80R20414 EJI-F

By: Lucio S.B. No. 1484

Substitute the following for S.B. No. 1484:

By: Solomons C.S.S.B. No. 1484

A BILL TO BE ENTITLED

AN ACT

relating to the provision of amortization schedules and accounting statements by a seller who finances the sale of residential real property owned by the seller; providing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 5, Property Code, is amended by adding Section 5.019 to read as follows:

Sec. 5.019. SCHEDULE OF PAYMENTS AND ANNUAL ACCOUNTING STATEMENTS REQUIRED FOR SELLER-FINANCED SALES OF RESIDENTIAL REAL PROPERTY. (a) This section applies only to a seller of residential real property who finances the sale of residential real property owned by the seller by delivering title to the property to the purchaser in exchange for an agreement by the purchaser to pay the purchase price to the seller by periodic installments.

(b) A seller who enters into a transaction described by Subsection (a) shall:

(1) not later than the 10th day after the date the seller delivers title, provide the purchaser, at no cost to the purchaser, with an amortization schedule that shows, through the date on which the purchase price is expected to be fully paid:

(A) the date on which each periodic installment is due;

(B) the initial principal amount to be repaid;

(C) the amount of each periodic installment allocated to interest;

(D) the amount of each periodic installment allocated to the reduction of the principal amount; and

(E) the balance of the principal amount after each installment;

(2) not later than the 30th day after the date the seller receives a written request from the purchaser, provide the purchaser, at no cost to the purchaser, with an additional copy of the current amortization schedule, except that the seller is not required to provide more than one copy of the amortization schedule to the purchaser in any 12-month period; and

(3) not later than the 30th day after the date the seller receives a written request from the purchaser, provide the purchaser, at no cost to the purchaser, with an annual accounting statement until the property is fully paid for by the purchaser.

(c) The annual accounting statement required by Subsection (b)(3) must be an accounting for the calendar year preceding the date on which the seller receives the purchaser's request and must include the following information:

(1) the total amount paid by the purchaser that specifically shows:

(A) the amount paid by the purchaser that was allocated to interest;

(B) the reduction of the principal amount; and

(C) any other charges paid by the purchaser;

(2) the remaining principal amount owed to the seller;

(3) any amount added to the principal;

(4) the number of payments remaining;

(5) the amounts paid to taxing authorities on the purchaser's behalf if collected by the seller; and

(6) the amounts paid to insurers on the purchaser's behalf if collected by the seller.

(d) If a seller fails to comply with this section:

(1) the purchaser may seek injunctive relief to compel the seller to comply with this section; and

(2) the seller is liable to the purchaser for:

(A) a civil penalty in the amount of $100 for each annual statement and each amortization schedule the seller fails to provide to the purchaser within the time required by Subsection (b); and

(B) reasonable attorney's fees.

(e) A court may allow the purchaser to deduct an amount owed to the purchaser by the seller under Subsection (d).

(f) An agreement that purports to waive a right or exempt a party from a liability or duty under this section is void and unenforceable.

(g) This section does not apply to a transfer:

(1) pursuant to 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 real property at a sale conducted pursuant to a power of sale under a deed of trust or a sale pursuant to a court-ordered foreclosure or has acquired the real property 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 one or more other co-owners;

(7) made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the transferors;

(8) between spouses resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to such a decree;

(9) by a seller who does not conduct two or more transfers that are subject to this section in a 12-month period; or

(10) to or from any governmental entity.

SECTION 2. The change in law made by this Act applies to a financing agreement entered into before, on, or after the effective date of this Act.

SECTION 3. This Act takes effect September 1, 2007.