Relating to an executory contract for the conveyance of real property; providing a penalty.
Impact
The impact of HB 2091 on state laws includes the modification of existing statutes related to the enforcement of executory contracts. The amendments grant sellers the additional power to transfer a purchaser's interest in a property through a designated trustee if the purchaser defaults after having paid a significant portion (40% or more) of the contract price or if the contract is recorded. This shift might empower sellers, but it also carries the potential for abuse if safeguards are not adequately implemented.
Summary
House Bill 2091 proposes amendments to the Texas Property Code specifically regarding executory contracts for the conveyance of real property. The bill outlines clearer procedures and remedies available to sellers in the event that a purchaser defaults on such contracts. Central to the bill is the stipulation that a seller must notify a purchaser of the intent to enforce a remedy and provide the purchaser with a 30-day period to cure the default before any enforcement actions can be taken. These provisions aim to promote fairness and transparency in the transaction processes involving real property.
Contention
One point of contention surrounding HB 2091 is the balance of power between sellers and purchasers in executory contracts. The bill provides sellers with substantial rights to enforce rescission and forfeiture, particularly in scenarios where the contract becomes recorded. Critics may argue that these provisions overly favor the seller, potentially leaving purchasers vulnerable if they face unexpected financial difficulties. Ensuring that purchasers maintain equitable rights in these transactions is likely to be a central topic of debate as the bill moves through the legislative process.