See THIS POST if you are looking for more information – this law was signed.
Texas House Bill 1823 has passed the the full senate and is now on Governor Rick Perry’s desk waiting to be signed. Unless he vetoes this bill by Sunday, it will become law automatically.
What does this mean for Texas investors?
– Lease options will untenable in Texas. – Why?
- A lease option becomes an executory contract (contract for deed).
- You will have to give 30 days notice before enforcing a remedy in the event of a late lease payment
- You are disallowed the forfeiture of any option consideration (payment) because of a late lease payment.
- This bill retroactively allows a lessee/purchaser to cancel land rescind a lease option contract if it is discovered that the property was platted or subdivided incorrectly
- Although this Bill allows a “purchase money loan” on the property:
- It requires the permission, acceptance and acknowledgment by any underlying lender of egregious privacy issues surrounding the loan;
- It makes any violation a deceptive trade practice;
- It places egregious requirements on Lease Options, while not affecting transactions of greater significance (i.e., Wrap-Around mortgages)
- This bill is potentially unconstitutional because it creates "an alienation on property", provides for retroactivity, and causes a restraint on trade.
This bill is part of a systematic process of some in the real estate community to make it very difficult for investors to continue to operate their businesses. If we continue to allow these types of bills to pass unopposed your livelihood will become more and more threatened.
If you are a Texas resident, please contact Gov. Rick Perry today and voice your concern over this egregious bill.
FAX: (512) 463-1849
Phone: (512) 463-2000
Office of the Governor
P.O. Box 12428
Austin, TX 78711-2428
Preferably send something on company letterhead that is well thought out, concise, and professional.