| 1 | 1 | | 2017S0416-1 03/07/17 |
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| 2 | 2 | | By: Zaffirini S.B. No. 2160 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the use of earnest money contracts and other offers for |
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| 8 | 8 | | the sale of land before a subdivision plat is approved in certain |
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| 9 | 9 | | border counties. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter B, Chapter 232, Local Government |
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| 12 | 12 | | Code, is amended by adding Section 232.045 to read as follows: |
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| 13 | 13 | | Sec. 232.045. EARNEST MONEY CONTRACTS BEFORE PLAT IS |
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| 14 | 14 | | APPROVED. (a) This section applies in addition to other |
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| 15 | 15 | | applicable law and prevails to the extent of a conflict with that |
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| 16 | 16 | | other law, including Sections 232.031(a) and (d). This section |
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| 17 | 17 | | applies only to a person who is a seller or subdivider and who is a |
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| 18 | 18 | | licensed, registered, or otherwise credentialed residential |
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| 19 | 19 | | mortgage loan originator under applicable state law, federal law, |
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| 20 | 20 | | and the Nationwide Mortgage Licensing System and Registry. A |
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| 21 | 21 | | person may, after the subdivider has submitted a plat application |
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| 22 | 22 | | to the county but before a plat has been finally approved and |
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| 23 | 23 | | recorded, enter into an earnest money contract with a potential |
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| 24 | 24 | | purchaser for a lot or lots in the subdivision and accept payment |
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| 25 | 25 | | under the contract in an amount of $250 or less. |
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| 26 | 26 | | (b) An earnest money contract is void if the plat for the |
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| 27 | 27 | | land has not been finally approved and recorded before the 91st day |
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| 28 | 28 | | after the date the earnest money contract is signed by the potential |
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| 29 | 29 | | purchaser, unless the potential purchaser agrees in writing to |
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| 30 | 30 | | extend the period for plat approval and recording for an additional |
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| 31 | 31 | | 90-day period. Only one extension may be granted under this |
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| 32 | 32 | | subsection. |
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| 33 | 33 | | (c) If an earnest money contract is void under Subsection |
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| 34 | 34 | | (b), the seller shall refund all earnest money paid to the potential |
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| 35 | 35 | | purchaser not later than the 30th day after the date the earnest |
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| 36 | 36 | | money contract becomes void. If the seller fails to refund the |
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| 37 | 37 | | earnest money to the potential purchaser in violation of this |
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| 38 | 38 | | subsection, the potential purchaser, in a suit to recover the |
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| 39 | 39 | | earnest money, may recover an amount equal to three times the amount |
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| 40 | 40 | | of the earnest money required to be refunded, plus reasonable |
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| 41 | 41 | | attorney's fees. |
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| 42 | 42 | | (d) Before entering into an earnest money contract, a person |
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| 43 | 43 | | must provide written notice to the local government responsible for |
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| 44 | 44 | | approving the plat. The notice must include: |
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| 45 | 45 | | (1) a statement of intent to enter into an earnest |
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| 46 | 46 | | money contract under this section; |
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| 47 | 47 | | (2) a legal description of the land to be included in |
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| 48 | 48 | | the subdivision; |
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| 49 | 49 | | (3) each county in which all or part of the subdivision |
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| 50 | 50 | | is located; and |
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| 51 | 51 | | (4) the number of proposed individual lots to be |
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| 52 | 52 | | included in the subdivision. |
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| 53 | 53 | | (e) An earnest money contract must contain the following |
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| 54 | 54 | | statement: |
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| 55 | 55 | | "NOTICE: THIS IS AN EARNEST MONEY CONTRACT ONLY. THE MAXIMUM |
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| 56 | 56 | | AMOUNT THAT THE SELLER MAY COLLECT UNDER THIS CONTRACT IS $250. THE |
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| 57 | 57 | | SELLER MAY NOT DEMAND ANY ADDITIONAL PAYMENT UNTIL A FINAL PLAT OF |
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| 58 | 58 | | THE SUBDIVISION HAS BEEN FILED AND APPROVED BY THE COUNTY |
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| 59 | 59 | | COMMISSIONERS COURT." |
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| 60 | 60 | | SECTION 2. Section 232.021(9), Local Government Code, is |
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| 61 | 61 | | repealed. |
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| 62 | 62 | | SECTION 3. The change in law made by this Act to Chapter |
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| 63 | 63 | | 232, Local Government Code, applies only to a subdivision plat |
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| 64 | 64 | | application submitted for approval on or after the effective date |
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| 65 | 65 | | of this Act. A subdivision plat application submitted for approval |
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| 66 | 66 | | before the effective date of this Act is governed by the law in |
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| 67 | 67 | | effect when the application was submitted, and the former law is |
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| 68 | 68 | | continued in effect for that purpose. |
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| 69 | 69 | | SECTION 4. This Act takes effect September 1, 2017. |
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