Texas Real Estate Laws 2026: Practical Guide for Property Owners

Navigating new real estate legislation is essential not only for maintaining compliance, but also for optimizing portfolio performance. Evolving municipal zoning rules, business property tax exemptions, and consumer protection standards directly influence real estate operations across Texas. For personalized guidance on aligning your portfolio with these legislative updates, call (214) 305-9166 to schedule a free consultation. You can also visit our official website at https://nmcpropertymanagement.com/, watch educational video guides on our YouTube channel, or explore the latest North Texas real estate market trends to support informed investment strategy.

1. Senate Bill 785: Manufactured Housing Zoning Expansion (Effective Sept 1, 2026)

Texas Senate Bill 785, authored by Sen. Pete Flores during the 89th Legislative Session and signed into law by Governor Greg Abbott on June 22, 2025, officially went into effect on September 1, 2026. This landmark legislation introduces the state’s most significant expansion of manufactured housing rights in decades. Under SB 785, any Texas municipality with zoning authority is prohibited from enforcing outright bans on manufactured housing. Instead, cities must allow new HUD-code manufactured homes "by right" in at least one residential zoning classification or district designated on the municipality's official zoning map.

The law directly addresses exclusionary zoning practices that previously prohibited mobile and manufactured homes across approximately 40% to 44% of Texas municipalities.

What SB 785 Changes & Local Limitations

While SB 785 broadens market access for manufactured housing, it balances state housing objectives with local governance rights through several key provisions:

• By-Right Placement: Property buyers and developers may site compliant manufactured structures without navigating lengthy, costly public hearings or securing conditional-use permits.
• Retention of Local Authority: Municipalities retain authority over designated zoning districts, provided a clear, lawful pathway for manufactured housing exists within the city limits.
• The 45-Day Rule: An application to install a new HUD-code manufactured home is automatically deemed approved unless the municipality issues a written denial detailing specific statutory grounds within 45 days of submission.
• Age and Condition Requirements: Municipalities may restrict placement to newer, unoccupied inventory. For instance, to comply with state requirements, the City of Nacogdoches established an "R3M" zoning district permitting manufactured housing alongside single-family homes, provided the units are no more than two years old and have never been occupied.
• Prohibition of Specific-Use Permits: Cities cannot require specific-use permits for new HUD-code homes that meet federal and state standards, unless identical permit requirements apply to all standard single-family residences within the same zoning class.
• Safety Standards: Federal HUD construction, safety, and installation protocols remain fully applicable and enforced.

For additional legislative details, property owners can visit the TMHA Resource Center or review the SB 785 Legislative History.

Strategic Opportunities for North Texas Investors

Beyond its immediate impact on manufactured home developers, SB 785 offers real estate investors an effective land-acquisition and zoning tool. By mitigating entitlement barriers, the law enhances the feasibility of infill development, micro-budget lots, and workforce housing projects.

To capitalize on these shifts, investors should evaluate outer-ring Dallas-Fort Worth growth corridors across Kaufman, Ellis, Rockwall, Hunt, Collin, Denton, Parker, and Johnson counties to identify municipalities establishing SB 785-compliant zoning districts.

Note: SB 785 does not supersede protections for historic landmarks, local historic districts, or private deed restrictions executed before January 2, 2025. Investors must verify property title, deed covenants, and HOA regulations before acquisition.

2. House Bill 9: Business Personal Property & Inventory Tax Relief (Effective Jan 1, 2026)

House Bill 9, passed by the 89th Texas Legislature and approved by voters as Proposition 9 (HJR 1) in November 2025, took effect on January 1, 2026. The law provides substantial financial relief by expanding the state’s business personal property (BPP) ad valorem tax exemption:

• Previous Exemption: $2,500
• New Exemption: $125,000

The exemption applies to tangible personal property utilized in income generation, including commercial machinery, furniture, fixtures, technology equipment, and qualifying inventory. If the total taxable value of BPP remains at or below $125,000 per location within a taxing unit, the owner incurs $0 in local property tax liabilities to school districts, cities, and counties for that property.

Exemption Scaling & Compliance Benefits

The legislative adjustment significantly lowers operational tax burdens across varying property valuation tiers:

*Simplified illustration using the former $2,500 exemption.

In addition to direct tax savings, HB 9 streamlines administrative compliance. Business owners who reasonably estimate that their aggregate BPP market value does not exceed $125,000 may file a simplified certification form rather than a comprehensive property rendition.

What HB 9 Means (and Doesn't Mean) for Real Estate

Property owners should note that HB 9 applies exclusively to business personal property and does not grant an exemption against the real property value of residential rental units, apartment buildings, or land structures, which are assessed separately under the Texas Tax Code.

Nevertheless, the increased threshold offers direct economic advantages for several real estate operational models:

• Multifamily Operators: Protects clubhouse furnishings, leasing office equipment, and maintenance assets from taxation.
• Short-Term and Furnished Rental Owners: Shields furniture, appliances, and tenant amenities installed across residential units.
• Property Management Firms: Reduces tax overhead on corporate operational technology and office fixtures, supporting effective property management strategies.
• Commercial Tenants: Lowers occupancy overhead for retail, office, and industrial tenants holding machinery or inventory, enhancing tenant retention and leasing demand.

For detailed tax filing procedures, consult the official Texas Comptroller Property Tax Guidance and county-specific Rendition Filing Guidance.

3. Senate Bill 1036: Residential Solar Door-to-Door Sales (Effective Sept 1, 2026)

Enacted as the Residential Solar Retailer Regulatory Act, Senate Bill 1036 addresses deceptive door-to-door marketing and predatory sales practices within the residential solar industry. Prompted by an 818% surge in consumer complaints to the Texas Attorney General between 2018 and 2023, the statute establishes statutory protections to prevent homeowners and property owners from entering high-interest, long-term solar financing agreements under misleading claims.

Key Consumer Protections & TDLR Registration

Under the regulatory oversight of the Texas Department of Licensing and Regulation (TDLR), the law introduces strict compliance standards:

• Mandatory State Registration: Effective September 1, 2026, all residential solar retailers and door-to-door sales representatives must register with the TDLR before executing sales or lease agreements in Texas.
• Five-Day Right of Cancellation: Solar contracts must grant buyers a mandatory five-business-day window to cancel the agreement without penalty, providing consumers time to review financial terms.
• Electrical Contractor Disclosures: Contracts must prominently identify the licensed electrical contractor responsible for physical installation, including active state license numbers.
• Background Checks and Liability: Sales representatives must undergo fingerprinting and criminal background checks. Solar retailers must maintain required general liability insurance and bear strict liability for sales force compliance.
• Prohibited Sales Practices: Representatives are legally barred from misrepresenting affiliations with public utilities or government agencies, and cannot solicit properties displaying "No Soliciting" notices.
• Enforcement and Penalties: The TDLR is authorized to void contracts, mandate full customer refunds, and assess civil penalties up to $10,000 per violation—or up to $100,000 for violations targeting seniors aged 65 or older.

Solar Due Diligence Checklist for DFW Landlords & Buyers

When acquiring or managing properties equipped with existing solar arrays, investors should rigorously evaluate system ownership and financial obligations. Use this 10-point checklist during acquisitions:

1. System Ownership Structure: Determine whether panels are owned outright, financed, leased, or tied to a Power Purchase Agreement (PPA).
2. Contract Documentation: Review original installation contracts, disclosures, and financing terms.
3. Payoff Balances: Obtain verified statement balances or remaining lease buyout obligations.
4. Transfer Provisions: Confirm formal lender or lessor approval requirements for title transfers.
5. Regulatory Verification: Verify TDLR registration for vendor and sales personnel for agreements subject to SB 1036.
6. Installation Compliance: Audit electrical contractor licensing, structural permits, and inspection records.
7. Equipment Warranties: Assess system age, degradation rates, inverter functionality, and manufacturer warranties.
8. Utility Cost Analysis: Analyze historical electric statements before and after installation to verify net energy production and savings.
9. Roof Integrity: Inspect roof age and condition, accounting for panel detachment and reinstallation costs during future roof replacements.
10. Title and Lien Verification: Ensure solar UCC filings or fixture liens do not cloud property title or impair future refinancing.

Additionally, property managers should update residential lease agreements to specify that tenants lack legal authorization to sign contracts, approve alterations, or permit solar panel installations on the premises without explicit written landlord approval, alongside establishing rigorous tenant screening processes.

4. Adapting Your Playbook for 2026 Compliance

Maintaining regulatory compliance is a key component of effective property management. Incorporating these statutory updates into your operational plan presents clear opportunities to safeguard yield:

• Leverage expanded manufactured housing zoning under SB 785 to access emerging land deals across outer DFW markets.
• Utilize the $125,000 HB 9 tax exemption to reduce BPP liabilities on furnished units, multifamily assets, and commercial holdings.
• Protect rental assets from unauthorized solar encumbrances by updating lease terms and tenant policy guidelines under SB 1036.

Navigating Legal Changes to Win in 2026

To maintain long-term asset value, Texas landlords and real estate investors must proactively align their operational protocols with shifting statutory standards by playing the long game. Read our comprehensive rental market guide for investors to navigate changing market dynamics.

Whether you are evaluating professional property management services or refining your self-managed strategy, our team provides the expert insights required to navigate statutory changes effectively.

Call (214) 305-9166 for a free consultation

Visit https://nmcpropertymanagement.com/.

Watch our video guides: https://www.youtube.com/@NorthTexasPropertyManagement/.