Relating to the purchase or acquisition of an interest in real property by certain aliens or foreign entities; creating a criminal offense; providing a civil penalty.

Contracts

• Purchase & Sale Agreements (PSAs): You must insert a "Prohibited Foreign Actor" representation clause. The Buyer must warrant they are not a prohibited entity under Texas Property Code Sec. 5.253.
• Indemnification: Update contracts to require Buyer indemnification for all civil penalties (minimum $250,000) and legal costs if the state seizes the property due to Buyer misrepresentation.
• Lease Agreements: Review all commercial and agricultural lease templates. Leases to prohibited foreign entities are only legal if the term is less than one year. Multi-year leases are now prohibited acquisitions.

Hiring/Training

• Intake Procedures: Front-line staff (brokers, landmen, loan officers) must move beyond identity verification to citizenship and domicile verification.
• Training: Staff must be trained to identify "red flag" corporate structures, particularly those involving shell companies in Delaware or Nevada that may shield foreign beneficial ownership.

Reporting & Record-Keeping

• Affidavits of Eligibility: Require a sworn affidavit from every buyer/lessee attesting to their compliance with SB17 prior to closing.
• Beneficial Ownership Mapping: For corporate buyers, retain certified organizational charts tracing ownership back to the ultimate individual beneficiaries.
• CID Readiness: Update document retention policies to ensure immediate production of ownership records if served with a Civil Investigative Demand (CID) from the AG.

Fees & Costs

• Civil Penalties: Violation carries a fine of the greater of $250,000 or 50% of the property’s market value. This is generally uninsurable.
• Legal Overhead: Budget for increased legal spend on due diligence for complex entity structures (e.g., private equity funds with foreign limited partners).