A quick look at the Texas Association of Realtors and several current real estate legislative policy issues
By: Coral Dworaczyk
Your professional realtor does far more than help consumers buy and sell homes locally. The Texas Association of Realtors (TAR) is the largest, most politically active professional trade association in the state of Texas, and its 110,000 realtor members are strong advocates for private-property rights, as well as the rights of homeowners and Texas real estate consumers.
Recently, 75 members of the Corpus Christi Association of Realtors were among more than 2,500 who participated in Realtor Day at the Texas Capitol on April 4, 2017. During this event, realtors advocated for several legislative priorities related to the real estate industry, including:
Property tax reform
Texas property taxes are currently among the highest in the United States – driven up by school funding, state mandates and statewide infrastructure development and maintenance needs. Unfortunately for homeowners, local taxing entities (statewide, not just locally) are able to easily capitalize on market upswings in property values, resulting in continual increases in individual property tax bills, regardless of the local tax rate.
TAR supports legislation that promotes honesty and transparency in the property tax rate-setting process, supports a greater separation between the appraisal process and the tax rate-setting process and believes that local government and voters should ultimately determine how much revenue is necessary for their communities.
TAR supports HB 15 to reform the property tax rate-setting process by focusing on taxing entity procedures and access to tax information for property owners, requiring an automatic tax ratification election for all taxing entities, and creating a statewide standardized database of property tax rate and collection information.
TAR also supports SB 2, which acts to create a new division under Texas Comptroller’s office (the Property Tax Administration Advisory Board) to oversee appraisal districts and local tax offices, to lower the rollback rate from 8 percent to 5 percent and to require an automatic tax ratification election for all taxing entities.
Many Texas cities are adopting or considering ordinances to regulate or ban short-term rental properties. Many cities already have code-enforcement divisions in place that are responsible for identifying, deterring and remedying code violations, and public safety and nuisance laws, that can be applied to short-term rental occupants.
TAR supports the development of clear and consistent statewide standards for short-term rental regulation. TAR supports HB 2551 and SB 451, which may work together to create a statewide blueprint for consistent regulation, while helping ensure the health and safety of property owners and protect their private-property rights.
For more than 140 years, Texas homeowners were not able to utilize home-equity lending due to the possible repercussions from defaulting on the loan. In 1997, TAR was heavily involved in passing a constitutional amendment that would then allow Texans to access the equity in their properties, while providing specific provisions to protect those homes. However, changes in the lending industry over the past 20 years may again be restricting homeowners’ ability to access equity in their properties.
TAR supports HJR 99 and SJR 60 to help update the Texas Constitution to modernize the home-equity lending process. These joint resolutions would work together to lower the fee cap to 2 percent, and remove three of the most expensive fee generators from the fee cap: (1) the appraisal fee, (2) the survey and (3) the state base premium for the title insurance policy/title examination report.
These joint resolutions would also maintain the 80 percent loan-to-value ratio, but would allow for an 80 percent loan-to-value ratio for home equity lines of credit (HELOCs). These updates would also provide a choice on “seasoned refinances” between maintaining the home equity loan (with its constitutional protections) and transitioning to a standard rate-and-term loan. If the loan were to be modified to a standard loan, a disclosure from the lender would be required to notify the borrower that they are forfeiting their constitutional protections guaranteed for home-equity loans.
The use of the power of eminent domain authority, while considered a necessary tool of the government, has the potential to be easily expanded and abused. Since 2005, Texas has worked to strengthen property owner protections in eminent domain proceedings. However, some issues are currently unresolved, and may leave property owners at risk. TAR believes property owners should be treated fairly and protected from abusive eminent domain practices.
There are currently 12 House and Senate bills under review that relate to the use of eminent domain. In summary, these bills are proposed to protect property owners by delineating future uses and restrictions for condemned property, by clarifying and expanding the definition of a true bona fide offer in condemnation proceedings and by requiring the timely disclosure of new appraisals to property owners during the condemnation process.
This proposed legislature would also work to support property owners by fairly awarding damages, and reasonable expenses and fees, in certain cases to the owners, and by restricting unauthorized or unwanted access to subject properties by condemning entities or their representatives.