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New Texas Bill - SB629

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Here is the proposed legislation.....anyone who could translate this into regular english, please feel free to comment.

 

 

 

By: Lucio S.B. No. 629

(In the Senate - Filed February 21, 2005; March 1, 2005,

read first time and referred to Committee on Business and Commerce;

April 11, 2005, reported favorably by the following vote: Yeas 9,

Nays 0; April 11, 2005, sent to printer.)

 

 

A BILL TO BE ENTITLED

 

AN ACT

 

 

relating to the rights of a purchaser under an executory contract

for conveyance of real property.

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

SECTION 1. Subsection ©, Section 212.0115, Local

Government Code, is amended to read as follows:

© On the written request of an owner of land, a purchaser

of real property under a contract for deed, executory contract, or

other executory conveyance, an entity that provides utility

service, or the governing body of the municipality, the municipal

authority responsible for approving plats shall make the following

determinations regarding the owner's land or the land in which the

entity or governing body is interested that is located within the

jurisdiction of the municipality:

(1) whether a plat is required under this subchapter

for the land; and

(2) if a plat is required, whether it has been prepared

and whether it has been reviewed and approved by the authority.

SECTION 2. Subsection (a), Section 5.062, Property Code, is

amended to read as follows:

(a) This subchapter applies only to a transaction involving

an executory contract for conveyance of real property used or to be

used as the purchaser's residence or as the residence of a person

related to the purchaser within the second degree by consanguinity

or affinity, as determined under Chapter 573, Government Code. For

purposes of this subchapter:

(1) [,] a lot measuring one acre or less is presumed to

be residential property; and

(2) a residential lease of real property that includes

an option to purchase the property is considered an executory

contract for conveyance of real property.

SECTION 3. Subchapter D, Chapter 5, Property Code, is

amended by adding Section 5.0621 to read as follows:

Sec. 5.0621. CONSTRUCTION WITH OTHER LAW. (a) Except as

provided by Subsection (:lol:, if a residential lease of real property

includes an option to purchase the property, the provisions of this

subchapter and Chapter 92 apply to the lease.

(:lol: After a tenant exercises an option to purchase leased

property under a residential lease described by Subsection (a),

Chapter 92 no longer applies to the lease.

SECTION 4. Section 5.073, Property Code, is amended to read

as follows:

Sec. 5.073. CONTRACT TERMS, CERTAIN WAIVERS PROHIBITED.

(a) A seller may not include as a term of the executory contract a

provision that:

(1) imposes an additional late-payment fee that

exceeds the lesser of:

(A) eight percent of the monthly payment under

the contract; or

(:lol: the actual administrative cost of processing

the late payment;

(2) prohibits the purchaser from pledging the

purchaser's interest in the property as security to obtain a loan to

place improvements, including utility improvements or fire

protection improvements, on the property; [or]

(3) imposes a prepayment penalty or any similar fee if

the purchaser elects to pay the entire amount due under the contract

before the scheduled payment date under the contract;

(4) forfeits an option fee or other option payment

paid under the contract for a late payment; or

(5) increases the purchase price, imposes a fee or

charge of any type, or otherwise penalizes a purchaser leasing

property with an option to buy the property for requesting repairs

or exercising any other right under Chapter 92.

(:lol: A provision of the executory contract that purports to

waive a right or exempt a party from a liability or duty under this

subchapter is void.

SECTION 5. Subchapter D, Chapter 5, Property Code, is

amended by adding Sections 5.081 through 5.085 to read as follows:

Sec. 5.081. RIGHT TO CONVERT CONTRACT. (a) A purchaser,

at any time and without paying penalties or charges of any kind, is

entitled to convert the purchaser's interest in property under an

executory contract into recorded, legal title in accordance with

this section.

(:lol: If the purchaser tenders to the seller an amount of

money equal to the balance of the total amount owed by the purchaser

to the seller under the executory contract, the seller shall

transfer to the purchaser recorded, legal title of the property

covered by the contract.

© Subject to Subsection (d), if the purchaser delivers to

the seller of property covered by an executory contract a

promissory note that is equal in amount to the balance of the total

amount owed by the purchaser to the seller under the contract and

that contains the same interest rate, due dates, and late fees as

the contract:

(1) the seller shall execute a deed containing any

warranties required by the contract and conveying to the purchaser

recorded, legal title of the property; and

(2) the purchaser shall simultaneously execute a deed

of trust that:

(A) contains the same terms as the contract

regarding the purchaser's and seller's duties concerning the

property;

(:) secures the purchaser's payment and

performance under the promissory note and deed of trust; and

© conveys the property to the trustee, in

trust, and confers on the trustee the power to sell the property if

the purchaser defaults on the promissory note or the terms of the

deed of trust.

(d) On or before the 10th day after the date the seller

receives a promissory note under Subsection © that substantially

complies with that subsection, the seller shall:

(1) deliver to the purchaser a written explanation

that legally justifies why the seller refuses to convert the

purchaser's interest into recorded, legal title under Subsection

©; or

(2) communicate with the purchaser to schedule a

mutually agreeable day and time to execute the deed and deed of

trust under Subsection ©.

(e) A seller who violates this section is liable to the

purchaser in the same manner and amount as a seller who violates

Section 5.079 is liable to a purchaser. This subsection does not

limit or affect any other rights or remedies a purchaser has under

other law.

(f) On the last date that all of the conveyances described

by Subsections (;) and © are executed, the executory contract:

(1) is considered completed; and

(2) has no further effect.

(g) The appropriate use of forms published by the Texas Real

Estate Commission for transactions described by this section

constitutes compliance with this section.

Sec. 5.082. REQUEST FOR BALANCE AND TRUSTEE. (a) A

purchaser under an executory contract, on written request, is

entitled to receive the following information from the seller:

(1) as of the date of the request or another date

specified by the purchaser, the amount owed by the purchaser under

the contract; and

(2) if applicable, the name and address of the seller's

desired trustee for a deed of trust to be executed under Section

5.081.

(;) On or before the 10th day after the date the seller

receives from the purchaser a written request for information

described by Subsection (a), the seller shall provide to the

purchaser a written statement of the requested information.

© If the seller does not timely respond to a request made

under this section, the purchaser may:

(1) determine or pay the amount owed under the

contract, including determining the amount necessary for a

promissory note under Section 5.081; and

(2) if applicable, select a trustee for a deed of trust

under Section 5.081.

(d) For purposes of Subsection ©(2), a purchaser must

select a trustee that lives or has a place of business in the same

county where the property covered by the executory contract is

located.

Sec. 5.083. RIGHT TO CANCEL CONTRACT FOR IMPROPER PLATTING.

(a) Except as provided by Subsection ©, in addition to other

rights or remedies provided by law, the purchaser may cancel and

rescind an executory contract at any time if the purchaser learns

that the seller has not properly subdivided or platted the property

that is covered by the contract in accordance with state and local

law. A purchaser canceling and rescinding a contract under this

subsection must:

(1) deliver a signed, written notice of the

cancellation and rescission to the seller in person; or

(2) send a signed, written notice of the cancellation

and rescission to the seller by telegram or certified or registered

mail, return receipt requested.

(:P If the purchaser cancels the contract as provided under

Subsection (a), the seller, not later than the 10th day after the

date the seller receives the notice of cancellation and rescission,

shall:

(1) deliver in person or send by telegram or certified

or registered mail, return receipt requested, to the purchaser a

signed, written notice that the seller intends to subdivide or plat

the property properly; or

(2) return to the purchaser all payments of any kind

made to the seller under the contract and reimburse the purchaser

for:

(A) any payments the purchaser made to a taxing

authority for the property; and

(B) the value of any improvements made to the

property by the purchaser.

© A purchaser may not exercise the purchaser's right to

cancel and rescind an executory contract under this section if, on

or before the 90th day after the date the purchaser receives the

seller's notice under Subsection (B)(1), the seller:

(1) properly subdivides or plats the property; and

(2) delivers in person or sends by telegram or

certified or registered mail, return receipt requested, to the

purchaser a signed, written notice evidencing that the property has

been subdivided or platted in accordance with state and local law.

(d) The seller may not terminate the purchaser's possession

of the property covered by the contract being canceled and

rescinded before the seller pays the purchaser any money to which

the purchaser is entitled under Subsection (B).

Sec. 5.084. RIGHT TO DEDUCT. If a seller is liable to a

purchaser under this subchapter, the purchaser, without taking

judicial action, may deduct the amount owed to the purchaser by the

seller from any amounts owed to the seller by the purchaser under

the terms of an executory contract.

Sec. 5.085. FEE SIMPLE TITLE REQUIRED; MAINTENANCE OF FEE

SIMPLE TITLE. (a) A potential seller may not execute an executory

contract with a potential purchaser if the seller does not own the

property in fee simple free from any liens or other encumbrances.

(B) Except as provided by this subsection, a seller, or the

seller's heirs or assigns, must maintain fee simple title free from

any liens or other encumbrances to property covered by an executory

contract for the entire duration of the contract. This subsection

does not apply to a lien or encumbrance placed on the property that

is:

(1) placed on the property because of the conduct of

the purchaser; or

(2) agreed to by the purchaser as a condition of a loan

obtained to place improvements on the property, including utility

or fire protection improvements.

© A violation of this section:

(1) is a false, misleading, or deceptive act or

practice within the meaning of Section 17.46, Business & Commerce

Code, and is actionable in a public or private suit brought under

Subchapter E, Chapter 17, Business & Commerce Code; and

(2) in addition to other rights or remedies provided

by law, entitles the purchaser to cancel and rescind the executory

contract and receive from the seller:

(A) the return of all payments of any kind made to

the seller under the contract; and

(B) reimbursement for:

(i) any payments the purchaser made to a

taxing authority for the property; and

(ii) the value of any improvements made to

the property by the purchaser.

SECTION 6. (a) Section 5.062, Property Code, as amended by

this Act, and Section 5.0621, Property Code, as added by this Act,

apply to an executory contract for conveyance in effect on the

effective date of this Act, regardless of the date on which the

purchaser and seller entered into the contract.

(B) Section 5.073, Property Code, as amended by this Act,

applies only to an executory contract for conveyance that was

entered into on or after the effective date of this Act. An

executory contract that was entered into before the effective date

of this Act is governed by the law in effect immediately before the

effective date of this Act, and the former law is continued in

effect for that purpose.

© Sections 5.081 and 5.082, Property Code, as added by

this Act, apply to a conversion of title initiated or a request for

information made on or after the effective date of this Act,

regardless of the date on which the purchaser and seller entered

into the executory contract that is the subject of the conversion or

request.

(d) Section 5.083, Property Code, as added by this Act,

applies only to a seller's failure or refusal to subdivide or plat

real property on or after the effective date of this Act, regardless

of the date on which the purchaser and seller entered into the

executory contract covering the property that is improperly

subdivided or platted.

(e) Section 5.084, Property Code, as added by this Act,

applies to the computation of any amount owed to the seller by the

purchaser under the terms of an executory contract on or after the

effective date of this Act, regardless of the date on which the

purchaser and seller entered into the executory contract.

(f) Section 5.085, Property Code, as added by this Act,

applies only to an executory contract for conveyance that is

entered into on or after the effective date of this Act. An

executory contract for conveyance that is entered into before the

effective date of this Act is covered by the law in effect at the

time the contract was entered into, and that law is continued in

effect for that purpose.

SECTION 7. This Act takes effect September 1, 2005.

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Quote from William Bronchick about this new legislation:

 

"Senate Bill 629 just passed a committee hearing favorably and is off for a vote in the TX senate.

 

http://www.capitol.state.tx.us/tlo/79R/billtext/SB00629S.HTM

 

This law, if passed, will effectively OUTLAW lease/options in Texas.

 

Basically, it makes a lease/option an "executory contract", which is essentially a land contract. If you live in TX, you are likely aware that land contracts require a lot of disclosures and annual reporting requirements.

 

Also, it further states that ALL EXECUTORY CONTRACTS (lease/options, land contracts) require the seller to have title. That means no sandwich lease/options, no selling a property on lease/opt or land contract that you bought on land contract.

 

AND, the kicker... you cannot sell a property on a land contract or lease/option if you have underlying financing! So, in effect, the only time you can sell on land contract or lease/option is if you have title FREE AND CLEAR!!

 

The only means of owner financing left in the state of TX will be:

 

1. Selling subject an existing loan and taking a wrap note (aka "All Inclusive Trust Deed" or "AITD")

 

2. Letting the buyer assume your note and take back a second

 

If you are in TX, don't sit around and complain about it - DO SOMETHING! Get the newspapers behind you. Raise money and run ad campaigns. Write a hundred letters to your state senators. Camp out outside the capitol building.

 

KILL THIS BILL BEFORE IT KILLS YOUR BUSINESS!!"

 

Bill posted this to the 3 local REI group boards....

 

Here is the webpage listing all Texas Senators. Please find your senator and email them to vote "NO" to SB 629.

 

http://www.senate.state.tx.us/75r/Senate/Members.htm

 

Taken from a post by William Bronchick on another board...

 

Here's a sample email:

 

SUBJECT: SENATE BILL 629 - PLEASE VOTE "NO"

 

Dear Senator X,

 

It has come to my attention that Senate Bill 629 proposes DRASTIC

changes to real estate law that will hurt many citizens of the great state

of Texas.

 

Specifically, this bill will convert ALL residential home leases

containing a purchase option into "executory contracts". An executory

contract is considered a sale under IRS tax rules, whereas a lease with

option is not. This will result in DRASTIC adverse tax consequences to

investors who cannot take advantage of long term capital gains rules.

 

Second, the bill requires that any seller of a property under an

executory contract own property free and clear of all liens. There are many

cases where this would be impractical, since creative financing is

often a solution to a property that is difficult to sell. Restricting the

means of sale would result in more foreclosures in Texas. It would

also limit the options of many low-income buyers who have no other means

of buying a home than on an executory contract from a seller.

 

I strongly urge that you vote "NO" on SB 629.

 

Sincerely,

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Joe, thanks for that heads up! Unbelievable! This is certainly no small matter. Hope the folks of Texas don't sit around waiting for "someone else" to stop this nonsense. If TX approves this, it could very well have a domino effect, with other states following. :lol:

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I just emailed my sister in Amarillo and she emailed that letter to her senator. It took less than half an hour from when I sent the email to when she emailed me back saying that she did it. I included the link to the TX senators directory and the letter that was provided above to make it easy.

 

Everyone, who do you know that lives in TX!? Even if it doesn't directly affect us in NV or CA or FL or MI or AL, we're helping out those of us who live in TX and to prevent a dangerous precedent from being set that could eventually endanger our businesses!

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Brian,

 

Thanks for the show of support. I emailed every Senator on the list. The local REI boards are buzzing with people doing the same thing.

 

Thanks Again.

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This isn't pretty at all.. I wonder how we can help.

I only have cousins in Houston TX, but they're in the marines and are still serving our Country in Iraq for the past yrs, they haven't been home in TX for a long time, I wonder if an email from them all the way from Iraq would count in TX? I mean the whole ship is from TX and I'm sure they have bigger issues in Iraq but just wondering how TX would see this if they do get emails from these honorable people? If anybody knows anything about this lemme know and I'll see what I can do to get in touch with me cousins at sea :lol:

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It's hard to say. I can't imagine that it would weigh any more with their respective senators being that they are in Iraq, but it definitely can't hurt. I'd email your cousins and ask for a small favor. Ask them to email their senators and to pass it along to everyone they know in TX. Who knows? This issue could effect another one of us in the future!

 

I would recommend everyone doing this: Contact whoever you know that lives in TX (and maybe people that don't!) and send them the link so they can easily find their senators and the form email written above. That way it is easy for them to do and they don't have to sit there and think about what they're going to say about a subject that they may not be too concerned/knowledgeable about.

 

Does anyone know why the bill was even introduced? What are the pros for wanting to pass such a bill?

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Does anyone know why the bill was even introduced? What are the pros for wanting to pass such a bill?

 

Here is a post from a local Dallas area board with analysis of the bill and some background info as to why it is being proposed.

 

BILL ANALYSIS

 

Senate Research Center S.B. 629

79R5150 KCR-D By: Lucio

Business & Commerce

4/4/2005

As Filed

 

AUTHOR'S/SPONSOR'S STATEMENT OF INTENT

 

Historically, low-income residents do not have access to traditional financing when they are purchasing real

property. Consequently, these residents often turn to nontraditional forms of purchasing land, such as

executory contracts ("contracts for deed"). A contract for deed is an agreement by which land is sold

through installment payments, and the seller provides the deed to the land only after all the payments have

been made. This type of conveyance is unlike a typical deed of trust transaction in that it takes place outside

of traditional land sales and property development, usually leaving buyers with few rights.

 

Along the Texas-Mexico border region, contracts for deed created an unregulated market for very low-cost

and substandard dwellings and are among the reasons why substandard housing (colonias) flourished in the

region. As housing advocates have reported, unscrupulous developers and contract for deed sellers often

promise prospective home and land buyers that the government--be it city, county, or state--will soon

provide needed public services (i.e., water and wastewater systems and electricity). Since these services are

not usually provided, unsafe and unsanitary housing conditions often develop.

 

In 1995, the 74th Legislature started to address some of the problems created through contract for deed land

sales. Although certain safeguards have been put in place, contract for deed land sales continue to persist and

to create substandard housing problems across the state.

 

S.B. 629 provides five major reforms to address the continuing problem of contracts for deeds.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Section 212.0115©, Local Government Code, to require, on written request of an

owner of land, a purchaser of real property under a contract for a deed, executory contract, or other

executory conveyance, an entity that provides utility service, or the governing body of the municipality, the

municipal authority responsible for approving plats to make certain determinations regarding the owner's land

or the land in which the entity or governing body is interested that is located within the jurisdiction of the

municipality.

 

SECTION 2. Amends Section 5.062(a), Property Code, to provide that, for purposes of this subchapter, a

residential lease of real property that includes an option to purchase the property is considered an executory

contract for conveyance of real property. Makes conforming changes.

 

SECTION 3. Amends Subchapter D, Chapter 5, Property Code, by adding Section 5.0621, as follows:

 

Sec. 5.0621. CONSTRUCTION WITH OTHER LAW. (a) Provides that, except as provided by

Subsection (B), if a residential lease of real property includes an option to purchase the property, the

provisions of this subchapter and Chapter 92 (Residential Tenancies), Property Code, apply to the

lease.

 

(B) Provides that, after a tenant exercises an option to purchase leased property under a

residential lease described by Subsection (a), Chapter 92, Property Code no longer applies

to the lease.

 

SECTION 4. Amends Section 5.073, Property Code, as follows:

 

Sec. 5.073. New heading: CONTRACT TERMS, CERTAIN WAIVERS PROHIBITED. (a)

Creates subsection from existing text and adds provisions that are prohibited from being included as

a term of the executory contract by a seller.

 

(B) Provides that a provision of the executory contract that purports to waive a right or

exempt a party from liability or duty under this subchapter is void.

 

SECTION 5. Amends Subchapter D, Chapter 5, Property Code, by adding Sections 5.081-5.085, as follows:

 

Sec. 5.081. RIGHT TO CONVERT CONTRACT. (a) Entitles a purchaser, at any time without

 

SRC-BEC S.B. 629 79® Page 1 of 4

 

paying penalties or charges of any kind, to convert the purchaser's interest in property under an

executory contract into recorded, legal title in accordance with this section.

 

(B) Requires the seller, if the purchaser tenders to the seller an amount of money equal to

the balance of the total amount owed by the purchaser to the seller under the executory

contract, to transfer to the purchaser recorded, legal title of the property covered by the

contract.

 

© Provides that, subject to Subsection (d), if the purchaser delivers to the seller of

property covered by an executory contract a promissory note that is equal in amount to the

balance of the total amount owed by the purchaser to the seller under the contract and that

contains the same interest rate, due dates, and late fees as the contract, the seller and the

purchaser will be required to execute certain deeds.

 

(d) Requires the seller, on or before the 10th day after the date the seller receives a

promissory note under Subsection © that substantially complies with that subsection, to

take certain actions.

 

(e) Provides that a seller who violates this section is liable to the purchaser in the same

manner and amount as a seller who violates Section 5.079 (Title Transfer) is liable to a

purchaser. Provides that this subsection does not limit or affect any other rights or

remedies a purchaser has under law.

 

(f) Provides that, on the last date that all of the conveyances described by Subsections (B)

and © are executed, the executory contract is considered completed and has no further

effect.

 

(g) Provides that the appropriate use of forms published by the Texas Real Estate

Commission for transactions described by this section constitutes compliance with this

section.

 

Sec. 5.082. REQUEST FOR BALANCE AND TRUSTEE. (a) Entitles a purchaser under an

executory contract, on written request, to receive certain information from the seller.

 

(B) Requires the seller, on or before the 10th day after the date the seller receives from the

purchaser a written request for information described by Subsection (a), to provide to the

purchaser a written statement of the requested information.

 

© Authorizes the purchaser, if the seller does not timely respond to a request made under

this section, to take certain actions.

 

(d) Requires a purchaser, for purposes of Subsection ©(2), to select a trustee that lives or

has a place of business in the same county where the property covered by the executory

contract is located.

 

Sec. 5.083. RIGHT TO CANCEL CONTRACT FOR IMPROPER PLATTING. (a) Authorizes the

purchaser, except as provided by Subsection ©, in addition to other rights or remedies provided by

law, to cancel and rescind an executory contract at any time if the purchaser learns that the seller

has not properly subdivided or platted the property that is covered by the contract in accordance

with state and local law. Requires a purchaser canceling and rescinding a contract under this

subsection to take certain actions.

 

(B) Requires the seller, if the purchaser cancels the contract as provided under Subsection

(a), to take certain actions not later than the 10th day after the date the seller receives the

notice of cancellation and rescission.

 

© Prohibits a purchaser from exercising the purchaser's right to cancel and rescind an

executory contract under this section if, on or before the 90th day after the date the

purchaser receives the seller's notice under Subsection (B)(1), the seller takes certain

actions.

 

(d) Prohibits the seller from terminating the purchaser's possession of the property covered

by the contract being canceled and rescinded before the seller pays the purchaser any money

to which the purchaser is entitled under Subsection (B).

 

Sec. 5.084. RIGHT TO DEDUCT. Authorizes the purchaser, if a seller is liable to a purchaser under

this subchapter, to deduct the amount owed to the purchaser by the seller from any amounts owed to

the seller by the purchaser under the terms of an executory contract without taking judicial action.

 

Sec. 5.085. FEE SIMPLE TITLE REQUIRED; MAINTENANCE OF FEE SIMPLE TITLE. (a)

Prohibits a potential seller from executing an executory contract with a potential purchaser if the

seller does not own the property in fee simple free from any liens or other encumbrances.

 

SRC-BEC S.B. 629 79® Page 1 of 4

 

(B) Requires a seller, or the seller's heirs or assigns, except as provided by this subsection,

to maintain fee simple title free from any liens or other encumbrances to property covered

by an executory contract for the entire duration of the contract. Provides that this

subsection does not apply to certain liens or encumbrances placed on the property.

 

© Sets forth the results of a violation of this section.

 

SECTION 6. (a) Provides that Section 5.062, Property Code, as amended by this Act, and Section 5.0621,

Property Code, as added by this Act, apply to an executory contract for conveyance in effect of the effective

date of this Act, regardless of the date on which the purchaser an seller entered into contract.

 

(B) Makes application of this Act prospective.

 

© Provides that Sections 5.081 and 5.082, Property Code, as added by this Act, apply to a

conversion of title initiated or a request for information made on or after the effective date of this

Act, regardless of the date on which the purchaser and seller entered into the executory contract that

is the subject of the conversion or request.

 

(d) Provides that Section 5.083, Property Code, as added by this Act, applies only to a seller's failure

or refusal to subdivide or plat real property on or after the effective date of this Act, regardless of the

date on which the purchaser and seller entered into the executory contract covering the property that

is improperly subdivided or platted.

 

(e) Provides that Section 5.084, Property Code, as added by this Act, applies to the computation of

any amount owed to the seller by the purchaser under the terms of an executory contract on or after

the effective date of this Act, regardless of the date on which the purchaser and seller entered into

the executory contract.

 

(f) Makes application of Section 5.085, Property Code, as added by this Act prospective.

 

SECTION 7. Effective date: September 1, 2005.

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I have been working frantically to contact our reps here in Texas. The Senator that drafted the bill, is Senator Lucio from Brownsville, which is a border town. I am sure his goal was to provide "protection" to Hispanics that were getting taken advantage of. However, what he has done, should this bill pass, is essentially shut the door on them to ever buying a home!!! He is throwing out the baby with the bathwater! I am putting together information packets to hand deliver to Austin next week to all of the state Senators.

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Just an update from the battle front. The REIN groups, other groups and the investors here in Texas are working hard to contact every member of the House and State Senate about this. I have faxed and called not only my own rep and Senator, but also evey member on teh House Committee that has this bill. We are now trying to raise capital for hiring a lobby group called Capital Consultants in Austin. They apparently specialize in the housing industry, and understand the potential ramifications of this. The clock is ticking quickly though, as they are only in session for 5 more weeks. It will most likely make it through the Senate, as it has already been rushed through Committee there. Our hope is to stop it in the House Committee of Business and Industry. If it's not too late, I will also be going to the Capital to try to meet with my reps.

This could be very serious for everyone, because if this was pushed through by the Realtor PAC, then watch out!! Your state could be next!!

 

If you want to donate to teh cause, we are currently trying to raise $17,000, the retainer for this group. E-mail me and I will get you specific information on the who, what , where, etc. My company is donating a sizeable amount, so we are putting our money where our mouth is.

Please get this info to ANY REIN group no matter the state!

I can also e-mail a list for those of you in Texas, of the members and phone numbers of teh House Committee that need to be contacted.

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This is a post I am copying from a local discussion board in South Carolina about a bill in the state of North Carolina. It looks like this may be a trend.

 

 

 

On March 16, 2005 there was a bill introduced into the House that would

> effectivly regulate the following types of transactions:

>

> 1. Lease Options

> 2. Rent To Own

> 3. Subject To

> 4. Options On Property

> 5. Basically everything we do as investors.

>

> It would require us to carry bonds, etc. Frankly this thing is awful. To

> see the entire bill go to:

>

> http://www.ncleg.net/gascripts/BillLookUp/...005&BillID=H725

>

> The bill is sponsored by a.... realtor.

>

> So what can you do? You need to call, email, fax and contact your

> representative to let them know your displeasure with this bill.

>

> Take action now!! You have a voice in NC and you must use it!!!

>

> Matthew Gillogly

> Fellow Real Estate Investor

 

Todd S.

>

>

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So in the case of this bill, the purpose seems to be to require people like us to be licensed. I'm assuming that there's nothing in there that requires a Realtor to have a bond to do LO's. I'm not familiar with the specifics, but this BS has got to stop! :wacko:

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Well, after many faxes, phone calls, and some e-mails, I think we may be OK here in TEXAS!!!! I sent an e-mail to my Senator and it was forwarded to some people working on the bill, and one of the people behind the bill actually called me and said I had some valid points and that there were amendments being put into place on the bill. Those amendments would require some document changes to L/O's but that we would still be in business!!!!! I confirmed the amendments this AM from the state website, and I think we have escaped the firestorm!! We can still do L/O's here, but we will need to advise the T/B on separate documents regarding the lien the owner has and that should the owner not pay, the house could be foreclosed upon.

I had mentioned in my e-mail to the Senator that on our contracts we clearly state that "the Tenant/Optionee and or assigns may at any time request verification of the mortgage payment from the Landlord/Optionor." and that I suggested that Sec. 5.085 of SB 629 (the section stating that the property could not have a lien)have similar verbiage. It looks like it will in fact have similar verbiage.

Bottom line..PILOT76180 IS STILL IN BUSINESS!!!! :wacko:

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That's encouraging news, pilot. I wouldn't pop the Lone Stars just yet, but it seems that some pressure on your lawmakers is requiring cooler heads to prevail. Keep on top of this and keep us posted here. Important stuff that needs to be kept on the front burner. As we can already see, the domino effect is taking place as other states are beginning to attempt to pass similar Bills.

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UPDATE: There is a new website to track SB 629 and HB 1823.

 

Save Texas Real Estate

 

Here is the latest from their website....

 

AN AGREEMENT HAS BEEN REACHED

 

Everyone:

 

 

I have just spoken with our lobbyist, and with Cathy Crowe.

 

Here is the agreement that has been reached (yes, he works fast!). On

Monday afternoon, during the reading of the House Bill 1823, there is

supposed to be an amendment proposed that will exclude lease/option

sales with a term of less than 3 years from the bill. This is probably the

best that we can get at this point. This should allow investors to

operate within the new law. If you have any questions, please let Scott

Horne or myself know immediately.

 

 

 

I was also told by our lobbyist to have all phone calls into Austin to

cease. There have been some very rude comments made, especially at

Sen. Lucio’s and Rep. Dutton’s office. The staffs of their offices have

not been treated with respect by people calling in opposition to the

bills. Our lobbyist, who doesn’t want his name or company mentioned

for the following reasons, told me that if this doesn’t stop, the

amendment may by in jeopardy. Some people calling into Austin have

even mentioned our lobbyist’s name, his company name, how much we’

re paying him (the exact words were “We’re having to pay $35,000 to

stop your bill!! {expletives deleted}), and how much the other

competing lobbyist groups were going to cost us. Someone, in this

group that I’m emailing, leaked this information to someone who didn’t

use the information to our benefit. Our lobbyist is demanding that this

information must stop. His group doesn’t work like that. We must

honor his request. After all, he’s the one that got our agreement

worked out!!

 

 

 

Therefore, please let everyone in your organization know to stop

calling Austin. At this point, it’s going to make matters worse, not

better. Please send out an announcement immediately.

 

 

 

As more information is available, we’ll let everyone know.

 

 

You may view this legislation here:

Current Senate Legislation or

http://www.senate.state.tx.us/75r/Senate/Members.htm

 

You may also join us for live up-to-the-minute updates at

SaveTexasRealEstate.blogspot.com

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