77th Regular Session, Texas Legislature Real Estate Legislation


Three of our attorneys are actively involved with the State Bar of Texas in monitoring legislation for the Real Estate, Probate and Trust Law Section. Janna Melton serves as Chairman of the Legislative Committee - Real Estate Division, of which she has been a member since 1997. James Warnica and Mary Simmons Mendoza also serve as members on the Committee. Of the 1400 bills the Committee monitored during the 77th Regular Session, about 230 made the Committee's final report on significant legislation, and contains summaries of each bill.  You may download a PDF of the Comittee's Report at the bottom of this document  Below are a few highlighted bills from the final report. Text for each bill can be accessed at the Legislature's website at www.capitol.state.tx.us.

  • Contracts of Sale - House Bill 2033 requires sellers of unimproved property located outside a municipality's jurisdiction to provide a statutory notice that the extension of water or sewer services to that property might result in additional expense or delay. House Bill 1880, which creates agricultural development districts with assessment powers, also requires sellers to provide a statutory notice in connection with the sale of property located in such a district. Senate Bill 198 establishes new requirements for contracts for deeds and extends application of existing requirements statewide.
  • Landlord and Tenant - House Bills 2803 and 2186, respectively, subject commercial landlords and tenants to new restrictions with respect to the refund and retention of security deposits and prohibit landlords from assessing charges (other than for rent or damage to the premises) that are not specified in the lease. The new security deposit requirements in House Bill 2803 contain inconsistencies. The bill requires refunds and accountings within 60 days of surrender, but establishes a presumption of bad faith if the landlord fails to provide either within 30 days. House Bill 2803 also requires a statutory notice to commercial tenants (similar to the currently required notice to residential tenants) regarding a change in ownership of the leasehold.
  • Lending and UCC - HJR 5 reduces to 5 days the 12-day waiting period after signing a mechanic's lien contract with respect to homestead property. Senate Bill 317 will require home equity lenders to use model home equity loan forms adopted by the Consumer Credit Commissioner. Senate Bill 433 makes technical corrections to Article 9 of the UCC as adopted in Texas last Session and adopts amendments to the transition rules. House Bill 1268 would create a Class A misdemeanor offense for lenders who makes an appraiser's fee contingent on a pre-agreed value. Senate Bill 1581 will require disclosures at certain residential loan closings that state the value to the borrower of mortgage counseling and provide information regarding credit insurance. House Bill 1365 prevents lenders from disbursing funds from accounts, including tax and insurance escrow accounts, after receipt of a notice of a child support lien. 
  • County Regulation - House Bill 1445 requires counties and municipalities (with populations under 1.9 million) to enter into agreements to provide for exclusive or dual subdivision authority in the extraterritorial jurisdiction. Senate Bill 1147 gives counties the right to regulate vehicular and pedestrian gates and to require building numbers on multi-family structures.
  • Development - Senate Bill 243 overhauls the impact fee statute to require political subdivisions to provide certain credits to developers against impact fees (i.e., fees charged to offset the costs of implementing capital improvements associated with the new development). Senate Bill 365 requires municipalities to adopt the International Residential Code as the uniform building code and the National Electric Code as the uniform electric code for all single-family homes, duplexes and certain multi-family residences. The Legislature also established requirements for adoption of uniform energy, plumbing and mechanical codes under Senate Bill 5 and House Bills 217 and 196, respectively. House Bill 2117 subjects cities to complicated notice and hearing procedures for moratoriums on residential development. House Bill 924 and Senate Bill 1444 authorize water districts and water supply corporations to require easements as a condition of providing service.
  • Construction - Senate Bill 561 voids provisions in architect and engineer agreements that require indemnification of owners for their own negligence. Senate Bill 484 makes changes to the inspection process for verification of compliance with the Architectural Barriers Program.
  • Property Owners' Associations - Senate Bill 507 creates a comprehensive statutory scheme applicable to mandatory residential property owners' associations. The bill establishes notice and hearing requirements and redemption rights in connection with the actions of an association with respect to collecting assessments and enforcing restrictions and lien rights. Senate Bill 731 extends the protection of the business judgment rule to officers of nonprofit corporations, in addition to directors who were protected under prior law.
  • Environment and Water - Senate Bill 509 makes city permits issued after January 1, 2002, for renovation and demolition of public and commercial buildings conditioned on receipt of certain evidence that the building is free from asbestos. The evidence can be in the form of an asbestos survey or a certification from an architect or engineer confirming the absence of asbestos in the affected portions of the building. House Bill 1927 prohibits installation of building materials in buildings with public assess without obtaining a material safety data sheet or if they contain more than 1% asbestos. House Bill 1027 provides incentives to encourage the cleanup of contaminated properties. There were a number of bills passed concerning groundwater and water districts, incentives for water conservation and management of water resources, the most significant being Senate Bill 2, which is the follow up to Senate Bill 1 from the 1997 Session.
  • Title and Survey - Senate Bill 1707 affects title company practices for granting survey coverage and allows for the adoption of rules for accepting surveys regardless of age.
  • Electronic Transactions - Senate Bill 393 makes e-commerce and electronic transactions enforceable by permitting electronic records and e-signatures. Several bills were also passed to increase the availability of government services online.
  • Brokers - House Bills 695 and 1493 make changes to the licensing and regulation of real estate and mortgage brokers. House Bill 1493 also requires mortgage brokers to use standard pre-approval and pre-qualification forms promulgated by the Finance Commission. Senate Bill 645 paves the way for electronic applications for broker's licenses and the issuance and renewal of the same.
  • Manufactured Housing - House Bill 468 imposes requirements on owners and movers of manufactured homes designed to assist taxing authorities in collecting taxes. House Bill 557 creates a new chapter in the Property Code governing leasing in manufactured home communities. House Bill 1869 imposes requirements on retailers and consumers in connection with the purchase of manufactured homes and establishes rules for determining the classification of such homes as real or personal property. HJR 5 permits liens on homesteads for refinancing of manufactured homes.
  • Affordable Housing - The Legislature made major changes in this area to increase availability.
  • Taxation - House Bill 1200 enacts the Texas Economic Development Act, which creates and governs all tax incentives that school districts are permitted to grant. Only certain types of businesses and properties will have these incentives available to them. House Bill 1449 amends the Property Redevelopment and Tax Abatement Act to exclude school districts, which must now rely on the Texas Economic Development Act. Other bills in this area impact the appraisal review process and property tax exemptions.

You may download a PDF of the Comittee's Report below.

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