Hinojosa Bill Caps Corporate Landlords At 10 Homes, Come 2027

The text as introduced · 1,808 words

89R1624 ATP-F

By: Hinojosa
H.B. No. 2910

A BILL TO BE ENTITLED

AN ACT

relating to single-family homes held by corporate owners for rental

purposes; providing a civil penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter C, Chapter 86, Education Code, is

amended by adding Sections 86.531 and 86.532 to read as follows:

Sec. 86.531. ANNUAL STUDY AND REPORT ON SINGLE-FAMILY HOME

PURCHASES, RENTALS, AND SALES BY CERTAIN CORPORATE OWNERS. (a) In

this section, "corporate owner," "rental property," and

"single-family home" have the meanings assigned by Section 5.251,

Property Code.

(b) Using existing available data and deed records, the

center shall compile information related to corporate owners'

purchases, rentals, and sales of single-family homes in this state

for each calendar year. The information must include:

(1) the number of single-family homes each corporate

owner had an interest in during the calendar year;

(2) the number of single-family homes purchased by

each corporate owner during the calendar year and the total number

purchased in each county and municipality;

(3) the number of single-family homes described by

Subdivisions (1) and (2) acquired through foreclosure;

(4) the number of single-family homes described by

Subdivisions (1) and (2) sold by each corporate owner during the

calendar year;

(5) the number of single-family homes described by

Subdivisions (1) and (2) used as a rental property during the

calendar year;

(6) the municipality and county in which each

single-family home described by Subdivisions (1) and (2) is

located;

(7) the appraised value of each single-family home

described by Subdivisions (1) and (2);

(8) the name, assumed name, business association type,

registered office address, telephone number, and registered agent

of each corporate owner of a single-family home; and

(9) the name, address, and contact information for the

landlord or third-party lessor, sublessor, management company, or

managing agent of each single-family home described by Subdivision

(5).

(c) In addition to the information required by Subsection

(b), the center may compile additional information at the

recommendation of the legislature or that the center determines is

relevant based on market trends.

(d) Not later than June 1 of each year, the center shall

submit a report to the lieutenant governor, the speaker of the house

of representatives, and each member of the legislature. The report

must contain:

(1) a summary of the information compiled under

Subsection (b) for the preceding calendar year;

(2) an assessment of any trends or patterns relating

to the relative number of purchases by corporate owners, including

whether the corporate owners fall into any readily observable

groups based on the number of purchases or other appropriate

criteria; and

(3) an analysis of:

(A) the impact of corporate owners on the cost of

housing; and

(B) the advantages and disadvantages, if any,

that corporate owners have over individual buyers in the real

estate market.

(e) After completing the initial report under this section,

the center may compile information from any calendar years

preceding 2025 to create and submit reports for those years that

include the information listed in Subsections (b) and (d).

Sec. 86.532. DATABASE OF CORPORATE OWNERS. (a) The center

shall create and maintain a statewide database that retains and

shows the cumulative information from each category described by

Section 86.531(b). The center shall make the database available in

a searchable format on its Internet website in a conspicuous

location.

(b) The center shall update information in the database each

month. The center shall enter into the database for access by the

public the updated information described by Section 86.531(b) not

later than the 30th business day after the date the center finds or

obtains the information.

(c) The center may consult with the appropriate agent of, or

other person representing, each corporate owner to obtain the

information necessary to operate and update the database.

(d) The center may consult with a state agency or political

subdivision to obtain assistance with collecting, aggregating, and

updating the data required by this section.

(e) The center may not charge a fee to the public to access

the database.

SECTION 2. Chapter 5, Property Code, is amended by adding

Subchapter H to read as follows:

SUBCHAPTER H. CORPORATE OWNERSHIP AND RENTAL OF SINGLE-FAMILY

HOMES

Sec. 5.251. DEFINITIONS. In this section:

(1) "Corporate owner" means a corporation, limited or

general partnership, limited liability company, business trust,

investment asset manager, real estate investment trust, joint

venture, joint stock company, or bank that holds an interest in

multiple single-family homes in this state that are offered or used

as a rental property to produce income directly or indirectly from a

residential tenant. The term includes an entity engaged in the

business of investing the pooled capital of investors in financial

securities.

(2) "Rental property" means real property used or

intended to be used:

(A) as a primary residence for 30 or more

consecutive days by a residential tenant under an oral or written

lease or rental agreement; or

(B) for occupancy for tourist or transient

accommodations for fewer than 30 consecutive days, where the

property does not serve as a residential tenant's primary

residence.

(3) "Residential tenant" means any person who does not

own but is authorized to use a single-family home in exchange for

consideration paid to a corporate owner or to a third-party lessor,

sublessor, management company, managing agent, or operator of a

hosting platform that derives revenues, including booking fees or

advertising revenues, from providing or maintaining a marketplace

that is used to facilitate the rental of a single-family home.

(4) "Single-family home" means a residential

structure with a yard or public way on not less than two sides that

is separated from any adjacent housing unit by a ground-to-roof

wall, does not share a heating, air-conditioning, or utility system

or a backyard, and does not have a housing unit located above or

below. The term does not include a mobile home or manufactured

home.

Sec. 5.252. LIMITATION ON PURCHASE AND RENTAL OF

SINGLE-FAMILY HOMES. (a) A corporate owner may not own or hold an

interest in more than 10 single-family homes in this state that are

used or offered for use as a rental property at any time.

(b) A corporate owner may not enter into an executory

contract to purchase, acquire, or otherwise obtain an interest in a

single-family home if, at the time the contract is entered into, the

corporate owner has an interest in 10 or more single-family homes

that have a residential tenant, are available as rental properties,

or have been offered as rental properties within the preceding 12

months.

(c) A contract entered into in violation of Subsection (b)

is voidable by the seller at any time before the contract is fully

executed.

(d) This section does not apply to:

(1) ownership and rental of single-family homes by:

(A) an agency of this state, a political

subdivision of this state, or the United States;

(B) a nonprofit organization exempt from federal

income taxation under Section 501(a), Internal Revenue Code of

1986, as a charitable organization under Section 501(c)(3) of that

code; or

(C) a person licensed to own and operate group

homes for people with disabilities and special health care needs;

or

(2) a single-family home rented by:

(A) an employer who rents the single-family home

to an employee;

(B) a person primarily engaged in development of

housing available for purchase by owner-occupants, with respect to

single-family homes that have not been held by the person longer

than five years without applying for building permits for the

property; or

(C) a holder of a security interest that owns the

single-family home as a result of foreclosure of the security

interest.

Sec. 5.253. ENFORCEMENT. (a) The attorney general, a

county or district attorney, independently or on behalf of an

affected municipality or county, or an appropriate agency of an

affected municipality or county may investigate an alleged

violation if there is reason to believe that a corporate owner has

violated Section 5.252 or has taken substantial steps to purchase a

single-family home with the intent to offer or use that

single-family home in violation of Section 5.252.

(b) A corporate owner who violates Section 5.252 is liable

for a civil penalty of $100,000 for each single-family home offered

or used as rental property in excess of the amount allowed under

Section 5.252.

(c) A county attorney, a district attorney, or the attorney

general may bring an action to collect a civil penalty under this

section in the district court in which any single-family home

related to the violation is located and may recover reasonable

expenses, including court costs, attorney's fees, investigative

costs, witness fees, and deposition expenses, incurred in relation

to the action. A county or district attorney may bring the action

in the name of the state or on behalf of an affected municipality or

county.

(d) Except as provided by this subsection, a civil penalty

recovered in an action brought under this section shall be

deposited in the state treasury to the credit of the general revenue

fund. A civil penalty recovered by a county or district attorney in

an action brought on behalf of a municipality or county under this

section shall be divided equally between the state and the

municipality or county, with 50 percent of the recovery to be paid

to the general revenue fund and the other 50 percent to be paid to

the municipality or county on whose behalf the suit was brought.

(e) The parties in an action under this section may agree to

a settlement that allows the corporate owner to achieve compliance

with Section 5.252(a) by selling any rental property owned by the

corporate owner, regardless of whether the corporate owner was in

violation of Section 5.252 when the property was purchased.

SECTION 3. (a) As soon as practicable after the effective

date of this Act, the Texas Real Estate Research Center at Texas A&M

University shall take any actions necessary to implement Sections

86.531 and 86.532, Education Code, as added by this Act, and submit

the initial report required under Section 86.531(d), Education

Code, as added by this Act, not later than June 1, 2026.

(b) The Texas Real Estate Research Center at Texas A&M

University shall establish and make available the database required

by Section 86.532, Education Code, as added by this Act, not later

than the seventh day after the date the initial report under Section

86.531 is completed.

SECTION 4. (a) A corporate owner, as defined by Section

5.251, Property Code, as added by this Act, is not required to

comply with Section 5.252(a), Property Code, as added by this Act,

before September 1, 2027.

(b) Section 5.252(b), Property Code, as added by this Act,

applies only to an executory contract entered into on or after the

effective date of this Act.

SECTION 5. This Act takes effect September 1, 2025.