Bill Text: TX SB443 | 2025-2026 | 89th Legislature | Introduced

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Bill Title: Relating to single-family homes held by corporate owners for rental purposes; providing a civil penalty.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-11-21 - Filed [SB443 Detail]

Download: Texas-2025-SB443-Introduced.html

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89R1624 ATP-F
By: Hinojosa S.B. No. 443

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.