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.