By Harris                                        S.B. No. 754

      75R6866 MLS-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the statute of limitations applying to a lien on real

 1-3     property.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 16.035, Civil Practice and Remedies Code,

 1-6     is amended to read as follows:

 1-7           Sec. 16.035.  LIEN [DEBT] ON REAL PROPERTY.  (a)  A person

 1-8     must bring suit for the recovery of real property under a real

 1-9     property lien [debt] or the foreclosure of a real property lien

1-10     [debt] not later than four years after the day the cause of action

1-11     accrues.

1-12           (b)  A sale of real property under a power of sale in a

1-13     mortgage or deed of trust that creates a real property [secures a]

1-14     lien [debt] must be made not later than four years  after the day

1-15     the cause of action accrues.

1-16           (c)  The running of the statute of limitations is not

1-17     suspended against a bona fide purchaser for value, a lienholder, or

1-18     a lessee who has no notice or knowledge of the suspension of the

1-19     limitations period and who acquires an interest in the property

1-20     when a cause of action on an outstanding real property lien has

1-21     accrued for [debt is] more than four years [past due], except as

1-22     provided by:

1-23                 (1)  Section 16.062, providing for suspension in the

1-24     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

 2-6     the 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].  (a)

2-24     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

2-26     in Section 16.035, may suspend the running of the four-year

2-27     limitations period for real property liens [lien debts] through a

 3-1     written extension agreement as provided by this section.

 3-2           (b)  The limitations period is suspended and the lien remains

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

 3-4     debt or obligation [note] if the extension agreement is:

 3-5                 (1)  signed and acknowledged as provided by law for a

 3-6     deed conveying real property; and

 3-7                 (2)  filed for record in the county clerk's office of

 3-8     the county where the real property is located.

 3-9           (c)  The parties may continue to extend the lien by entering,

3-10     acknowledging, and recording additional extension agreements.

3-11           (d)  The maturity date stated in the original instrument or

3-12     in the date of the recorded renewal and extension is conclusive

3-13     evidence of the maturity date of the debt or obligation.

3-14           (e)  The limitations period under this section is not

3-15     affected by Section 3.118, Business & Commerce Code.

3-16           SECTION 3.  Section 16.037, Civil Practice and Remedies Code,

3-17     is amended to read as follows:

3-18           Sec. 16.037.  EFFECT OF EXTENSION OF REAL PROPERTY LIEN

3-19     [DEBT] ON THIRD PARTIES.  An extension agreement is void as to a

3-20     bona fide purchaser for value, a lienholder, or a lessee who deals

3-21     with real property affected by a real property lien [debt] without

3-22     actual notice of the agreement and before the agreement is

3-23     acknowledged, filed, and recorded.

3-24           SECTION 4.  Section 3.118, Business & Commerce Code, is

3-25     amended by adding Subsection (h) to read as follows:

3-26           (h)  This section does not apply to an action involving a

3-27     real property lien covered by Section 16.035 or 16.036, Civil

 4-1     Practice and Remedies Code.

 4-2           SECTION 5.  The importance of this legislation and the

 4-3     crowded condition of the calendars in both houses create an

 4-4     emergency and an imperative public necessity that the

 4-5     constitutional rule requiring bills to be read on three several

 4-6     days in each house be suspended, and this rule is hereby suspended,

 4-7     and that this Act take effect and be in force from and after its

 4-8     passage, and it is so enacted.