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IN HB1495
Bill
Status
4/17/2019
Primary Sponsor
Vanessa Summers
Click for details
AI Summary
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Sellers must provide buyers with disclosures at least 10 days before executing a principal dwelling land contract, including a licensed appraisal completed within 12 months, lien records, lead paint disclosure for pre-1978 homes, and title search information
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Contracts must allow buyers to pay off the balance and receive the deed at any time without prepayment penalties, and both parties have a 3-day cancellation period after execution
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Sellers must satisfy all preexisting liens by the end of the contract term, record the contract or memorandum within 30 days of execution, and provide buyers with annual statements of account by January 31
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Forfeiture is only available as a remedy for buyer default if the property is abandoned or if buyer payments total less than 10% of purchase price and the seller's security interest is jeopardized
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Violations constitute incurable deceptive acts actionable by the attorney general, with remedies including contract rescission, liquidated damages up to one month's payment, and potential court costs and attorney's fees
Legislative Description
Principal dwelling land contracts. Defines "principal dwelling land contract" (contract) as a land contract for the sale of real property: (1) designed for the occupancy of one to two families; and (2) that is or will be occupied by the buyer as the buyer's principal dwelling. Provides that the seller under a contract must provide the buyer with certain disclosures at least 10 days before the contract is executed. Sets forth disclosures that must be included in a contract. Requires all preexisting liens on the property to be satisfied by the seller by the end of the contract term. Provides that a contract must permit a buyer to pay the balance owed and receive the deed at any time. Prohibits prepayment penalties or additional charges for an early payoff. Provides a three-day cancellation period for both the buyer and seller. Allows the seller and the buyer to transfer their respective interests in the contract to other parties, subject to certain conditions. Requires the seller to provide the buyer with an annual statement of account. Sets forth certain rights and responsibilities of the parties upon default by either the buyer or the seller. Sets forth acts and omissions constituting violations and establishes remedies for these violations. Provides that a violation of these provisions constitutes an incurable deceptive act that is actionable by the attorney general under the deceptive consumer sales act. Authorizes the attorney general, in consultation with the department of financial institutions, to adopt rules to implement these provisions. Provides that a buyer who has completed the buyer's obligations under the contract is entitled to the homestead deduction regardless of whether the seller has conveyed title. Requires that a title search be conducted, and that a statement regarding title insurance be provided by the seller to the buyer. Requires that the executed principal dwelling land contract or a memorandum of land contract be notarized. Provides that, if the buyer defaults, then the seller and buyer may execute a notarized release of land contract quitclaim deed, and both shall be recorded by the seller within 30 days of execution.
Last Action
Rules Suspended. Conference Committee Report 1: rejected by the Senate; Roll Call 624: yeas 19, nays 30
4/24/2019