SECTION 175.11. Transfer of Contract of Sale and Purchase

(a) After the original veteran-purchaser has been in possession of the tract for at least three years from the date of closing, the contract of sale and purchase may be transferred in one of the following ways:

(1) the contract may be assigned to an eligible veteran without any increase in the interest rate.

(2) the contract may be assigned to a non-veteran, a veteran who has previously participated in the program or a firm or corporation with an increase in the interest rate. The new rate of interest shall be set by the board.

(b) The contract may be transferred before the expiration of the three year period only if the veteran dies, becomes financially incapacitated, or in the event of an involuntary transfer by court order or proceedings, such as bankruptcy, sheriff's sale, or divorce. Affidavits, certified copies of proceedings and other documentation may be requested by the board in connection with this exception.

(c) If the veteran attempts to transfer, sell, or convey the property before the three year period has elapsed, the board may forfeit the account and order the property to be sold. In the alternative, the board may require that the account be paid in full and a penalty paid, or approve the unauthorized transfer upon the payment of the penalty and receipt of such other documentation as may be required. The penalty shall be the difference between the account's interest rate and the interest rate charged to non-veterans at the time the unacceptable transfer or conveyance is discovered.

(d) No assignment shall be effective until approved by the chairman of the board.

(e) Upon request, the board will furnish to the assignor, or to one designated by him, the forms and information necessary to complete a transfer.

(f) An assignment will not be approved if it is executed by an attorney in fact.

(g) If married, the veteran's spouse must join in the assignment.

(h) If the assignor wishes to reserve any interest in the property, he must obtain the approval of the board prior to the assignment. An assignment will not be approved if the assignor attempts to reserve any interest in the contract of sale and purchase.

(i) The board is not responsible for the condition of title subsequent to the execution of the contract of sale and purchase with the original veteran-purchaser. The assignee should satisfy himself as to condition of title before accepting an assignment.

Source Note: The provisions of this §175.11 adopted to be effective March 11, 1986, 11 TexReg 1005