Real Estate Law

Texas Legislative Update

More than 10,000 bills were filed in the course of the 86th Texas legislative session. Some of the filed bills and, in the long run, signed into law especially affect the actual estate and production industries. Below is a breakdown of six new laws a good way to possibly impact actual property developers and builders in Texas.

HB 852 – Building Permit Fees

The Texas Constitution prohibits municipalities from implementing expenses that can be considered an occupation tax. In determining whether or not a fee imposed by a municipality’s ordinance is a professional tax, courts appear to see if the price raises revenue above what is reasonably wished for the regulation. More specifically, to be reasonable, the charge charged for the permit can’t be greater than its expenses to run this system. In different words, building permit prices must only cover the municipality’s direct expenses and affordable indirect costs related to the review of building plans, inspections, and allow processing.

Despite this current requirement, rather than base the fee of residential constructing permits on the value to carry out the services, numerous municipalities calculate their permit expenses primarily based on the alleged value of the assets as outlined in a chart created by using the International Code Council. This kind of calculation generally ends in sales over what it fees to offer constructing lets in.


HB 852 was introduced to combat this kind of permit calculation. This invoice amends the Texas Local Government Code to restrict municipalities from using the valuation or creation fee to decide the amount of permit or inspection charges charged. This new law also prevents municipalities from requiring disclosure of information associated with the valuation or construction fee of residential living as a situation for acquiring a building permit until required for FEMA National Flood Insurance Program participation. This new law is powerful right now.

HB 1743 – Reducing Agriculture Rollback Tax

To lower their taxes, many property owners maintain the land as agricultural before developing it into any other sort of use. When the land receives the agricultural exemption adjustments to non-agricultural use, the asset owner who modifications the use will owe a rollback tax. The rollback tax is the difference between the taxes paid on the land’s agricultural price and the taxes paid if the land had been taxed on its better marketplace price.

The rollback tax is due for every 5 years in which the land acquired the decrease appraisal. Plus, the property proprietor pays 7% interest every 12 months from the date the taxes could have been due. This bill amends the Texas Tax Code to decrease the variety of years that the agriculture rollback tax is due from five years to 3 years and lowers the hobby price owed on back taxes from 7% to 5%. This new law was powerful on September 1, 2019.

HB 2439 – Prohibition on Governmental Product Mandates

This invoice amends the Texas Government Code to limit cities and different governmental entities from the usage of building codes or different neighborhood ordinance powers to mandate vendor-driven and product-precise mandates in construction, which result in the direct or oblique prohibition of other products accepted with the aid of national codes and requirements. Specifically, this new regulation affords that a governmental entity might not undertake a rule, charter, ordinance, constructing code, or other law that:

(a) prohibits or limits, immediately or indirectly, the use or installation of a constructing product or material in the creation, maintenance, maintenance, or different alteration of a residential or commercial construction if the constructing product or fabric is accredited for use by using a national model code posted in the closing three code cycles that applies to the development; or

(b) establishes a general for a building product, material, or aesthetic method in production, maintenance, protection, or other alteration of a residential or business building if the same old is greater stringent than a widespread for the product, material, or aesthetic approach under a countrywide version code posted in the last three code cycles that apply to the development.

This new regulation does, however, have numerous exemptions, along with historical homes, certain authorities funded housing and disaster healing programs, and certain lighting necessities to fulfill darkish sky ordinances. This new regulation was effective on September 1, 2019.

HB 3167 – Consistent Development Plan and Plat Review Timelines

This invoice amends the Texas Local Government Code to offer sure timelines for city/county overview of improvement plans and plans. Under this new regulation, the municipal authority liable for approving a plat shall approve, approve with situations, or disapprove a plan—including subdivision improvement plans, subdivision production plans, website plans, land development programs, and location improvement plans—and a plat inside 30 days after the date the plan or plat is filed. Previously, this timeline requirement handiest carried out to plats, no longer plans.

Additionally, if a plan or plat is required to be approved via the governing body of the municipality further to the planning fee, the governing body needs to approve, approve with conditions, or disapprove the plan or plat within 30 days after the date the plan or plat is permitted with the aid of the making plans fee. While the parties can agree to increase the closing date with the aid of no more than 30 days, if the governing body fails to timely deal with the plan or plan, it’s far routinely accredited.

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