By: Lucio  S.B. No. 1320
         (In the Senate - Filed March 8, 2011; March 23, 2011, read
  first time and referred to Committee on Business and Commerce;
  April 18, 2011, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; April 18, 2011,
  sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1320 By:  Lucio
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the execution of deeds conveying residential real
  estate in connection with certain transactions involving
  residential real estate.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 2, Business & Commerce Code, is amended by
  adding Chapter 21 to read as follows:
  CHAPTER 21.  EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING
  RESIDENTIAL REAL ESTATE
         Sec. 21.001.  DEFINITION. In this chapter, "residential
  real estate" means real property on which a dwelling designed for
  occupancy for one to four families is constructed or intended to be
  constructed.
         Sec. 21.002.  PROHIBITION OF EXECUTION OF DEEDS CONVEYING
  RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a)  A seller of
  residential real estate or a person who makes an extension of credit
  and takes a security interest or mortgage against residential real
  estate may not, before or at the time of the conveyance of the
  residential real estate to the purchaser or the extension of credit
  to the borrower, request or require the purchaser or borrower to
  execute and deliver to the seller or person making the extension of
  credit a deed conveying the residential real estate to the seller or
  person making the extension of credit.
         (b)  A deed executed in violation of this section is voidable
  unless a subsequent purchaser of the residential real estate, for
  valuable consideration, obtains an interest in the property after
  the deed was recorded without notice of the violation, including
  notice provided by actual possession of the property by the grantor
  of the deed. The residential real estate continues to be subject to
  the security interest of a creditor who, without notice of the
  violation, granted an extension of credit to a borrower based on the
  deed executed in violation of this section.
         (c)  A purchaser or borrower must bring an action to void a
  deed executed in violation of this section not later than the fourth
  anniversary of the date the deed was recorded.
         Sec. 21.003.  CIVIL ACTION FOR DAMAGES. A person who
  violates Section 21.002 is liable to the purchaser or borrower for:
               (1)  actual damages;
               (2)  exemplary damages in an amount equal to or greater
  than $5,000 and not more than three times the amount of actual
  damages;
               (3)  court costs; and
               (4)  reasonable attorney's fees.
         SECTION 2.  Section 24.004, Property Code, is amended to
  read as follows:
         Sec. 24.004.  JURISDICTION; DISMISSAL. (a)  Except as
  provided by Subsection (b), a [A] justice court in the precinct in
  which the real property is located has jurisdiction in eviction
  suits. Eviction suits include forcible entry and detainer and
  forcible detainer suits.
         (b)  A justice court does not have jurisdiction in a forcible
  entry and detainer or forcible detainer suit and shall dismiss the
  suit if the defendant files a sworn statement alleging the suit is
  based on a deed executed in violation of Chapter 21, Business &
  Commerce Code.
         SECTION 3.  This Act takes effect September 1, 2011.
 
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