract regardless
23-5 of when the contract was entered into. A named insured who
23-6 currently holds an insurance policy binder or other coverage
23-7 relating to property subject to an executory contract shall notify
23-8 the insurer as provided by Section 5.078(a), Property Code, not
23-9 later than January 1, 2002.