New Texas Real Estate Legislation, and How It Will Impact the Market

July 30, 2019, Posted By: Richard Simon

Of over 10,000 bills filed during the 86th Texas legislative session, six new laws were passed that will have an impact on real estate developers and builders in Texas. Here is an overview of each law coming into effect September 1, 2019 unless otherwise indicated. 

Building Permit Fees (HB 852)

Effective immediately, municipalities are now prohibited from determining the amount of permit or inspection fees charged based on the valuation or construction cost of a residential dwelling. Municipalities will not require disclosure of information related to the valuation or construction cost of a residential dwelling as a condition for acquiring a building permit. The only time this is allowed is when the FEMA National Flood Insurance Program is involved. 

Reducing Agriculture Rollback Tax (HB 1743)

This bill lowers the number of years that the agriculture rollback tax is due to three years. It also lowers the interest rate owed on those back taxes to 5%. 

Prohibition on Governmental Product Mandates (HB 2439)

This law provides that a governmental entity may not adopt a rule, charter, ordinance, building code, or other regulation that:

  1. prohibits or limits, either directly or indirectly, the use or installation of a building product or material if the building product or material is approved for use by a national model code released within the last three code cycles that applies to the construction; or
  2. establishes a standard for a building product, material, or aesthetic method if the standard is more stringent under a national model code released within the last three code cycles that applies to the construction.

Exempt buildings include:

  • Historic buildings
  • Some government-funded housing and disaster recovery programs
  • Certain lighting requirements to fulfil dark sky ordinances 

Consistent Development Plan and Plat Review Timelines (HB 3167)

This bill amends certain timelines allotted for city/county review of development plans and plats. Plats and plans must now be processed within 30 days after the date the plan or plat is filed. That also applies to the governing body of the municipality in addition to the planning commission. If both parties agree, the deadline can be extended by no more than 30 days. If the deadline is not met, the plan or plat is automatically approved.

Conditional approvals or disapprovals require written conditions or reasons for disapproval that clearly explain each specific condition with a citation to the corresponding law. The applicant can then respond to the conditions. The municipality has 15 days to approve or disapprove the plan or plat based on the response. If they miss the 15-day deadline, then the plan or plat is approved. The municipality cannot add new reasons to deny the plan or plat at the time of the second review.

The municipality has the burden of proof if disapproval is challenged. The court cannot set standards to be in favor of the municipality. 

Historic Landmark Designation (HB 2496)

A municipality cannot designate a property as a local historic landmark unless: 

  • The owner of the property agrees or consents to the designation; or 
  • The designation is approved by a three-fourths (75%) vote of the governing body of the municipality as well as the zoning, planning, or historical commission. 

Religious institutions must consent to historical designation before a property can be designated as historical. 

Annexation (HB 347)

This new law is effective immediately. It provides that there is no longer a two-tiered system for annexation. If a municipality wants to annex land in any county, it must hold an election in the area proposed to be annexed and have a majority of the voters approve the annexation. 

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