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AN ACT
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relating to the execution of written instruments relating to |
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residential real estate transactions and deeds conveying |
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residential real estate in connection with certain transactions |
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involving residential real estate; providing a civil penalty. |
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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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(d) A purchaser or borrower who is a prevailing party in an |
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action to void a deed under this section may recover reasonable and |
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necessary attorney's fees. |
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Sec. 21.003. ACTION BY ATTORNEY GENERAL. (a) The attorney |
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general may bring an action on behalf of the state: |
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(1) for injunctive relief to require compliance with |
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this chapter; |
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(2) to recover a civil penalty of $500 for each |
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violation of this chapter; or |
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(3) for both injunctive relief and to recover the |
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civil penalty. |
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(b) The attorney general is entitled to recover reasonable |
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expenses incurred in obtaining injunctive relief or a civil |
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penalty, or both, under this section, including court costs and |
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reasonable attorney's fees. |
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(c) The court may make such additional orders or judgments |
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as are necessary to return to the purchaser a deed conveying |
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residential real estate that the court finds was acquired by means |
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of any violation of this chapter. |
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(d) In bringing or participating in an action under this |
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chapter, the attorney general acts in the name of the state and does |
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not establish an attorney-client relationship with another person, |
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including a person to whom the attorney general requests that the |
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court award relief. |
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(e) An action by the attorney general must be brought not |
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later than the fourth anniversary of the date the deed was recorded. |
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SECTION 2. Subsection (a), Section 121.005, Civil Practice |
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and Remedies Code, is amended to read as follows: |
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(a) An officer may not take the acknowledgment of a written |
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instrument unless the officer knows or has satisfactory evidence |
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that the acknowledging person is the person who executed the |
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instrument and is described in it. An officer may accept, as |
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satisfactory evidence of the identity of an acknowledging person, |
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only: |
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(1) the oath of a credible witness personally known to |
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the officer; [or] |
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(2) a current identification card or other document |
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issued by the federal government or any state government that |
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contains the photograph and signature of the acknowledging person; |
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or |
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(3) with respect to a deed or other instrument |
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relating to a residential real estate transaction, a current |
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passport issued by a foreign country. |
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SECTION 3. 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 4. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1320 passed the Senate on |
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April 28, 2011, by the following vote: Yeas 31, Nays 0; |
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May 24, 2011, Senate refused to concur in House amendment and |
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requested appointment of Conference Committee; May 27, 2011, House |
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granted request of the Senate; May 29, 2011, Senate adopted |
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Conference Committee Report by the following vote: Yeas 31, |
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Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1320 passed the House, with |
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amendment, on May 20, 2011, by the following vote: Yeas 147, |
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Nays 2, one present not voting; May 27, 2011, House granted request |
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of the Senate for appointment of Conference Committee; |
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May 29, 2011, House adopted Conference Committee Report by the |
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following vote: Yeas 112, Nays 15, two present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |