89R15784 SCR-D
By: Noble H.B. No. 4211
A BILL TO BE ENTITLED
AN ACT
relating to certain residential property interests controlled by
certain entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Property Code, is amended by adding
Chapter 223 to read as follows:
CHAPTER 223. BUSINESS ENTITY-OWNED RESIDENTIAL ARRANGEMENTS
Sec. 223.001. DEFINITIONS. In this chapter:
(1) "Business entity" means a partnership,
corporation, joint venture, limited liability company, or other
business organization or business association, however organized.
(2) "Managing entity" means a business entity that
owns residential property used in a residential arrangement.
(3) "Residential arrangement" means an arrangement in
which the purchaser of an interest in a business entity is entitled
to exclusive possession of residential property owned by the entity
as long as the purchaser holds the interest in the business entity.
(4) "Residential property" means the real property and
improvements for a single-family house, duplex, triplex, or
quadruplex.
Sec. 223.002. APPLICABILITY. This chapter does not apply
to a timeshare plan, as defined by Section 221.002.
Sec. 223.003. AGREEMENTS AND RULES. (a) An agreement for
the purchase of an interest in a managing entity must disclose to
the purchaser that the agreement is for the purchase of an interest
in the entity and not in any residential property itself.
(b) The purchase agreement and any other agreement or rules
governing the residential arrangement or the ownership interest in
the entity may not require that a dispute concerning the
arrangement or interest be brought before a tribunal other than a
court established under the laws of this state or the United States.
Sec. 223.004. DISCRIMINATION PROHIBITED. A managing entity
may not take an action with respect to an interest in the entity in a
manner that would be a violation of Chapter 301 if the interest in
the entity were an interest in real property, including:
(1) restricting the transfer of the interest;
(2) imposing requirements to maintain the interest; or
(3) refusing to grant an interest to an otherwise
qualified person.
Sec. 223.005. TRANSFER OF INTEREST. Notwithstanding any
provision in an agreement between the owner and a managing entity,
an owner of an interest in a managing entity may transfer the
interest without approval from the managing entity.
Sec. 223.006. CERTAIN CHARGES PROHIBITED. A managing
entity may not charge a fee for or share in the proceeds of the
transfer of an interest in the managing entity from an owner to a
subsequent purchaser.
Sec. 223.007. DECEPTIVE TRADE PRACTICE. A violation of
this chapter is a deceptive trade practice under Subchapter E,
Chapter 17, Business & Commerce Code.
SECTION 2. Section 301.042, Property Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) Subsection (a) does not apply to the sale, rental, or
occupancy of a dwelling that is a single-family house, duplex,
triplex, or quadruplex located on a subdivided lot in a parcel of
land 25 acres or greater owned by a religious organization,
association, or society or a nonprofit institution or organization
operated, supervised, or controlled by or in conjunction with a
religious organization, association, or society.
SECTION 3. This Act takes effect September 1, 2025.