Texas Legislative Wrap-Up: Major Wins for Texas Homeowners

The 82ndRegular Session and Special Session of the Texas Legislature have wrapped up, and Texas homeowners scored several major political victories.  June 19, 2011 was the deadline for Gov. Rick Perry to veto any legislation passed during the Regular Session.  The deadline passed and Gov. Perry chose not to veto any of TAR’s priority legislation passed during the session.  Therefore, many pro-consumer laws have gone into effect, including:

  • Strengthening private property rights through Eminent Domain reform;
  • Elimination of certain Private Transfer Fees on real estate;
  • Reform of the Texas Windstorm Insurance Association (TWIA)

More on the Legislation

Eminent Domain Reform – The new law signed by Gov. Perry requires: 1) local and state government entities interested in acquiring private property to first make an offer, in writing and based on an appraisal, to the landowner to purchase the property through a voluntary sale for a fair price, 2) condemnation petitions to specifically state the public use for which the land is needed, 3) a governmental or private entity may not take private property through the use of eminent domain if the taking is not for public use, 4) a government entity that takes land to first have a record vote stating the land to be taken and the project for which it is being taken, and 5) entities to provide all appraisals of the property they have during negotiations.

Also in the law, landowners may repurchase their land if in 10 years it is not used for the public use for which it was condemned.

Ban of Certain Private Transfer Fees – A new law prohibits private transfer fees on certain real estate transactions and requires disclosure for properties subject to existing transfer fees.  Developers often include the fees, typically 1 percent of the purchase price, as a deed restriction or covenant for new homes that many times are not discovered until the deal closes.  Homeowners then do not have a choice other than to pay the fee.  The developer continues to collect on every sale within the subdivision for a certain amount of time, usually 99 years, while adding no real value.

TWIA Reform – Under legislation passed during the Special Session, TWIA policyholders would be required to file a claim no later than one year after the damage occurred and the agency may offer premium discounts for policyholders who agree to binding arbitration for handling claims disputes.

The bill seeks to limit the circumstances when policyholders can sue the financially strapped agency, for instance if TWIA “intentionally” or improperly mishandles a claim.

The bill also establishes a code of conduct and performance standards for TWIA employees, calls for TWIA to broadcast its board meetings on the Internet and keep an archive of those meetings, and subjects the agency to state open meetings and open records laws.

The legislative accomplishments were due in large part to the success of the 2011 REALTOR® Lobby Day.   In April, thousands of Texas REALTORS® converged at the state Capitol and delivered a clear message to state legislators: protect private property rights and preserve our economy.  A big “Thank You” goes out to all who participated in the 2011 Lobby Day, and all are encouraged to join in the effort at the next regular session of the legislature, which will occur in 2013.

Dana Kervin

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