L/O to be outlawed in Texas? SB629

I heard on another REI message board that the Texas Senate has a bill that may outlaw lease/options in the state. Bill Bronchick posted in another group the following:

Texans, are you aware of Senate Bill 629 that just passed a committee hearing favorably and is off for a vote in the TX senate?

http://www.capitol.state.tx.us/tlo/79R/bil...xt/SB00629S.HTM

This law, if passed, will effectively OUTLAW lease/options in Texas.

Basically, it makes a lease/option an “executory contract”, which is essentially a land contract. You are likely aware that land contracts require a lot of disclosures and annual reporting requirements.

Also, it further states that ALL EXECUTORY CONTRACTS (lease/options, land contracts) require the seller to have title. That means no sandwich lease/options, no selling a property on lease/opt or land contract that you bought on land contract.

AND, the kicker… you cannot sell a property on a land contract or lease/option if you have underlying financing! So, in effect, the only time you can sell on land contract or lease/option is if you have title FREE AND CLEAR!!

The only means of owner financing left in the state of TX will be:

  1. Selling subject an existing loan and taking a wrap note (aka “All Inclusive Trust Deed” or “AITD”)

  2. Letting the buyer assume your note and take back a second

PLEASE, GET YOUR MEMBERS TOGETHER TO RALLY AGAINST AND KILL THIS BILL BEFORE IT KILLS YOUR BUSINESS!!

Bill Bronchick
Legalwiz.com

This is terrible.

This is really going to hurt folks heading for foreclosure not just us investors.