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78R4874 KCR-D
By: Naishtat H.B. No. 3260
A BILL TO BE ENTITLED
AN ACT
relating to the forced sale of an owner's interest in certain real
property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 29, Property Code, is amended to read as
follows:
CHAPTER 29. FORCED SALE OF OWNER'S INTEREST IN CERTAIN REAL
PROPERTY AS REIMBURSEMENT FOR PROPERTY TAXES PAID BY CO-OWNER ON
OWNER'S BEHALF
Sec. 29.001. APPLICATION OF CHAPTER. This chapter applies
only to real property that is not exempt from forced sale under the
constitution or laws of this state and is:
(1) received by a person as a result of the death of
another person:
(A) by inheritance;
(B) under a will;
(C) by a joint tenancy with a right of
survivorship; or
(D) by any other survivorship agreement in which
the interest of the decedent passes to a surviving beneficiary
other than an agreement between spouses for community property with
a right of survivorship; or
(2) owned in part by a nonprofit organization that is
exempt from federal income tax under Section 501(a), Internal
Revenue Code of 1986, and its subsequent amendments, by being
listed as an exempt organization under Section 501(c)(3), Internal
Revenue Code of 1986, and its subsequent amendments, that:
(A) has been incorporated in this state for at
least one year;
(B) has a corporate purpose to develop affordable
housing that is stated in the nonprofit corporation's original or
restated [the] articles of incorporation or charter;
(C) has at least one-fourth of its board of
directors residing in the county in which the property is located;
and
(D) engages primarily in the building, repair,
rental, or sale of housing for low-income individuals or families.
Sec. 29.002. PETITION FOR FORCED SALE. (a) A person,
including a nonprofit organization, that owns an undivided interest
in real property to which this chapter applies may file in the
district court in a county in which the property is located a
petition for a court order to require another owner of an undivided
interest in that property to sell the other owner's interest in the
property to the person if:
(1) the person has paid the other owner's share of ad
valorem taxes imposed on the property for any three years in a
five-year period or, in the case of a nonprofit organization, has
paid the other owner's share of current or delinquent ad valorem
taxes imposed on the property for any two years in a three-year
period that may precede the date when the nonprofit corporation
acquired an interest in the property; and
(2) the other owner has not reimbursed the person for
more than half of the total amount paid by the person for the taxes
on the owner's behalf.
(b) The petition must contain:
(1) a description of the property;
(2) the name of each known owner of the property;
(3) if known, the interest held by each known owner of
the property;
(4) the total amount paid by the petitioner for the
defendant's share of ad valorem taxes imposed on the property; and
(5) if applicable, the amount paid by the defendant to
the petitioner to reimburse the petitioner for paying the
defendant's share of ad valorem taxes imposed on the property.
(c) Any defendant whose identity is unknown or whose
identity is known but whose address is unknown to the petitioner may
be served by publication in accordance with the Texas Rules of Civil
Procedure, or by another method of publication or service
authorized by the court, if requested.
Sec. 29.003. HEARING ON PETITION FOR FORCED SALE. (a) At a
hearing on a petition filed under Section 29.002, the petitioner
must prove by clear and convincing evidence that:
(1) the petitioner has paid the defendant's share of ad
valorem taxes imposed on the property that is the subject of the
petition for any three years in a five-year period or, in the case
of a nonprofit organization, the petitioner has paid the
defendant's share of current or delinquent ad valorem taxes imposed
on the property that is the subject of the petition for any two
years in a three-year period that may precede the date the nonprofit
corporation acquired an interest in the property;
(2) before the date on which the petition was filed the
petitioner made a demand that the defendant reimburse the
petitioner for the amount of the defendant's share of ad valorem
taxes imposed on the property paid by the petitioner; and
(3) the defendant has not reimbursed the petitioner
more than half of the amount of money the petitioner paid on the
defendant's behalf for the defendant's share of ad valorem taxes
imposed on the property.
(b) A hearing on a petition filed under Section 29.002 may
not be held earlier than the 60th day after the date a demand for
payment is made by the petitioner or, if demand is by publication,
not earlier than the 60th day after the date of the last publication
of notice.
Sec. 29.0035. DEMAND TO UNKNOWN DEFENDANT. If the address
or identity of the defendant is unknown, the demand of the
petitioner for reimbursement from the defendant required by Section
29.003(2) may be met by publication in a newspaper in the county in
which the property is located once each week for four consecutive
weeks, with the final publication occurring not later than the 30th
day before the date on which the petition is filed. The publication
must contain the demand for reimbursement and:
(1) the street address or a general description of the
property involved;
(2) the legal description of the property [according
to the survey of the property], including the number of the lot and
block or any other plat description that may be of record if the
property is located in a recorded subdivision [municipality];
(3) the county in which the property is located;
(4) the interest of the defendant, if known; and
(5) the name and address of the petitioner.
Sec. 29.004. COURT-ORDERED SALE. (a) On completion of the
hearing on a petition filed under Section 29.002, if the court is
satisfied that the petitioner has made the requisite proof under
Section 29.003, the court shall enter an order that:
(1) divests the defendant's interest in the real
property that is the subject of the petition;
(2) awards title and possession of the defendant's
interest in the real property that is the subject of the petition to
the petitioner; and
(3) [that] orders the petitioner to pay to the
defendant an amount of money, if any, computed by subtracting the
outstanding amount of money the defendant owes to the petitioner
for payment of the defendant's share of ad valorem taxes imposed on
the property and all costs of court from the fair market value of
the defendant's interest in the property as determined by [an
independent appraiser appointed by] the court. The court's order
may also direct the defendant or any attorney ad litem appointed to
represent any defendant whose identity or location is unknown to
execute and deliver to the petitioner a deed that conveys to the
petitioner the defendant's interest in the property.
(b) A deed conveying to the petitioner the defendant's
interest in the property is not necessary to transfer title to the
petitioner. A transfer of title may be affected by the court's
order entered under Subsection (a).
(c) In determining the fair market value of the defendant's
interest in the property, the court may rely on the most recent
appraised value of the property reflected in the rolls of the
appraisal district in which the property is located. The court
shall consider any liens or other outstanding liabilities against
the property, including any ad valorem taxes, penalties, or
interest that remain unpaid as of the date of the hearing, in
determining the fair market value of the defendant's interest in
the property.
(d) All costs of court, including any expense incurred in
appointing an attorney ad litem, shall be taxed against the
defendant.
SECTION 2. This Act takes effect September 1, 2003, and
applies only to a petition for forced sale filed on or after that
date. A petition for forced sale filed before the effective date of
this Act is governed by the law in effect at the time the petition
for forced sale is filed, and the former law is continued in effect
for that purpose.