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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of earnest money contracts and other offers for |
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the sale of land before a subdivision plat is filed in certain |
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border counties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 232, Local Government |
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Code, is amended by adding Section 232.045 to read as follows: |
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Sec. 232.045. EARNEST MONEY CONTRACTS BEFORE PLAT IS FILED. |
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(a) This section applies in addition to other applicable law and |
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prevails to the extent of a conflict with that other law, including |
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Sections 232.031(a) and (d). This section applies only to a person |
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who is a seller or subdivider and who is a licensed, registered, or |
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otherwise credentialed residential mortgage loan originator under |
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applicable state law, federal law, and the Nationwide Mortgage |
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Licensing System and Registry. A person may, before a plat has been |
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finally approved and recorded, enter into an earnest money contract |
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with a potential purchaser and accept payment under the contract in |
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an amount of $250 or less. |
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(b) An earnest money contract is void if the plat for the |
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land has not been finally approved and recorded before the 91st day |
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after the date the earnest money contract is signed by the potential |
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purchaser, unless the potential purchaser agrees in writing to |
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extend the period for plat approval and recording for an additional |
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90-day period. Only one extension may be granted under this |
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subsection. |
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(c) If an earnest money contract is void under Subsection |
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(b), the seller shall refund all earnest money paid to the potential |
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purchaser not later than the 30th day after the date the earnest |
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money contract becomes void. If the seller fails to refund the |
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earnest money to the potential purchaser in violation of this |
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subsection, the potential purchaser, in a suit to recover the |
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earnest money, may recover an amount equal to three times the amount |
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of the earnest money required to be refunded, plus reasonable |
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attorney's fees. |
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(d) Before entering into an earnest money contract, a person |
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must provide written notice to the attorney general and to the local |
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government responsible for approving the plat. The notice must |
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include: |
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(1) a statement of intent to enter into an earnest |
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money contract under this section; |
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(2) a legal description of the land to be included in |
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the subdivision; |
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(3) each county in which all or part of the subdivision |
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is located; and |
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(4) the number of proposed individual lots to be |
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included in the subdivision. |
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(e) An earnest money contract must contain the following |
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statement: |
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"NOTICE: THIS IS AN EARNEST MONEY CONTRACT ONLY. THE MAXIMUM |
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AMOUNT THAT THE SELLER MAY COLLECT UNDER THIS CONTRACT IS $250. THE |
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SELLER MAY NOT DEMAND ANY ADDITIONAL PAYMENT UNTIL A PLAT OF THE |
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SUBDIVISION HAS BEEN FILED WITH THE COUNTY CLERK." |
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SECTION 2. Section 232.021(9), Local Government Code, is |
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repealed. |
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SECTION 3. This Act takes effect September 1, 2017. |