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A BILL TO BE ENTITLED
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AN ACT
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relating to the conveyance of certain residential real property |
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encumbered by a lien. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 5, Property Code, is |
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amended by adding Section 5.016 to read as follows: |
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Sec. 5.016. CONVEYANCE OF RESIDENTIAL PROPERTY ENCUMBERED |
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BY LIEN. (a) This section does not apply to a sale of residential |
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real property where the purchaser of real property obtains a title |
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insurance policy or a commitment for title insurance insuring the |
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transfer of title to the real property. |
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(b) A person may not sell residential real property that is |
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encumbered by a recorded lien unless, on or before the seventh day |
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before the effective date of an executory contract binding the |
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purchaser to purchase the property, the person provides the |
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purchaser and each lienholder a written disclosure statement in at |
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least 12-point type that: |
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(1) conspicuously identifies the seller, lienholder, |
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and purchaser and includes the name, address, and phone number of |
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the lienholder if the lienholder is a person other than the seller; |
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(2) states the amount of the debt that is secured by |
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each lien; |
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(3) specifies the terms of any contract or law under |
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which the debt that is secured by the lien was incurred, including, |
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as applicable: |
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(A) the rate of interest; |
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(B) the periodic installments required to be |
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paid; and |
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(C) the account number; and |
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(4) indicates whether the lienholder has consented to |
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the transfer of the property to the purchaser. |
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(c) A statement provided under this section must be in the |
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language used by the parties to negotiate the transaction. |
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(d) Except as provided by Subsection (e), a violation of |
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this section is a false, misleading, or deceptive act or practice |
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within the meaning of Section 17.46, Business & Commerce Code, and |
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is actionable in a public or private suit brought under Subchapter |
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E, Chapter 17, Business & Commerce Code. |
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(e) A violation of this section is not actionable if the |
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person required to give notice reasonably believes and takes any |
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necessary action to ensure that each lien for which notice was not |
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provided will be released on or before the 30th day after the date |
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on which title to the property is transferred. |
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SECTION 2. The change in law made by this Act applies only |
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to a transfer of property that occurs on or after the effective date |
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of this Act. For the purposes of this section, a transfer of |
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property occurs before the effective date of this Act if the |
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executory contract binding the purchaser to purchase the property |
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is executed before that date. Property transferred before the |
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effective date of this Act is governed by the law in effect |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 3. This Act takes effect January 1, 2008. |