HBA-MPA H.B. 637 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 637
By: Goolsby
Business & Industry
2/8/1999
Introduced

        
BACKGROUND AND PURPOSE 

A buyer of real estate located outside a city's limits may not be aware of
whether the property lies within a city's extraterritorial jurisdiction
(ETJ) and is subject to future annexation.  Currently, a seller of real
property is not required to deliver a notice to a purchaser regarding
possible annexation of the property.  Including such a notice within a
standard real estate sales contract notifies a buyer that the property lies
within a municipality's ETJ and may be subject to annexation in the future.
H.B. 637 requires a seller of real property to deliver notice to the
purchaser regarding the potential for annexation of the property. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 5, Property Code, by adding
Section 5.011, as follows: 

Sec. 5.011. SELLER'S DISCLOSURE REGARDING POTENTIAL ANNEXATION.  (a)
Requires the seller of real property to provide to the purchaser of the
property written notice that details the inclusion of the property in a
municipality's annexation plan.  Provides a model of recommended language
for such a notice. 

(b) Requires the notice to be delivered to the purchaser separately, as
part of the contract negotiation, or as part of any other notice delivered
to the purchaser, before the date of the executory contract binding the
purchaser. 

(c) Exempts from this section a transfer under a court order or foreclosure
sale; by a trustee in bankruptcy; to a mortgagee or beneficiary of a trust
deed by a mortgagor or trustor or successor in interest;  to a mortgagee or
beneficiary of a trust deed who has acquired the land at a sale under a
power of sale, a court-ordered foreclosure, or by a deed in lieu of
foreclosure; by a fiduciary administering an estate, guardianship,
conservatorship, or trust; from one co-owner to another; to a spouse  or a
person related by consanguinity; to or from a government entity; of only
mineral, leasehold, or security interests; or of property wholly within a
municipality. 

(c) Provides that if the notice is delivered as required by this section
the seller is under no other obligation to provide additional information
regarding the annexation of the property. 

(d) Authorizes the purchaser, if the seller fails to provide the notice
before the contract is entered, to terminate the executory contract for any
reason within the earlier of seven days after the date purchaser receives
the notice is received or the date of transfer. 

SECTION 2. Effective date: January 1, 2000.
           Makes application of this Act prospective.

SECTION 3.  Emergency clause.