TEXAS LAND TITLE ASSOCIATION LEGISLATIVE2007 REPORT by Mindy Carr, TLTA Director of Government Affairs or the fi rst time in several years, the Texas Legislature convened SESSION FACTS the session without any emergency issues on the table. In 2003, TLTA tracked 667 bills F they dealt with the controversial congressional redistricting issue and in 2005, revision of the school fi nance system and property tax relief were top priorities. However, within the fi rst several weeks, Of more than 6,300 bills filed, approximately 24% a number of big issues arose causing the Legislature to spend most of them were passed of the year in response mode. From moving to block the Governor’s into law controversial order of the HPV vaccine to overhauling the troubled Texas Youth Commission, members of the Legislature were forced to deal with 49 bills were vetoed by emotionally charged issues that greatly impacted their constituents. As Governor Perry the session continued, Legislators’ personal agendas, such as a statewide smoking ban, the death penalty for sexual predators, toll roads and Number of days in the regular water reservoirs, gradually became top priority. session – 140 In turn, the title insurance industry also fell into response mode. In There are 31 members in the February, the Attorney General released an opinion stating that social Senate and 150 members in the House security numbers (SSNs) were confi dential and county clerks would be held criminally responsible if the numbers were released. This caused the State senators are elected for majority of the 254 county courthouses to either shut down or limit the four-year terms (Staggered) real estate industry’s access to offi cial public records. TLTA immediately allied with the County and District Clerks Association, Texas Association Representatives are elected of Counties, Texas Association of Realtors, members of the oil and gas for two-year terms industry and others to fi le last minute legislation that would clarify that the records should be released by the county clerks. These groups Legislators are paid $7,200 also urged authors of the bill to include safeguards for the public on a per year go forward basis to help protect SSNs in the future. In the meantime, members of the legislature met with the Attorney General, asking for a BILLS 2007 2005 60-day moratorium with the hope that most counties would go back to business as usual. In the end, the bill passed both chambers and was HB Filed 4140 3592 signed by the Governor in just 21 days. HB Passed 955 876 SB Filed 2050 1892 SB Passed 526 512 HJR Filed 108 102 4 hb  highlights: HJR Passed 10 5 ‰ SJR Filed 64 54 SJR Passed 7 4 ƒ County or district clerk is not liable for the disclosure of a SSN contained in a fi led document ƒ Requires, upon written request by an individual, the redaction of all but the last four digits of an SSN from documents specifi ed by 2007 TLTA Legislative the individual, unless another law requires the full SSN to be on the document Committee interim issues: ƒ Requires clerks to accept documents for fi ling even if they contain Prohibition of transfer fees SSNs and does not require the clerk to confi rm that a document preparer actually redacted a SSN from a document Continued access to pubic records ƒ Requires that the preparer of a document not include the SSN on Redacting of social security numbers deeds or deeds of trust dditionally, the TLTA Lobby Team worked around the clock to verall, the title insurance protect title insurance industry employees from civil and criminal industry experienced an- Aliability. In order to deter people from committing mortgage Oother successful legislative fraud, the Texas Mortgage Bankers Association supported legislation session and escaped some ma- that increased criminal penalties for everyone involved in a real jor pitfalls. A great deal of TLTA’s estate transaction. TLTA, along with the Texas Association of Realtors, success came from an increased believed that the proposal was too onerous and overly broad. Instead, awareness of the title insurance we supported proactive measures that would provide consumers with industry – a direct result of our better information and offer additional resources to investigators to aid members’ efforts to get to know in pursuing more cases. Rep. Burt Solomons listened to our concerns their local legislators and educate and worked with all parties to pass a meaningful mortgage fraud reform them about important industry is- bill – HB 716. sues. We also worked closely with other real estate industry groups on numerous issues where we shared interest. 4 hb  highlights: ‰ Kudos to everyone who answered our calls for action and contacted ƒ Increases awareness of mortgage fraud for consumers, prosecutors, their senators and state represen- law enforcement and those involved in the transaction county or tatives. You made a huge differ- district clerk is not liable for the disclosure of a SSN contained in ence in the outcome of the 80th a fi led document Legislative Session! ƒ Provides for a notice to be given at closing, warning the borrower The following is a summary of that it is a criminal offense to participate in mortgage fraud schemes bills tracked during the legislative ƒ Requires the reporting of suspected mortgage fraud to authorized session. agencies and the Attorney General A check box indicates the bill ƒ Provides civil immunity for reporting suspicious mortgage fraud 4 passed and will become law activity ‰ on the effective date noted.

ƒ Creates a residential mortgage fraud task force to better enable An x indicates the bill was law enforcement and state agencies ‰X not approved. To read the full text for any of the bills listed, go to Texas Legislature Online, www.capitol.state.tx.us mortgage fraud bills and search by bill number. ‰X tlta successfully opposed:

SB 1307 by Sen. Wentworth/HB 2204 by Rep. Harper-Brown ƒ Increased criminal penalties

ƒ Person can be found guilty by a simple “omission” of fact Legislative Resources ƒ Includes broad conspiracy implications

SB 1308 by Sen. Wentworth/HB 3861 by Rep. Anderson Texas Legislative Council www.tlc.state.tx.us ƒ Invented a wide range of new torts described in vague, subjective and overreaching terms Texas Legislature Online ƒ Repealed the tort reform of proportionate responsibility and allows www.capitol.state.tx.us lenders or other parties to a real estate transaction to profi t from their own negligence if someone else commits one of the new torts Texas Ethics Commission www.tec.state.tx.us ƒ Pre-empted the authority of the Commissioner of Insurance to defi ne responsibility for escrow losses in the insured closing letter Offi ce of Secretary of State ƒ Overreached by making an independent agent the general agent www.sos.state.tx.us of a title insurance company regardless of the agency agreement between the agent and the company

TLTA Legislative Report, July 2007 page 2 TLTA Proposed Legislation Home Equity & Lien Issues

The TLTA Lobby Team was successful in passing all but one proposal HJR 72 by Solomons that was part of TLTA’s Legislative Agenda. The following bills were Proposing a constitutional discussed and debated by the Legislative Committee during the interim amendment to clarify certain and ultimately approved by the TLTA Board of Directors: provisions relating to the making of a home equity loan ‰4 SB 1153 by Carona and use of home equity loan Relating to the use of title insurance to insure certain interests proceeds. in personal property. The changes will clarify some of the This bill, also known as the UCC bill, provides for the use of title provisions of the home equity law insurance for personal property, such as boats and aircrafts, to ensure that were challenged in the ACRORN that a debtor has suffi cient ownership rights or interest in the property lawsuit. Highlights include: 1) to transfer a security interest the property to the lender as collateral. Agricultural (Ag) use valuation will Effective date: Sept. 1, 2007 be relevant only at date of closing. If (TDI, by way of a public hearing, must adopt promulgated forms with property is not exempt at that point, accompany rule and rate before this product can be issued) the lien is valid. 2) Oral applications 4 will be permitted and will trigger the ‰ SB 512 by Harris 12-day cooling off period. However, Relating to the attachment of a judgment lien to homestead the oral application must eventually property. be reduced to writing and provided This bill authorizes recordation of an affi davit for release of a judgment to the borrower not later than the lien on a homestead and authorizes a bona fi de purchaser or a mortgagee day before closing. 3) The one-year for value to rely on the affi davit. Effective date: Sept. 1, 2007 period between home equity closings ‰4 HB 1352 by Paxton can be waived if the owner of the Relating to the operation of a farm, ranch, factory, or other property completes an affi davit requesting an earlier closing due business by the personal representative of a decedent’s estate. to a declared state of emergency This bill authorizes a court to order the personal representative of an affecting his homestead. 4) Only estate to operate a business that is part of the estate and to grant blanks relating to the substantive the personal representative the powers to operate the business that terms would constitute a violation the court determines are appropriate under certain circumstances and of the law. Other blanks such as upon making certain considerations. Effective date: Sept. 1, 2007 in the HUD 1-A, can remain blank 4 and will not need a “not applicable” ‰ HB 2403 by Darby (amended to HB 2207 by Gallego) inserted. 5) At closing, only copies Relating to prohibiting fees for future transfers of real property. of the documents signed at closing Prohibits a scheme called Transfer Fee Rights, which involves the fi ling by must be provided to the owners. 6) a homeowner, of a notice containing a deed restriction that is attached HELOCs will clearly be able to be to the land record for 99 years. The restriction or covenant asserts that distributed by check. However, after in any subsequent transfer of title, the transferor is obligated to pay closing, only checks requested by the original owner a transfer fee equal to 1% of the sales proceeds. the borrower should be used. However, nonprofi t or governmental entities are exempt from the Effective date: November 6, 2007 prohibition. Effective date: January 1, 2008 (If approved by the voters)

The following Legislators deserve special recognition for their assistance to the TLTA lobby team and support of TLTA issues during the legislative session:

Rep. Drew Darby (R-San Angelo) Rep. Harvey Hilderbran (R-Kerrville) Rep. Joe Deshotel (D-Beaumont) Rep. Mike Krusee (R-Taylor) Rep. Jim Keffer (R-Eastland) Sen. Chris Harris (R-Arlington) Rep. Burt Solomons (R-Carrollton) Sen. Troy Fraser (R-Horseshoe Bay) Rep. Jim Pitts (R-Waxahachie) Sen. Kip Averitt (R-Waco) Rep. Pete Gallego (D-Alpine) Sen. Tommy Williams (R-The Woodlands) Rep. Jose Menendez (D-San Antonio) Sen. Carlos Uresti (D-San Antonio) Rep. Ken Paxton (R-McKinney) Sen. Kirk Watson (D-Austin) Rep. Gary Elkins (R-Houston) Sen. Kevin Eltife (R-Tyler) Rep. Rick Hardcastle (R-Vernon) Sen. John Carona (R-Dallas) Rep. Will Hartnett (R-Dallas)

TLTA Legislative Report, July 2007 page 3 Home Equity & Lien Issues, Cont. ‰4 SB 1520 by Wentworth Relating to ad valorem tax lien transfers. ‰4 HB 3630 by Van Arsdale This bill establishes a new code of restrictions on Relating to the appraisal for ad valorem tax and requirements for property tax lenders. These purposes of agricultural or open-space land. are lenders who make loans on delinquent property As fi led, this bill requires appraisal districts to appraise taxes and receive assignment or transfer of the the market value of the entire property owned by priority government tax lien. The bill says the Finance a landowner and attributes the same market value Commission shall 1) prescribe a form and content of to the home-site as is given to the other acres on an appropriate disclosure statement that the property the property. More important for the title insurance tax lender must provide to a property owner before industry, the bill prohibits an individual from having the tax lien transfer is executed and 2) adopt rules land designated for agricultural use if the land secures relating to the reasonableness of closing costs, fees a home equity loan on January 1, 2008. and other charges property tax lenders may assess. Effective date: Jan. 1, 2008 The bill also includes provisions that require within ten business days after transfer of a property tax lien, the property tax lender must give notice of the ‰4 HB 2207 by Gallego transfer to any mortgage servicer and any holder of Relating to the conveyance of certain residential a recorded fi rst lien on the property. The property tax real property encumbered by a lien. lender must obtain a court order before foreclosing on This bill requires a specifi ed notifi cation in connection its transferred tax lien. Any application for foreclosure with conveyance of an interest in residential real must be served on the holder of any recorded pre- property that is encumbered by a recorded lien. The existing fi rst lien on the property. Notwithstanding requirement would not apply to a foreclosure sale, a any contractual agreement between the property deed in lieu of foreclosure, or to the sale of a residence tax lender and the property owner, the property tax if a title insurance policy is purchased. lender must provide the payoff information required Effective date: January 1, 2008 by law when requested by other lien holders. There are several other provisions in the bill to protect both consumers and traditional mortgage lenders that have ‰4 SB 300 by Ellis purchase money liens. Relating to the duration of judgment liens in Effective date: Sept. 1, 2007 favor of the state. This bill extends the duration of an abstract of 4 HB 2138 by Paxton judgment in favor of the State of Texas or a state ‰ agency to 20 years. The bill provides that a properly Relating to regulation of property tax lenders; fi led abstract of judgment (AJ) in favor of the State providing a penalty. of Texas or a state agency continues to constitute a This bill requires licensing of property tax lenders lien until the earlier of the 20th anniversary of the by the Consumer Credit Commissioner and grants date the abstract is recorded and indexed; or the date to the Commissioner extensive regulatory powers to the judgment is satisfi ed or the lien is released. The supervise their lending activities. judgment lien may be renewed for one additional 20 Effective date: June 15, 2007 year period by fi ling, before the expiration of the initial 20 year period, a renewed AJ in the same manner as the original AJ. The renewed AJ lien relates back to the ‰4 HB 2931 by T. King date the original AJ was fi led. SB 300 also provides Relating to required notice of and a lien that this change in the law applies to: 1) a judgment, resulting from damage to a fence. if the judgment is not then dormant, that exists on This bill authorizes a person who owns real property in the effective date of SB 300, being April 23, 2007; 2) this state that is enclosed by a fence or other structure a judgment lien on record before the effective date obviously designed to exclude intruders or to contain of SB 300, being April 23, 2007; or 3) a judgment livestock or other animals to obtain from a court in entered or AJ recorded and indexed on or after the this state a judgment entitling the person to a lien effective date of SB 300, being April 23, 2007. against the motor vehicle, if the person who damages Effective date: April 23, 2007 the landowner’s fence owns the motor vehicle or has the consent of the owner of the motor vehicle to drive the vehicle at the time the person damages the landowner’s fence. Effective date: Sept. 1, 2007

TLTA Legislative Report, July 2007 page 4 Privacy & Open Records Issues ‰X SB 434 by Shapiro This bill would have required a governmental body to ‰4 SB 699 by Carona redact SSNs of living persons from all documents. Relating to the use of only parts of driver’s li- 4 cense and social security numbers in certain ‰ HB 41 by Paxton court documents. Relating to the confi dentiality of home address This bill requires each party or party’s attorney in a information of certain public offi cials and their civil action to provide the last three numbers of each spouses and to the immunity from liability of party’s driver’s license number and the last three certain agencies. numbers of each party’s Social Security number (SSN) This bill extends the confi dentiality protection of to the clerk of the court within a specifi ed amount residence information in appraisal records to federal of time after the lawsuit is fi led. The bill authorizes and state judges in Texas, including federal, district, a court to issue a contempt fi nding if party fails to county, appellate, and administrative law judges. provide required information. This bill applies to current, former, and retired judges. Effective date: Sept. 1, 2007 Effective date: Sept. 1, 2007 4 X HB 59 by Isett ‰ HB 1237 by Farabee ‰ Relating to the confi dential- This bill would have ity of certain information of provided that a state or local a person licensed to prac- governmental entity may not FACT: tice law held by the State disclose personal information Most number of vetoes by Bar of Texas. such as SSN, date of birth, Texas Governors: Upon written request, licensed address, etc; unless the Offi ce attorneys could make confi - of the Attorney General (OAG) dential their home addresses, authorizes the disclosure Governor # of Vetoes Year phone numbers, email address- after determining that there Gov. Perry 83 2001 es, SSNs and dates of birth. is a compelling governmental Gov. Edmund Davis 72 1870 interest in disclosing the Filings with the county or information that cannot be Gov. Preston Smith 67 1969 district clerk are exempt. effectively accomplished Gov. Bill Clements 56 1989 Effective date: Sept. 1, 2007 without the disclosure. In Gov. Rick Perry 49 2007 addition, the bill provides that ‰4 SB 596 by Wentworth a state or local governmental Relating to the confi denti- entity shall develop a privacy ality of certain information policy that completely describes in plainly written involving real estate transactions of the School language the reasons that the governmental entity Land Board, Veterans’ Land Board, General requires or collects each category of personal Land Offi ce, or Commissioner of the General information. The bill further requires the OAG to Land Offi ce. establish additional guidelines for local entities to This bill makes confi dential information pertaining to follow when responding to open records requests. The development of real property until deed is executed. bill would also amend the Penal Code by enhancing Information about governmental land transactions, the punishment for the offense of fraudulent use or either buying or selling, is to a great extent already possession of identifying information from a state jail confi dential until a sales contact or deed is executed. felony to a felony of the third degree. Effective date: June 15, 2007

‰4 SB 123 by Deuell ‰X HB 2305 by Talton Relating to excepting from required disclosure This bill would have allowed for law enforcement under the public information law certain offi cials to request that their personal information be personal information maintained by a confi dential and required anyone who looked at these municipality that pertains to a minor. records to submit their personal contact information This bill makes certain types of information held by to the Clerk. the government that pertains to those 17 years old or younger confi dential. The types of information X include: name, age, home address, home/personal ‰ SB 48 by Nelson phone number, SSN, or information that tends to This bill would have made SSNs in any record held by reveal the name of a guardian of the minor or of a the county clerk confi dential. member of the minor’s family. Effective date: May 17, 2007

TLTA Legislative Report, July 2007 page 5 Recording and County Issues and emergency escape ladders to ‰4 HB 1067 by Murphy the checklist. The buyer waives Relating to subdivision replat- ‰4 HB 732 by Krusee the buyer’s rights to have smoke ting by certain municipalities. Relating to recording require- detectors upon signing this notice. Specifi es that “covenants and ments for certain documents. The bill also requires the Texas restrictions” are only relevant if Confusion still remains regarding Department of Insurance to they are contained or referenced in the acceptance of paper copies of prepare and distribute information a recorded dedicatory instrument. an electronic document and some of public interest relating to fi re This legislation conforms state law county clerks have questioned safety and the dangers of carbon to the method used by the City of whether a document, specifi cally monoxide. Houston to handle re-plats from a real estate document that has Effective date: Sept. 1, 2007 1983 through mid-2006, and is been faxed, emailed or copied, is bracketed to the City of Houston. an original document containing ‰4 HB 2738 Solomons Effective date: June 15, 2007 Relating to liens on real property. original signatures and notary X seals. This bill prohibits a paper This bill provides 1) for alternate ‰ HB 1222 by Goolsby document concerning real or foreclosure posting if the Allowed counties to use the personal property from being courthouse or the county clerk’s maintenance and preservation fee recorded or serving as notice of offi ce is closed because of inclement for redacting purposes. the paper document unless certain weather, natural disaster or other 4 actions are taken. act of God, 2) the foreclosure ‰ HB 1100 by Lucio Effective date: Sept. 1, 2007 trustee is not a fi duciary of the Relating to cancellation of a mortgagor or mortgagee, and 3) subdivision plat under certain ‰4 HB 2566 by Madden the purchase price at a foreclosure circumstances. Relating to a document or sale is payable immediately on Authorizes certain people who instrument fi led by an inmate acceptance of the bid. own real property in certain with a court concerning real or Effective date: June 15, 2007 subdivisions to follow a process in personal property. 4 order to cancel, wholly or partly, This bill prohibits a prison inmate or ‰ SB 1781 by Carona an existing subdivision plat and a person fi ling on behalf of an inmate Relating to technical defects to reestablish the property using from recording a real property in instruments conveying real lots and blocks descriptions. In instrument unless the document property. 1926, the original owners of a refl ects the fact that the benefi ciary SB 1781 changes the statute of subdivision in Olmito, Texas, fi led is an inmate. As introduced, the limitations from four years to two a plat describing the property bill would have required every years on challenging a recorded in lots and blocks. In 1930, the real property instrument recorded instrument affecting real property owners had the Cameron County to state whether the benefi ciary which contains a ministerial commissioners court cancel that was a prison inmate, but that defect, omission or formality in plat and replace it with a plat that requirement was changed due to the certifi cate of acknowledgment. described the property by acreage. TLTA’s lobbying efforts. Effective date: June 15, 2007 However, the tax appraisal district, Effective date: Sept. 1, 2007 title companies, surveyors, ‰4 HB 989 by Zerwas and real estate attorneys have ‰4 HB 2118 by Pickett Relating to the fi ling for continued to use the block and Relating to licensing and regu- record of a plat or re-plat of a lot description rather than the lation of residential fi re alarm subdivision of real property. acreage description, which has technicians and regulation and A bill enacted by the 79th Legislature created problems for property installation of fi re detection prohibited a person from fi ling for owners seeking to build on their and alarm devices. record or having recorded a plat property. This bill requires each one-family or re-plat, unless an original tax Effective date: June 15, 2007 or two-family dwelling to be certifi cate was attached, proving equipped with a working smoke that delinquent taxes were not ‰X SB 1812 by Duncan detector in accordance with the owed. Due to legislative oversight, Authorized the Offi ce of Court smoke detector requirements of language to include condominiums Administration to develop a cen- the building code in effect in the and amended plats and re-plats tralized, state-recognized website political subdivision in which the was inadvertently excluded. to provide an option for posting dwelling is located. It modifi es the This bill extends the same fi ling legally suffi cient notices. seller’s disclosure notice, which the requirements already in statute seller must provide to the buyer, for condominiums, amended plats, and adds smoke detector, smoke and amended re-plats. detector for hearing impaired Effective date: Sept. 1, 2007 person, carbon monoxide alarm, TLTA Legislative Report, July 2007 page 6 Probate Issues representative of a decedent’s ‰X SB 987 by Lucio estate, within a certain time This bill would have required loan ‰4 HB 519 by Naishtat period of an order admitting a applicants for complex home loans Relating to the creation of a will to probate, to give notice to to receive consumer counseling trust for the management of an each benefi ciary named in the before the closing date of such incapacitated person’s estate. will whose identity is known or, a loan to provide the consumer Under current law, a proper court through reasonable diligence, the chance to make an informed is authorized to enter an order can be ascertained, and to fi le decision of the consequences of creating a management trust for an affi davit with the court listing such complex loans and to attempt the estate of an incapacitated the benefi ciaries notifi ed. The bill to lower foreclosure rates in this person. This is a power that also sets out what the notice must state. may be better suited for probate contain. courts. This bill authorizes a court Effective date: Sept. 1, 2007 ‰X SB 1484 by Lucio exercising probate jurisdiction SB 1484 would have required to enter an order creating a Banking and Foreclosure sellers of real property who fi nance management trust. the sale, rather than using a third- Effective date: Sept. 1, 2007 Issues party lender or bank, to provide amortization schedule and annual 4 HB 1460 by Haggerty 4 HB 564 by Hartnett ‰ accounting statements to the buyer ‰ Relating to the licensing, Relating to the administration so the buyer knows on a timely acquisition, regulation, and and operation of certain trusts and regular basis how payments taxation of manufactured and other property interests are being applied, and the amount housing; providing administra- held for the benefi t of another. of principal still owed. tive and criminal penalties. This bill enacts the changes to HB 1460 proposes several changes 4 statutory law recommended by ‰ HB 2783 by Solomons to Chapter 1201 (Manufactured the State Bar of Texas, including a Relating to the regulation of Housing), Occupations Code revision of statutory duty to keep certain persons involved in providing greater consumer benefi ciaries informed, clarifi cation mortgage lending. protections through increased on when a trust is considered This bill contains multiple enforcement authority granted “self-settled,” a reversal of the amendments and new provisions to the Manufactured Housing default rule requiring bonds of to the Texas Mortgage Broker Division of the Texas Department trustees, and an authorization of License Act including permitting of Housing and Community Affairs a custodian to create a trust that mortgage brokers to make second (TDHCA). In particular, this bill would last beyond a child’s 21st lien loans under their license provides more stringent procedures birthday provided that certain from the Savings and Mortgage required to transfer ownership requirements are met. During Lending Commissioner without and clarifi es responsibilities of the interim between legislative being required to get an additional businesses licensed by TDHCA. sessions, it is the practice of the license. Effective date: Sept. 1, This bill also includes a provision Real Estate, Probate, and Trust Law 2007 that permits a mortgage lender to Section of the State Bar of Texas take action to effect a conversion 4 to recommend improvements to ‰ HB 2007 by Solomons of the manufactured home from the Texas Trust Code for adoption Relating to modernization of being personal property to real by the next legislature. the regulation of banking in property if the owner fails to do Effective date: June 15, 2007 this state. so as part of the mortgage loan This bill modernizes provisions of requirements. The bill also further Texas banking law and contains 4 HB 1710 by Naishtat ‰ clarifi es how property taxes are a provision requiring the Texas Relating to the administration recorded and collected with respect Department of Banking to establish of community property. to manufactured homes that are and implement a fi nancial literacy HB 1710 deletes existing statute designated as personal property. educational program. providing for formal administration Effective date: January 1, 2008 Effective date: Sept. 1, 2007 of a community estate and retains the statute addressing informal X SB 645 by Ellis X HB 3798 by Vaught administration of a community estate. ‰ ‰ SB 645 would have established This bill would have prohibited a Effective date: Sept. 1, 2007 a professional study to examine person who builds and sells a single- mortgage foreclosure rates in family residence from offering or 4 SB 593 by Wentworth ‰ the Houston-Sugarland-Baytown providing a benefi t to a potential Relating to proof of, and provid- purchaser as consideration to use Metropolitan Statistical Area. ing notice to certain benefi cia- a mortgage lender specifi ed by the ries under, a decedent’s will. person for a loan to purchase the This bill requires the personal residence. TLTA Legislative Report, July 2007 page 7 Industry and Real Estate Issues ‰X SB 270 Wentworth, HB 133 and HB 1552 by Villareal There were numerous proposals fi led again this session ‰4 HB 3271 by Eiland to require sale price disclosure, but once again did not Relating to the biennial hearing concerning title make its way to the governor because of opposition insurance and related information. from the real estate industry. Most of the bills would Makes changes to information collected and used have required the information to be recorded with the by TDI in regards to biennial hearings: 1) Each title deed. insurance company and agent shall annually submit 4 HB 3232 by Olivio [bracketed to Houston area] to TDI a statistical report of loss experience, expense ‰ of operation and other material matters. 2) If new or Relating to certain subdivision golf courses. different information is required to be included in the This bill requires a public hearing be held before re- stat report the information may be considered by the platting subdivision golf courses for commercial or commissioner if the information is reasonably credible residential development. This hearing would be held by for the purposes for which it is intended. 3) A title the municipal authority responsible for approving the proposed re-platting. HB 3232 requires public notice at insurance company or agent may bring suit in Travis least 15 days prior to said hearing by publishing notice County district court if the information required to be in an area newspaper, providing written notice to the reported in the statistical report is unduly burdensome affected property owner’s associations, and providing or not material to the biennial hearing. 4) Allows a written notice directly to the owners of lots that are party to the ratemaking phase of the biennial hearing within 200 feet of the area subject to the proposed to challenge another person’s admission as a party. re-platting. The bill constrains the municipal authority Effective date: Sept. 1, 2007 from approving the re-platting unless it determines that the new plat meets numerous criteria relating to ‰4 SB 1253 by Averitt municipal services and the standard of living in the Relating to the frequency and expenses of subdivision. HB 3232 also requires that the proposed certain examinations conducted by the Texas re-platting be complete and explicitly detailed (with Department of Insurance. specifi c defi nitions of what that means). This explicitly SB 1253 requires TDI to examine a carrier as frequently allows property owners of lots within 200 feet of the as TDI considers necessary and at least every fi ve proposed re-platting to sue in order to have a county years and requires the commissioner to adopt rules district court enforce this law. governing the frequency of examinations of carriers Effective date: June 15, 2007 that have been organized or incorporated for less than 4 fi ve years. Effective date: Sept. 1, 2007 ‰ HB 2402 by Truitt Relating to the authority granted to certain ‰X HB 3323 by Homer property owners’ associations in dedicatory This bill would have required the Commissioner of the instruments and restrictive covenants. Texas Department of Insurance to be elected by the HB 2402 prohibits a property owners’ association from forcing one of its members to grant an easement people rather than appointed by the Governor. on that person’s property against the person’s will. This bill also prohibits certain developers of residential 4 HB 1787 by Hartnett ‰ subdivisions from prohibiting an amendment to Relating to the determination of title to real a dedicatory instrument of a property owner’s property through a declaratory judgment. association. Effective date: Sept. 1, 2007 A recent Texas Supreme Court decision prohibited title disputes from being resolved under the Uniform ‰4 HB 1495 by Callegari Declaratory Judgments Act. There is now only one Relating to a bill of rights for property owners method by which a title dispute can be resolved - the whose property may be acquired by governmental trespass to try title action. The bill provides that a or private entities through the use of eminent boundary dispute can now be resolved through the domain authority. use of a declaratory judgment suit. Effective date: This bill requires landowners affected by potential June 15, 2007 condemnation to receive a written statement of their rights and options as provided by state law. Current ‰4 HB 1038 Ritter law requires limited disclosure regarding a property Relating to the operation of the Texas Residential owners’ rights during a condemnation proceeding. Construction Commission; providing penalties. Although Chapter 21 (Eminent Domain), Property This bill makes extensive changes to the Texas Code, requires certain notices and disclosure to Residential Construction Commission which includes a property owners, current law does not require that provision requiring the seller of residential property to these property owners be informed of their statutory provide notice of applicability of certain warranties and and constitutional rights. Affected property owners building and performance standards. The requirement may decide to hire legal counsel to advise them of their rights and options during a condemnation proceeding, does not apply to a mortgagee under a foreclosure but while such counsel may assist a property owner sale or a deed in lieu of foreclosure. during a condemnation proceeding, this benefi t is Effective date: Sept. 1, 2007 mitigated by the costs of attorney’s fees and court costs. Effective date: February 1, 2008 TLTA Legislative Report, July 2007 page 8 ‰4 HB 1671 by Homer Relating to limiting the authority of a property owner to erect a SPECIAL THANKS gate on certain third-class and neighborhood roads. The TLTA lobby team would like to thank the Legislative Committee This bill prohibits a person from for all their input and hard work. Committee members spent hours erecting a gate across neighborhood reviewing bills and recommending positions. and third-class roads unless ap- proved by the commissioners’ court TLTA Legislative Committee Members of the county. Chair Fred Schraub, San Antonio Effective date: Sept. 1, 2007 Tommy Bastian, Addison Bobby Burnett, Benjamin 4 SB 1634 by Wentworth ‰ Brent Chesney, Corpus Christi Relating to a court order for a John Cook, Breckenridge land surveyor to cross land. John DeLoach, San Antonio SB 1634 provides that a registered Denise Dumon, Dallas professional land surveyor may seek Whitney Eledge, Austin and obtain a court order authorizing James Farrar, Eastland the surveyor to enter land owned by Walter Fortney, Fort Worth a private party when the surveyor is Celia Goode-Haddock, College Station acting in his or her offi cial capacity James Gosdin, Houston or when the issuance of the court Joe Grealish, Houston order is in the public’s best interest. David Hays, Dallas Effective date: May 21, 2007 Kim Hesley, Boerne Sam Howell, Marshall James Johnson, Houston Aff ordable Housing Maureen Kersey, Addison Roland Love, Dallas ‰4 HB 1637 Menendez Pete Marianos, Dallas Relating to the operation and Katherine Metcalfe, Keller administration of the Texas Eldridge Moak, Rusk First-Time Homebuyer Program Dawn Moore, Dallas by the Texas Department of Dewayne Naumann, Austin Housing and Community Affairs Greg Nix, Houston and to certain down payment Scott Noel, San Antonio assistance under that program. Brian Pitman, Austin This bill establishes the Texas First- Bickford Shaw, Austin Time Homebuyer Program in the James Sibley, Houston Texas Department of Housing and Cara Swisher, Austin Community Affairs to provide fi nan- Latra Szal, Austin cial assistance to low income fi rst- Kathleen Terrell, Navasota time homebuyers. Effective date: Susan Valdez, Edinburg Sept. 1, 2007 Special thanks to: 4 SB 1908 by Ellis Stewart Title Guaranty’s Lobby Team: ‰ Randy Lee, Jim Gosdin, Mary Herrick, John Rothermel Relating to affordable housing and to the receivership and We also appreciate those members who took time out of their rehabilitation of certain proper- busy schedules to testify in hearings and walk the capitol ty; providing an administrative corridors helping educate lawmakers about industry issues: penalty. Tim Redding, Roland Love, Whitney Eledge, John Deloach, Brian SB 1908 requires that for loans made Pitman for the development of multifamily housing with funds provided under Other industry lobbyists: the National Affordable Housing Act, Mark Borskey, Buster Brown, Jennifer Brown, Jay Brown, Nora del the TDHCA must 1) obtain a mort- Bosque, Galt Graydon, Nick Kralj, Ron Lewis, Carl Richie, Mark Vane, gagee’s title policy in the amount of David Webber the loan, 2) TDHCA may not desig- nate a specifi c title insurance com- TLTA Lobby Team: pany to provide the policy or require Mindy Carr, Director of Government Affairs the borrower to provide the policy Allen Place, Legislative Consultant from a specifi c title insurance com- Tom Rutledge, Regulatory/Legislative Counsel pany and 3) the borrower shall se- lect the title insurance company to close the loan and provide the policy. Effective date: Sept. 1, 2007 TLTA Legislative Report, July 2007 page 9