The bill, titled "An Act relating to prohibiting the use of unfair service agreements; creating an offense," introduces a new subchapter, Subchapter M, to Chapter 17 of the Business & Commerce Code. This subchapter defines "unfair service agreements" and outlines specific characteristics that make such agreements void and unenforceable. Key definitions include "residential real estate," "service agreement," and "service provider." The bill specifies that a service agreement is considered unfair if it includes provisions that are not to be performed within one year, binds future owners of the property, allows assignment of service rights without owner consent, or creates a lien or encumbrance on the property. Certain exceptions are noted, such as home warranties and insurance contracts.

Additionally, the bill establishes penalties for filing unfair service agreements for recording, classifying such an offense as a Class A misdemeanor. It also allows individuals with an interest in the affected property to seek a court order to declare the agreement void if it has been recorded. Furthermore, those impacted by a recorded unfair service agreement can recover actual damages and reasonable attorney's fees from the service provider. The provisions of this bill will apply only to contracts entered into on or after its effective date of September 1, 2025.

Statutes affected:
Introduced: ()