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A BILL TO BE ENTITLED
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AN ACT
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relating to persons subject to liability for residential |
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construction defects or regulation as a builder of residential |
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construction. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 59.011(a), Finance Code, is amended to |
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read as follows: |
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(a) For purposes of Chapter 27, Property Code, and Title 16, |
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Property Code, a federally insured financial institution, or a |
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subsidiary or affiliate of the institution, regulated under this |
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code is not a builder. |
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SECTION 2. Sections 5.016(a) and (c), Property Code, as |
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added by Chapter 843 (H.B. 1038), Acts of the 80th Legislature, |
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Regular Session, 2007, are amended to read as follows: |
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(a) A seller of residential real property that is exempt |
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from Title 16 under Section 401.003(c)(3) or (e) or Section 401.005 |
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shall give to the purchaser of the property a written notice that |
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reads substantially similar to the following: |
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NOTICE OF NONAPPLICABILITY OF CERTAIN WARRANTIES |
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AND BUILDING AND PERFORMANCE STANDARDS |
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The property that is subject to this contract is exempt from |
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Title 16, Property Code, including the provisions of that title |
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that provide statutory warranties and building and performance |
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standards. |
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(c) This section does not apply to a transfer: |
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(1) under 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 land at a sale conducted under a power of |
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sale under a deed of trust or a sale under a court-ordered |
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foreclosure or has acquired the land by a deed in lieu of |
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foreclosure unless the property acquired was a partially completed |
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home that was subsequently completed; |
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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 another co-owner of an |
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undivided interest in the real property; |
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(7) to a spouse or a person in the lineal line of |
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consanguinity of the seller; |
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(8) to or from a governmental entity; or |
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(9) of only a mineral interest, leasehold interest, or |
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security interest. |
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SECTION 3. Section 401.003, Property Code, is amended by |
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amending Subsection (c) and adding Subsection (e) to read as |
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follows: |
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(c) The term does not include a [any] person who: |
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(1) has been issued a license by this state or an |
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agency of this state to practice a trade or profession related to or |
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affiliated with residential construction if the work being done by |
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the entity or individual to the home is solely for the purpose for |
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which the license was issued; [or] |
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(2) sells a new home and: |
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(A) does not construct or supervise or manage the |
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construction of the home; and |
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(B) holds a license issued under Chapter 1101, |
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Occupations Code, or is exempt from that chapter under Section |
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1101.005, Occupations Code; |
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(3) guarantees or co-makes a construction loan and is |
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not otherwise a builder under Subsection (a); or |
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(4) constructs or makes improvements to not more than |
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one home in a 12-month period. |
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(e) The term does not include a federally insured financial |
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institution or a subsidiary or affiliate of the institution. |
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SECTION 4. Section 426.003, Property Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) Notwithstanding Subsections (a) and (b), a builder is |
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not required to comply with this subtitle after completing |
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construction of a partially completed home owned by a mortgagee or a |
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beneficiary under a deed of trust who acquired the partially |
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completed home: |
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(1) at a sale conducted under a power of sale under a |
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deed of trust or a court-ordered foreclosure; or |
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(2) by a deed in lieu of foreclosure. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |