Texas Proposes Stronger Rules for Foreign Ownership of Real Estate

Texas Attorney General Ken Paxton has proposed revised enforcement rules for Senate Bill 17 (SB 17), the state law restricting certain foreign individuals and entities from purchasing or acquiring interests in Texas real estate.

Published in the Texas Register on October 9, 2026, the proposed rules would establish procedures for investigating potential violations, clarify reporting requirements, and create a framework for improving public access to information about certain property ownership. The proposal comes as Texas continues implementing restrictions intended to address national security concerns involving designated foreign persons and entities.

The rules have not yet been finalized. If adopted, they could affect how certain real estate transactions are reviewed and how title companies, lenders, real estate professionals, and other parties respond to potential violations.

What Texas Senate Bill 17 Covers

SB 17 was enacted in 2025 and took effect on September 1 of that year. It added Subchapter H to Chapter 5 of the Texas Property Code, restricting certain purchases and acquisitions of interests in Texas real property by designated foreign individuals, governmental entities, and foreign-owned or foreign-controlled organizations.

The law addresses connections to countries designated as foreign adversaries, including China, Russia, Iran, and North Korea. However, the restrictions do not automatically apply to every person who holds citizenship from one of these countries. Coverage depends on the statutory definitions, the person’s or entity’s circumstances, and applicable exceptions.

The law authorizes the Texas Attorney General’s Office to investigate potential violations and pursue enforcement actions. The proposed Chapter 67 rules would establish procedures to help administer those responsibilities.

Key Changes in the Proposed Chapter 67 Rules

The October proposal includes 12 sections addressing definitions, complaints, investigations, agency coordination, confidentiality, and public information. Several provisions could be particularly relevant to real estate transactions.

Reporting Potential Violations

The proposal clarifies that any person who has reason to believe a covered property acquisition may violate SB 17 can submit a complaint to the Attorney General’s Office. Reporting would not be limited to people directly involved in facilitating a transaction.

The proposed rules also address duties applicable to certain facilitating entities, including parties involved in real estate transactions. These provisions could affect internal compliance procedures for businesses that help process covered acquisitions.

Due-Diligence Protections for Facilitating Entities

The revised proposal includes a conditional safe harbor for facilitating entities whose due diligence follows regulatory guidance or standards adopted in good faith by an industry group.

This provision is intended to clarify how qualifying due-diligence practices may be treated under the rules. It should not be interpreted as blanket immunity from liability or as eliminating all reporting and compliance obligations.

Businesses that may be affected should review the final wording if the rules are adopted and seek legal advice about the standards applicable to their activities.

Voluntary Reporting of Earlier Property Acquisitions

The proposal would establish an optional reporting mechanism for people who believe a Texas property was acquired before SB 17 took effect on September 1, 2025, but is owned by an individual or entity covered by the law.

This reporting mechanism is distinct from a complaint alleging a violation. The proposed rules state that voluntarily reporting an earlier acquisition does not, by itself, establish that a violation occurred.

The distinction matters because the proposal’s general applicability provision covers acquisitions occurring on or after September 1, 2025, consistent with the statute’s effective-date provisions.

A Proposed Public Property Search Portal

The Attorney General’s Office may prepare a plan for a publicly accessible property-search portal containing information about certain prohibited transactions and covered property interests.

The proposal envisions a searchable system intended to improve transparency and public awareness. The office has discussed features similar to those available through other statewide public registries.

However, the proposal concerns the development and planning of a portal; it does not mean that a comprehensive registry is already operating or that every property associated with a foreign owner would automatically appear in it.

What the Proposed Rules Could Mean for Buyers, Sellers, and Real Estate Businesses

For buyers: People considering a property purchase involving foreign ownership or corporate structures should determine whether the transaction falls within SB 17’s definitions and restrictions. Nationality alone should not be treated as the only factor determining whether the law applies.

For sellers: Transactions involving covered individuals or entities may require additional attention to eligibility and compliance. Sellers should obtain appropriate advice before proceeding if there is uncertainty about a buyer’s ownership structure or legal status under the statute.

For title companies, lenders, and real estate professionals: The proposed rules could influence due-diligence procedures, documentation, reporting practices, and responses to suspected violations. Affected businesses should monitor the rulemaking process rather than assume the revised requirements are already binding.

For investors and property-owning entities: Transactions involving indirect ownership, control of a company, or the acquisition of an entity that already holds Texas real estate may require careful legal review. The proposed definitions address certain indirect and entity-level arrangements, so the legal structure of a transaction can matter as much as the name appearing on a property record.

Public Comments and the Rulemaking Timeline

The revised proposal was published in the October 9, 2026, issue of the Texas Register. Written comments may be submitted to the Attorney General’s Office during the 30-day comment period following publication.

The notice identifies November 8, 2026, as the earliest possible adoption date. That date is not a guarantee that the rules will be adopted then or that they will become effective immediately on that date.

The final language, implementation details, and any subsequent guidance should be reviewed before businesses change their compliance procedures.

Practical Takeaway

Texas’s proposed Chapter 67 rules would provide additional procedures for enforcing SB 17, including broader complaint access, conditional due-diligence protections, optional reporting of certain earlier acquisitions, and planning for a public property-search portal.

For homeowners, buyers, sellers, investors, and real estate professionals, the most important step is to distinguish the existing statute from the proposed administrative rules. SB 17 is already in effect, but the October 2026 Chapter 67 proposal remains subject to the rulemaking process.

Anyone involved in a transaction that may fall within the law should consult the official statute and current guidance from the Texas Attorney General’s Office. Where ownership, control, or eligibility is uncertain, advice from a qualified Texas real estate attorney is advisable.