Bill Text: TX HB1386 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to the use of earnest money contracts and other offers for the sale of land before a subdivision plat is filed in certain border counties.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-03-28 - Left pending in committee [HB1386 Detail]
Download: Texas-2017-HB1386-Introduced.html
85R8330 JTS-D | ||
By: Guillen | H.B. No. 1386 |
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relating to the use of earnest money contracts and other offers for | ||
the sale of land before a subdivision plat is filed 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 FILED. | ||
(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, before a plat has been | ||
finally approved and recorded, enter into an earnest money contract | ||
with a potential purchaser 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 attorney general and 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 PLAT OF THE | ||
SUBDIVISION HAS BEEN FILED WITH THE COUNTY CLERK." | ||
SECTION 2. Section 232.021(9), Local Government Code, is | ||
repealed. | ||
SECTION 3. This Act takes effect September 1, 2017. |