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With three months (at press time) to go in the 2001 legislative session in Texas, more than 2,500 bills have been filed. There likely will be 5,000 by the filing deadline. Many of these bills directly affect the real estate industry and the rights of private-property owners in Texas. The Governmental Affairs staff at the Texas Association of REALTORS® carefully review all bills filed to determine the impact they might have on your ability to market real property in Texas.
This update highlights some of the broad issues before lawmakers this session that are of special interest to the real estate industry. These issues change daily, so be sure to call the Legislative Hotline at 800/873-9153 for the latest information. Also, the Texas Association of REALTORS® has recently revamped the Governmental Affairs section of www.tar.org. Both of these resources are designed to give TAR members a complete and updated view of the 77th Legislature of Texas.
Home equity lending
The home equity lending protections in the Texas constitution that TAR supported are working sufficiently to protect the consumer while allowing home equity financial products to be offered to the public.
TAR position: The Texas Association of REALTORS® continues to resist all efforts this session to compromise these hard-fought consumer protections and supports modest home equity legislation designed to clarify technical language in the home equity statute.
Home warranty
A recent attorney-general opinion concluded that Chapter 39 of the Business and Commerce Code applies to home warranties. (This chapter contains a three-day right of rescission.) Unfortunately, as a result of this rescission period, some home purchasers mistakenly believe they are covered under a home-warranty contract when in actuality they are not.
The seller of a home often agrees to purchase a home-warranty contract during the closing of the real estate transaction. The seller can purchase the contract the day of the closing and present it to the buyer. However, with the three-day right-of-rescission clause in effect, the seller can cancel the policy after the closing without the buyer’s knowledge. The buyer could be left believing that the home is covered by a home warranty contract and will only be made aware of the cancellation upon attempting to exercise rights under the contract.
TAR position: The Texas Association of REALTORS® supports House Bill 493 by Pat Haggerty. This pro-consumer measure allows a home purchaser the agreed-to protections contained in the contract with immediate coverage. (Furthermore, home warranty contracts operate very similarly to insurance policies, which are already exempted under Chapter 39.)
Property owner associations
In recent years, the Texas Legislature has been presented with numerous proposals dealing with conflicts arising between property owner associations (POAs) and their members. At the center of these legislative battles are factions who feel the powers and responsibilities of property owner associations should be curbed, while others feel the associations need additional authority to perform standard functions.
TAR position: TAR supports Senate Bill 507 by John Carona and Rodney Ellis as a constructive measure designed to eliminate or mitigate the most egregious problems arising between property owner associations and their members while not compromising a POA’s right to exist, collect dues, and enforce restrictions.
The intensity of these debates and the limited success in resolving these conflicts prompted the Texas Association of REALTORS® to appoint a Property Owner Association Task Force to study these issues and identify possible problem areas and solutions.
Major provisions of Senate Bill 507, better know as the Texas Residential Property Owners Protection Act, include efforts to curb exorbitant and uncontrolled legal fees charged to a homeowner, a 90-day right of redemption in all foreclosures by property owner associations, and a user-friendly dispute-resolution procedure. The bill also requires a POA to give written notice to a homeowner of the owner’s rights to cure a violation or allow the homeowner to request a hearing before the board before the POA can levy a fine or initiate other enforcement actions.
Manufactured housing
It is estimated that one out of every three new home starts in Texas is a manufactured home. This statistic is slightly higher than the national average, and it reflects a direct correlation with the accelerated increase in the cost of homeownership in Texas. TAR supports efforts to promote manufactured housing as an acceptable solution to some affordable-housing issues in Texas. The association is concerned about the high number of repossessions in the manufactured housing industry and the difficulty many consumers of this product face when they try to resell their homes.
TAR position: The Texas Association of REALTORS® is supporting language placed in several bills this session designed to offer full disclosure to manufactured-home buyers of their financial obligations and options when purchasing a manufactured home. These disclosures are designed to inform prospective purchasers of all the benefits and possible negative resale scenarios associated with each funding mechanism.
Texas Real Estate Commission
The stated mission of the Texas Real Estate Commission (TREC) is to assist and protect consumers of real estate services, thereby fostering economic growth in Texas. Through its programs of education, licensing, and industry regulation, the commission ensures the availability of honest and capable real estate services.
TAR position: The Texas Association of REALTORS® supports the role of TREC as an effective consumer-protection regulatory body. TAR also maintains a legislative objective to see that bills are not passed into law that place undue, unnecessary, and overreaching restrictions on REALTORS® doing business in Texas.
This session, TAR supports three bills relating to TREC that are currently making their way through the Legislature: Senate Bill 362 by Jeff Wentworth, House Bill 695 by Art Reyna, and House Bill 659 by Joe Pickett are all designed to ensure smooth and consumer-friendly regulation of the real estate industry. The measures are designed to streamline the licensing and renewal process and strengthen continuing-education requirements. The bills also create a method to stop flagrant abuses of practicing real estate without a license.
Telemarketing
House Bill 472 by Burt Solomons is designed to address a growing problem in our state of telemarketing companies who often prey on unsuspecting consumers, annoy citizens in their homes, and disregard current laws designed to curb telephone abuses.
TAR position: The Texas Association of REALTORS® has not taken exception with the concepts of the bill and appreciates the bill author and his responsible efforts to address this issue. However, the way the bill was originally drafted included REALTORS® in the definition of a telemarketer. By being included in the definition, REALTORS® would be significantly restricted in using the telephone to market properties. TAR is working closely with the bill author to see that the definition is modified so that REALTORS® will not be included.
County ordinance-making authority
The Texas Association of REALTORS® feels that current divisions of responsibility between state, county, and municipal governments is sufficient to address real estate public-policy concerns. During this session, numerous bills have been introduced designed to give all counties broad and sweeping additional authority.
TAR position: As a general rule, TAR opposes these comprehensive efforts to increase government authority over private-property owners. However, each bill is carefully analyzed to make sure TAR policy does not prevent a specific county from addressing a matter that is in the public interest of the citizens of that county.
Legislative positions for the Texas Association of REALTORS® are established by volunteer association leaders based on member input. The TAR Legislative Management Team meets weekly to discuss current legislative issues and determine positions and strategies. Members of the TAR Legislative Management Team include the chairman of the board, chairman-elect, secretary/treasurer, immediate past chairman, the Legislative and Political Affairs Committees’ chairs and vice chairs, the Texas Association of REALTORS® Political Action Committee chair and vice chair, the vice president of governmental affairs, and the CEO. Your input and involvement is an important part of the TAR legislative presence. To find out how you can stay informed and involved, log on to the Governmental Affairs section of www.tar.org.
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Buyers & sellers,
visit www.texasrealestate.com.
REALTORS®, visit www.tar.org.
