2017S0416-1 03/07/17
By: Zaffirini S.B. No. 2160
A BILL TO BE ENTITLED
AN ACT
relating to the use of earnest money contracts and other offers for
the sale of land before a subdivision plat is approved in certain
border counties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 232, Local Government
Code, is amended by adding Section 232.045 to read as follows:
Sec. 232.045. EARNEST MONEY CONTRACTS BEFORE PLAT IS
APPROVED. (a) This section applies in addition to other
applicable law and prevails to the extent of a conflict with that
other law, including Sections 232.031(a) and (d). 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, after the subdivider has submitted a plat application
to the county but before a plat has been finally approved and
recorded, enter into an earnest money contract with a potential
purchaser for a lot or lots in the subdivision and accept payment
under the contract in an amount of $250 or less.
(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 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 FINAL PLAT OF
THE SUBDIVISION HAS BEEN FILED AND APPROVED BY THE COUNTY
COMMISSIONERS COURT."
SECTION 2. Section 232.021(9), Local Government Code, is
repealed.
SECTION 3. The change in law made by this Act to Chapter
232, Local Government Code, applies only to a subdivision plat
application submitted for approval on or after the effective date
of this Act. A subdivision plat application submitted for approval
before the effective date of this Act is governed by the law in
effect when the application was submitted, and the former law is
continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2017.