By: Nixon S.B. No. 378
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the payment of judgment against an undivided interest
1-2 in real property.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 31, Civil Practice and Remedies Code, is
1-5 amended by adding Section 31.009 to read as follows:
1-6 Sec. 31.009. PAYMENT OF JUDGMENT AGAINST UNDIVIDED INTEREST
1-7 IN REAL PROPERTY. (a) This section applies only if:
1-8 (1) the owner of an undivided interest in real
1-9 property, alone or with the other owners of the real property, is
1-10 selling and conveying title to the real property or the undivided
1-11 interest in the real property to another person under a written
1-12 contract and the consideration under the contract is money, secured
1-13 loans assumed or existing on the real property, or both money and
1-14 secured loans;
1-15 (2) the interest of the owner is subject to an
1-16 abstract of judgment or judgment lien or the abstract of judgment
1-17 or judgment lien names that person as the judgment debtor;
1-18 (3) the interest of the owner which is subject to the
1-19 abstract of judgment or judgment lien that attaches to the interest
1-20 or that names the owner as the judgment debtor does not exceed a 50
1-21 percent undivided interest in the real property; and
1-22 (4) the abstract of judgment or judgment lien does not
1-23 name the owner of any other undivided interest in the real property
1-24 as a judgment debtor and does not purport to attach to the interest
2-1 of the owner of any other undivided interest in the real property.
2-2 (b) Before the owner of the undivided interest is entitled
2-3 to pay for a partial release of the judgment to a court under
2-4 Subsection (d), the owner must send a letter notifying the judgment
2-5 creditor of the judgment by registered or certified mail, return
2-6 receipt requested, to:
2-7 (1) the judgment creditor's last known address;
2-8 (2) the address appearing in the judgment creditor's
2-9 pleadings or other court records, if different from the judgment
2-10 creditor's last known address;
2-11 (3) the address of the judgment creditor's last
2-12 attorney as shown in the judgment creditor's pleadings or other
2-13 court record; and
2-14 (4) the address of the judgment creditor's last
2-15 attorney as shown in the records of the State Bar of Texas, if that
2-16 address is different from the address shown in the judgment
2-17 creditor's pleadings or other court record.
2-18 (c) The letter must include:
2-19 (1) the legal description of the real property;
2-20 (2) the percentage, fraction, or amount of undivided
2-21 interest in the real property owned or claimed by the owner as
2-22 evidenced by a copy of a title report, title commitment, deed, or
2-23 other written evidence of title;
2-24 (3) a copy of the written contract to sell the real
2-25 property or the undivided interest of the owner;
2-26 (4) a statement of the total sales price of the
3-1 undivided interest of the owner or proportionate share of the sales
3-2 price of the real property equivalent to the undivided interest of
3-3 the owner in the real property if sold in conjunction with other
3-4 owners of the real property, without reduction for:
3-5 (A) any costs, expenses, debts, or other amounts
3-6 paid by or on behalf of the owner; and
3-7 (B) any offset;
3-8 (5) an affidavit in the letter or included with the
3-9 letter stating that the written contract is a bona fide sale; and
3-10 (6) an offer to pay by cash, wire of funds, or
3-11 cashier's check the sales price of the undivided interest of the
3-12 owner or proportionate share of the sales price of the real
3-13 property equivalent to the undivided interest of the owner in the
3-14 real property if sold in conjunction with other owners of the real
3-15 property in return for a release of the abstract of judgment or
3-16 judgment lien as to the undivided interest of the owner in the real
3-17 property.
3-18 (d) If the judgment creditor does not respond to the letter
3-19 by furnishing a release of the abstract of judgment or judgment
3-20 lien as to the undivided interest of the owner on or before the
3-21 15th day after the date on which the letter was sent, the owner of
3-22 the undivided interest in the real property may file with the court
3-23 that rendered the judgment:
3-24 (1) an affidavit stating that:
3-25 (A) the owner has complied with this section and
3-26 is entitled to a release of the abstract of judgment or judgment
4-1 lien as to the undivided interest of the owner in the real
4-2 property;
4-3 (B) the owner provided the letter and offered
4-4 payment of the sales price of the undivided interest of the owner,
4-5 without reduction for any costs, expenses, debts, or other amounts
4-6 paid by or on behalf of the owner and without reduction for any
4-7 offset; and
4-8 (C) the judgment creditor has not responded to
4-9 the letter by furnishing a release;
4-10 (2) a copy of the written contract to sell the real
4-11 property or undivided interest of the owner in the real property;
4-12 (3) a copy of the letter sent under this section and
4-13 any document included with the letter;
4-14 (4) payment of the amount of the sales price of the
4-15 undivided interest of the owner or proportionate share of the sales
4-16 price of the real property equivalent to the undivided interest of
4-17 the owner in the real property if sold in conjunction with other
4-18 owners of the real property;
4-19 (5) any written correspondence received from the
4-20 judgment creditor or the attorney of the judgment creditor in
4-21 response to the letter; and
4-22 (6) a copy of the deed executed or to be executed by
4-23 the owner of the undivided interest in the real property under the
4-24 written contract.
4-25 (e) The owner of the undivided interest in the real property
4-26 shall send a copy of the affidavit under Subsection (d) by
5-1 registered or certified mail, return receipt requested, to the
5-2 judgment creditor and judgment creditor's last attorney as shown in
5-3 the judgment creditor's pleadings or other court record at the
5-4 addresses listed in Subsection (b) before the sixth day after the
5-5 date the affidavit is filed with the court.
5-6 (f) The owner of the undivided interest in the real property
5-7 shall prepare a recordable release of the abstract of judgment or
5-8 judgment lien as to the undivided interest of the owner in the real
5-9 property. The release must state that "THIS PARTIAL RELEASE OF
5-10 ABSTRACT OF JUDGMENT OR JUDGMENT LIEN SHALL NOT BE EFFECTIVE SO
5-11 LONG AS (NAME OF OWNER OF UNDIVIDED INTEREST IN REAL PROPERTY) HAS
5-12 RECORD TITLE TO AN INTEREST IN THE REAL PROPERTY DESCRIBED IN THIS
5-13 RELEASE, BUT SHALL AUTOMATICALLY CONSTITUTE A RELEASE OF THE
5-14 ABSTRACT OF JUDGMENT OR JUDGMENT LIEN ON CONVEYANCE BY THE PERSON
5-15 OF THAT PERSON'S INTEREST IN THE REAL PROPERTY TO (NAME OF
5-16 PURCHASER OR PURCHASERS UNDER THE WRITTEN CONTRACT)." The judge or
5-17 clerk of the court shall execute the release of the abstract of
5-18 judgment or judgment lien on behalf of the creditor and issue the
5-19 release to the owner of the undivided interest in the real property
5-20 on or after the 15th day after the date the owner files the
5-21 affidavit with the court and before the 31st day after the date the
5-22 owner files the affidavit with the court, unless the judge
5-23 determines that the owner of the undivided interest in real
5-24 property is not entitled to a release under this section. The
5-25 release must state the cause number, the court, the parties, the
5-26 date of judgment, the amount of the judgment, the amount paid to
6-1 the court, the date of the partial release, and the undivided
6-2 interest of the owner and the description of the real property.
6-3 (g) The court shall hold the amount paid to it by the owner
6-4 of the undivided interest in the real property and interest earned
6-5 on that amount in trust for the judgment creditor. The clerk of
6-6 the court shall deposit the trust funds and any interest earned by
6-7 the funds in the clerk's trust fund account. The clerk shall pay
6-8 the funds and any interest earned by the funds to the judgment
6-9 creditor or to the successors to the rights of the judgment
6-10 creditor. The clerk may presume that the funds are payable to the
6-11 judgment creditor unless the clerk is furnished with a written
6-12 assignment of the judgment. Funds held in the clerk's trust fund
6-13 account in accordance with this section are subject to escheat
6-14 under Chapter 72, Property Code.
6-15 (h) A purchaser or lender for value may conclusively rely on
6-16 the partial release of abstract of judgment or judgment lien and
6-17 take title to the undivided interest of the owner free and clear of
6-18 the abstract of judgment or judgment lien. The purchaser or lender
6-19 may not be required to determine whether the owner of the undivided
6-20 interest in real property has complied with this section.
6-21 (i) In this section, "judgment creditor" means a party in
6-22 whose favor a judgment has been rendered, whether a plaintiff,
6-23 counterclaimant, cross-claimant, third-party plaintiff, or other
6-24 judgment creditor.
6-25 SECTION 2. (a) This Act takes effect September 1, 1999.
6-26 (b) This Act applies to the payment of judgments against
7-1 undivided interests in real property rendered before, on, or after
7-2 the effective date of this Act for which notice is given under
7-3 Subsection (b), Section 31.009, Civil Practice and Remedies Code,
7-4 as added by this Act, on or after the effective date of this Act.
7-5 SECTION 3. The importance of this legislation and the
7-6 crowded condition of the calendars in both houses create an
7-7 emergency and an imperative public necessity that the
7-8 constitutional rule requiring bills to be read on three several
7-9 days in each house be suspended, and this rule is hereby suspended.