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A BILL TO BE ENTITLED
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AN ACT
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relating to the provision of amortization schedules and accounting |
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statements by a seller who finances the sale of residential real |
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property owned by the seller; providing a civil penalty. |
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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 5.019 to read as follows: |
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Sec. 5.019. SCHEDULE OF PAYMENTS AND ANNUAL ACCOUNTING |
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STATEMENTS REQUIRED FOR SELLER-FINANCED SALES OF RESIDENTIAL REAL |
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PROPERTY. (a) This section applies only to a seller of residential |
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real property who finances the sale of residential real property |
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owned by the seller by delivering title to the property to the |
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purchaser in exchange for an agreement by the purchaser to pay the |
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purchase price to the seller by periodic installments. |
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(b) A seller who enters into a transaction described by |
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Subsection (a) shall: |
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(1) not later than the 10th day after the date the |
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seller delivers title, provide the purchaser, at no cost to the |
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purchaser, with an amortization schedule that shows, through the |
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date on which the purchase price is expected to be fully paid: |
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(A) the date on which each periodic installment |
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is due; |
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(B) the initial principal amount to be repaid; |
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(C) the amount of each periodic installment |
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allocated to interest; |
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(D) the amount of each periodic installment |
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allocated to the reduction of the principal amount; and |
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(E) the balance of the principal amount after |
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each installment; |
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(2) not later than the 30th day after the date the |
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seller receives a written request from the purchaser, provide the |
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purchaser, at no cost to the purchaser, with an additional copy of |
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the current amortization schedule, except that the seller is not |
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required to provide more than one copy of the amortization schedule |
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to the purchaser in any 12-month period; and |
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(3) not later than the 30th day after the date the |
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seller receives a written request from the purchaser, provide the |
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purchaser, at no cost to the purchaser, with an annual accounting |
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statement until the property is fully paid for by the purchaser. |
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(c) The annual accounting statement required by Subsection |
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(b)(3) must be an accounting for the calendar year preceding the |
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date on which the seller receives the purchaser's request and must |
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include the following information: |
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(1) the total amount paid by the purchaser that |
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specifically shows: |
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(A) the amount paid by the purchaser that was |
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allocated to interest; |
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(B) the reduction of the principal amount; and |
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(C) any other charges paid by the purchaser; |
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(2) the remaining principal amount owed to the seller; |
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(3) any amount added to the principal; |
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(4) the number of payments remaining; |
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(5) the amounts paid to taxing authorities on the |
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purchaser's behalf if collected by the seller; and |
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(6) the amounts paid to insurers on the purchaser's |
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behalf if collected by the seller. |
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(d) If a seller fails to comply with this section: |
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(1) the purchaser may seek injunctive relief to compel |
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the seller to comply with this section; and |
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(2) the seller is liable to the purchaser for: |
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(A) a civil penalty in the amount of $100 for each |
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annual statement and each amortization schedule the seller fails to |
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provide to the purchaser within the time required by Subsection |
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(b); and |
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(B) reasonable attorney's fees. |
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(e) A court may allow the purchaser to deduct an amount owed |
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to the purchaser by the seller under Subsection (d). |
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(f) An agreement that purports to waive a right or exempt a |
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party from a liability or duty under this section is void and |
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unenforceable. |
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(g) This section does not apply to a transfer: |
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(1) pursuant to a court order or foreclosure sale; |
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(2) by a trustee in bankruptcy; |
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(3) to a mortgagee by a mortgagor or successor in |
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interest or to a beneficiary of a deed of trust by a trustor or |
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successor in interest; |
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(4) by a mortgagee or a beneficiary under a deed of |
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trust who has acquired the real property at a sale conducted |
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pursuant to a power of sale under a deed of trust or a sale pursuant |
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to a court-ordered foreclosure or has acquired the real property by |
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a deed in lieu of foreclosure; |
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(5) by a fiduciary in the course of the administration |
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of a decedent's estate, guardianship, conservatorship, or trust; |
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(6) from one co-owner to one or more other co-owners; |
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(7) made to a spouse or to a person or persons in the |
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lineal line of consanguinity of one or more of the transferors; |
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(8) between spouses resulting from a decree of |
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dissolution of marriage or a decree of legal separation or from a |
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property settlement agreement incidental to such a decree; |
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(9) by a seller who does not conduct two or more |
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transfers that are subject to this section in a 12-month period; or |
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(10) to or from any governmental entity. |
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SECTION 2. The change in law made by this Act applies to a |
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financing agreement entered into before, on, or after the effective |
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date of this Act. |
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SECTION 3. This Act takes effect September 1, 2007. |