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A BILL TO BE ENTITLED
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AN ACT
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relating to an executory contract for the conveyance of real |
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property; providing a penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 5.064, Property Code, is amended to read |
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as follows: |
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Sec. 5.064. SELLER'S REMEDIES ON DEFAULT. A seller may |
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enforce the remedy of rescission or of forfeiture and acceleration |
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against a purchaser in default under an executory contract for |
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conveyance of real property only if: |
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(1) the seller notifies the purchaser of: |
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(A) the seller's intent to enforce a remedy under |
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this section; and |
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(B) the purchaser's right to cure the default |
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within the 30-day period described by Section 5.065; |
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(2) the purchaser fails to cure the default within the |
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30-day period described by Section 5.065; [and] |
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(3) Section 5.066 does not apply; and |
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(4) the contract has not been recorded. |
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SECTION 2. Section 5.066(a), Property Code, is amended to |
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read as follows: |
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(a) If a purchaser defaults after the purchaser has paid 40 |
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percent or more of the amount due or the equivalent of 48 monthly |
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payments under the executory contract or, regardless of the amount |
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the purchaser has paid, the executory contract has been recorded, |
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the seller is granted the power to sell, through a trustee |
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designated by the seller, the purchaser's interest in the property |
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as provided by this section. The seller may not enforce the remedy |
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of rescission or of forfeiture and acceleration after the contract |
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has been recorded. |
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SECTION 3. Section 5.076, Property Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) A seller who violates this section is liable to the |
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purchaser in the same manner and for the same amount as a seller who |
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violates Section 5.079 is liable to a purchaser, except the damages |
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may not exceed the greater of the value of the property or the |
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amount paid under the contract. An action to recover damages under |
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this section may be brought as an action for declaratory judgment |
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under Chapter 37, Civil Practice and Remedies Code. This subsection |
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does not limit or affect any other rights or remedies a purchaser |
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has under other law. |
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SECTION 4. Subchapter D, Chapter 5, Property Code, is |
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amended by adding Section 5.0765 to read as follows: |
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Sec. 5.0765. ENCUMBERED TITLE TRANSFERRED ON RECORDING. |
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Notwithstanding any other law, on recording, an executory contract |
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conveys legal title to the purchaser, subject to a lien retained by |
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the seller for the amount of the unpaid contract price less any |
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lawful deductions. Extrinsic evidence may be used to supply the |
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legal description of the property if that information is not |
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apparent from the contract. |
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SECTION 5. Section 5.081, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (h) to read as |
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follows: |
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(a) A purchaser, at any time and without paying penalties or |
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charges of any kind, is entitled to convert the purchaser's |
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interest in property under an executory contract into recorded, |
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legal title in accordance with this section, regardless of whether |
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the seller has recorded the executory contract. |
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(h) This section may not be construed to limit the |
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purchaser's equitable interest in the property established by other |
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law, if any, or any other rights of the purchaser under this |
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subchapter. |
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SECTION 6. Section 5.066(g), Property Code, is repealed. |
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SECTION 7. The changes in law made by this Act apply to an |
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executory contract entered into on or after the effective date of |
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this Act. An executory contract entered into before the effective |
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date of this Act is governed by the law in effect on the date the |
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contract was entered into, and that law is continued in effect for |
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that purpose. |
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SECTION 8. This Act takes effect September 1, 2013. |