How the legislative session affected Texas real estate

Texas REALTORS®, the strongest advocates for Texas real estate consumers, had several legislative victories this session, including bills that will enhance disclosure, restrict fees on new construction, protect private-property rights, and increase transportation options.

 There’s a rundown of TAR’s legislative successes below … but first, find out why lawmakers may not be done talking about Texas real estate at the state Capitol. 

Could there be a special session on property taxes?
The regular session has ended, but the possibility of a special session is likely.

Gov. Abbott said Monday that he’d decide later this week about whether to call a special session. (Only the governor can call a special session, and he will set the agenda.)

It’s also highly likely that property tax reform will be on the agenda, as this was one of Gov. Abbott’s priority issues for the session.

Texas REALTORS® strongly advocated for the pro-consumer property tax reforms in Senate Bill 669 that would have given taxpayers more information about how their tax rates are set and how they can engage in the rate-setting process. However, the Texas Legislature ultimately failed to pass SB 669.

While we are disappointed that lawmakers didn’t resolve this important issue during the session, Texas real estate did have several victories.

Legislative successes for Texas real estate
These TAR-supported bills are moving on to become law (statuses will be updated as bills are signed by the governor): 

Home equity will be on the ballot
On November 7, Texas voters will have the chance to allow more homeowners to access the equity in their properties.

Senate Joint Resolution 60, authored by Sen. Kelly Hancock and sponsored by Rep. Tan Parker, will make a few select updates to the home-equity provisions in the Texas Constitution.

Amending the Constitution requires voter approval, so it will be on the November 7, 2017 ballot.

The updates include lowering the fee cap to 2% and removing three of the top fee generators from the fee cap (appraisal fee, survey, and state base premium for title insurance policy/title examination report).

If voters approve the amendment, it will take effect Jan. 1, 2018 and will apply to new home-equity loans made on or after the effective date and existing home-equity loans refinanced on or after the effective date.

Enhanced disclosure for real estate consumers
On June 15, Gov. Abbott signed Senate Bill 2212, authored by Sen. Kelly Hancock and sponsored by Rep. John Kuempel, effective Sept. 1, 2017.

The legislation will protect real estate consumers from misleading real estate advertisements and require disclosure from real estate wholesalers.

TAR worked with the Texas Real Estate Commission on this important pro-consumer legislation.

More information on seller’s disclosure
Last week, Gov. Greg Abbott signed into law House Bill 890, authored by Rep. Charlie Geren and sponsored by Sen. Craig Estes.

The bill puts a mechanism in place to provide real estate buyers disclosure about the impact of potential aircraft noise and other activities from nearby military installations.

The bill will add this language to TREC’s Seller’s Disclosure, effective Sept. 1, 2017:

This property may be located near a military installation and may be affected by high noise or air installation compatible use zones or other operations. Information relating to high noise and compatible use zones is available in the most recent Air Installation Compatible Use Zone Study or Joint Land Use Study prepared for a military installation and may be accessed on the Internet website of the military installation and of the county and any municipality in which the military installation is located.

This will provide potential buyers with information about military installations without putting a burden on sellers to investigate whether such disclosure may be required for a particular property.

Clearing up voter confusion
Senate Bill 957 passed the House and Senate unanimously.

The bill, which was authored by Sens. Donna Campbell and Juan “Chuy” Hinojosa and sponsored in the House by Reps. Jodie Laubenberg, Larry Gonzales, Gina Hinojosa, Charlie Geren, and Toni Rose, will clarify Texas ballots in several ways:

  • State propositions must be labeled with a number (Proposition 1, Proposition 2, etc.)
  • Local propositions must be labeled with a letter (Proposition A, Proposition B, etc.)
  • Propositions must be labeled with the entity ordering the election (State of Texas Proposition 1, City of Lakeway Proposition A, etc.)
  • State propositions must be listed above local propositions.

Gov. Abbott signed the bill on June 1, effective immediately, which means the changes will be reflected on the November 7, 2017 ballot.

Expanding transportation options statewide
On Monday, Gov. Abbott signed HB 100 into law, effective immediately.

The bill provides clear statewide standards for transportation network companies (TNCs) by implementing several requirements, including:

  • TNCs must be permitted by the Texas Department of Licensing and Regulation
  • TNCs must pay an annual fee ($5,000) to operate throughout the state
  • TNCs must perform annual local, state, and national criminal background checks on drivers.

This TAR-supported legislation had wide support in the Legislature, as it was authored by Rep. Chris Paddie, joint-authored by Reps. Senfronia Thompson, Poncho Nevárez, John Kuempel, and Geanie Morrison; coauthored by 67 other representatives; and sponsored in the Senate by Sen. Charles Schwertner.

TAR supported the bill because TNCs play an integral role in a multimodal approach to resolving the state’s transportation challenges, allow real estate consumers to expand their property search, and encourage the state’s pro-business environment.

Fighting fees on new construction
House Bill 1449, authored by Rep. Ron Simmons and sponsored by Sen. Jane Nelson, prohibits cities from imposing California-style linkage fees on all new residential and commercial construction.

These fees would raise costs to real estate consumers and harm economic growth and expansion in Texas.

Gov. Abbott signed the bill Monday, effective immediately.

Special session agenda includes real estate
On June 15, Gov. Abbott vetoed Senate Bill 744, authored by Sen. Lois Kolkhorst and sponsored by Rep. Dade Phelan. The bill would have allowed someone who has to remove trees on their property for construction or development to get credit for a municipal tree mitigation fee by planting a tree on the property or in a mutually-agreed upon other property.

However, the issue is likely to arise again because the special session agenda includes a call to pass legislation that prevents cities from regulating what property owners can do with trees on private land.

Read more about how the special session may affect real estate.

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