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.