By: Canales (Senate Sponsor - Lucio) H.B. No. 311
(In the Senate - Received from the House April 27, 2015;
May 4, 2015, read first time and referred to Committee on Business
and Commerce; May 18, 2015, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 8, Nays 0;
May 18, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 311 By: Watson
COMMITTEE VOTE
YeaNayAbsentPNV
EltifeX
CreightonX
EllisX
HuffinesX
SchwertnerX
SeligerX
TaylorofGalvestonX
WatsonX
WhitmireX
A BILL TO BE ENTITLED
AN ACT
relating to an executory contract for the conveyance of real
property; providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 5.062(e), Property Code, is amended to
read as follows:
(e) Sections 5.066, 5.067, 5.071, 5.075, 5.079, 5.081, and
5.082 do not apply to an executory contract described by Subsection
(a)(2).
SECTION 2. Section 5.064, Property Code, is amended to read
as follows:
Sec. 5.064. SELLER'S REMEDIES ON DEFAULT. A seller may
enforce the remedy of rescission or of forfeiture and acceleration
against a purchaser in default under an executory contract for
conveyance of real property only if:
(1) the seller notifies the purchaser of:
(A) the seller's intent to enforce a remedy under
this section; and
(B) the purchaser's right to cure the default
within the 30-day period described by Section 5.065;
(2) the purchaser fails to cure the default within the
30-day period described by Section 5.065; [and]
(3) Section 5.066 does not apply; and
(4) the contract has not been recorded in the county in
which the property is located.
SECTION 3. Section 5.066(a), Property Code, is amended to
read as follows:
(a) If a purchaser defaults after the purchaser has paid 40
percent or more of the amount due or the equivalent of 48 monthly
payments under the executory contract or, regardless of the amount
the purchaser has paid, the executory contract has been recorded,
the seller is granted the power to sell, through a trustee
designated by the seller, the purchaser's interest in the property
as provided by this section. The seller may not enforce the remedy
of rescission or of forfeiture and acceleration after the contract
has been recorded.
SECTION 4. Section 5.070, Property Code, is amended by
adding Subsection (d) to read as follows:
(d) If the executory contract is recorded, the seller is not
required to continue insuring the property.
SECTION 5. The heading to Section 5.072, Property Code, is
amended to read as follows:
Sec. 5.072. ORAL AGREEMENTS [PROHIBITED].
SECTION 6. Section 5.072, Property Code, is amended by
amending Subsection (a) and adding Subsection (g) to read as
follows:
(a) Except as provided by Subsection (g), an [An] executory
contract is not enforceable unless the contract is in writing and
signed by the party to be bound or by that party's authorized
representative.
(g) If the parties enter into an oral executory contract,
the contract is enforceable if the purchaser occupies the property
as a homestead, maintains or makes improvements to the property,
and provides the seller with consideration. If the seller fails to
reduce the oral contract to writing and execute it, the seller is
considered to have failed to provide the notice required by this
section.
SECTION 7. Section 5.076, Property Code, is amended by
adding Subsection (e) to read as follows:
(e) A seller who violates this section is liable to the
purchaser in the same manner and for the same amount as a seller who
violates Section 5.079 is liable to a purchaser, except the damages
may not exceed $500 for each calendar year of noncompliance. This
subsection does not limit or affect any other rights or remedies a
purchaser has under other law.
SECTION 8. Section 5.077, Property Code, is amended by
adding Subsection (e) to read as follows:
(e) The requirements of this section continue to apply after
a purchaser obtains title to the property by conversion or any other
process.
SECTION 9. Section 5.079(a), Property Code, is amended to
read as follows:
(a) A recorded executory contract shall be the same as a
deed with a vendor's lien. The vendor's lien is for the amount of
the unpaid contract price, less any lawful deductions, and may be
enforced by foreclosure sale under Section 5.066 or by judicial
foreclosure. A general warranty is implied unless otherwise
limited by the recorded executory contract. If an executory
contract has not been recorded or converted under Section 5.081,
the [The] seller shall transfer recorded, legal title of the
property covered by the executory contract to the purchaser not
later than the 30th day after the date the seller receives the
purchaser's final payment due under the contract.
SECTION 10. Section 5.081, Property Code, is amended by
amending Subsection (a) and adding Subsection (h) to read as
follows:
(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, regardless of whether
the seller has recorded the executory contract.
(h) This section may not be construed to limit the
purchaser's interest in the property established by other law, if
any, or any other rights of the purchaser under this subchapter.
SECTION 11. (a) The changes in law made by this Act to
Sections 5.064 and 5.066, Property Code, apply only to a default
that occurs on or after the effective date of this Act. A default
that occurred before the effective date of this Act is governed by
the law in effect on the date the default occurred, and that law is
continued in effect for that purpose.
(b) Sections 5.072, 5.079, and 5.081, Property Code, as
amended by this Act, apply to an executory contract entered into
before, on, or after the effective date of this Act.
(c) The changes in law made by this Act to Sections 5.070 and
5.076, Property Code, apply to an executory contract entered into
on or after the effective date of this Act. An executory contract
entered into before the effective date of this Act is governed by
the law in effect on the date the contract was entered into, and
that law is continued in effect for that purpose.
(d) The changes in law made by this Act to Section 5.077,
Property Code, apply to an executory contract that is converted to
transfer legal title on or after the effective date of this Act. An
executory contract that is converted to transfer legal title before
the effective date of this Act is governed by the law in effect on
the date the contract was entered into, and that law is continued in
effect for that purpose.
SECTION 12. This Act takes effect September 1, 2015.
* * * * *