By: Ellis S.B. No. 1757
 
 
A BILL TO BE ENTITLED
AN ACT
relating to certain real property transactions involving certain
land banks.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subsection (a), Section 379D.010, Local
Government Code, is amended to read as follows:
       (a)  The land bank shall impose deed restrictions with
appropriate terms and conditions on property sold to qualified
participating developers and eligible adjacent property owners
that require:
             (1)  the development and sale or rental of the property
to low income households, if the property is sold to a qualified
participating developer; or
             (2)  the use of the property to be consistent and
compatible with the residential character of the neighborhood and
any applicable standards for use adopted by the land bank, if the
property is sold to an eligible adjacent property owner.
       SECTION 2.  Section 379D.011, Local Government Code, is
amended to read as follows:
       Sec. 379D.011.  RIGHT OF FIRST REFUSAL IN ELIGIBLE ADJACENT
PROPERTY OWNERS; CONDITIONS OF PURCHASE.  (a)  Property acquired by
the land bank shall be offered for sale, at fair market value as
determined by the appraisal district in which the property is
located, to eligible adjacent property owners under a right of
first refusal on terms and conditions developed by the land bank
that are consistent with this chapter.
       (b)  To be eligible to exercise a right of first refusal
under this section, an owner of property adjacent to property
acquired by the land bank:
             (1)  must have owned and continuously occupied that
property for at least the five preceding years as that person's
principal residence; and
             (2)  must meet any eligibility requirements adopted by
the land bank.
       (c)  An adjacent property owner who purchases property under
this section may not lease, sell, or otherwise transfer the
property to another party before the 10th anniversary of the date
the adjacent property owner purchases the property.  This
prohibition does not apply to a transfer of property, as allowed by
policies adopted by the land bank:
             (1)  to a family member of the adjacent property owner;
or
             (2)  in the case of the death of the adjacent property
owner.
       SECTION 3.  Chapter 379D, Local Government Code, is amended
by adding Section 379D.015 to read as follows:
       Sec. 379D.015.  EFFECT OF SALE TO LAND BANK OR SUBSEQUENT
PURCHASERS OR LENDERS FOR VALUE; LIMITATION ON CERTAIN CAUSES OF
ACTION.  After the first anniversary of a sale of property to a land
bank under this chapter:
             (1)  a third party, other than a qualified
participating developer or eligible adjacent property owner who
purchased the property from the land bank under this chapter or a
person with a cause of action based on a right, title, interest, or
other claim described by Subdivision (2)(A)(ii), may not bring a
cause of action to set aside or otherwise challenge the sale of the
property to the land bank, including a cause of action that is
brought against:
                   (A)  a qualified participating developer or
eligible adjacent property owner who purchases property from the
land bank under Section 379D.009 or 379D.011, as applicable; or
                   (B)  any other subsequent purchaser for value or
lender for value; and
             (2)  a qualified participating developer or eligible
adjacent property owner who purchases property from a land bank
under this chapter or any other subsequent purchaser for value or,
if applicable, a lender for a developer, owner, or purchaser
described by this subdivision or any other subsequent lender for
value:
                   (A)  has, with the following characteristics, a
full title to the property:
                         (i)  except as provided by Subparagraph
(ii), the title is not subject to any right, title, interest, or
other claim a person acquired in the property before or after the
sale of the property to the land bank, including a right of first
refusal, right of second refusal, and any other right, title,
interest, or other claim provided by this chapter, other than the
right of reverter provided by Section 379D.009(d); and
                         (ii)  the title is subject only to:
                               (a)  the recorded restrictive
covenants, liens, and valid easements of record described by
Section 34.01(n), Tax Code;
                               (b)  any rights of redemption
applicable to the property;
                               (c)  any cause of action to impeach the
property deed based on a claim of fraud;
                               (d)  the right of reverter provided by
Section 379D.009(d) and the recorded deed restrictions described by
Section 379D.010; and
                               (e)  any right, title, interest, or
other claim with respect to the property that arose after the sale
of the property to the land bank under a law other than this
chapter; and
                   (B)  may conclusively presume that:
                         (i)  the sale of the property to the land
bank under this chapter was valid; and
                         (ii)  a mortgage on or a subsequent sale of
the property complies with this chapter and is subject only to a
right, title, interest, or other claim provided by Paragraph
(A)(ii).
       SECTION 4.  Section 379D.015, Local Government Code, as
added by this Act, applies only to a cause of action that accrues on
or after the effective date of this Act and concerns property that
is first purchased by a land bank under Section 379D.015, Local
Government Code, on or after the effective date of this Act.
       SECTION 5.  This Act takes effect September 1, 2007.