2017S0416-1 03/07/17
 
  By: Zaffirini S.B. No. 2160
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the use of earnest money contracts and other offers for
  the sale of land before a subdivision plat is approved in certain
  border counties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter B, Chapter 232, Local Government
  Code, is amended by adding Section 232.045 to read as follows:
         Sec. 232.045.  EARNEST MONEY CONTRACTS BEFORE PLAT IS
  APPROVED. (a)  This section applies in addition to other
  applicable law and prevails to the extent of a conflict with that
  other law, including Sections 232.031(a) and (d). This section
  applies only to a person who is a seller or subdivider and who is a
  licensed, registered, or otherwise credentialed residential
  mortgage loan originator under applicable state law, federal law,
  and the Nationwide Mortgage Licensing System and Registry. A
  person may, after the subdivider has submitted a plat application
  to the county but before a plat has been finally approved and
  recorded, enter into an earnest money contract with a potential
  purchaser for a lot or lots in the subdivision and accept payment
  under the contract in an amount of $250 or less.
         (b)  An earnest money contract is void if the plat for the
  land has not been finally approved and recorded before the 91st day
  after the date the earnest money contract is signed by the potential
  purchaser, unless the potential purchaser agrees in writing to
  extend the period for plat approval and recording for an additional
  90-day period. Only one extension may be granted under this
  subsection.
         (c)  If an earnest money contract is void under Subsection
  (b), the seller shall refund all earnest money paid to the potential
  purchaser not later than the 30th day after the date the earnest
  money contract becomes void. If the seller fails to refund the
  earnest money to the potential purchaser in violation of this
  subsection, the potential purchaser, in a suit to recover the
  earnest money, may recover an amount equal to three times the amount
  of the earnest money required to be refunded, plus reasonable
  attorney's fees.
         (d)  Before entering into an earnest money contract, a person
  must provide written notice to the local government responsible for
  approving the plat.  The notice must include:
               (1)  a statement of intent to enter into an earnest
  money contract under this section;
               (2)  a legal description of the land to be included in
  the subdivision;
               (3)  each county in which all or part of the subdivision
  is located; and
               (4)  the number of proposed individual lots to be
  included in the subdivision.
         (e)  An earnest money contract must contain the following
  statement:
         "NOTICE:  THIS IS AN EARNEST MONEY CONTRACT ONLY.  THE MAXIMUM
  AMOUNT THAT THE SELLER MAY COLLECT UNDER THIS CONTRACT IS $250. THE
  SELLER MAY NOT DEMAND ANY ADDITIONAL PAYMENT UNTIL A FINAL PLAT OF
  THE SUBDIVISION HAS BEEN FILED AND APPROVED BY THE COUNTY
  COMMISSIONERS COURT."
         SECTION 2.  Section 232.021(9), Local Government Code, is
  repealed.
         SECTION 3.  The change in law made by this Act to Chapter
  232, Local Government Code, applies only to a subdivision plat
  application submitted for approval on or after the effective date
  of this Act.  A subdivision plat application submitted for approval
  before the effective date of this Act is governed by the law in
  effect when the application was submitted, and the former law is
  continued in effect for that purpose.
         SECTION 4.  This Act takes effect September 1, 2017.