bill making corporate owners of rental homes register yearly

The text as introduced · 1,642 words

89R8414 SCR-D

By: Talarico
H.B. No. 2968

A BILL TO BE ENTITLED

AN ACT

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

purposes; requiring information by and registration of certain

corporate owners; authorizing a fee and civil penalty.

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

SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is

amended by adding Chapter 121 to read as follows:

CHAPTER 121. REGISTRATION REQUIREMENT FOR CORPORATE OWNERS OF

MULTIPLE SINGLE-FAMILY HOMES

Sec. 121.001. DEFINITIONS. In this chapter:

(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) "Governing authority" has the meaning assigned by

Section 1.002, Business Organizations Code.

(3) "Officer" has the meaning assigned by Section

1.002, Business Organizations Code.

(4) "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.

(5) "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.

(6) "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. 121.002. REGISTRATION STATEMENT. (a) A corporate

owner that owns single-family homes in this state that are used or

offered for use as a rental property shall register with the

secretary of state by filing a registration statement that

contains:

(1) the name under which the corporate owner conducts

business and the address of the corporate owner;

(2) the state or country of incorporation, formation,

registration, or organization;

(3) the location of the headquarters or principal

office of the corporate owner;

(4) the type of business entity of the corporate

owner;

(5) the number of single-family homes in this state

the corporate owner owns; and

(6) the name and mailing address of an officer or

person serving as part of the governing authority of the corporate

owner.

(b) The secretary of state may charge a reasonable fee for

issuance of a certificate acknowledging registration under this

section.

(c) A registration certificate expires on the first

anniversary of its date of issuance. A corporate owner may renew a

registration certificate by filing a renewal application, in the

form prescribed by the secretary of state, and paying a reasonable

renewal fee in an amount set by the secretary of state.

Sec. 121.003. UPDATE OF REGISTRATION STATEMENT. A

corporate owner shall update information contained in the

registration statement not later than the 60th day after the date on

which the information changes.

Sec. 121.004. CIVIL PENALTY. (a) A corporate owner who

fails to comply with this chapter is liable to this state for a

civil penalty in the amount of $500 for each day of the violation.

(b) The attorney general may bring an action to recover a

civil penalty under this section.

Sec. 121.005. REGISTRY. (a) The secretary of state shall

establish and post on the secretary's Internet website a searchable

registry of corporate owners registered under Section 121.002(a).

(b) The registry must include:

(1) a search feature that allows a person searching

the registry to identify a specific corporate owner; and

(2) for each corporate owner, the information in the

registration statement filed under Section 121.002(a).

Sec. 121.006. RULES. The secretary of state shall adopt the

rules necessary to implement this chapter.

SECTION 2. Subchapter C, Chapter 86, Education Code, is

amended by adding Section 86.531 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 121.001,

Business & Commerce Code.

(b) Using existing available data, including data from the

secretary of state, 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 may be classified 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;

(B) any advantages and disadvantages corporate

owners have over individual buyers in the real estate market;

(C) the impact of corporate owners on the cost

and availability of single-family home rentals; and

(D) the impact of corporate owners on the

availability of single-family homes for purchase.

(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).

SECTION 3. Chapter 12, Property Code, is amended by adding

Section 12.00125 to read as follows:

Sec. 12.00125. INSTRUMENTS CONCERNING SINGLE-FAMILY HOMES

PURCHASED BY CORPORATE OWNERS. (a) In this section, "corporate

owner" and "single-family home" have the meanings assigned by

Section 121.001, Business & Commerce Code.

(b) If a corporate owner purchases a single-family home in

this state, the county clerk in the county in which the

single-family home is located may not record an instrument

conveying title to the home unless:

(1) the corporate owner provides to the county clerk a

copy of the registration certificate issued under Section 121.002,

Business & Commerce Code;

(2) the name of the grantee on the instrument

conveying title to the home matches the name of the corporate owner

on the registration certificate;

(3) the instrument conveying title to the home:

(A) contains the name and mailing address of an

officer or governing person of the corporate owner; and

(B) clearly states that the single-family home is

not the primary residence of the grantee; and

(4) the corporate owner provides to the county clerk a

sworn affidavit signed by a duly authorized officer or agent of the

corporate owner stating that the information required to be

included in the instrument conveying title under Subdivision (3) is

also included in the corporate owner registry established under

Section 121.005, Business & Commerce Code.

SECTION 4. 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 Section

86.531, 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.

SECTION 5. (a) As soon as practicable after the effective

date of this Act, the secretary of state shall adopt rules necessary

to implement Chapter 121, Business & Commerce Code, as added by this

Act.

(b) Notwithstanding Section 121.002, Business & Commerce

Code, as added by this Act, a corporate owner is not required to

comply with that section until January 1, 2026.

SECTION 6. (a) Except as provided by Subsection (b) of this

section, this Act takes effect September 1, 2025.

(b) Section 12.00125, Property Code, as added by this Act,

takes effect February 1, 2026.