H.B. No. 4204 introduces a new subchapter, Subchapter M, to the Business & Commerce Code, which specifically addresses unfair service agreements related to residential real estate. The bill defines key terms such as "residential real estate," "service agreement," and "service provider." It outlines characteristics that render a service agreement unfair, including provisions that extend beyond one year, allow assignment without owner consent, or create liens on the property. The bill also clarifies that certain agreements, such as home warranties and insurance contracts, are exempt from this classification.

Additionally, the bill establishes that unfair service agreements are void and unenforceable, and entering into such an agreement constitutes a deceptive act. It prohibits the recording of these agreements and imposes a Class A misdemeanor for violations. If an unfair service agreement is recorded, it does not provide notice to bona fide purchasers or creditors. The bill allows affected parties to seek court orders to declare such agreements void and entitles them to recover damages, including attorney's fees, from the service provider. The provisions of this bill will apply to contracts entered into on or after its effective date of September 1, 2025.

Statutes affected:
Introduced: ()
House Committee Report: ()
Engrossed: ()