Legislative Preview 2001

On Jan. 9, 2001, the 77th Legislature of Texas convenes. Some say that little will happen since this is a redistricting year. There’s no way to know for sure until it’s all over on May 28, and by then it will be too late to do anything about it. So, if you want to make sure that the real estate industry is treated fairly and that private property rights are protected, the time to get involved is now. Rest assured that TAR staff will be promoting real estate interests at the Capitol and–perhaps even more important–watching for and defeating measures that adversely affect real estate professionals and property owners.

TAR task forces have been studying several issues to determine TAR positions for the upcoming session. Read on for a summary.

Manufactured housing
Why this matters: Last legislative session, TAR helped pass a law opening up the opportunity for real estate licensees to sell manufactured homes. (Previously, licensees could sell only one per year.) Approximately one of every three new homes in Texas is a manufactured home. This statistic is slightly higher than the national average, due in large respect to the accelerated increase in the cost of homeownership in Texas. TAR believes that manufactured housing should be viewed as a partial solution to the affordable-housing problem in Texas.

TAR position:
• Support efforts to promote manufactured housing as an acceptable solution to affordable-housing issues in Texas.

• Encourage a review of conventional and industry-driven financing programs for manufactured homes so that prospective purchasers are aware of all the benefits and possible negative resale scenarios associated with each funding mechanism.

• Support efforts designed to provide full disclosure to manufactured-home buyers concerning their financial options and obligations when purchasing a manufactured home. This disclosure should include conventional as well as unconventional loan programs and potential ramifications.

• To increase public awareness about this housing option, support federal, state, and local efforts to create pilot projects allowing manufactured-housing communities to be built in targeted urban areas. TAR will only support such projects that are approved by local authorities and that are designed as planned-unit developments that enhance the quality of life and improve property values.

Premise liability
Why this matters: Property owners should have protections from litigation abuses associated with premise liability (liability of landlords, business owners, and property managers for criminal acts by third parties or injuries that take place on the property).

In 1995, the Texas Legislature passed a series of tort reform measures that dramatically altered the Texas civil justice system. These reforms were designed to minimize abuses in our court system that had resulted in excessive jury awards, delayed justice, and a costly court system that denied many citizens legitimate access to the process.

The Texas Association of REALTORS® has a long history of support for most tort reforms, and the association played an integral role in the passage of the 1995 reforms. However, premise liability was not included in the original package. The association has always supported efforts to curb this type of litigation, which causes many property owners to be vulnerable to lawsuits for actions over which they had little or no control.

TAR position:
• Support legislation designed to allow premise owners to be held liable for criminal conduct of third-parties only if:

1. the premise owner engaged in intentional or grossly negligent misconduct, and that misconduct contributed to causing the harm; or

2. the person who committed the offense was an employee of the premise owner, and the owner directed or ratified the criminal conduct.

• Support legislation that would restore the defenses of assumption of the risk to open and obvious dangers, which includes not holding premise owners liable if a person voluntarily encountered a condition of a property that any reasonable person would deem unsafe.

• Support legislation that will allow for the proportional assignment of fault in cases involving premise liability.

• Support expanding current law that allows agricultural landowners an exemption from liability for persons who use the land for recreational purposes to include most real property.

Property owner associations
Why this matters: The number of property owner associations (POAs), sometimes referred to as homeowner associations, is significant in Texas. Many buyers and sellers must deal with POAs in order to purchase and sell property. Sometimes when these interactions become contentious or overly complicated, sales transactions themselves can be placed in jeopardy.

In recent years, the Texas Legislature has been presented with numerous proposals dealing with conflicts between POAs and their members. At the center of these legislative battles are factions who feel the powers and responsibilities of POAs should be curbed, while others feel the associations need additional authority to perform standard functions.

The TAR Property Owner Association Task Force concluded that significant, but limited, problems exist among a minority of POAs, their management companies, and their members. The majority of abuses are the result of excessive legal fees assessed against homeowners by lawyers who often agree to handle the POA’s legal work for a reduced fee in exchange for unrestricted fee schedules when dealing with individual members of the association.

TAR position:
• Support efforts 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. Efforts to remedy these problems should focus on the following areas:

• Curbing exorbitant and uncontrolled legal fees.

• Eliminating nonjudicial contested foreclosures.

• Allowing for a 90-day right of redemption in all foreclosures.

• Standardizing notification to all POA members of their rights and responsibilities under established rules and regulations. (This procedure should include a process for notifying a homeowner in advance of any legal fees that could result from their actions.)

• Establishing a procedure for mandatory dispute resolution prior to foreclosure.

Texas Real Estate Commission
Why this matters: TREC’s mission 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 service providers.

The Texas Association of REALTORS® supports the role of TREC and feels it is incumbent on the association to work within the legislative process to ensure that laws are not passed that could compromise TREC’s mission. TAR also maintains a legislative objective to see that legislative actions do not place undue, unnecessary, and overreaching restrictions on REALTORS® doing business in Texas.

TAR position:
• Support specific legislative recommendations of the Texas Real Estate Commission designed to maintain the highest standard of professionalism in the real estate industry.

• TAR’s TREC Legislative Task Force believes that the majority of recommendations in the TREC Strategic Plan 2001 - 2005 can be categorized as "constructive housekeeping" designed to streamline licensing procedures and minimize several outdated and counter-productive statutory requirements that no longer benefit TREC or real estate professionals in Texas.

• Support efforts to strengthen continuing education requirements and eliminate procedures that could be used to unfairly prevent competition in certain real estate fields.

To read the full reports from the TAR task forces, visit the Governmental Affairs Section of www.tar.org.

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