Thanks for the post! I am very concerned about this bill, but Im afraid it will pass from what I hear. There does seem to be a loophole:
In the first section it states that this bill applies to—
(2) a residential lease of real property that includes
an option to purchase the property is considered an executory
contract for conveyance of real property.
All my leases are completely separate from my options. I do this to avoid any tenants claiming equitable interest.
PLEASE NOTE: I AM NOT AN ATTORNEY AND THIS SHOULD BE CONSTRUED AS PERSONAL OPINION.
You may be 100% correct, but, unfortunately, if the law passes and it comes down to you and a judge, it will be his/her interpretation of what “includes” means. I sent an email to my representatives, but it isn’t looking good right now, though, there is still hope.
Our only hope if it passes is that it is repealed due to constitutional issues. As others have said, it paints too broad a stroke on the whole industry and others, besides RE investors, could be snared.
I agree totally, but the question is: Who is going to fight it in court? The average investor does not have enough money to fight it.
Who is pushing this anyway? What is their stated reason for wanting this? If it is to protect consumers, that is exactly who it will hurt.
For example, if someone has not sold their house they might not qualify to get a new mortgage. It is common for them to lease-option their next home until their previous one sells. Under this law, they would not be able to do that.
The Constitution bans interference with existing contracts, though exceptions have been made. The Legislature can interfere with prospective contracts as much as it likes.
FORT WORTH, Texas Two federal agencies are fighting a plan to require Texas real estate agents to negotiate on behalf of home sellers and buyers.
The Federal Trade Commission and the Justice Department sent a letter to the Texas Real Estate Commission. They say the change could reduce choices for consumers and increase prices.
The letter came just days before the commission was scheduled to vote on the proposal.
Supporters say the rule change would eliminate confusion and potential conflicts of interest that can surface when sellers question agents bound to represent buyers.
But the federal agencies urge a less-restrictive solution.
Can someone comment on how to execute a lease with some rental credit toward a potential purchase at a future date?
This is immediately holding up the sale of my own property. As I read the legislation, I cannot engage in a lease with an option to purchase (even though those are seperate contracts) unless I own the home free and clear. Doing so anyway results in an illegal contract and subjects the seller to substantial penalties…