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F I S C A L I M P A C T R E P O R T

SPONSOR Campos

DATE TYPED 3/14/05

HB

SHORT TITLE Airport Proximity to Real Estate Sales

SB 464/aSCORC

ANALYST Medina

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Regulation and Licensing Department (RLD)

SUMMARY

Synopsis of SCORC Amendment

The Senate Corporations and Transportation Committee amendment to Senate Bill 464 places

the condition on the real estate seller’s disclosure that the property for sale is within three miles

of an airport, requiring that the seller do so if the municipality or the county in which the real es-

tate is located furnishes to the seller, upon request, a map that includes the airport and the area

within a three-mile radius of the airport. The amendment changes references to real estate agent

to real estate licensee. The amendment also clarifies that the provisions of the bill relating to mu-

nicipalities also apply to counties, if the property for sale is outside a municipality.

Synopsis of Original Bill

Senate Bill 464 requires that a seller of real estate disclose to a prospective purchaser of real es-

tate whether the real estate for sale is located within three miles of an airport. The bill requires

that the sole responsibility for disclosure fall upon the seller of real estate and does not hold a

real estate agent liable for omission of disclosure. The bill further requires that the seller of real

estate can request and the municipality in which the real estate is located must furnish to the

seller a map that includes the airport and the area within a three mile radius of the airport.

Senate Bill 464/aSCORC -- Page 2

Significant Issues

This bill does not indicate a section of statute being amended. Given the bill’s provision of pro-

tection from liability for omission of disclosure for real estate agents, it does not appear that the

Real Estate Commission’s rules and regulations are affected. However, according to RLD, the

Real Estate Commission’s rules and regulations require a real estate licensee to disclose to pro-

spective purchasers of real estate any adverse material facts about the property or the transaction

that is known by the licensee. RLD further states that it is possible that proximity of an airport to

real estate being offered for sale could be construed to be an adverse material fact about the

property. Given that possibility, it would behoove a licensee, if he or she knew about the prox-

imity of an airport to a property being offered for sale, to make that information known to buy-

ers.

OTHER SUBSTANTIVE ISSUES

The Regulation and Licensing Department states the following:

“Because the proximity of an existing airport would most likely be obvious or well-

known, it might be more helpful to a prospective purchaser to know that an airport might

be built in the future in the area in which they are proposing to purchase real estate. The

Real Estate Commission has received complaints in the past from individuals who were

not aware at the time they purchased real estate that a highway or some other public facil-

ity was planned for the area in which they made a purchase.”

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

Sellers of real property will not be required to disclose to prospective buyers whether or not the

property for sale is within three miles of an airport.

DXM/yr:lg