TITLE: Relating to capping interest rates in executory contracts.

SUMMARY: Relating to capping interest rates in executory contracts.

FULL TEXT:
AN ACT Relating to capping interest rates in executory contracts. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Sec. 5.073(a), Property Code, is amended to read as follows: (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;or (6) imposes an interest rate that exceeds twelve percent.(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. SECTION 2. This Act takes effect September 1, 2013.