Texas Anti-Lease/Option Bill - Legislator Contact Info

Comments(7)

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  AustinREI19th April, 2005

  I don't know why this board bans urls that are not advertisments...in this case it is doing Texas investors a disservice because we actually need the URLs in this article!!
  
  
  
  What is "a while" anyway? What time period must you be on the board, or how many posts before you can post URLs?

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    elliottdl19th April, 2005 Reply

    If you click on the text where it says "must post a while before posting URLS" it will send you to the correct web page.
    
    
    
    David

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    commercialking20th April, 2005 Reply

    I believe that the rule is somewhere around 50 or 60 posts.
    

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  TexHanlon20th April, 2005

  Here is one of the origginal comments put on an REI board by Bill Bronchic:
  
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  Texans, are you aware of Senate Bill 629 that just passed a committee hearing favorably and is off for a vote in the TX senate?
  
  
  
  ****Must participate a while before posting URL's***
  
  
  
  This law, if passed, will effectively OUTLAW lease/options in Texas.
  
  
  
  Basically, it makes a lease/option an "executory contract", which is essentially a land contract. You are likely aware that land contracts require a lot of disclosures and annual reporting requirements.
  
  
  
  Also, it further states that ALL EXECUTORY CONTRACTS (lease/options, land contracts) require the seller to have title. That means no sandwich lease/options, no selling a property on lease/opt or land contract that you bought on land contract.
  
  
  
  AND, the kicker... you cannot sell a property on a land contract or lease/option if you have underlying financing! So, in effect, the only time you can sell on land contract or lease/option is if you have title FREE AND CLEAR!!
  
  
  
  The only means of owner financing left in the state of TX will be:
  
  
  
  1. Selling subject an existing loan and taking a wrap note (aka "All Inclusive Trust Deed" or "AITD")
  
  
  
  2. Letting the buyer assume your note and take back a second
  
  
  
  PLEASE, GET YOUR MEMBERS TOGETHER TO RALLY AGAINST AND KILL THIS BILL BEFORE IT KILLS YOUR BUSINESS!!
  
  
  
  Bill Bronchick
  
  ****Must participate a while before posting URL's***
  
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  We need to work fast to stop this bill from being implemented. from what I can tell it will become active in September.
  

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  commercialking20th April, 2005

  Well I have now glanced through the text of this proposed legislation and I am, as seems to be frequently the case, confused. Exactly where in this bill do you think it outlaws lease/options?
  
  
  
  About the worst thing I can come up with in this bill is that it prohibits forfieture of the option fee as a late payment penalty. While this is not a good thing it looks to me like a well-drafted lease/option would allow you to keep the option fee if the tenant had to be evicted.
  
  
  
  So whats the big deal?
  
  
  
  By the way, these things come up all the time (and in much worse forms than this) but since large numbers of legislators tend to be lawyers there is some understanding that the Lease/option performs legitmate functions in addition to occasional abuse.
  
  
  
  Reminds me of the time the legislature of Indiana seriously considered a bill to change the value of pi to 3.2 in the State of Indiana. Simpler for the school children to learn.

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  TexHanlon20th April, 2005

  This is the part of SB629 I was concerned with:
  
  
  
  Sec. 5.085. FEE SIMPLE TITLE REQUIRED; MAINTENANCE OF FEE SIMPLE TITLE.
  
  
  
  (a) A potential seller may not execute an executory contract with a potential purchaser if the seller does not own the property in fee simple free from any liens or other encumbrances.
  
  
  
  (b) Except as provided by this subsection, a seller, or the seller's heirs or assigns, must maintain fee simple title free from any liens or other encumbrances to property covered by an executory contract for the entire duration of the contract. This subsection does not apply to a lien or encumbrance placed on the property that is:
  
  
  
  (1) placed on the property because of the conduct of the purchaser; or (2) agreed to by the purchaser as a condition of a loan obtained to place improvements on the property, including utility or fire protection improvements. (c) A violation of this section: (1) is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under Subchapter E, Chapter 17, Business & Commerce Code; and (2) in addition to other rights or remedies provided by law, entitles the purchaser to cancel and rescind the executory contract and receive from the seller: (A) the return of all payments of any kind made to the seller under the contract; and (B) reimbursement for: (i) any payments the purchaser made to a taxing authority for the property; and (ii) the value of any improvements made to the property by the purchaser.
  
  
  
  
  
  It seems I cannot have a contract (Option) to sell a property I don't have clear title
  
  
  
  
  
  I am more than will to hear opposing viewpoints..In fact that is exactly what I am looking for.