Bill Text: TX HB8 | 2011-2012 | 82nd Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to prohibiting certain private transfer fees and the preservation of private real property rights; providing penalties.
Spectrum: Moderate Partisan Bill (Republican 73-14)
Status: (Passed) 2011-06-17 - Effective immediately [HB8 Detail]
Download: Texas-2011-HB8-Introduced.html
Bill Title: Relating to prohibiting certain private transfer fees and the preservation of private real property rights; providing penalties.
Spectrum: Moderate Partisan Bill (Republican 73-14)
Status: (Passed) 2011-06-17 - Effective immediately [HB8 Detail]
Download: Texas-2011-HB8-Introduced.html
82R7830 PMO-D | ||
By: Darby | H.B. No. 8 |
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relating to prohibiting certain private transfer fees and the | ||
preservation of private real property rights; providing penalties. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 5, Property Code, is amended by adding | ||
Subchapter G to read as follows: | ||
SUBCHAPTER G. CERTAIN PRIVATE TRANSFER FEES PROHIBITED; | ||
PRESERVATION OF PRIVATE REAL PROPERTY RIGHTS | ||
Sec. 5.201. DEFINITIONS. In this subchapter: | ||
(1) "Lender" means a lending institution, including a | ||
bank, trust company, banking association, savings and loan | ||
association, mortgage company, investment bank, credit union, life | ||
insurance company, and governmental agency, that customarily | ||
provides financing or an affiliate of a lending institution. | ||
(2) "Payee" means a person who claims the right to | ||
receive or collect a private transfer fee payable under a private | ||
transfer fee obligation and who may or may not have a pecuniary | ||
interest in the obligation. | ||
(3) "Private transfer fee" means an amount of money, | ||
regardless of the method of determining the amount, that is payable | ||
on the transfer of an interest in real property or payable for a | ||
right to make or accept a transfer. | ||
(4) "Private transfer fee obligation" means an | ||
obligation to pay a private transfer fee created under: | ||
(A) a declaration or other covenant recorded in | ||
the real property records in the county in which the property | ||
subject to the private transfer fee obligation is located; | ||
(B) a contractual agreement or promise; or | ||
(C) an unrecorded contractual agreement or | ||
promise. | ||
(5) "Subsequent owner" means a person who acquires | ||
real property by transfer from a person other than the person who is | ||
the seller of the property on the date the private transfer fee | ||
obligation is created. | ||
(6) "Subsequent purchaser" means a person who | ||
purchases real property from a person other than the person who is | ||
the seller on the date the private transfer fee obligation is | ||
created. The term includes a lender who provides a mortgage loan to | ||
a subsequent purchaser to purchase the property. | ||
(7) "Transfer" means the sale, gift, conveyance, | ||
assignment, inheritance, or other transfer of an ownership interest | ||
in real property. | ||
Sec. 5.202. CERTAIN PRIVATE TRANSFER FEE OBLIGATIONS VOID. | ||
(a) Except as provided by this subchapter, a private transfer fee | ||
obligation is not binding or enforceable against a subsequent owner | ||
or subsequent purchaser of an interest in real property and is void. | ||
(b) For purposes of this subchapter, the following payments | ||
are not considered private transfer fee obligations: | ||
(1) consideration paid by a purchaser to a seller for | ||
an interest in real property transferred, including, as applicable, | ||
a mineral interest transferred, including additional consideration | ||
paid to a seller for the property's appreciation, development, or | ||
sale after the interest in the property has been transferred to the | ||
purchaser, if the additional consideration is paid only once and | ||
that payment does not bind successors in interest to the property to | ||
any private transfer fee obligation; | ||
(2) a commission paid to a licensed real estate broker | ||
under a written agreement between a seller or purchaser and the | ||
broker, including an additional commission for the property's | ||
appreciation, development, or sale after the interest in property | ||
is transferred to the purchaser; | ||
(3) interest, a fee, a charge, or another type of | ||
payment to a lender under a loan secured by a mortgage on the | ||
property, including: | ||
(A) a fee payable for the lender's consent to an | ||
assumption of the loan or transfer of the property subject to the | ||
mortgage; | ||
(B) a fee or charge payable for an estoppel | ||
letter or certificate; | ||
(C) a shared appreciation interest or profit | ||
participation; or | ||
(D) other consideration payable in connection | ||
with the loan; | ||
(4) rent, reimbursement, a fee, a charge, or another | ||
type of payment to a lessor under a lease, including a fee for | ||
consent to an assignment, sublease, encumbrance, or transfer of a | ||
lease; | ||
(5) consideration paid to the holder of an option to | ||
purchase an interest in property, or to the holder of a right of | ||
first refusal or first offer to purchase an interest in property, | ||
for waiving, releasing, or not exercising the option or right when | ||
the property is transferred to another person; | ||
(6) a fee payable to or imposed by a governmental | ||
entity in connection with recording the transfer of the property; | ||
(7) dues, a fee, a charge, an assessment, a fine, a | ||
contribution, or another type of payment to a property owners' | ||
association, as defined by Section 209.002, under a declaration or | ||
other covenant or under law, including a fee or charge payable for | ||
an estoppel letter or certificate issued by the association or an | ||
authorized agent of the association, provided that no portion of | ||
the fee or charge is required to be passed through to a third party | ||
designated or identifiable in the declaration or other covenant or | ||
law or in a document referenced in the declaration or other covenant | ||
or law; or | ||
(8) dues, a fee, a charge, an assessment, a fine, a | ||
contribution, or another type of payment for the transfer of a club | ||
membership related to the property. | ||
Sec. 5.203. NOTICE REQUIREMENTS FOR CONTINUATION OF | ||
EXISTING PRIVATE TRANSFER FEE OBLIGATIONS. (a) A person who | ||
receives or collects a private transfer fee under a private | ||
transfer fee obligation created before the effective date of this | ||
subchapter must, on or before January 31, 2012, file for record a | ||
"Notice of Private Transfer Fee Obligation" as provided by this | ||
section in the real property records of each county in which the | ||
property is located. | ||
(b) Multiple payees of a single private transfer fee under a | ||
private transfer fee obligation must designate one payee as the | ||
payee of record for the fee. | ||
(c) A notice under Subsection (a) must: | ||
(1) be printed in at least 14-point boldface type; | ||
(2) state the amount of the private transfer fee and | ||
the method of determination, if applicable; | ||
(3) state the date or any circumstance under which the | ||
private transfer fee obligation expires, if any; | ||
(4) state the purpose for which the money from the | ||
private transfer fee obligation will be used; | ||
(5) notwithstanding Subsection (b), state the name of | ||
each payee and each payee's contact information; | ||
(6) state the name and address of the payee of record | ||
to whom the payment of the fee must be sent; | ||
(7) include the acknowledged signature of each payee | ||
or authorized representative of each payee; and | ||
(8) state the legal description of the property | ||
subject to the private transfer fee obligation. | ||
(d) A person required to file a notice under this section | ||
shall: | ||
(1) refile the notice described by this section on or | ||
before January 31 of each year in which a private transfer fee may | ||
be collected or received; and | ||
(2) amend the notice to reflect any change in the name | ||
or address of any payee included in the notice not later than the | ||
30th day after the date the change occurs. | ||
(e) A person who amends a notice under Subsection (d)(2) | ||
must include: | ||
(1) the recording information of the original notice | ||
filed as required by this section; and | ||
(2) the legal description of the property subject to | ||
the private transfer fee obligation. | ||
(f) If a person required to file a notice under this section | ||
fails to comply with this section: | ||
(1) payment of the private transfer fee may not be a | ||
requirement for the conveyance of an interest in the property to a | ||
purchaser; | ||
(2) the property is not subject to further obligation | ||
under the private transfer fee obligation; and | ||
(3) the private transfer fee obligation is void. | ||
Sec. 5.204. ADDITIONAL COMPLIANCE REQUIREMENT: RESPONSE TO | ||
REQUEST FOR NOTICE. (a) A person may send a written request to the | ||
payee of record at the payee's address of record requesting a copy | ||
of the most recently filed notice under Section 5.203 and a | ||
statement of the amount of the private transfer fee. The payee | ||
shall provide to the requesting party a copy of the notice and a | ||
statement of the amount of the private transfer fee not later than | ||
the 30th day after the date the party sends the written request to | ||
the payee of record. | ||
(b) If the payee of record fails to comply with Subsection | ||
(a), a subsequent purchaser of property subject to the private | ||
transfer fee obligation may file an affidavit as provided by this | ||
subsection. The affidavit must: | ||
(1) state that: | ||
(A) a written request for a copy of the notice | ||
required under Section 5.203 and a statement of the amount of the | ||
private transfer fee was sent to the payee of record at the address | ||
shown in the most recent notice filed on the date the request was | ||
sent; and | ||
(B) the payee failed to provide a copy of the | ||
notice and a statement of the amount of the private transfer fee in | ||
a timely manner; and | ||
(2) include: | ||
(A) the legal description of the property subject | ||
to the private transfer fee obligation; | ||
(B) the name of the record owner of the property | ||
on the date the affidavit is signed; | ||
(C) recording information for the instrument of | ||
record, if any, imposing the private transfer fee obligation; and | ||
(D) a description of the unrecorded contractual | ||
agreement or promise, if any, imposing the private transfer fee | ||
obligation. | ||
(c) An affidavit filed for record under Subsection (b) is | ||
prima facie evidence that the payee failed to comply with Section | ||
5.203. | ||
(d) After the date an affidavit under this section is filed: | ||
(1) payment of the private transfer fee may not be a | ||
requirement for the conveyance of an interest in the property to a | ||
purchaser; | ||
(2) the property is not subject to further obligation | ||
under the private transfer fee obligation; and | ||
(3) the private transfer fee obligation is void. | ||
Sec. 5.205. ADDITIONAL COMPLIANCE REQUIREMENT: TIMELY | ||
ACCEPTANCE OF FEES PAID UNDER EXISTING PRIVATE TRANSFER FEE | ||
OBLIGATIONS. (a) The payee of record on the date a private | ||
transfer fee is paid under a private transfer fee obligation | ||
subject to Section 5.203 must accept the payment on or before the | ||
30th day after the date the payment is made. | ||
(b) If the payee of record fails to comply with Subsection | ||
(a): | ||
(1) the payment must be returned to the purchaser; | ||
(2) payment of the private transfer fee may not be a | ||
requirement for the conveyance of an interest in the property to a | ||
purchaser; | ||
(3) the property is not subject to further obligation | ||
under the private transfer fee obligation; and | ||
(4) the private transfer fee obligation is void. | ||
Sec. 5.206. DISCLOSURE OF EXISTING TRANSFER FEE OBLIGATION | ||
REQUIRED IN CONTRACT FOR SALE. (a) A contract for the sale of real | ||
property subject to a private transfer fee obligation authorized | ||
under this subchapter must describe the obligation and state that | ||
the obligation is governed by this subchapter. | ||
(b) If a contract for the sale of real property subject to a | ||
private transfer fee obligation authorized under this subchapter | ||
fails to comply with this section: | ||
(1) payment of the private transfer fee may not be a | ||
requirement for the conveyance of an interest in the property to a | ||
purchaser; | ||
(2) the property is not subject to further obligation | ||
under the private transfer fee obligation; and | ||
(3) the private transfer fee obligation is void. | ||
Sec. 5.207. WAIVER VOID. A provision that purports to waive | ||
a purchaser's rights under this subchapter is void. | ||
Sec. 5.208. LIABILITY FOR IMPOSING PRIVATE TRANSFER FEE | ||
OBLIGATION. A person who imposes or enters into an agreement | ||
imposing a private transfer fee obligation in the person's favor in | ||
violation of this subchapter is liable for: | ||
(1) damages resulting from the imposition of the | ||
private transfer fee obligation, including the amount of any | ||
private transfer fee paid; and | ||
(2) attorney's fees, expenses, and costs incurred in | ||
an action to recover the private transfer fee paid or to quiet title | ||
to the real property. | ||
Sec. 5.209. INJUNCTIVE OR DECLARATORY RELIEF; PROVIDING | ||
PENALTIES. (a) The attorney general may institute an action for | ||
injunctive or declaratory relief to restrain a violation of this | ||
subchapter. | ||
(b) In addition to instituting an action for injunctive or | ||
declaratory relief under Subsection (a), the attorney general may | ||
institute an action for civil penalties against a payee for a | ||
violation of this chapter. Except as provided by Subsection (c), a | ||
civil penalty assessed under this section may not exceed an amount | ||
equal to two times the amount of the private transfer fee charged or | ||
collected by the payee in violation of this subchapter. | ||
(c) If the court in which an action under Subsection (b) is | ||
pending finds that a payee violated this subchapter with a | ||
frequency that constitutes a pattern or practice, the court may | ||
assess a civil penalty not to exceed $250,000. | ||
(d) If the attorney general substantially prevails in an | ||
action for injunctive relief or a civil penalty under this section, | ||
the attorney general may recover reasonable attorney's fees, costs, | ||
and expenses incurred in obtaining the relief or penalty, including | ||
court costs and witness fees. | ||
(e) The comptroller shall deposit to the credit of the | ||
general revenue fund all money collected under this section. | ||
SECTION 2. Section 5.017, Property Code, is repealed. | ||
SECTION 3. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2011. |