89R9055 PRL-F     By: Parker S.B. No. 2957       A BILL TO BE ENTITLED   AN ACT   relating to prohibiting the use of unfair service agreements;   creating an offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 17, Business & Commerce Code, is amended   by adding Subchapter M to read as follows:   SUBCHAPTER M. UNFAIR SERVICE AGREEMENTS          Sec. 17.971.  DEFINITIONS. In this subchapter:                (1)  "Residential real estate" means real property   located in this state used primarily for personal, family, or   household purposes and improved by one to four dwelling units.                (2)  "Service agreement" means a contract under which a   person agrees to provide services in connection with:                      (A)  the maintenance of residential real estate;   or                      (B)  the purchase or sale of residential real   estate.                (3)  "Service provider" means an individual or entity   that provides services to a person.          Sec. 17.972.  CHARACTERISTICS OF UNFAIR SERVICE AGREEMENTS.   (a)  A service agreement is unfair under this subchapter if any part   of the service subject to the agreement is not to be performed on or   before the first anniversary of the date the agreement is entered   into and:                (1)  purports to run with the land or bind current   owners or successors in title to specified real property located in   this state;                (2)  allows for assignment of the right to provide   service without notice to and consent of the owner of residential   real estate; or                 (3)  purports to create a lien, encumbrance, or other   real property security interest.          (b)  This section does not apply to:                (1)  a home warranty or similar guarantee that is   designed to guarantee or warrant the repair or service of an   appliance, system, or component of a residential property for a   fixed period;                (2)  an insurance contract;                (3)  an option or right of refusal to purchase the   residential real estate;                (4)  a declaration created in the formation of a common   interest community or an amendment to the declaration;                (5)  a maintenance or repair agreement entered into by   a homeowners' association in a common interest community;                (6)  a mortgage loan or a commitment to make or receive   a mortgage loan;                (7)  a security agreement under Title 1 relating to the   sale or lease of personal property or fixtures; or                (8)  water, sewer, electrical, telephone, cable, or   other regulated utility service providers.          (c)  This section does not impair the rights granted by   Section 53.123, Property Code.          (d)  A service agreement that is unfair is void and   unenforceable.          (e)  A person that enters into an unfair service agreement   with a consumer commits a false, misleading, or deceptive act or   practice actionable under Subchapter E.          Sec. 17.973.  RECORDING PROHIBITED. (a)  A person may not   file for recording or cause to be filed for recording an unfair   service agreement or notice or memorandum thereof.          (b)  A person commits an offense if the person files for   recording or causes to be filed for recording an unfair service   agreement or notice or memorandum of an unfair service agreement.          (c)  An offense under this section is a Class A misdemeanor.          (d)  Notwithstanding any other law, a county clerk may refuse   to record an unfair service agreement.          (e)  If an unfair service agreement is recorded, it does not   provide actual or constructive notice against an otherwise bona   fide purchaser or creditor.          Sec. 17.974.  APPLICATION FOR ISSUANCE OF COURT ORDER. If an   unfair service agreement or a notice or memorandum thereof is   recorded, any person with an interest in the real property that is   the subject of that agreement may file an application with the   district court in the county in which the agreement is recorded for   the issuance of an order declaring that the agreement is void and   unenforceable.          Sec. 17.975.  DAMAGES. If an unfair service agreement or a   notice or memorandum thereof is recorded, any person with an   interest in the real property that is the subject of that agreement   is entitled to recover from the service provider who recorded the   agreement:                (1)  actual damages; and                (2)  reasonable attorney's fees and other litigation   costs reasonably incurred.          SECTION 2.  Subchapter M, Chapter 17, Business & Commerce   Code, as added by this Act, applies only to a contract entered into   on or after the effective date of this Act.          SECTION 3.  This Act takes effect September 1, 2025.