1-1     By:  Nixon                                             S.B. No. 378
 1-2           (In the Senate - Filed February 2, 1999; February 4, 1999,
 1-3     read first time and referred to Committee on Jurisprudence;
 1-4     April 27, 1999, reported favorably by the following vote:  Yeas 4,
 1-5     Nays 0; April 27, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the payment of judgment against an undivided interest
 1-9     in real property.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Chapter 31, Civil Practice and Remedies Code, is
1-12     amended by adding Section 31.009 to read as follows:
1-13           Sec. 31.009.  PAYMENT OF JUDGMENT AGAINST UNDIVIDED INTEREST
1-14     IN REAL PROPERTY.  (a)  This section applies only if:
1-15                 (1)  the owner of an undivided interest in real
1-16     property, alone or with the other owners of the real property, is
1-17     selling and conveying title to the real property or the undivided
1-18     interest in the real property to another person under a written
1-19     contract and the consideration under the contract is money, secured
1-20     loans assumed or existing on the real property, or both money and
1-21     secured loans;
1-22                 (2)  the interest of the owner is subject to an
1-23     abstract of judgment or judgment lien or the abstract of judgment
1-24     or judgment lien names that person as the judgment debtor;
1-25                 (3)  the interest of the owner which is subject to the
1-26     abstract of judgment or judgment lien that attaches to the interest
1-27     or that names the owner as the judgment debtor does not exceed a 50
1-28     percent undivided interest in the real property; and
1-29                 (4)  the abstract of judgment or judgment lien does not
1-30     name the owner of any other undivided interest in the real property
1-31     as a judgment debtor and does not purport to attach to the interest
1-32     of the owner of any other undivided interest in the real property.
1-33           (b)  Before the owner of the undivided interest is entitled
1-34     to pay for a partial release of the judgment to a court under
1-35     Subsection (d), the owner must send a letter notifying the judgment
1-36     creditor of the judgment by registered or certified mail, return
1-37     receipt requested, to:
1-38                 (1)  the judgment creditor's last known address;
1-39                 (2)  the address appearing in the judgment creditor's
1-40     pleadings or other court records, if different from the judgment
1-41     creditor's last known address;
1-42                 (3)  the address of the judgment creditor's last
1-43     attorney as shown in the judgment creditor's pleadings or other
1-44     court record; and
1-45                 (4)  the address of the judgment creditor's last
1-46     attorney as shown in the records of the State Bar of Texas, if that
1-47     address is different from the address shown in the judgment
1-48     creditor's pleadings or other court record.
1-49           (c)  The letter must include:
1-50                 (1)  the legal description of the real property;
1-51                 (2)  the percentage, fraction, or amount of undivided
1-52     interest in the real property owned or claimed by the owner as
1-53     evidenced by a copy of a title report, title commitment, deed, or
1-54     other written evidence of title;
1-55                 (3)  a copy of the written contract to sell the real
1-56     property or the undivided interest of the owner;
1-57                 (4)  a statement of the total sales price of the
1-58     undivided interest of the owner or proportionate share of the sales
1-59     price of the real property equivalent to the undivided interest of
1-60     the owner in the real property if sold in conjunction with other
1-61     owners of the real property, without reduction for:
1-62                       (A)  any costs, expenses, debts, or other amounts
1-63     paid by or on behalf of the owner; and
1-64                       (B)  any offset;
 2-1                 (5)  an affidavit in the letter or included with the
 2-2     letter stating that the written contract is a bona fide sale; and
 2-3                 (6)  an offer to pay by cash, wire of funds, or
 2-4     cashier's check the sales price of the undivided interest of the
 2-5     owner or proportionate share of the sales price of the real
 2-6     property equivalent to the undivided interest of the owner in the
 2-7     real property if sold in conjunction with other owners of the real
 2-8     property in return for a release of the abstract of judgment or
 2-9     judgment lien as to the undivided interest of the owner in the real
2-10     property.
2-11           (d)  If the judgment creditor does not respond to the letter
2-12     by furnishing a release of the abstract of judgment or judgment
2-13     lien as to the undivided interest of the owner on or before the
2-14     15th day after the date on which the letter was sent, the owner of
2-15     the undivided interest in the real property may file with the court
2-16     that rendered the judgment:
2-17                 (1)  an affidavit stating that:
2-18                       (A)  the owner has complied with this section and
2-19     is entitled to a release of the abstract of judgment or judgment
2-20     lien as to the undivided interest of the owner in the real
2-21     property;
2-22                       (B)  the owner provided the letter and offered
2-23     payment of the sales price of the undivided interest of the owner,
2-24     without reduction for any costs, expenses, debts, or other amounts
2-25     paid by or on behalf of the owner and without reduction for any
2-26     offset; and
2-27                       (C)  the judgment creditor has not responded to
2-28     the letter by furnishing a release;
2-29                 (2)  a copy of the written contract to sell the real
2-30     property or undivided interest of the owner in the real property;
2-31                 (3)  a copy of the letter sent under this section and
2-32     any document included with the letter;
2-33                 (4)  payment of the amount of the sales price of the
2-34     undivided interest of the owner or proportionate share of the sales
2-35     price of the real property equivalent to the undivided interest of
2-36     the owner in the real property if sold in conjunction with other
2-37     owners of the real property;
2-38                 (5)  any written correspondence received from the
2-39     judgment creditor or the attorney of the judgment creditor in
2-40     response to the letter; and
2-41                 (6)  a copy of the deed executed or to be executed by
2-42     the owner of the undivided interest in the real property under the
2-43     written contract.
2-44           (e)  The owner of the undivided interest in the real property
2-45     shall send a copy of the affidavit under Subsection (d) by
2-46     registered or certified mail, return receipt requested, to the
2-47     judgment creditor and judgment creditor's last attorney as shown in
2-48     the judgment creditor's pleadings or other court record at the
2-49     addresses listed in Subsection (b) before the sixth day after the
2-50     date the affidavit is filed with the court.
2-51           (f)  The owner of the undivided interest in the real property
2-52     shall prepare a recordable release of the abstract of judgment or
2-53     judgment lien as to the undivided interest of the owner in the real
2-54     property.  The release must state that "THIS PARTIAL RELEASE OF
2-55     ABSTRACT OF JUDGMENT OR JUDGMENT LIEN SHALL NOT BE EFFECTIVE SO
2-56     LONG AS (NAME OF OWNER OF UNDIVIDED INTEREST IN REAL PROPERTY) HAS
2-57     RECORD TITLE TO AN INTEREST IN THE REAL PROPERTY DESCRIBED IN THIS
2-58     RELEASE, BUT SHALL AUTOMATICALLY CONSTITUTE A RELEASE OF THE
2-59     ABSTRACT   OF  JUDGMENT  OR JUDGMENT LIEN  ON  CONVEYANCE  BY  THE
2-60     PERSON  OF  THAT  PERSON'S   INTEREST  IN  THE REAL PROPERTY  TO
2-61     (NAME OF PURCHASER OR PURCHASERS UNDER THE WRITTEN CONTRACT)." The
2-62     judge or clerk of the court shall execute the release of the
2-63     abstract of judgment or judgment lien on behalf of the creditor and
2-64     issue the release to the owner of the undivided interest in the
2-65     real property on or after the 15th day after the date the owner
2-66     files the affidavit with the court and before the 31st day after
2-67     the date the owner files the affidavit with the court, unless the
2-68     judge determines that the owner of the undivided interest in real
2-69     property is not entitled to a release under this section.  The
 3-1     release must state the cause number, the court, the parties, the
 3-2     date of judgment, the amount of the judgment, the amount paid to
 3-3     the court, the date of the partial release, and the undivided
 3-4     interest of the owner and the description of the real property.
 3-5           (g)  The court shall hold the amount paid to it by the owner
 3-6     of the undivided interest in the real property and interest earned
 3-7     on that amount in trust for the judgment creditor.  The clerk of
 3-8     the court shall deposit the trust funds and any interest earned by
 3-9     the funds in the clerk's trust fund account.  The clerk shall pay
3-10     the funds and any interest earned by the funds to the judgment
3-11     creditor or to the successors to the rights of the judgment
3-12     creditor.  The clerk may presume that the funds are payable to the
3-13     judgment creditor unless the clerk is furnished with a written
3-14     assignment of the judgment.  Funds held in the clerk's trust fund
3-15     account in accordance with this section are subject to escheat
3-16     under Chapter 72, Property Code.
3-17           (h)  A purchaser or lender for value may conclusively rely on
3-18     the partial release of abstract of judgment or judgment lien and
3-19     take title to the undivided interest of the owner free and clear of
3-20     the abstract of judgment or judgment lien.  The purchaser or lender
3-21     may not be required to determine whether the owner of the undivided
3-22     interest in real property has complied with this section.
3-23           (i)  In this section, "judgment creditor" means a party in
3-24     whose favor a judgment has been rendered, whether a plaintiff,
3-25     counterclaimant, cross-claimant, third-party plaintiff, or other
3-26     judgment creditor.
3-27           SECTION 2.  (a)  This Act takes effect September 1, 1999.
3-28           (b)  This Act applies to the payment of judgments against
3-29     undivided interests in real property rendered before, on, or after
3-30     the effective date of this Act for which notice is given under
3-31     Subsection (b), Section 31.009, Civil Practice and Remedies Code,
3-32     as added by this Act, on or after the effective date of this Act.
3-33           SECTION 3.  The importance of this legislation and the
3-34     crowded condition of the calendars in both houses create an
3-35     emergency and an imperative public necessity that the
3-36     constitutional rule requiring bills to be read on three several
3-37     days in each house be suspended, and this rule is hereby suspended.
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