A land bank may dispose of its property in several ways, but it must dispose of fee simple property by the end of the fifth consecutive year unless an exception applies.
Sec. 379H.157. DISPOSITION OF PROPERTY GENERALLY. (a) A land bank may convey, exchange, sell, transfer, lease as lessor, grant, release and demise, pledge, or hypothecate any interest in, on, or to real property of the land bank. (b) For real property that a land bank holds fee simple title to, the land bank must convey, exchange, sell, transfer, or otherwise dispose of the fee simple interest in the property not later than the last day of the fifth consecutive year during which the land bank continuously holds the fee simple title. This subsection does not apply to real property that a land bank holds fee simple title to: (1) that is subject to a long-term lease with: (A) a nonprofit corporation that is incorporated or holds a certificate of authority under Chapter 22, Business Organizations Code; (B) a local government corporation, as defined by Section 431.003, Transportation Code; or (C) a governmental unit, as defined by Section 101.001, Civil Practice and Remedies Code; (2) for which the land bank is required by the municipality that created the land bank or an entity that funds the land bank, either under an agreement with the municipality or entity or to comply with an official action of the municipality or entity, to hold and assemble one or more parcels of real property for a period that is longer than five years for the purpose of fulfilling specific program or funding goals related to creating or developing affordable housing, supporting community-based economic development, creating parks and other public places, or supporting other goals required by the municipality or entity described by this subdivision; (3) for which a determination has been made by the land bank that the best use of the real property is for flood control or storm water retention or drainage and the real property has not yet been transferred to a public entity such as a flood control district or a municipal parks and recreation department under Section 379H.158; or (4) that is the subject of an active proceeding in a court of competent jurisdiction or is subject to a court order that conflicts with this subsection. (c) A municipality may, in the ordinance creating a land bank, require that a particular form of disposition of real property of the land bank, or any disposition of real property located within a specified jurisdiction of the municipality, be subject to specified voting and approval requirements of the board. Unless restricted under this subsection, the board may delegate to officers and employees the authority to enter into and execute agreements, instruments of conveyance, and all other related documents pertaining to the conveyance of real property by the land bank. (d) Subject to Subsection (b), a land bank shall determine the terms, conditions, form, and substance of consideration necessary and appropriate to convey, exchange, sell, transfer, lease as lessor, grant, or mortgage as mortgagor any interest in, on, or to real property of the land bank. Consideration may take the form of monetary payments and secured financial obligations, covenants, and conditions related to the present and future use of the property, deed covenants and limitations, contractual commitments of the transferee, mortgage financing, defeasible fees, and other forms of consideration as determined by the board to be in the best interests of the land bank. The board shall determine and state in the land bank's policies and procedures the general terms for consideration to be received by the land bank for the transfer of real property of the land bank. (e) The board may authorize in the board's policies governing the disposition of land bank property a program for the disposition of land bank property to owners of contiguous properties. (f) A municipality may recommend that a land bank created by the municipality, and the land bank may in the land bank's own policies and procedures, establish a hierarchical ranking of priorities for the use of real property conveyed by the land bank, including use for: (1) production of housing, including affordable housing, long-term affordable housing, workforce housing, public service housing, and mixed-income housing; (2) community-based economic development, including retail, commercial, and industrial activities; (3) parks and other purely public spaces and places; (4) flood reduction, storm water retention and drainage, and storm resiliency; (5) food desert solutions; (6) conservation areas; and (7) other purposes necessary and appropriate to convert properties to the tax rolls, stabilize communities, improve living conditions, and protect against the displacement of residents of the municipality served by the land bank. Added by Acts 2021, 87th Leg., R.S., Ch. 780 (S.B. 1679), Sec. 1, eff. September 1, 2021.