One bankruptcy court says yes. Here is an argument for the answer being no.
Under Section 5.077(d), the volume-dealer penalties apply to “A seller who conducts two or more transactions in a 12-month period under this section . . . .” One bankruptcy court has interpreted this provision as meaning that the volume-dealer penalties apply only when a second Contract for Deed has been executed within twelve-months of the Contract for Deed that is the subject of the case currently before the court. Dodson v. Perkins (In re Dodson), 2008 Bankr. LEXIS 4647, 20; 2008 WL 4621293 (Bankr. W.D. Tex. Oct. 16, 2008).
While the Dodson court concluded that Section 5.077(d) must be “anchored” to the signing of the contract being enforced, the court admitted that that court was unable to locate “any case law or other authority, nor any legislative history that would clarify the meaning of the 2005 Statute in this respect.” Id. The statute clearly states that any seller who conducts two transactions in any twelve-month period falls under Section 5.077(d). Texas Courts should not add an additional “anchoring” requirement to an otherwise straightforward statute. Furthermore, the “anchoring” requirement does not make the statute “easier to comply with and to enforce.” Id. at 22. Instead, an “anchoring” requirement would make relief under Section 5.077(d) nearly impossible to prove for many plaintiffs without expending exorbitant time and effort on investigations outside of the discovery process in order to corroborate defendants’ production or lack thereof. If the legislature wanted to add an “anchoring” requirement, then such a requirement would have been easy enough to draft. The legislature did not, however, add an “anchoring” requirement and such a requirement should not be imposed judicially.
Before the statute was amended in 2005, the $250 penalty applied to all Contract for Deed sellers. Id. at 6. The new statute carves out a very narrow niche of sellers—sellers who never conduct more than one qualifying transaction within one year—to be exempted from the harsh penalties and assessed only a nominal penalty of $100 per year. Consequently, an unsophisticated individual who owner-carries financing on his own home to a buyer, generally, will not accidentally lose that home to the harsher penalties. Meanwhile, volume dealers who own multiple properties and sell all or many of the properties by Contracts for Deed will incur the full, normal penalties that were applicable to all Contract for Deed sellers before the 2005 amendments carved out a narrow niche of sellers to exempt under Section 5.077(c). See Tex. Prop. Code § 5.077; Acts 2005, 79th Leg., ch. 978 (H.B. 1823), § 5, effective September 1, 2005.
For most plaintiffs, proving the statutory requirement of two contracts within twelve months creates enough of a hurdle without adding an even more difficult “anchoring” element.
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