1-1 By: Harris S.B. No. 754
1-2 (In the Senate - Filed February 25, 1997; February 27, 1997,
1-3 read first time and referred to Committee on Jurisprudence;
1-4 March 18, 1997, reported favorably by the following vote: Yeas 6,
1-5 Nays 0; March 18, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the statute of limitations applying to a lien on real
1-9 property.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 16.035, Civil Practice and Remedies Code,
1-12 is amended to read as follows:
1-13 Sec. 16.035. LIEN [DEBT] ON REAL PROPERTY. (a) A person
1-14 must bring suit for the recovery of real property under a real
1-15 property lien [debt] or the foreclosure of a real property lien
1-16 [debt] not later than four years after the day the cause of action
1-17 accrues.
1-18 (b) A sale of real property under a power of sale in a
1-19 mortgage or deed of trust that creates a real property [secures a]
1-20 lien [debt] must be made not later than four years after the day
1-21 the cause of action accrues.
1-22 (c) The running of the statute of limitations is not
1-23 suspended against a bona fide purchaser for value, a lienholder, or
1-24 a lessee who has no notice or knowledge of the suspension of the
1-25 limitations period and who acquires an interest in the property
1-26 when a cause of action on an outstanding real property lien has
1-27 accrued for [debt is] more than four years [past due], except as
1-28 provided by:
1-29 (1) Section 16.062, providing for suspension in the
1-30 event of death; or
1-31 (2) Section 16.036, providing for recorded extensions
1-32 of real property liens [lien debts].
1-33 (d) On the expiration of the four-year limitations period,
1-34 the real property [it is conclusively presumed that a] lien [debt
1-35 has been paid and the lien debt] and a power of sale to enforce the
1-36 real property lien become void [at that time].
1-37 (e) If a series of notes or obligations or a note or
1-38 obligation payable in installments is secured by a real property
1-39 lien [on real property], the four-year limitations period does not
1-40 begin to run until the maturity date of the last note, obligation,
1-41 or installment.
1-42 (f) The limitations period under this section is not
1-43 affected by Section 3.118, Business & Commerce Code.
1-44 (g) In this section, "real property lien" ["lien debt"]
1-45 means:
1-46 (1) a superior title retained by a vendor in a deed of
1-47 conveyance or a purchase money note; or
1-48 (2) a vendor's lien, a mortgage, a deed of trust, a
1-49 voluntary mechanic's lien, or a voluntary materialman's lien on
1-50 real estate, securing a note or other written obligation.
1-51 SECTION 2. Section 16.036, Civil Practice and Remedies Code,
1-52 is amended to read as follows:
1-53 Sec. 16.036. EXTENSION OF REAL PROPERTY LIEN [DEBT].
1-54 (a) The party or parties primarily liable for a [lien] debt or
1-55 obligation secured by a real property lien, as that term is defined
1-56 in Section 16.035, may suspend the running of the four-year
1-57 limitations period for real property liens [lien debts] through a
1-58 written extension agreement as provided by this section.
1-59 (b) The limitations period is suspended and the lien remains
1-60 in effect for four years after the extended maturity date of the
1-61 debt or obligation [note] if the extension agreement is:
1-62 (1) signed and acknowledged as provided by law for a
1-63 deed conveying real property; and
1-64 (2) filed for record in the county clerk's office of
2-1 the county where the real property is located.
2-2 (c) The parties may continue to extend the lien by entering,
2-3 acknowledging, and recording additional extension agreements.
2-4 (d) The maturity date stated in the original instrument or
2-5 in the date of the recorded renewal and extension is conclusive
2-6 evidence of the maturity date of the debt or obligation.
2-7 (e) The limitations period under this section is not
2-8 affected by Section 3.118, Business & Commerce Code.
2-9 SECTION 3. Section 16.037, Civil Practice and Remedies Code,
2-10 is amended to read as follows:
2-11 Sec. 16.037. EFFECT OF EXTENSION OF REAL PROPERTY LIEN
2-12 [DEBT] ON THIRD PARTIES. An extension agreement is void as to a
2-13 bona fide purchaser for value, a lienholder, or a lessee who deals
2-14 with real property affected by a real property lien [debt] without
2-15 actual notice of the agreement and before the agreement is
2-16 acknowledged, filed, and recorded.
2-17 SECTION 4. Section 3.118, Business & Commerce Code, is
2-18 amended by adding Subsection (h) to read as follows:
2-19 (h) This section does not apply to an action involving a
2-20 real property lien covered by Section 16.035 or 16.036, Civil
2-21 Practice and Remedies Code.
2-22 SECTION 5. The importance of this legislation and the
2-23 crowded condition of the calendars in both houses create an
2-24 emergency and an imperative public necessity that the
2-25 constitutional rule requiring bills to be read on three several
2-26 days in each house be suspended, and this rule is hereby suspended,
2-27 and that this Act take effect and be in force from and after its
2-28 passage, and it is so enacted.
2-29 * * * * *