79R3459 KCR-D
By: Puente H.B. No. 666
A BILL TO BE ENTITLED
AN ACT
relating to executory contracts for conveyance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 5.066(a) and (g), Property Code, are
amended to read as follows:
(a) If a purchaser defaults after the purchaser has paid 40
percent or more of the amount due [or the equivalent of 48 monthly
payments] under the executory contract, the seller is granted the
power to sell, through a trustee designated by the seller, the
purchaser's interest in the property as provided by this section.
The seller may not enforce the remedy of rescission or of forfeiture
and acceleration.
(g) If a purchaser defaults before the purchaser has paid 40
percent of the amount due [or the equivalent of 48 monthly payments]
under the executory contract, the seller may enforce the remedy of
rescission or of forfeiture and acceleration of the indebtedness if
the seller complies with the notice requirements of Sections 5.063
and 5.064.
SECTION 2. Section 5.068, Property Code, is amended to read
as follows:
Sec. 5.068. FOREIGN LANGUAGE REQUIREMENT. (a) Except as
provided by Subsection (b), if [If] the negotiations that precede
the execution of an executory contract are conducted primarily in a
language other than English, the seller shall provide a copy in that
language of all written documents relating to the transaction,
including the contract, disclosure notices, annual accounting
statements, and a notice of default required by this subchapter.
(b) Before signing an executory contract, the purchaser and
seller may agree in writing in the language in which the
negotiations that precede the execution of the contract are
conducted that:
(1) the seller shall provide all written documents
required by this subchapter in English; and
(2) the purchaser shall retain the services of a
translator or interpreter of the purchaser's choosing to assist the
purchaser in preparing, receiving, and understanding all written
documents required by this subchapter.
SECTION 3. Section 5.069(a), Property Code, is amended to
read as follows:
(a) Before an executory contract is signed by the purchaser,
the seller shall provide the purchaser with:
(1) a survey[, which was] completed within the past 10
years that contains a current [year, or] plat of [a current survey
of] the real property;
(2) a legible copy of any document that describes an
encumbrance or other claim, including a restrictive covenant or
easement, that affects title to the real property; and
(3) a written notice, which must be attached to the
contract, informing the purchaser of the condition of the property
that must, at a minimum, be executed by the seller and purchaser and
read substantially similar to the following:
WARNING
IF ANY OF THE ITEMS BELOW HAVE NOT BEEN CHECKED, YOU MAY NOT BE ABLE
TO LIVE ON THE PROPERTY.
SELLER'S DISCLOSURE NOTICE
CONCERNING THE PROPERTY AT (street address or legal description and
city)
THIS DOCUMENT STATES CERTAIN APPLICABLE FACTS ABOUT THE PROPERTY
YOU ARE CONSIDERING PURCHASING.
CHECK ALL THE ITEMS THAT ARE APPLICABLE OR TRUE:
____ The property is in a recorded subdivision.
____ The property has water service that provides potable water.
____ The property has sewer service.
____ The property has been approved by the appropriate municipal,
county, or state agency for installation of a septic system.
____ The property has electric service.
____ The property is not in a floodplain.
____ The roads to the boundaries of the property are paved and
maintained by:
____ the seller;
____ the owner of the property on which the road exists;
____ the municipality;
____ the county; or
____ the state.
____ No individual or entity other than the seller:
(1) owns the property;
(2) has a claim of ownership to the property; or
(3) has an interest in the property.
____ No individual or entity has a lien filed against the property.
____ There are no restrictive covenants, easements, or other title
exceptions or encumbrances that prohibit construction of a house on
the property.
NOTICE: SELLER ADVISES PURCHASER TO:
(1) OBTAIN A TITLE ABSTRACT OR TITLE COMMITMENT COVERING THE
PROPERTY AND HAVE THE ABSTRACT OR COMMITMENT REVIEWED BY AN
ATTORNEY BEFORE SIGNING A CONTRACT OF THIS TYPE; AND
(2) PURCHASE AN OWNER'S POLICY OF TITLE INSURANCE COVERING
THE PROPERTY.
____________________________ _______________________________
(Date) (Signature of Seller)
____________________________ _______________________________
(Date) (Signature of Purchaser)
SECTION 4. Section 5.076(a), Property Code, is amended to
read as follows:
(a) Except as provided by Subsection (b), on or before the
30th day after the date an executory contract is executed, the
seller shall, as prescribed by Title 3, record:
(1) the executory contract, including the attached
disclosure statement required by Section 5.069; or
(2) a memorandum describing the contents of the
contract and the disclosure statement required by Section 5.069[,
as prescribed by Title 3 on or before the 30th day after the date the
contract is executed].
SECTION 5. Section 5.077, Property Code, is amended to read
as follows:
Sec. 5.077. ANNUAL ACCOUNTING STATEMENT. (a) The seller
shall provide the purchaser with an annual statement in February
[January] of each year for the term of the executory contract. If
the seller mails the statement to the purchaser, the statement must
be postmarked not later than February 15 [January 31].
(b) The statement must include the following information:
(1) the total amount paid in principal and interest
under the contract during the preceding year;
(2) the remaining principal amount owed under the
contract;
(3) the number of payments remaining under the
contract;
(4) the amounts paid to taxing authorities on the
purchaser's behalf if collected by the seller;
(5) the amounts paid to insure the property on the
purchaser's behalf if collected by the seller;
(6) if the property has been damaged and the seller has
received insurance proceeds, an accounting of the proceeds applied
to the property; and
(7) if the seller has changed insurance coverage, a
legible copy of the current policy, binder, or other evidence that
satisfies the requirements of Section 5.070(a)(2).
(c) If the seller fails to comply with Subsections (a) and
(b), the purchaser may submit a written notice to the seller
requesting the seller to provide the purchaser with an annual
accounting statement that complies with Subsections (a) and (b).
(d) A seller who fails to comply with a purchaser's request
for an annual accounting statement under Subsection (c) on or
before the 30th day after the date the request was received
[Subsection (a)] is liable to the purchaser for:
(1) a civil penalty of $1,000 [liquidated damages in
the amount of $250 a day for each day after January 31 that the
seller fails to provide the purchaser with the statement]; and
(2) reasonable attorney's fees the purchaser incurs
seeking enforcement of this section.
SECTION 6. Section 5.079(a), Property Code, is amended to
read as follows:
(a) The seller shall transfer recorded, legal title of the
property covered by the executory contract to the purchaser using a
title company authorized to do business in this state or an attorney
licensed by this state who has agreed in writing to hold the deed in
trust for the seller until the purchaser delivers the final payment
due under the contract to the title company or attorney. On receipt
of the final payment due under the contract, the title company or
attorney shall deliver the title to the property covered by the
executory contract to the purchaser [not later than the 30th day
after the date the seller receives the purchaser's final payment
due under the contract].
SECTION 7. Section 5.074, Property Code, is repealed.
SECTION 8. Sections 5.079(b) and (c), Property Code, are
repealed.
SECTION 9. This Act applies only to an executory contract
for conveyance of real property signed on or after the effective
date of this Act. An executory contract for conveyance of real
property signed before the effective date of this Act is governed by
the law in effect immediately before the effective date of this Act.
SECTION 10. This Act takes effect September 1, 2005.