AUSTIN – Early Tuesday, House Bill 2590 (HB2590) passed the Texas Senate on a unanimous vote. The bill, authored by State Representative Eric Johnson (D-Dallas) would allow state and local prosecutors to take action to combat a form of real estate fraud where scam artists sell homes to unsuspecting, less-affluent buyers that the seller does not own or have legal rights to.

State Senator Royce West (D-Dallas) carried HB2590 in the senate. The bill has now been approved by both chambers and awaits approval by Texas Governor Greg Abbott. Under this scenario, unethical realtors produce fraudulent documents and use them to lure buyers into the purchase of houses that are actually owned by other parties without the knowledge or permission of the property owner. Payments are made to the seller unbeknownst to the property owner leaving the buyer without any legal claims to the property or credit for payments made.

Under current state law, only the buyer can sue to recover damages from the unauthorized seller. Some of the buyers are immigrants and suffer language barriers. Others cannot afford to hire legal representation, so the seller fraudulently collects money and goes unpunished.

"This issue actually came to my attention nearly 10 years ago," said Senator West. "We held a hearing at Mountain View College and invited then-Texas General John Cornyn. It has languished without lasting results since that time. I am glad that Rep. Johnson found a way to protect unsuspecting buyers and found a legal recourse to pursue these bad actors who have taken advantage of the disadvantaged for too long."

Under HB2590, the practice known as adverse possession under Texas laws, will soon fall under the provisions of the Texas Deceptive Trade Practices Act. Victims will be able to recover damages of up to three times the amounts lost and both local and state prosecutors can collect penalties levied against unlawful sellers.

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