Texas House Committee Considers Lease/Option Bill
The Business and Industry Committee of the Texas House of Representatives has received Senate Bill 629, which would have the effect of ending Lease/Options and Contract for Deed in Texas. The bill passed the Senate on April 28, and passed the ‘First Reading’ step in the House on May 2, 2005.
The bill was originally presented as a consumer-protection bill to protect unsophisticated low-income home buyers. It was prompted by abuses and possible fraud by unscrupulous speculators in the ‘colonias’ along the Texas border. Observers feel that the current version of the bill would hurt the very people it seeks to help by making it unlikely that home sellers would offer non-traditional financing.
The bill would remove important incentives for home sellers, and make it illegal to sell on Lease-Option or Contract for Deed if the seller does not own the property free and clear of liens.
Other provisions of the bill would effectively eliminate late payment penalties, outlaw pre-payment penalties, enforce penalties of up to $250 per day on sellers who don’t provide statements to buyers, allow buyers to pledge optioned properties as collateral for some loans, and allow buyers to force sellers to become involuntary lenders. Some of the provisions unintended effects would be adverse tax consequences to home sellers.
Interested parties can contact members of the Business and Industry Committee by email. If you choose to contact them, it is suggested that you include “Senate Bill 629” in the subject, and that you respectfully and diplomatically express your opinion in your own words as to whether the bill should be passed or not.
Helen.Giddings@house.state.tx.us
Gary.Elkins@house.state.tx.us
Armando.Martinez@house.state.tx.us
Kevin.Bailey@house.state.tx.us
Dwayne.Bohac@house.state.tx.us
Burt.Solomons@house.state.tx.us
Larry.Taylor@house.state.tx.us
Hubert.Vo@house.state.tx.us
Bill.Zedler@house.state.tx.us
The text of the bill can be read at http://www.capitol.state.tx.us/cgi-bin/db2www/tlo/billhist/billhist.d2w/report?LEG=79&SESS=R&CHAMBER=S&BILLTYPE=B&BILLSUFFIX=00629
It was my understanding that a lobbyist was hired to do all the “negotiations” with the politicians, and that concerned citizens were asked not to assist anymore (according to http://savetexasrealestate.org). Evidentally, too many people were writing/calling the politicans using less than desirable language and tone. I haven’t heard what progress this supposed lobbyist is making, though.
I was not involved in hiring any lobbyist, and they do not speak for me.
This lobbyist wants to compromise on one point in the bill and call it a victory.
As far as the comment by the people who hired the lobbyist that the lobbyists compromise “… is the best we can do” - I totally reject that. What we can do is have the bill defeated entirely.
I don’t accept that anyone can tell me not to write to my representatives or continue to influence my government.
I do think it is important for people to be rational and civil when the contact their representatives.
Also, the supposed compromise the lobbyist got into the bill does not appear in the bill as it was presented to the committe on May 2nd.
I read on another site that “an amendment has been included that excludes lease options of durations less than 3 years.” I’ll be the first to say I would like to see the entire bill nixed, but this does represent some relief to the original bill.
bcrider - Last time I checked it was a free country and your free speech is not limited. I did not mean to insinuate you are not allowed to contact your representatives, but only suggest if you do so to not use derogatory comments as many have been doing. As I said previously, I would love for nothing more to defeat the entire bill, but given the unorganized effort that was going on and the speed at which the bill was moving through the legislation process, it is good to see that it had been trimmed down to at least make it still lawful to do L/O’s in Texas.
You can go to the Texas house web site and read the current version of the bill. If the official state web site is to be believed, no such amendment was offered or entered.
The web site/blog you are referring to says their lobbyist told them a compromise was reached, and that it was the best that could be hoped for.
I think they should get a new lobbyist without a defeatist attitude.
And I think every person with a stake in Contracts for Deed or Lease-Options should politely, rationally, and firmly inform their representative how they feel.
While the site you are referring is very informative, I’ve noticed it does lack in both accuracy and speed at times, so it may take a while to get updated. However, the source I read may also be in error. I guess time will tell.
I agree that everyone should contact their representatives about this bill, as well as others that affect our industry. However, without knowing all the circumstances involved, a “defeat all or none” attitude may not have been the correct approach in this particular case. I wrote my representatives as soon as I learned about the bill, as you and scores of others did, yet it still moved through the Senate unscathed. And from what I could tell, the house wasn’t going to put up much of a resistance either. Maybe if more investors banned together both in voice and in finances, we could have hired a more competant lobbiest to defeat the bill in its entirety, but again, who knows the circumstances. I, for one, would be overjoyed if this bill got defeated, but will be happy none-the-less if it passes with this ammendment attached as opposed going through in its original form.