|
|
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. |