Amend CSHB 1038 on page 1, between lines 4 and 5, by inserting 
the following appropriately numbered SECTION and renumbering 
subsequent SECTIONS accordingly:
	SECTION ____.  Subchapter A, Chapter 5, Property Code, is 
amended by adding Section 5.016 to read as follows:
	Sec. 5.016.  DISCLOSURE OF ABSENCE OF CERTAIN WARRANTIES.  
(a)  A seller of residential real property that is exempt from Title 
16 under Section 401.005 shall give to the purchaser of the property 
a written notice that reads substantially similar to the following:
NOTICE OF NONAPPLICABILITY OF CERTAIN WARRANTIES
AND BUILDING AND PERFORMANCE STANDARDS
The property that is subject to this contract is exempt from Title 16, Property Code, including the provisions of that title that provide statutory warranties and building and performance standards. (b) A notice required by this section shall be delivered by the seller to the purchaser on or before the effective date of an executory contract binding the purchaser to purchase the property. If a contract is entered into without the seller providing the notice, the purchaser may terminate the contract for any reason on or before the seventh day after the date the purchaser receives the notice. (c) This section does not apply to a transfer: (1) under a court order or foreclosure sale; (2) by a trustee in bankruptcy; (3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; (4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; (5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; (6) from one co-owner to another co-owner of an undivided interest in the real property; (7) to a spouse or a person in the lineal line of consanguinity of the seller; (8) to or from a governmental entity; or (9) of only a mineral interest, leasehold interest, or security interest.