HB 311

84(R) - 2015
House Business & Industry
House Business & Industry
Business, Industry, & Commerce
Land Management
Property Rights

Vote Recommendation

  • Neutral
  • Positive
  • Negative
  • Neutral
  • Neutral


Terry Canales

Bill Caption

Relating to an executory contract for the conveyance of real property; providing a penalty.

Fiscal Notes

No significant fiscal impact to the State or local governments is expected.

Bill Analysis

This bill is has been substantively updated since we reported on it in its original chamber. However, these changes do not affect our recommendation. 

The second chamber sponsor is Sen. Lucio. 

First chamber analysis is below:

An executory contract is a type of contract sometimes used in the transfer of real property. In the past these types of contracts, which are on terms heavily favorable to the seller, have been used to swindle buyers who were unable to purchase a home through the traditional means. 

The reason executory contracts are viewed as being predatory is that they make it very difficult for the buyer to fulfill the terms and leave the seller to benefit from the buyer's improvements to structures or land based on slight deficiencies in the buyer's fulfillment of contractual obligations. 

These types of contracts have been heavily regulated in Texas for a decade and are ostensibly in declining use. HB 311 seeks to further regulate executory contracts to make them work more like traditional mortgages. This would, presumably, put an end to the practice of executory contracts because it would eliminate the aspects of these contracts that so heavily skews them in favor of the buyer.

Vote Recommendation Notes

First chamber recommendation below:

HB 311 has some liberty-affirming and some liberty-abridging aspects. On the one hand it would be good for the property owners by helping to protect the equity of homeowners utilizing executory contracts. This supports our property rights principle. On the other hand this bill would offend our personal responsibility principle by putting the state in the position of telling people what type of contract they can and can not use for real estate transactions.

Due to these conflicts we are neutral on HB 311.