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A BILL TO BE ENTITLED
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AN ACT
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relating to the execution of deeds conveying residential real |
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estate in connection with certain transactions involving |
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residential real estate. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 2, Business & Commerce Code, is amended by |
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adding Chapter 21 to read as follows: |
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CHAPTER 21. EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING |
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RESIDENTIAL REAL ESTATE |
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Sec. 21.001. DEFINITION. In this chapter, "residential |
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real estate" means real property on which a dwelling designed for |
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occupancy for one to four families is constructed or intended to be |
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constructed. |
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Sec. 21.002. PROHIBITION OF EXECUTION OF DEEDS CONVEYING |
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RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a) A seller of |
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residential real estate or a person who makes an extension of credit |
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and takes a security interest or mortgage against residential real |
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estate may not, before or at the time of the conveyance of the |
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residential real estate to the purchaser or the extension of credit |
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to the borrower, request or require the purchaser or borrower to |
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execute and deliver to the seller or person making the extension of |
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credit a deed conveying the residential real estate to the seller or |
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person making the extension of credit. |
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(b) A deed executed in violation of this section is voidable |
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unless a subsequent purchaser of the residential real estate, for |
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valuable consideration, obtains an interest in the property after |
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the deed was recorded without notice of the violation, including |
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notice provided by actual possession of the property by the grantor |
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of the deed. The residential real estate continues to be subject to |
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the security interest of a creditor who, without notice of the |
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violation, granted an extension of credit to a borrower based on the |
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deed executed in violation of this section. |
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(c) A purchaser or borrower must bring an action to void a |
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deed executed in violation of this section not later than the fourth |
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anniversary of the date the deed was recorded. |
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Sec. 21.003. CIVIL ACTION FOR DAMAGES. A person who |
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violates Section 21.002 is liable to the purchaser or borrower for: |
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(1) actual damages; |
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(2) exemplary damages in an amount equal to or greater |
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than $5,000 and not more than three times the amount of actual |
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damages; |
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(3) court costs; and |
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(4) reasonable attorney's fees. |
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SECTION 2. Section 24.004, Property Code, is amended to |
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read as follows: |
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Sec. 24.004. JURISDICTION; DISMISSAL. (a) Except as |
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provided by Subsection (b), a [A] justice court in the precinct in |
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which the real property is located has jurisdiction in eviction |
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suits. Eviction suits include forcible entry and detainer and |
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forcible detainer suits. |
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(b) A justice court does not have jurisdiction in a forcible |
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entry and detainer or forcible detainer suit and shall dismiss the |
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suit if the defendant files a sworn statement alleging the suit is |
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based on a deed executed in violation of Chapter 21, Business & |
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Commerce Code. |
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SECTION 3. This Act takes effect September 1, 2011. |