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