By:  Harris                                            S.B. No. 754

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the statute of limitations applying to a lien on real

 1-2     property.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 16.035, Civil Practice and Remedies Code,

 1-5     is amended to read as follows:

 1-6           Sec. 16.035.  LIEN [DEBT] ON REAL PROPERTY.  (a)  A person

 1-7     must bring suit for the recovery of real property under a real

 1-8     property lien [debt] or the foreclosure of a real property lien

 1-9     [debt] not later than four years after the day the cause of action

1-10     accrues.

1-11           (b)  A sale of real property under a power of sale in a

1-12     mortgage or deed of trust that creates a real property [secures a]

1-13     lien [debt] must be made not later than four years after the day

1-14     the cause of action accrues.

1-15           (c)  The running of the statute of limitations is not

1-16     suspended against a bona fide purchaser for value, a lienholder, or

1-17     a lessee who has no notice or knowledge of the suspension of the

1-18     limitations period and who acquires an interest in the property

1-19     when a cause of action on an outstanding real property lien has

1-20     accrued for [debt is] more than four years [past due], except as

1-21     provided by:

1-22                 (1)  Section 16.062, providing for suspension in the

1-23     event of death; or

 2-1                 (2)  Section 16.036, providing for recorded extensions

 2-2     of real property liens [lien debts].

 2-3           (d)  On the expiration of the four-year limitations period,

 2-4     the real property [it is conclusively presumed that a] lien [debt

 2-5     has been paid and the lien debt] and a power of sale to enforce the

 2-6     real property lien become void [at that time].

 2-7           (e)  If a series of notes or obligations or a note or

 2-8     obligation payable in installments is secured by a real property

 2-9     lien [on real property], the four-year limitations period does not

2-10     begin to run until the maturity date of the last note, obligation,

2-11     or installment.

2-12           (f)  The limitations period under this section is not

2-13     affected by Section 3.118, Business & Commerce Code.

2-14           (g)  In this section, "real property lien" ["lien debt"]

2-15     means:

2-16                 (1)  a superior title retained by a vendor in a deed of

2-17     conveyance or a purchase money note; or

2-18                 (2)  a vendor's lien, a mortgage, a deed of trust, a

2-19     voluntary mechanic's lien, or a voluntary materialman's lien on

2-20     real estate, securing a note or other written obligation.

2-21           SECTION 2.  Section 16.036, Civil Practice and Remedies Code,

2-22     is amended to read as follows:

2-23           Sec. 16.036.  EXTENSION OF REAL PROPERTY LIEN [DEBT].

2-24     (a)  The party or parties primarily liable for a [lien] debt or

2-25     obligation secured by a real property lien, as that term is defined

 3-1     in Section 16.035, may suspend the running of the four-year

 3-2     limitations period for real property liens [lien debts] through a

 3-3     written extension agreement as provided by this section.

 3-4           (b)  The limitations period is suspended and the lien remains

 3-5     in effect for four years after the extended maturity date of the

 3-6     debt or obligation [note] if the extension agreement is:

 3-7                 (1)  signed and acknowledged as provided by law for a

 3-8     deed conveying real property; and

 3-9                 (2)  filed for record in the county clerk's office of

3-10     the county where the real property is located.

3-11           (c)  The parties may continue to extend the lien by entering,

3-12     acknowledging, and recording additional extension agreements.

3-13           (d)  The maturity date stated in the original instrument or

3-14     in the date of the recorded renewal and extension is conclusive

3-15     evidence of the maturity date of the debt or obligation.

3-16           (e)  The limitations period under this section is not

3-17     affected by Section 3.118, Business & Commerce Code.

3-18           SECTION 3.  Section 16.037, Civil Practice and Remedies Code,

3-19     is amended to read as follows:

3-20           Sec. 16.037.  EFFECT OF EXTENSION OF REAL PROPERTY LIEN

3-21     [DEBT] ON THIRD PARTIES.  An extension agreement is void as to a

3-22     bona fide purchaser for value, a lienholder, or a lessee who deals

3-23     with real property affected by a real property lien [debt] without

3-24     actual notice of the agreement and before the agreement is

3-25     acknowledged, filed, and recorded.

 4-1           SECTION 4.  Section 3.118, Business & Commerce Code, is

 4-2     amended by adding Subsection (h) to read as follows:

 4-3           (h)  This section does not apply to an action involving a

 4-4     real property lien covered by Section 16.035 or 16.036, Civil

 4-5     Practice and Remedies Code.

 4-6           SECTION 5.  The importance of this legislation and the

 4-7     crowded condition of the calendars in both houses create an

 4-8     emergency and an imperative public necessity that the

 4-9     constitutional rule requiring bills to be read on three several

4-10     days in each house be suspended, and this rule is hereby suspended,

4-11     and that this Act take effect and be in force from and after its

4-12     passage, and it is so enacted.