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Texas Property Code - Section 5.073. Contract Terms, Certain Waivers Prohibited

Legal Research Home > Texas Laws > Property Code > Texas Property Code - Section 5.073. Contract Terms, Certain Waivers Prohibited

§ 5.073. CONTRACT TERMS, CERTAIN WAIVERS PROHIBITED.  (a) 
A seller may not include as a term of the executory contract a 
provision that:
		(1)  imposes an additional late-payment fee that 
exceeds the lesser of:     
			(A)  eight percent of the monthly payment under 
the contract;  or          
			(B)  the actual administrative cost of processing 
the late payment;        
		(2)  prohibits the purchaser from pledging the 
purchaser's interest in the property as security to obtain a loan to 
place improvements, including utility improvements or fire 
protection improvements, on the property;
		(3)  imposes a prepayment penalty or any similar fee if 
the purchaser elects to pay the entire amount due under the contract 
before the scheduled payment date under the contract;
		(4)  forfeits an option fee or other option payment 
paid under the contract for a late payment;  or
		(5)  increases the purchase price, imposes a fee or 
charge of any type, or otherwise penalizes a purchaser leasing 
property with an option to buy the property for requesting repairs 
or exercising any other right under Chapter 92.
	(b)  A provision of the executory contract that purports to 
waive a right or exempt a party from a liability or duty under this 
subchapter is void.

Added by Acts 1995, 74th Leg., ch. 994, § 3, eff. Sept. 1, 1995.  
Renumbered from V.T.C.A., Property Code § 5.096 and amended by 
Acts 2001, 77th Leg., ch. 693, § 1, eff. Sept. 1, 2001.  Amended 
by Acts 2005, 79th Leg., ch. 978, § 4, eff. Sept. 1, 2005.

Last modified: August 11, 2007