HB 4211 establishes a regulatory framework for a growing type of residential property arrangement in which individuals acquire occupancy rights through ownership interests in business entities that own residential properties. These “residential arrangements” involve shared ownership of single-family homes, duplexes, triplexes, or quadruplexes through entities such as LLCs, partnerships, or corporations. HB 4211 seeks to protect individuals participating in such arrangements by clarifying rights and responsibilities between owners and managing entities.
Key provisions include a mandatory disclosure requirement that buyers are purchasing an interest in a business entity, not in real property. The bill prohibits managing entities from imposing dispute resolution forums outside Texas courts, preserving local legal recourse for owners. It also applies anti-discrimination standards (mirroring Chapter 301 of the Property Code) to these arrangements, thereby extending protections similar to those found in real property transactions.
Additionally, the bill empowers owners by prohibiting managing entities from requiring approval for transfers of ownership interests and from collecting fees or sharing in profits from such transfers. Violations of these provisions constitute deceptive trade practices under the Texas Business and Commerce Code. Finally, the bill amends Section 301.042 of the Property Code to exempt certain religious or nonprofit-owned housing on parcels over 25 acres from specific anti-discrimination requirements.
In sum, HB 4211 modernizes Texas property law to address entity-owned residential living structures, aiming to promote transparency, owner autonomy, and equitable treatment within a novel real estate model.
The originally filed version of HB 4211 and the Committee Substitute differ primarily in the expansion of legislative authorship, the clarification of statutory references, and subtle refinements in language, while maintaining the core intent of the bill.
The originally filed version included a straightforward structure: creating Chapter 223 of the Texas Property Code to regulate "business entity-owned residential arrangements." It defined relevant terms, required disclosure that a purchaser was buying an interest in an entity (not real property), prohibited certain types of arbitration clauses, and imposed restrictions to prevent discrimination, transfer limitations, and unjustified fees. It also designated violations as deceptive trade practices and amended Section 301.042 of the Property Code to create an exemption for religious or nonprofit entities operating on land over 25 acres.
In contrast, the Committee Substitute retains the structural integrity of the original bill but presents a cleaner layout with slightly revised formatting and bill drafting conventions, likely in response to feedback or review by legislative counsel. While the substance of each section—definitions, applicability, disclosure requirements, rights of transfer, and anti-discrimination clauses—remains effectively unchanged, the substitute version aligns more closely with House drafting norms and appears tailored for improved readability and enforceability.
No major new policy provisions were introduced in the substitute version; the changes primarily ensure clarity, compliance with drafting standards, and improved legislative presentation. The legislative intent and protections outlined in the original version remain intact.
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Rep. Candy Noble
