Overview<\/p>\n
On March 27, 2026, the Texas Office of the Attorney General<\/a> published Chapter 67 rules to implement and administer SB 17<\/a>, the statute that restricts foreign ownership in Texas real property (including China, Russia, Iran and N. Korea). The rules became effective on April 26, 2026. Together with SB 17, the rules move the law from statutory prohibitions into an operational enforcement regime by defining key terms and affected parties broadly, reflecting the broader anti-circumvention approach of the government. <\/p>\n Natural persons<\/p>\n SB 17 continues to prohibit certain individuals tied to designated countries from purchasing or otherwise acquiring interests in Texas real property, while continuing to exempt US citizens and lawful permanent residents. <\/p>\n The statute continues to define \u201creal property\u201d broadly, including:<\/p>\n The rules clarify that arrangements structured as successive short\u2011term leases may be treated as a covered interest if they, in substance, create a leasehold of one year or more. <\/p>\n Entities and control<\/p>\n The rules adopt an expansive definition of \u201ccontrol,\u201d including the power to direct an entity\u2019s management, policies or real property decisions. <\/p>\n Persons deemed to be in control include: <\/p>\n The definition of \u201cpurchase or otherwise acquire\u201d also extends to transactions involving changes in control of entities that own Texas real property. <\/p>\n Together, these provisions broaden the scope of the statute to reach minority ownership interests and indirect acquisitions through entity-level transactions.<\/p>\n Facilitating entities and reporting obligations<\/p>\n The rules impose reporting obligations on \u201cfacilitating entities,\u201d including lenders, title companies, insurers, brokers and appraisers. <\/p>\n A facilitating entity must submit a complaint to the Office of the Attorney General if it knows or should have known, after reasonable due diligence, that a transaction violates SB 17. This obligation extends to post-closing transfers used to effect a prohibited acquisition. <\/p>\n Failure to report may result in referral to applicable licensing or disciplinary authorities.<\/p>\n Enforcement architecture and process<\/p>\n The rules establish an enforcement unit within the Office of the Attorney General responsible for administering SB 17. The unit may: <\/p>\n \nProceedings and related records are generally confidential, and parties typically have at least seven (7) days to respond to investigative demands. <\/p>\n Practical implications<\/p>\n The Chapter 67 rules define the key terms in SB 17 broadly, limiting indirect and structural arrangements and potential loopholes, and expanding enforcement to real estate intermediaries beyond buyers, sellers, landlords and tenants, signaling Texas\u2019s strong enforcement stance. While the statute is still being challenged constitutionally, to comply with the current effective rules, we suggest that market participants should be prepared in the following ways:<\/p>\n For buyers:<\/p>\n For sellers:<\/p>\n For real estate professionals (Brokers, agents, title companies, lenders and appraisers):<\/p>\n\n
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