Texas Legislature Rejects Bill That Would Have Harmed Property Rights

August 3, 2023

The Texas legislature defeated a bill that would have allowed the predatory practice of filing unfair real estate fee agreements in property records in Texas, known as Non-Title Recorded Agreements for Personal Services (NTRAPS).  

ALTA, the Texas Land Title Association (TLTA) and the AARP applauded Texas legislators for defeating HB 4126. The bill would have allowed Texas real estate brokerages to offer future real estate fee agreements and provided nominal upfront cash payments to homeowners in exchange for the exclusive right to list their homes for up to 15 years, even upon the homeowner’s death. If the contract was broken, the brokerage could have enforced the contract and collected 3 percent of the home’s value from the homeowner or their heirs. 

“I was incredibly pleased to provide testimony on ALTA’s behalf and be heard by the Texas House Committee on Licensing and Administrative Procedures regarding NTRAPS,” said ALTA Vice President of Government Affairs Elizabeth Blosser. “Thankfully, Texas legislators understood that HB 4126 was an outlier to other state bills that ALTA advocated for and subsequently passed.” 

Aaron Day, TLTA director of governmental affairs and counsel, added, “TLTA is grateful for the coalescence of our partners around this issue, including the Texas Realtors, AARP and ALTA, who all worked together to successfully educate the Texas Legislature about this predatory practice and its impact on the consumer and the health of Texas real estate.”

Submitting NTRAPS for inclusion in property records characterized as liens, covenants, encumbrances or security interests in exchange for money creates impediments and increases the cost and complexity of transferring or financing real estate in the future. 

“With the defeat of HB 4126, the Texas legislature has ensured that the unfair and deceptive practice of unfair service agreements was not legitimized as an acceptable business practice, resulting in a great victory for homeowners and property rights,” said AARP Government Affairs Director Samar Jha.

Contact ALTA at 202-296-3671 or [email protected].