89R8414 SCR-D

By: Talarico H.B. No. 2968

A BILL TO BE ENTITLED

AN ACT

relating to single-family homes held by corporate owners for rental purposes; requiring information by and registration of certain corporate owners; authorizing a fee and civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is amended by adding Chapter 121 to read as follows:

CHAPTER 121. REGISTRATION REQUIREMENT FOR CORPORATE OWNERS OF

MULTIPLE SINGLE-FAMILY HOMES

Sec. 121.001. DEFINITIONS. In this chapter:

(1) "Corporate owner" means a corporation, limited or general partnership, limited liability company, business trust, investment asset manager, real estate investment trust, joint venture, joint stock company, or bank that holds an interest in multiple single-family homes in this state that are offered or used as a rental property to produce income directly or indirectly from a residential tenant. The term includes an entity engaged in the business of investing the pooled capital of investors in financial securities.

(2) "Governing authority" has the meaning assigned by Section 1.002, Business Organizations Code.

(3) "Officer" has the meaning assigned by Section 1.002, Business Organizations Code.

(4) "Rental property" means real property used or intended to be used:

(A) as a primary residence for 30 or more consecutive days by a residential tenant under an oral or written lease or rental agreement; or

(B) for occupancy for tourist or transient accommodations for fewer than 30 consecutive days, where the property does not serve as a residential tenant's primary residence.

(5) "Residential tenant" means any person who does not own but is authorized to use a single-family home in exchange for consideration paid to a corporate owner or to a third-party lessor, sublessor, management company, managing agent, or operator of a hosting platform that derives revenues, including booking fees or advertising revenues, from providing or maintaining a marketplace that is used to facilitate the rental of a single-family home.

(6) "Single-family home" means a residential structure with a yard or public way on not less than two sides that is separated from any adjacent housing unit by a ground-to-roof wall, does not share a heating, air-conditioning, or utility system or a backyard, and does not have a housing unit located above or below. The term does not include a mobile home or manufactured home.

Sec. 121.002. REGISTRATION STATEMENT. (a) A corporate owner that owns single-family homes in this state that are used or offered for use as a rental property shall register with the secretary of state by filing a registration statement that contains:

(1) the name under which the corporate owner conducts business and the address of the corporate owner;

(2) the state or country of incorporation, formation, registration, or organization;

(3) the location of the headquarters or principal office of the corporate owner;

(4) the type of business entity of the corporate owner;

(5) the number of single-family homes in this state the corporate owner owns; and

(6) the name and mailing address of an officer or person serving as part of the governing authority of the corporate owner.

(b) The secretary of state may charge a reasonable fee for issuance of a certificate acknowledging registration under this section.

(c) A registration certificate expires on the first anniversary of its date of issuance. A corporate owner may renew a registration certificate by filing a renewal application, in the form prescribed by the secretary of state, and paying a reasonable renewal fee in an amount set by the secretary of state.

Sec. 121.003. UPDATE OF REGISTRATION STATEMENT. A corporate owner shall update information contained in the registration statement not later than the 60th day after the date on which the information changes.

Sec. 121.004. CIVIL PENALTY. (a) A corporate owner who fails to comply with this chapter is liable to this state for a civil penalty in the amount of $500 for each day of the violation.

(b) The attorney general may bring an action to recover a civil penalty under this section.

Sec. 121.005. REGISTRY. (a) The secretary of state shall establish and post on the secretary's Internet website a searchable registry of corporate owners registered under Section 121.002(a).

(b) The registry must include:

(1) a search feature that allows a person searching the registry to identify a specific corporate owner; and

(2) for each corporate owner, the information in the registration statement filed under Section 121.002(a).

Sec. 121.006. RULES. The secretary of state shall adopt the rules necessary to implement this chapter.

SECTION 2. Subchapter C, Chapter 86, Education Code, is amended by adding Section 86.531 to read as follows:

Sec. 86.531. ANNUAL STUDY AND REPORT ON SINGLE-FAMILY HOME PURCHASES, RENTALS, AND SALES BY CERTAIN CORPORATE OWNERS. (a) In this section, "corporate owner," "rental property," and "single-family home" have the meanings assigned by Section 121.001, Business & Commerce Code.

(b) Using existing available data, including data from the secretary of state, and deed records, the center shall compile information related to corporate owners' purchases, rentals, and sales of single-family homes in this state for each calendar year. The information must include:

(1) the number of single-family homes each corporate owner had an interest in during the calendar year;

(2) the number of single-family homes purchased by each corporate owner during the calendar year and the total number purchased in each county and municipality;

(3) the number of single-family homes described by Subdivisions (1) and (2) acquired through foreclosure;

(4) the number of single-family homes described by Subdivisions (1) and (2) sold by each corporate owner during the calendar year;

(5) the number of single-family homes described by Subdivisions (1) and (2) used as a rental property during the calendar year;

(6) the municipality and county in which each single-family home described by Subdivisions (1) and (2) is located;

(7) the appraised value of each single-family home described by Subdivisions (1) and (2);

(8) the name, assumed name, business association type, registered office address, telephone number, and registered agent of each corporate owner of a single-family home; and

(9) the name, address, and contact information for the landlord or third-party lessor, sublessor, management company, or managing agent of each single-family home described by Subdivision (5).

(c) In addition to the information required by Subsection (b), the center may compile additional information at the recommendation of the legislature or that the center determines is relevant based on market trends.

(d) Not later than June 1 of each year, the center shall submit a report to the lieutenant governor, the speaker of the house of representatives, and each member of the legislature. The report must contain:

(1) a summary of the information compiled under Subsection (b) for the preceding calendar year;

(2) an assessment of any trends or patterns relating to the relative number of purchases by corporate owners, including whether the corporate owners may be classified into any readily observable groups based on the number of purchases or other appropriate criteria; and

(3) an analysis of:

(A) the impact of corporate owners on the cost of housing;

(B) any advantages and disadvantages corporate owners have over individual buyers in the real estate market;

(C) the impact of corporate owners on the cost and availability of single-family home rentals; and

(D) the impact of corporate owners on the availability of single-family homes for purchase.

(e) After completing the initial report under this section, the center may compile information from any calendar years preceding 2025 to create and submit reports for those years that include the information listed in Subsections (b) and (d).

SECTION 3. Chapter 12, Property Code, is amended by adding Section 12.00125 to read as follows:

Sec. 12.00125. INSTRUMENTS CONCERNING SINGLE-FAMILY HOMES PURCHASED BY CORPORATE OWNERS. (a) In this section, "corporate owner" and "single-family home" have the meanings assigned by Section 121.001, Business & Commerce Code.

(b) If a corporate owner purchases a single-family home in this state, the county clerk in the county in which the single-family home is located may not record an instrument conveying title to the home unless:

(1) the corporate owner provides to the county clerk a copy of the registration certificate issued under Section 121.002, Business & Commerce Code;

(2) the name of the grantee on the instrument conveying title to the home matches the name of the corporate owner on the registration certificate;

(3) the instrument conveying title to the home:

(A) contains the name and mailing address of an officer or governing person of the corporate owner; and

(B) clearly states that the single-family home is not the primary residence of the grantee; and

(4) the corporate owner provides to the county clerk a sworn affidavit signed by a duly authorized officer or agent of the corporate owner stating that the information required to be included in the instrument conveying title under Subdivision (3) is also included in the corporate owner registry established under Section 121.005, Business & Commerce Code.

SECTION 4. As soon as practicable after the effective date of this Act, the Texas Real Estate Research Center at Texas A&M University shall take any actions necessary to implement Section 86.531, Education Code, as added by this Act, and submit the initial report required under Section 86.531(d), Education Code, as added by this Act, not later than June 1, 2026.

SECTION 5. (a) As soon as practicable after the effective date of this Act, the secretary of state shall adopt rules necessary to implement Chapter 121, Business & Commerce Code, as added by this Act.

(b) Notwithstanding Section 121.002, Business & Commerce Code, as added by this Act, a corporate owner is not required to comply with that section until January 1, 2026.

SECTION 6. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2025.

(b) Section 12.00125, Property Code, as added by this Act, takes effect February 1, 2026.