84R19185 JTS-D
By: Guillen, Anderson of Dallas, Lozano H.B. No. 2214
Substitute the following for H.B. No. 2214:
By: Anderson of Dallas C.S.H.B. No. 2214
A BILL TO BE ENTITLED
AN ACT
relating to the use of earnest money contracts to purchase land in
certain border and economically distressed counties; amending
provisions subject to a criminal penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 232.033(a) and (h), Local Government
Code, are amended to read as follows:
(a) Brochures, publications, [and] advertising of any form,
and earnest money contracts relating to [subdivided] land required
to be platted under this subchapter:
(1) may not contain any misrepresentation; [and]
(2) except for a for-sale sign posted on the property
that is no larger than three feet by three feet, must accurately
describe the availability of water and sewer service facilities and
electric and gas utilities; and
(3) if a plat for the land has not been finally
approved and recorded, must include a notice that:
(A) subject to Section 232.045, a contract for
the sale of any portion of the land may not be entered into until the
land receives final plat approval under Section 232.024; and
(B) the land may not be possessed or occupied
until:
(i) the land receives final plat approval
under Section 232.024; and
(ii) all water and sewer service facilities
for the lot are connected or installed in compliance with the model
rules adopted under Section 16.343, Water Code.
(h) A person who is a seller of lots for which a plat is
required under this subchapter [in a subdivision], or a subdivider
or an agent of a seller or subdivider, commits an offense if the
person knowingly authorizes or assists in the publication,
advertising, distribution, or circulation of any statement or
representation that the person knows is false concerning any
[subdivided] land offered for sale or lease. An offense under this
section is a Class A misdemeanor.
SECTION 2. Subchapter B, Chapter 232, Local Government
Code, is amended by adding Section 232.045 to read as follows:
Sec. 232.045. EARNEST MONEY CONTRACTS. (a) This section
applies in addition to other applicable law and prevails to the
extent of a conflict with that other law. 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,
before a plat has been finally approved and recorded:
(1) enter into an earnest money contract with a
potential purchaser and accept payment under the contract in an
amount of $250 or less; and
(2) advertise in accordance with Section 232.033.
(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 attorney general and 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 PLAT OF THE
SUBDIVISION HAS BEEN FILED WITH THE COUNTY CLERK."
SECTION 3. Section 232.021(9), Local Government Code, is
repealed.
SECTION 4. This Act takes effect September 1, 2015.