Ceremonial Signing of Act providing
Colonia and Low Income Residents
Rights under Contracts for Deed Law
(Austin, Texas) Today, Governor Rick
Perry was joined by Rep. Harold Dutton (D-Houston) and Sen. Eddie
Lucio (D-Brownsville) in the ceremonial signing of a bill relating
to the rights of a purchaser under an Executory Contract for
conveyance of real property.
"After more than 40 years of abuse, the
contracts-for-deed system has finally been fixed once and for
all," said John Henneberger, co-director of the Texas Low Income
Housing Information (TLIHIS) Service, a non-profit entity whose
goal is to assist low income Texans.
"For more than 10 years, we have worked
with Senator Lucio to curb the predatory practices of those who
would take advantage of low income residents. With this bill,
Senator Lucio has ensured that residents of colonias and low
income neighborhoods all along the Border will no longer be
subject to arbitrarily losing their homes under the old
contract-for-deed system," added Mr. Henneberger.
House Bill 1823 proposes key reforms to
curb the abuses on contracts-for-deed by unscrupulous developers
and attempts to curtail the emerging predatory practice of
option-to-buy lease contracts in a well-balanced manner. This
measure was the companion bill to Senate Bill 629 which
overwhelmingly passed the Senate but stalled in the Texas House.
By working with Rep. Dutton along with Chairman Troy Fraser
(R-Horseshoe Bay) of the Senate Business and Commerce Committee,
Senator Lucio was successful in substituting the provisions of his
SB 629 into HB 1823. The revised HB 1823 passed the Senate
Business and Commerce Committee with a vote of eight to zero and
subsequently passed the Senate with unanimous approval and now has
been signed into law.
"The Texas Senate sent a strong message
to those who would prey on the innocence of our low-income Texans
with this unanimous vote that we will not let the unscrupulous
take advantage of our constituents," said Senator Lucio.
Housing advocates are praising this bill
as the most far-reaching housing bill of the regular 79th
legislative session. Mr. Henneberger was quoted in the Quorum
Report as saying, "This bill is historic because it finally puts a
stop to contracts-for-deed abuses. . . These are the abuses that
built the colonias. These are the abuses that prey on poor,
hardworking immigrant families." In their June Newsletter, the
TLIHIS said that with the passage of this Act, the state would be
"putting a halt to contract-for-deed and
rent-to-own home sales
"Now we are going to be able to be active
owners of our homes," said Gloria Romo, a Webb County El Cenizo
Colonia resident and a victim of contracts-for-deed. "I am
grateful to the Senator because with his help we will finally
become true homeowners. Senator Lucio has always been our foremost
hero on issues that affect colonia residents."
As passed, the Act would (among other
- Help people become property owners by
giving them the option to convert their contracts for deed into
- Requires property sold under contracts
for deed to be legally platted/subdivided.
- Enables contract for deed owners to
obtain information to determine whether their property has been
- Clarifies that residential
contracts are in practice "executory contracts" and entitles
buyers with certain protections.
- Requires sellers to keep the property
free of liens during the term of the contract but allows certain
prior mortgage liens with certain protections to the buyers.
- Provides reasonable time for sellers
to remove certain liens.
- Provides reasonable time so that
option-contract provisions/forms can become updated as per new
Note: International Relations and Trade Committee Director Dan
Esparza handles this issue Senator Eddie Lucio, Jr.