By: Uher H.B. No. 1537 73R4614 LJD-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to marketable record title. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Title 4, Property Code, is amended by adding 1-5 Chapter 28 to read as follows: 1-6 CHAPTER 28. TEXAS MARKETABLE RECORD TITLE ACT 1-7 Sec. 28.001. DEFINITIONS. In this chapter: 1-8 (1) "Failed depository institution" means a bank, 1-9 savings and loan association, or other depository institution 1-10 placed in receivership or conservatorship by a state or federal 1-11 agency or instrumentality, including the Banking Department of 1-12 Texas, the Savings and Loan Department of Texas, the Office of the 1-13 Comptroller of the Currency, the Resolution Trust Corporation, the 1-14 Federal Deposit Insurance Corporation, the Federal Savings and Loan 1-15 Insurance Corporation, and their successors. 1-16 (2) "Marketable record title" means a title of record 1-17 that extinguishes interests and claims existing before the 1-18 effective date of the origin of marketable record title, as 1-19 provided by Section 28.004. 1-20 (3) "Mortgage" includes a deed of trust. 1-21 (4) "Origin of marketable record title" means a title 1-22 transaction purporting to create the interest claimed by a person 1-23 that was the most recent to be recorded as of a date 50 years 1-24 before the time when marketability is being determined. The 2-1 "effective date of the origin of marketable record title" is the 2-2 date on which the title transaction was recorded. 2-3 (5) "Possession" means use or occupancy of land 2-4 sufficient to cause a person to inquire as to the reason for the 2-5 use or occupancy and includes occupancy of a residence or business 2-6 on the land or farming, grazing, or harvesting timber on the land. 2-7 (6) "Recording," when applied to records, includes 2-8 filing. 2-9 (7) "Records," "record," or "recorded" means the real 2-10 property records of the county clerk of the county in which the 2-11 land is located. 2-12 (8) "Title" includes fee title such as fee simple 2-13 absolute, fee simple determinable, fee simple subject to condition 2-14 subsequent, or other fee, a life estate, and an estate for years. 2-15 (9) "Title transaction" means any transaction 2-16 purporting to affect title to any interest in land, without regard 2-17 to whether the transaction is valid or is in the chain of title 2-18 from the sovereign, and includes: 2-19 (A) a mortgage; 2-20 (B) a transfer of an easement; 2-21 (C) a transfer of a mineral or royalty interest; 2-22 (D) title by will; 2-23 (E) title by descent evidenced by a 2-24 determination of heirship or an instrument described by Section 2-25 28.007; 2-26 (F) title by decree of any court; 2-27 (G) a patent or grant from the state or 3-1 sovereign; 3-2 (H) a proper notice that complies with Section 3-3 28.005; and 3-4 (I) title by warranty, quitclaim, trustee's, 3-5 receiver's, guardian's, executor's, administrator's, sheriff's, 3-6 tax, or other deed. 3-7 Sec. 28.002. MARKETABLE RECORD TITLE. (a) A person who 3-8 possesses the legal capacity to own land in this state and who has 3-9 an unbroken chain of title of record from the origin of marketable 3-10 record title to an interest in land for 50 years or more is 3-11 considered to have a marketable record title to the interest. A 3-12 judicial determination of marketable record title is not necessary. 3-13 A title that meets the requirements of this section is presumed to 3-14 be marketable title in any proceeding, in the absence of proof that 3-15 an exception under Section 28.003 exists. A marketable record 3-16 title is subject only to the exceptions prescribed by Section 3-17 28.003. A person is considered to have an unbroken chain of title 3-18 of record when the records disclose a title transaction that is the 3-19 origin of marketable record title that has been of record at least 3-20 50 years and purports to create an interest in: 3-21 (1) the person claiming the interest; or 3-22 (2) some other person who transferred title to the 3-23 claimant directly or by mesne title transactions of record. 3-24 (b) A title to a particular interest is not a marketable 3-25 record title of the claimant if a transaction appears of record 3-26 that purports to divest the claimant of the interest. 3-27 (c) Marketable record title is determined by the title to 4-1 the particular land. Title to particular land is not unmarketable 4-2 because of: 4-3 (1) the status or quality of the title to: 4-4 (A) other land; 4-5 (B) easements appurtenant to the particular 4-6 land; or 4-7 (C) access to the particular land; or 4-8 (2) reliance on uncontradicted presumptions of 4-9 authority to convey as recognized by other applicable law. 4-10 Sec. 28.003. INTERESTS TO WHICH MARKETABLE RECORD TITLE IS 4-11 SUBJECT. A marketable record title is subject to and this chapter 4-12 may not be applied to bar: 4-13 (1) each interest or defect that is specifically 4-14 described, by reference to the recorded title transaction that 4-15 creates the interest or defect, in the muniment forming the chain 4-16 of record title from the origin of marketable record title; 4-17 (2) each interest preserved in accordance with Section 4-18 28.005 by: 4-19 (A) the filing of proper notice; 4-20 (B) possession; or 4-21 (C) payment of real property taxes; 4-22 (3) the rights of a person arising from a period of 4-23 adverse possession or use that was in whole or in part after the 4-24 effective date of the origin of marketable record title; 4-25 (4) an interest arising out of a title transaction 4-26 that is recorded after the effective date of the origin of 4-27 marketable record title that is equal to and a substitute for a 5-1 notice under Section 28.005; however, recording does not revive or 5-2 give validity to any interest that was extinguished by the 5-3 operation of Section 28.004 before the time the interest was 5-4 recorded; 5-5 (5) a lessor's reversion when the lease expires; 5-6 (6) an easement or right of way, whether by 5-7 prescription, grant, reservation, implication, or otherwise, and 5-8 whether created before or after the effective date of the origin of 5-9 marketable record title; 5-10 (7) a mortgage, statutory or constitutional lien, or 5-11 restrictive covenant not barred by other applicable law; 5-12 (8) any of the following rights or interests severed 5-13 from the surface or from remaining rights in land: 5-14 (A) geothermal; 5-15 (B) coal; 5-16 (C) lignite; 5-17 (D) uranium; 5-18 (E) iron; 5-19 (F) rock asphalt; 5-20 (G) oil; 5-21 (H) gas; and 5-22 (I) mineral; 5-23 (9) a right to explore for, develop, mine, or produce 5-24 a right or interest described by Subdivision (8); 5-25 (10) proceeds, income, or profits from production of a 5-26 right or interest described by Subdivision (8) whether a working 5-27 interest or a royalty interest; 6-1 (11) consideration for a severance of a right or 6-2 interest described by Subdivision (8) from the surface or remaining 6-3 interests in the land; 6-4 (12) any use of the surface or subsurface in 6-5 connection with a right or interest described by Subdivision (8) 6-6 that is recognized by applicable law or agreement; 6-7 (13) a surface lease of the land for or incidental to 6-8 the exploration, development, production, processing, 6-9 transportation, refining, or marketing of a right or interest 6-10 described by Subdivision (8); 6-11 (14) water rights and interests; 6-12 (15) a right, title, or interest of this state or an 6-13 agency, instrumentality, commission, board, or political 6-14 subdivision of this state; and 6-15 (16) a right, title, or interest of the United States 6-16 or any instrumentality of the United States. 6-17 Sec. 28.004. INTERESTS EXTINGUISHED BY MARKETABLE RECORD 6-18 TITLE. Subject to the interests prescribed by Section 28.003 to 6-19 the extent those interests are enforceable under other applicable 6-20 law, a marketable record title is free and clear of each interest 6-21 that depends on an act, transaction, event, or omission that 6-22 occurred before the effective date of the origin of marketable 6-23 record title. An interest from which the marketable record title 6-24 is free and clear is void, without regard to whether the interest 6-25 is legal or equitable, present or future, asserted by a person sui 6-26 juris or under a disability, or asserted by a person within or 6-27 outside this state. 7-1 Sec. 28.005. EFFECT OF FILING OR POSSESSION. (a) A person 7-2 claiming an interest in land may preserve and keep effective the 7-3 interest by filing for record a verified notice setting forth the 7-4 nature of the claim. The notice must be filed not later than the 7-5 50th anniversary of the effective date of the origin of marketable 7-6 record title. A disability or lack of knowledge of any kind on the 7-7 part of any person does not suspend the running of the 50-year 7-8 period. The notice may be filed for record by the claimant or by a 7-9 person acting on behalf of a claimant without regard to whether the 7-10 claimant is: 7-11 (1) under a disability; 7-12 (2) unable to assert a claim on the claimant's own 7-13 behalf; or 7-14 (3) one of a class whose identity cannot be 7-15 established or is uncertain at the time for filing the notice of 7-16 claim for record. 7-17 (b) A person acting on behalf of a claimant under Subsection 7-18 (a) is not required to be a legally appointed or authorized 7-19 representative or agent. 7-20 (c) A period of possession is equivalent to the filing of a 7-21 notice immediately preceding the termination of the 50-year period 7-22 described by Subsection (a) if: 7-23 (1) the owner of a possessory interest in land has 7-24 been in possession of the land from the day immediately preceding 7-25 the termination of the 50-year period described by Subsection (a); 7-26 (2) no title transaction with respect to the interest 7-27 appears of record in the owner's chain of title; 8-1 (3) notice has not been filed by the owner or on the 8-2 owner's behalf as provided by Subsection (a); and 8-3 (4) the possession continues to the time when 8-4 marketability is being determined or until a notice is filed in 8-5 accordance with Subsection (a). 8-6 (d) Payment of all real property taxes by an owner or 8-7 deferral of payment of taxes under Section 33.06, Tax Code, equals 8-8 possession by the person under Subsection (c) for the year the 8-9 taxes are imposed. 8-10 (e) For purposes of this section, payment of taxes or 8-11 possession by a predecessor or tenant of an owner equals payment of 8-12 taxes or possession by the owner. 8-13 (f) For purposes of this section, an instrument in the 8-14 records may state the specific years that a person has paid taxes 8-15 on or been in possession of the land and is prima facie evidence of 8-16 the correctness of the stated facts. 8-17 Sec. 28.006. CONTENTS AND FORM OF NOTICE; RECORDING AND 8-18 INDEXING. (a) To be effective and to be eligible for recording, a 8-19 notice under Section 28.005 must contain an accurate and full 8-20 description of the land affected by the notice. The description 8-21 must be set forth in particular terms, such as by reference to lots 8-22 and blocks in a recorded plat, to a metes and bounds description, 8-23 or to specific records of the General Land Office, and not by 8-24 general inclusions. If the claim is founded on a recorded 8-25 instrument, the description in the notice may be the same as that 8-26 contained in the recorded instrument. A notice may incorporate a 8-27 description contained in a recorded instrument by reference to the 9-1 volume and page numbers or file number of the instrument. A notice 9-2 may contain, refer to, or incorporate the description of more than 9-3 one tract or parcel of land. The notice must be filed for record 9-4 in the office of the clerk of each county in which any part of the 9-5 land is situated. The clerk of each county shall accept each 9-6 notice presented to the clerk that describes land located in the 9-7 county in which the clerk serves and shall enter and record a full 9-8 copy in the same way that a deed or other instrument is recorded. 9-9 The clerk is not required to verify compliance with this section by 9-10 a person filing a notice. Each clerk may charge the same fee for 9-11 recording a notice as is charged for recording a deed. 9-12 (b) The notice must be in substantially the following form: 9-13 State of Texas 9-14 County of ___________________ 9-15 Notice of Preservation of Interest under the 9-16 Texas Marketable Record Title Act 9-17 (On behalf of ______________ (if applicable)) 9-18 _____________________ (the Claimant) files this notice pursuant to 9-19 the Texas Marketable Record Title Act to preserve the Claimant's 9-20 interest in the following described property (the Property): 9-21 (describe land) 9-22 Claimant claims the following interest in the Property: 9-23 (describe interest asserted) 9-24 Signed: ____________________________________________________ 9-25 Date: ______________________________________________________ 9-26 Name of Claimant or person 9-27 signing on behalf of Claimant 10-1 (print name): ______________________________________________ 10-2 (where another person signs 10-3 on behalf of Claimant) 10-4 On behalf of (print 10-5 name of Claimant): __________________________________________ 10-6 Sworn to and subscribed before me the undersigned authority 10-7 on this the ______________ day of _____________________ by 10-8 _____________. 10-9 (c) A county clerk shall make copies of the form of notice 10-10 available to the public and may charge a reasonable fee for the 10-11 form. 10-12 (d) A notice under Section 28.005 substantially complies 10-13 with the requirements of Subsection (b) if the notice: 10-14 (1) describes the land; 10-15 (2) states the interest that the claimant asserts; 10-16 (3) contains the name of the claimant; and 10-17 (4) contains the signature and jurat of the claimant 10-18 or a person signing for the claimant. 10-19 Sec. 28.007. PROCEEDING AFTER DEATH. (a) Not earlier than 10-20 six months after the date of a decedent's death, an affidavit of 10-21 heirship in the record constitutes prima facie evidence of the 10-22 heirship from the decedent for the purpose of title to land. The 10-23 existence of the affidavit of heirship as the sole evidence of 10-24 heirship does not cause unmarketability of the title if: 10-25 (1) a judicial determination of heirship is not 10-26 pending or has not occurred; and 10-27 (2) no affidavit, judgment of heirship, or title 11-1 transaction in the chain of title in the records states that an 11-2 heir omitted from the affidavit of heirship is an heir of the 11-3 decedent. 11-4 (b) An affidavit or instrument that complies with Section 11-5 52, Texas Probate Code, does not constitute a matter that causes 11-6 unmarketability of the title because of the lack of judicial 11-7 determination of heirship. 11-8 (c) A bona fide purchaser for value from the heirs stated in 11-9 an affidavit of heirship acquires title subject to the claims of 11-10 the decedent's creditors, legatees or devisees of the decedent 11-11 under a will admitted to probate, and omitted heirs as otherwise 11-12 provided by applicable law. An omitted heir, personal 11-13 representative of the decedent's estate, or a legatee or devisee 11-14 under a will admitted to probate also may recover from an heir who 11-15 received consideration in a transfer to a bona fide purchaser for 11-16 value, based on an affidavit that complies with this section. 11-17 Sec. 28.008. FAILED DEPOSITORY INSTITUTION. A party at any 11-18 time may record an affidavit or memorandum of any sale, transfer, 11-19 purchase, or acquisition agreement between the receiver or 11-20 conservator of a failed depository institution and another 11-21 depository institution. If the sale, transfer, purchase, or 11-22 acquisition agreement transfers an interest in land or in a 11-23 mortgage vested according to the records of the failed depository 11-24 institution, a recorded affidavit or memorandum under this section 11-25 is constructive notice of the transfer or sale. The failure of the 11-26 affidavit or memorandum to be executed by the record owner or to 11-27 contain language of conveyance does not create unmarketability of 12-1 the title. 12-2 Sec. 28.009. LIMITATIONS OF ACTIONS AND RECORDING ACTS. 12-3 This chapter does not extend any statute of limitations period, 12-4 including any statutes relating to adverse possession or use. This 12-5 chapter does not affect any recording statutes except as 12-6 specifically provided. 12-7 Sec. 28.010. CHAPTER TO BE LIBERALLY CONSTRUED. (a) This 12-8 chapter shall be liberally construed to effect the legislative 12-9 purpose of simplifying and facilitating land title transactions by 12-10 allowing persons to rely on a record chain of title as described by 12-11 Section 28.002, subject only to limitations as provided by Section 12-12 28.003. 12-13 (b) For purposes of Section 28.003(8), the terms "oil," 12-14 "gas," and "mineral" shall be liberally construed. 12-15 Sec. 28.011. TWO-YEAR EXTENSION OF 50-YEAR PERIOD. If the 12-16 50-year period for notice, possession, or payment of taxes provided 12-17 by Section 28.005 has expired before September 1, 1993, or expires 12-18 before September 1, 1995, the period is extended to September 1, 12-19 1995. 12-20 SECTION 2. This Act takes effect September 1, 1993. 12-21 SECTION 3. The importance of this legislation and the 12-22 crowded condition of the calendars in both houses create an 12-23 emergency and an imperative public necessity that the 12-24 constitutional rule requiring bills to be read on three several 12-25 days in each house be suspended, and this rule is hereby suspended.