The following statutes and regulations affecting real estate are organized alphabetically by topic, with cross-references to other relevant sections where appropriate.
The landlord’s rights and obligations regarding personal property after a tenant abandons commercial leased premises are addressed in . A landlord has a duty to mitigate damages if a tenant abandons leased premises. . The general subject of unclaimed personal property and escheat is addressed in .
A person in whose favor a judgment is rendered, or certain others on their behalf, may apply for an abstract of judgment. The Texas Property Code sets out the procedure for obtaining an abstract of judgment from the judge or justice of the peace who rendered the judgment or from the clerk of the court. . The required contents of an abstract of judgment are located in . Abstracts of judgment are recorded in the county’s real property records. . See also sections 2.146 and 2.219 below.
provides that a homestead affidavit and a certificate of mailing (both in the form prescribed by the statute) may be filed by a judgment debtor as a release of a judgment lien on homestead property, provided the judgment creditor does not file a contradicting affidavit within thirty days of the filing of the certificate of mailing.
For special restrictions on the filing of abstracts of judgment, including fraudulent filings or filings by inmates or their representatives, refer to .
provides that if the maturity date of a note is accelerated and subsequently rescinded or waived in accordance with the requirements of section 16.038 before the limitations period expires, then the acceleration is deemed rescinded and waived, and the note is governed by as if no acceleration had occurred. A notice served under section 16.038 does not affect a lienholder’s right to accelerate the maturity date of the debt in the future or waive past defaults. Section 16.038 does not create an exclusive method for waiver and rescission of acceleration or affect the accrual of a cause of action and the running of the related limitations period under on any subsequent maturity date, accelerated or otherwise, of the note.
On the law of acknowledgments generally, see –.016. Texas law provides one form of ordinary certificate of acknowledgment and six short-form certificates of acknowledgment. . A notary may sign on behalf of a disabled person in certain circumstances. . There are specific requirements for proof of instruments. , . Instruments may be recorded in Texas real property records if they contain an acknowledgment, a jurat, or a proof. . Instruments may be acknowledged using online notarization. An acknowledgment may be made by appearing in person before the notary or appearing by an interactive two-way audiovisual communication that meets the online notarization requirements. See , ; ; . See section 3.13 in this manual. Forms of acknowledgments are included in chapter 3. See also section 2.187 below.
Both real and personal property are subject to ad valorem taxes in Texas. . Provisions for special assessments or exemptions that may apply to real property include those for a residence homestead (, ); charitable organizations providing services related to the placement of a child in a foster or adoptive home (); charitable organizations improving property for low-income housing (,); agricultural use (; ); timber production (; , ); restricted timber use land (); open-space scenic, recreational, or park use (; , ); mandatory school-tax home exemption (); partially disabled and disabled veterans or their surviving spouses, surviving spouses of members of the armed services killed in action, and surviving spouses of first responders killed or fatally injured in the line of duty (; , ); and solar or wind-powered energy devices (). There is also a provision dealing with the separate taxation of tax parcels in condominium projects (). The word grant or convey in a deed implies a covenant that the estate is free of encumbrances at the time of execution of the conveyance. . “Encumbrance” includes a tax, an assessment, and a lien on real property. .
Owners taxed at a reduced rate under the agricultural-use amendment (), the open-space amendment (), or the special appraisal provisions of subchapters B through H of chapter 23 of the Tax Code should be alert to the potential tax liability that accrues if the land use changes or title is transferred and must disclose the reduced rate to a potential buyer using the statutorily prescribed form. . The county appraisal district office is required to maintain a list of properties potentially subject to this type of rollback of taxes. See . Lenders should be aware of the prohibitions against certain waivers and indemnities relating to the agricultural or open-space use exemption, described in more detail at section 2.163 below. In certain circumstances, taxing authorities may have the ability to waive penalties and interest on property erroneously omitted from taxation or granted improper tax exemptions. See .
Tax appraisals, methods, and procedures are governed by . Tax protests and reviews are governed by . A tenant may contest a landlord’s ad valorem tax assessment under certain circumstances. , . The property owner may have an obligation to send notices of appraised value to a tenant. .
A tax lien attaches to property on January 1 of each year. . Ad valorem tax liens take priority over homestead interests and most prior recorded liens. . Certain redemption and possessory rights also apply to properties sold at tax foreclosures. See generally ; see also section 2.216 below. A tax lien may also be transferred to a third party on payment of taxes authorized by the owner in accordance with . In some cases, property tax lenders will need to be licensed, are prohibited from lending to those eligible for the tax exemption for people over age sixty-five, will need to be cognizant of the regulations concerning advertising, and may be limited in selling a property tax loan in the secondary market. See .
Tax foreclosure sales are governed by . In counties having a population in excess of 250,000 and counties of less than 250,000 whose county commissioners opt to participate, an officer conducting a tax foreclosure sale of real property may not execute or deliver a deed to a purchaser unless the purchaser provides evidence that the purchaser owes no delinquent ad valorem taxes, whether on real or personal property. .
When a governmental entity acquires the right to possession of taxable property by a court order issued in condemnation proceedings, takes possession of taxable property under a possession and use agreement, or acquires title to taxable property, taxes for the year of conveyance are prorated to the date of the order granting possession, the effective date of the possession and use agreement, or the date of conveyance. If taxes for the year have not yet been determined, the assessor for each taxing unit may base the proration on taxes for the prior year. The collector must accept the tax payment, and the transferor is relieved of further payment for that year. .
Texas has adverse possession periods of three, five, ten, and twenty-five years, depending on different factors. See . There is a special provision for “cotenant heirs” that provides for a ten-year adverse possession period followed by a five-year “waiting” period after filing certain affidavits. .
If an ownership interest in real property is in the estate of a decedent who dies intestate, inheritance of the property may be established by an affidavit recorded in the real property records of the county in which the property is located that details the family history and heirship of the decedent and identifies the heirs-at-law. . The form of affidavit of heirship is provided in . See also section 2.300 below. A form of affidavit is furnished at form 26-1 in this manual. The practitioner may want to verify with a title insurance company that the affidavit will be sufficient evidence of inheritance for issuance of a title policy in the event of a future sale of the property interest.
§ 2.8Affordable Housing Investments
The Internal Revenue Code provides for credits against federal income tax for owners of qualified low-income rental housing projects. See . In Texas that program is administered by the Texas Department of Housing and Community Affairs under and the rules found in . Under the National Affordable Housing Act of 1990, , certain HUD funds are available for nonprofit and community development organizations to build or preserve low-income housing. Those projects must also satisfy the HUD program requirements found in , . Affordable housing constructed with federal or state funds must meet specified handicapped-accessible standards. . provides for the allocation of housing tax credits in Fort Worth, Houston, Dallas, and San Antonio. A community land trust may be created to acquire and hold land for the benefit of developing and preserving long-term affordable housing in a municipality or county. .
§ 2.9Agricultural Development Districts
The creation of agricultural development districts is authorized by chapter 60 of the Agriculture Code. . Districts have the power of eminent domain and may issue bonds () and levy taxes (). See also section 2.71 below.
§ 2.10Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA)
The below excerpt is reprinted with permission from the Drake Journal of Agricultural Law.
Acquisition and Dispositions of U.S. Agricultural Land by Foreign Investors: Federal and State Legislative Restrictions, Limitations, and Disclosure Requirements
Marisa N. Bocci, Kari L. Larson, and Paulina J. Wu
Introduction. Foreign integration into the United States agribusiness sector has been steadily increasing over the last few decades. . . . Farmland transactions need to comply with federal reporting requirements under the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA) . . . . In light of the broad scope and potential repercussions of AFIDA and the related State Acts, it is important to consider whether a transaction triggers any of these legislative requirements. . . .
What Is AFIDA and When Is Reporting Required? AFIDA was enacted in 1978 to create a nationwide system for the collection of information about foreign ownership of U.S. agricultural land. Under the statute, foreign persons acquiring or transferring any interest in agricultural land (by sale, lease, or by sale of a direct or indirect interest in a company that owns or leases the land) may be required to submit a report on the transfer or acquisition to the USDA. Failure to timely file a report can subject the foreign person to financially significant penalties. The law requires “[a]ny foreign person who acquires or transfers any interest, other than a security interest, in agricultural land shall submit a report to the Secretary of Agriculture not later than 90 days after the date of such acquisition or transfer.” The AFIDA reporting obligations must be satisfied by delivering an AFIDA Report Form FSA-153 to the County Farm Service Agency (FSA) Office where the tract of land is located. In most instances, multiple AFIDA filings will be required throughout the ownership lifecycle of a property. For example, after the initial disclosure on FSA-153, each subsequent change of ownership, or use of the agricultural land that involves a foreign person, may require reporting under a subsequent FSA-153 filing.
Who Is a “Foreign Person”? The threshold percentage of foreign interests necessary to trigger the reporting requirement under AFIDA is fairly low. An entity is a “foreign person” if it is organized under the laws of a foreign government or its principal place of business is located outside the U.S. In addition, a domestic entity is a “foreign person” if a foreign entity, individual, or government holds a “significant interest or substantial control” over the domestic entity, which generally means a foreign person or multiple foreign persons (in the aggregate) own 10% or more interest in the domestic entity (directly or indirectly).
What Is an “Interest” in “Agricultural Land”? Under AFIDA, an “interest” in land is “all interests acquired, transferred or held in agricultural lands,” subject to certain exceptions. Exceptions include: (a) leaseholds less than ten years; (b) contingent future interests (e.g., options); and (c) easements unrelated to agricultural production. Note that AFIDA applies to leasehold interests of ten years or longer, as well as ownership interests in agricultural land. By way of example, say Company A, a foreign investor, is interested in acquiring Company B, a winery. Company B owns a 100-acre parcel where its processing facility, tasting room, and a portion of its vineyard are located. Company B also leases 500 acres of farmland adjacent to its processing facility pursuant to a twenty-five-year lease. Under this scenario, following Company A’s acquisition of Company B, Company A will be required to file an FSA-153 for both its fee ownership interest in the 100-acre parcel and its leasehold interest in the adjacent 500-acre parcel. The definition of “agricultural land” under AFIDA is very broad and may capture land in transactions where agricultural purposes are not central to the intended post-closing use of the land. “Agricultural land” means land “currently used for, or, if currently idle, land last used within the past five years, for farming, ranching, or timber production, . . .” For example, wind farms and solar farms could each have filing requirements if the deal structure and land involved meet certain criteria. An exception exists for land not exceeding ten acres, in the aggregate, but only if annual gross receipts from agricultural or timber use do not exceed $1000. Accordingly, even smaller farms may be subject to an AFIDA filing requirement if annual gross receipts exceed the dollar limit. This could trigger filings for restaurants with interests in farmland that feature fresh-from-the-farm produce, where menus include products from farmland owned or controlled by the restaurant. Similarly, beef suppliers that own an interest in ranch land, perhaps through subsidiaries or other venture arrangements, would need to do an AFIDA filing analysis.
What Are the Penalties for Failure to Comply? The penalty for failure to report (or reporting false information) under AFIDA is 25% of the fair market value of the land, as determined by the FSA. The penalty for a late report is 0.1% of the fair market value of the land for each week that the violation continues, with a cap of 25% of the fair market value of land on the date the penalty is assessed. The USDA has the discretion to reduce the penalty and may take into account factors including: (i) the total time that the violation existed; (ii) the method in which the violation was discovered (i.e., whether the violation was voluntarily self-reported); (iii) extenuating circumstances; and (iv) the nature of the information misstated or not reported.
. . .
What Does This Mean for Agribusiness Transactions? As discussed above, AFIDA reporting is required within ninety days following the completion of a qualifying transaction. Failure to report can subject a transaction to significant monetary penalties, resulting in negative publicity. Given AFIDA’s broad definition of agricultural land, what constitutes an interest in agricultural land, and the relatively small interest held by a foreign person or entity that can trigger the application of the statute, parties should carefully consider the context of every transaction that involves real property and whether an AFIDA filing is required at the outset. Part of this inquiry requires evaluating whether any of the applicable land is used for agricultural land within the scope of AFIDA, even if the business purpose of the transaction is not directly related to farming. This inquiry also requires confirming the intended direct and indirect ownership interests in the acquisition and whether the involvement of any foreign person in the transaction exceeds the AFIDA reportable levels. Finally, depending on the state, additional state reporting or other limitations on ownership or operation may apply.
Marisa N. Bocci, Kari L. Larson, and Paulina J. Wu, Acquisition and Dispositions of U.S. Agricultural Land by Foreign Investors: Federal and State Legislative Restrictions, Limitations, and Disclosure Requirements, 23 Drake J. Agric. L. 5 (2018). The full article can be found at https://aglawjournal.wp.drake.edu/past-issues/volume-23/.
An agricultural lien on crops is governed by . Notwithstanding chapter 9 of the Texas Uniform Commercial Code, such a lien is perfected at the time it attaches and continues to be perfected if a financing statement is filed within ninety days after physical delivery of the crops to the purchaser. . A lien created under , expires on the first anniversary of the date of attachment. . The statutory trust created upon acceptance of commodities to which the Perishable Agricultural Commodities Act (PACA) applies may also have priority over certain previously filed UCC liens. See –499s. The seller of commodities to which PACA applies may be in a position superior to all other creditors.
§ 2.12Agricultural Use Exemption
See sections 2.5 above and 2.163 below.
Lien instruments covering aircraft should consider the aircraft registration requirements of the Federal Aviation Act of 1958 as amended (FAA), , and regulations found in . There are also provisions relating to aircraft storage, maintenance, and repair liens in .
There are a number of significant limitations on the transfer of and eligibility for alcoholic beverage permits under Texas law. See . Businesses that sell alcohol are heavily regulated, and statutory control may extend to the physical structure of the business. See, e.g., . The Alcoholic Beverage Code also imposes location requirements applicable to the sale and consumption of alcoholic beverages. See , .
§ 2.15Alternative Dispute Resolution (ADR)
The Texas Alternate Methods of Dispute Resolution Act establishes alternative dispute resolution procedures, including mediation. . See section 2.20 below.
§ 2.16Americans with Disabilities Act and Related Statutes
Title III of the Americans with Disabilities Act of 1990 (ADA), , creates minimum standards for accessibility in commercial and some types of residential buildings, including requirements relating to new construction; parking alterations; removing barriers from existing structures; installing telephone devices and other assistive listening devices for the deaf; providing auxiliary aids for conferences, seminars, and written materials offered to the public; and ensuring equivalent services and opportunities to disabled persons. Regulations under title III of the ADA pertaining to public accommodations, commercial facilities, and private entities are promulgated under . Architectural guidelines can be found in .
Texas also has a state architectural-barriers statute that applies to certain commercial and residential facilities. . Regulations promulgated under the statute are found at . The Human Resources Code permits guide trainers reasonable access to public facilities to train assistance animals and prohibits the denial of access to public facilities, commercial properties, or housing for disabled persons, including those who use assistance animals. . Affordable housing constructed with federal or state funds must meet specified handicapped-accessible standards. .
For current information on contractors and municipalities that are authorized to perform inspection functions, contact the Texas Department of Licensing and Regulation.
A set of procedures has been adopted for persons pursuing claims of failure to comply with ADA and similar standards, including required notice, opportunity to cure, evidentiary hearings, and abatement of actions. .
See also section 2.99 below for additional statutes relating to disability access for residential properties.
Annexation and disannexation of real property by municipalities are governed generally by . Chapter 43 was revised in 2019 to eliminate unilateral annexations. See Acts 2019, 86th Leg., R.S., ch. 155 (H.B. 347), eff. May 24, 2019. A municipality may contract with an owner of land that is located in the municipality’s extraterritorial jurisdiction to guarantee the land’s immunity from annexation for a period not to exceed forty-five years, including renewals or extensions. . If a municipality enters into an agreement with a landowner regarding annexation, the municipality must provide the landowner a written disclosure that includes required provisions. Any agreement regarding annexation that fails to provide such disclosure is void. ; Release of municipal extraterritorial jurisdiction status may be required by , E. Municipal extraterritorial jurisdiction must be released (unless the area is protected) when requested by a petition signed by more than 50 percent of the registered voters in the area or a majority in value of the holders of title of land in the area. , . Also, a resident of an area in a municipality’s extraterritorial jurisdiction may request the municipality to hold an election to vote on whether to release the area from the municipality’s extraterritorial jurisdiction. . If at the election a majority of voters approve the release, the municipality is required to immediately release the area from the municipality’s extraterritorial jurisdiction. .
Chapter 191 of the Texas Natural Resources Code (the Antiquities Code) governs the location, protection, and preservation of “all sites, objects, buildings, pre-twentieth century shipwrecks, and locations of historical, archeological, educational, or scientific interest . . . in, on, or under any of the land in the State of Texas.” . The Antiquities Code provides landowners with certain rights. See , . There are civil and criminal penalties for violation of provisions of the statute. See .
Appraisers are governed by , the Texas Appraiser Licensing and Certification Act. The Broker’s and Appraiser’s Lien on Commercial Real Estate Act provides for a lien and procedures to foreclose the lien for commissions and fees due and payable on the sale or lease of commercial real estate (as defined in the Act). See . An appraiser or other person who intentionally or knowingly makes a materially false or misleading written statement in providing an appraisal of real property for compensation commits a criminal offense punishable under .
Except for an action for fraud or breach of contract, a person must bring suit for damages or other relief arising from an appraisal or appraisal review conducted by a real estate appraiser or appraisal firm not later than the earlier of (a) two years after the day the person knew or should have known the facts on which the action is based or (b) five years after the day the appraisal or appraisal review was completed. .
Appraisal management companies are defined and regulated by .
Creditors approved as sellers and servicers to government-sponsored enterprises Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) must represent and warrant that appraisals for all covered loans for which application is made on or after October 15, 2010, comply with certain appraiser independence requirements as defined in their respective seller and servicing guides. See Fannie Mae, Announcement SEL-2010-14 (Oct. 15, 2010), and Freddie Mac, Bulletin 2010-23 (Oct. 15, 2010).
Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111-203, 124 Stat. 1376) contains extensive appraisal reform measures. Appraisal requirements are set out in Regulation Z (Truth in Lending) and for consumer credit transactions secured by a consumer’s principal residence. The regulations are intended to ensure that real estate appraisals used to support creditors’ underwriting decisions are based on the appraisers’ independent professional judgment, free of any influence or pressure exerted by parties to the transactions.
Arbitration is a dispute resolution process whereby one or more arbitrators make a decision, called an award, which is binding only if the parties agree to be bound. In Texas, arbitrations can be governed by common law, the Texas Arbitration Act (TAA), and the Federal Arbitration Act (FAA). See L.H. Lacy v. City of Lubbock, 559 S.W.2d 348, 351 (Tex. 1977); , ; . Some Texas statutes prohibit arbitration under certain circumstances. For example, in a contract for the construction or repair of improvements to real property in Texas, a provision requiring arbitration of disputes in another state is voidable. . Also, in a contract for the sale or lease of goods worth $50,000 or less, a provision requiring arbitration in another state is voidable unless the provision is in bold-faced, capitalized, underlined, or otherwise conspicuous type. . When an arbitration agreement is not governed by or enforceable under the TAA, it may be governed by relevant Texas common-law arbitration rules. L.H. Lacy, 559 S.W.2d at 352. The FAA applies when the dispute concerns a contract evidencing a transaction involving interstate commerce. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269–70 (Tex. 1992). The FAA and TAA are not mutually exclusive and can both apply to an arbitration provision. In re D. Wilson Construction Co., 196 S.W.3d 774, 779–80 (Tex. 2006). If, however, the FAA applies restrictions under Texas statutes, like the ones described above, can be preempted if the TAA would not allow enforcement of an arbitration agreement that the FAA would enforce. In re D. Wilson Construction Co., 196 S.W.3d at 780.
The Board of Architectural Examiners governs the registration and the activities of professional architects. .
An architect’s lien against real estate is addressed in . The statute of repose for claims against an architect is ten years after substantial completion of the improvement () or eight years for a governmental entity (). An architect’s standard of care is addressed in .
See section 2.87 below.
Assignment of rents to a lienholder is governed by , commonly referred to as the Texas Assignment of Rents Act, or TARA. An enforceable security instrument creates an assignment of rents arising from the real property described in the instrument. . An assignment of rents creates a security interest in accrued and unaccrued rents, regardless of whether the assignment is referred to as an absolute assignment. . The Act provides methods of enforcement, by notice to the assignor () or by notice to tenants (). A form of notice is provided. .
The circumstances under which assumed names should be filed are addressed in the Assumed Business or Professional Name Act, . Penalties and sanctions for failure to comply with chapter 71 are set out in –.203. The circumstances under which an entity is considered to have fraudulently filed an assumed name and the penalties for doing so are addressed in . See also section 2.116 below.
A financing statement that identifies a debtor by an assumed name or trade name may not be effective to perfect a security interest against the debtor unless the name used in the financing statement is so similar to the debtor’s name that a search of the records of the filing office under the debtor’s name, using the filing office’s standard search logic, would disclose the financing statement that used a different assumed name or trade name. . The Texas Business and Commerce Code provides rules for the name to be used in a financing statement for different types of debtors—for example, a debtor that is a decedent’s estate, a trust or a trustee, an individual, or an organization. .
§ 2.25Astronomical Observatories
See section 2.191 below.
§ 2.26Automatic Teller Machines (ATMs)
Public safety requirements for the design of and layout surrounding an unmanned teller machine are found at .
In addition to the federal Bankruptcy Code, title 11 of the United States Code, property subject to bankruptcy protection will also be affected by the homestead and personal property exemptions of the Texas Constitution and Property Code. ; . . Assignment for the benefit of creditors is addressed in . Texas has also adopted the Uniform Fraudulent Transfer Act, . The circumstances under which a judgment lien is canceled after a bankruptcy discharge are addressed in .
See section 2.44 below.
Lessors of premises used for beauty salons and parlors should be aware of the Texas Department of Licensing and Regulation regulations found in .
See section 2.192 below.
§ 2.31Blind Trusts and Undisclosed Beneficiaries
A conveyance by a person designated as trustee is valid, even if the identity of the beneficiary has not been disclosed; the beneficiary may not set aside the conveyance of the property. . A governmental entity may not purchase real property held in trust or sell real property to a trustee until the trustee submits a copy of the trust agreement and identifies the true owner of the property to the governmental entity. .
Real estate brokers and salespersons are regulated by the Texas Real Estate Commission under the provisions of the Real Estate License Act, . The Broker’s and Appraiser’s Lien on Commercial Real Estate Act provides for a lien and procedures to foreclose the lien for commissions and fees due and payable on the sale or lease of commercial real estate (as defined in the Act). See . See also section 2.71 below.
See section 2.291 below.
The Plumbing License Law adopts the Uniform Plumbing Code and the International Plumbing Code. See . The International Residential Code applies to all construction, alteration, remodeling, enlargement, and repair of residential structures inside municipalities except the installation and maintenance of electrical components. See . The National Electrical Code regulates all residential electrical installation and maintenance. See . See also section 2.301 below.
The National Electrical Code as it existed on May 1, 2001, is the municipal electrical construction code in Texas and applies to (1) all residential electrical construction applications and (2) commercial buildings in a municipality for which construction began after January 1, 2006. A municipality may establish procedures to adopt local amendments and to administer and enforce the code. .
The International Building Code as it existed on May 1, 2012, is the municipal commercial building code in Texas for commercial buildings in a municipality for which construction began after January 1, 2022. A municipality may establish procedures to adopt local amendments and to administer and enforce the code. .
The International Residential Code as it existed on May 1, 2012, is the municipal residential building code in Texas. A municipality may establish procedures to adopt local amendments and to administer and enforce the code. .
§ 2.35Business Organizations Code
Corporations, partnerships, limited partnerships, limited liability companies, registered limited liability partnerships, nonprofit corporations, and cooperative associations organized or qualified to do business in Texas on or after January 1, 2006, must comply with the Texas Business Organizations Code. Entities organized or qualified to do business before January 1, 2006, had the option to be governed by the Code on or after January 1, 2006. Effective January 1, 2010, all entities organized or qualified to do business in Texas must comply with the Code. See generally . Significant changes were made to the Texas Business Organizations Code in the 2023 legislature, including changes to the content requirements of various documents to be filed with the secretary of state and to methods of giving notices of meetings or soliciting consents.
The Texas Membership Camping Resort Act is found at . See also section 2.150 below.
Those who receive in connection with their trade or business more than $10,000 in cash in a transaction or in several related transactions must report to the Internal Revenue Service the amount of currency received; the payor’s name, address, and tax identification number; the date and nature of the transaction; and other information as the United States Secretary of the Treasury may prescribe. ; .
The location and operation of cemeteries are regulated by . The dedication of cemetery lands, mausoleums, crematories, and columbariums is governed by .
§ 2.39Certificates of Convenience and Necessity
See sections 2.237, 2.258, and 2.296 below.
A person other than a beneficiary is not required to inquire into the extent of the trustee’s powers or the propriety of the exercise of those powers if the person deals with the trustee in good faith and obtains a certification of trust. . describes the contents of such a certification and describes the instances in which a party may rely on the representations about the power of the trustee to take actions on behalf of the trust described in the certification. A document purporting to be a certification of trust under section 114.086 that is recorded in the county in which real property of the trust is located is presumed to correctly identify the trust and the trustee and may be relied on by a good-faith purchaser or lender for value. . See section 10.15 in this manual.
See section 2.217 below.
A lien for all child support due and owing, including any accrued interest, attaches by operation of law to all nonhomestead property of an obligor. . A child support lien against real property is perfected by filing or delivering an abstract of judgment or a child support lien notice as provided by . . The lien is subject to the general requirements addressed in . Foreclosure is governed by . sets out the provisions regarding duration and effect of child support liens. provides a process that parallels and adopts portions of to release an abstracted child support lien from homestead property.
Choice-of-law provisions in contracts of $1 million or more are enforceable under certain conditions. . restricts the enforceability of choice-of-law provisions in contracts for the construction or repair of improvements to real property. For other types of contracts of $50,000 or less, a conspicuous legend informing the parties of the choice-of-law provision must be in the contract (if another state’s laws are chosen). . Choice-of-law provisions for contracts made solely over the Internet are governed by .
Two types of notices relating to coastal properties are required for real property transactions in the vicinity of coastal waters. First, persons entering into an executory contract to convey an interest in property located seaward of the Gulf Intracoastal Waterway must make the disclosure required by , either in the contract itself or in a notice delivered not less than ten days before the closing of the sale. With some exceptions, the notice must be provided to the purchaser or transferee in all conveyancing transactions, including nonjudicial foreclosure sales. See (1987). Second, if real property adjoins and abuts the tidally influenced waters of the state, the notice prescribed in must be given in all written executory contracts. The statutory disclosure form prescribed by section 5.008(b) of the Texas Property Code also includes language regarding such coastal properties.
The Texas Open Beaches Act, Natural Resources Code chapter 61, declares the public policy of the state is that the public has free and unrestricted right of ingress and egress to and from state-owned beaches bordering on the seaward shore of the Gulf of Mexico and the larger area extending from the line of mean low tide to the line of vegetation bordering on the Gulf of Mexico, to which the public has acquired a right of use or easement to or over by prescription or dedication or has established and retained a right by virtue of continuous right in the public under Texas common law. Chapter 61 contains provisions under which the commissioner of the General Land Office can (1) impose administrative penalties on persons constructing, maintaining, controlling, owning, or possessing improvements on public beaches; (2) order those improvements removed at the expense of the person constructing, maintaining, controlling, owning, or possessing them; (3) notify the State Board of Insurance that the improvements are not insurable; and (4) make determinations concerning the line of vegetation, including the ability to suspend a determination on the line of vegetation for up to three years. There are several provisions regarding public access to beaches, coastal erosion duties, erosion responses, and posting of private access in . See also section 2.301 below.
The Texas Constitution was amended in 2009 to further protect the right of the public to access and use public beaches. , defines “public beach” and grants to the public a permanent easement and the unrestricted right to use, and a right of ingress to and egress from, a public beach. Section 33 further authorizes the legislature to enact laws to protect the public’s right to access and use a public beach and to protect the public beach easement from interference and encroachments, but it does not create a private right of enforcement. However, Texas law does not recognize the concept of a “rolling” public easement onto privately owned beachfront property, which would have the effect of allowing the public use easement to migrate onto previously unencumbered private property.
Easements for public use of private dry beach property change size and shape along with the gradual and imperceptible erosion or accretion in the coastal landscape. But, avulsive events such as storms and hurricanes that drastically alter pre-existing littoral boundaries do not have the effect of allowing a public use easement to migrate onto previously unencumbered property.
Severance v. Patterson, 370 S.W.3d 705, 724–25 (Tex. 2012).
Colonias are housing developments in low-income regions, typically near the border between Texas and Mexico. The Texas Local Government Code contains subdivision platting requirements in counties located (1) within fifty miles of the international border regardless of the population of any city within the county or (2) within one hundred miles of the international border if a city located within the county has a population of more than 250,000. . See also for alternate subdivision platting requirements applicable to certain other economically distressed areas. The Property Code contains restrictions on executory contracts (contracts for deed), a form of real estate transaction widely used in colonias. See . Colonia self-help centers are authorized in certain counties under . See also section 2.58 below.
§ 2.46Community Homes; Group Homes
The Community Homes for Persons with Disabilities Act, codified in , governs community homes for disabled persons. The use and operation of community homes that meet the qualifications of the act is a use by right that is authorized in any district zoned as residential. . Restrictive covenants and zoning provisions that relate to the transfer, sale, lease, or use of property may not prohibit the use of the property as a community home for disabled persons. .
§ 2.47Community Property with Right of Survivorship
If two or more persons hold an interest in property jointly and one joint owner dies before severance, the interest of the decedent in the joint estate does not survive to the remaining joint owner or owners. . Spouses may create a right of survivorship in community property by executing a written agreement. .
§ 2.48Condemnation and Eminent Domain
Condemnation is the right to take private property for public use; property may not be taken, damaged, or destroyed for or applied to public use without just and adequate compensation and due process. See U.S. Const. amends. V, XIV, § 1; , . Condemnation actions are governed by chapter 21 of the Texas Property Code. Before a governmental entity with eminent domain authority begins negotiating with a property owner to acquire real property, the entity must provide a landowner’s bill of rights statement provided by . The landowner’s bill of rights provides that the property owner has a right to (1) notice of the proposed acquisition of the owner’s property; (2) a bona fide good-faith effort to negotiate by the entity proposing to acquire the property; (3) an assessment of damages to the owner that will result from the taking of the property; (4) a hearing under chapter 21 of the Texas Property Code, including a hearing on the assessment of damages; (5) an appeal of a judgment in a condemnation proceeding, including an appeal of an assessment of damages; and (6) file a written complaint with the Texas Real Estate Commission regarding alleged misconduct by a registered easement or right-of-way agent acting on behalf of the entity exercising eminent domain authority. The attorney general will prepare a written statement that includes a bill of rights for a property owner whose real property may be acquired by a governmental or private entity through the use of the entity’s eminent domain authority under chapter 21 of the Texas Property Code. A copy of the Texas Landowner’s Bill of Rights can be found at www.texasattorneygeneral.gov/sites/default/files/files/divisions/general-oag/landowners-bill-of-rights-2022.pdf.
Some of the statutes authorizing condemnation are (airports and airspace), , , (highways, streets, and railroad roadbeds); (public works or public use), , (parks and playgrounds), , (waterworks), (seawalls, levees, floodways, and the like); (common carrier pipelines); (cemetery organizations); (school districts); (gas or electric utilities); (drainage districts or water supply corporations); and (municipal utility districts (“MUDs”)).
See also sections 2.151 and 2.203 below.
The comptroller is required to create an eminent domain database including the name, address, and representative of each entity authorized by the state to exercise the power of eminent domain. . The database must identify the scope of eminent domain granted to the entity, the entity’s website address, and whether the entity exercised its eminent domain authority in the past year. Entities with the power of eminent domain are required to submit an annual report to the comptroller to update the database, including whether or not the entity exercised its eminent domain authority in the past year. Failure to file a report may result in a civil penalty.
A condominium is a form of real property ownership in which portions of the real property are designated for separate ownership and the remainder is designated for common ownership solely by the separate owners. A condominium exists only if one or more of the common elements are directly owned in undivided interests by the unit owners. If an entity separate from the unit owners (e.g., an incorporated property owners’ association) owns all the common elements, the real property is not a condominium, even if the separate entity is owned by all the unit owners. .
The Texas Uniform Condominium Act (TUCA), , governs the creation, operation, alteration, termination, and management of TUCA condominium projects created on or after January 1, 1994, but certain provisions of TUCA apply to those created before that date. Condominium projects created before January 1, 1994, are governed by portions of (the prior Condominium Act) and portions of TUCA, unless the owners of the project amend their declaration and submit it exclusively to the provisions of TUCA. See . Tax certificates, receipts, or other statements evidencing payment of taxes or that taxes have not yet been calculated must be attached to a plat, replat, or amended plat or replat of a condominium before recording in accordance with . The separate taxation of individual units of a condominium is addressed in and . Certain disclosures are required in a contract for sale of a condominium. . See chapter 24 in this manual.
Confession-of-judgment provisions in contracts executed before a lawsuit is brought are not enforceable. .
See section 2.71 below.
Several statutes require that certain notices and contractual provisions be set apart from and made more conspicuous than the surrounding text, either by using bold-faced type or some other method. A partial list of these provisions includes—
1.choice-of-law provisions designating another state and agreements to litigate or arbitrate in another state in contracts concerning goods valued at $50,000 or less ();
2.Deceptive Trade Practices Act waivers ();
3.the statutory statute-of-frauds notice for loans greater than $50,000 ();
4.notices of cancellation for certain types of credit services agreements ();
5.disclosures required in rental-purchase agreements ();
6.certain language in homestead improvement contracts ();
7.certain language in homestead lien affidavits ();
8.certain notices relating to contracts for deed (, , );
9.certain agreements between landlords and residential tenants concerning repairs ();
10.certain notices in residential leases concerning the landlord’s obligations to install safety devices ();
11.certain notices in residential leases concerning the disabling of smoke alarms by tenants ();
12.various provisions in retail installment contracts (, , );
13.home solicitation transaction cancellation notices ();
14.the business opportunity contract disclosure statement () (note that “business opportunity” does not include real estate syndications and certain other transactions ());
15.seller’s disclosure of potential annexation ();
16.liability for rollback taxes ();
17.the confidentiality notice required by the Property Code (); and
18.material changes to prior or existing property and casualty insurance policies ().
Construction accounts are governed by .
Payment to contractors, subcontractors, and materialmen must be made within certain prescribed time periods. . Waivers of this provision are generally void. . Certain restrictions on indemnity agreements entered into with contractors are contained in . Restrictions on choice-of-law provisions and agreements to litigate or arbitrate in another state in some types of construction contracts are contained in . Disclosures concerning home insulation are required of sellers of new homes by . Contractors are required to give owners a disclosure statement for residential construction contracts. . See also sections 2.57, 2.135, and 2.169 below. Except in certain instances, contractors are not liable for design defects in (and may not warranty the accuracy or suitability of) plans, specifications, or other design documents provided to the contractor by a person other than the contractor’s agents. –.052. A person may recover attorney’s fees as compensatory damages for breach of a construction contract. . Generally, a provision in a construction contract is void and unenforceable as against public policy to the extent that it requires the contractor, as indemnitor, to indemnify a party against a claim caused by the negligence or fault, the breach or violation of a statute, ordinance, governmental regulation, standard, or rule, or the breach of contract of the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee, other than the indemnitor or its agent, employee, or subcontractor of any tier. .
§ 2.55Construction Liability Claims on Public Projects
Construction defects in public buildings and public works are addressed in .
§ 2.56Construction Payment Bond Claims
Construction payment bonds are governed by . A surety company that has issued a construction payment bond is subject to requirements governing the claims process. See .
Many of the laws designed to protect consumers apply to real estate transactions, including—
1.the Deceptive Trade Practices–Consumer Protection Act (DTPA), (including special provisions in section 17.42 limiting waivers of DTPA rights);
2.the Magnuson-Moss Warranty Act, (applies to consumer products used for personal, family, or household purposes, including property intended to be attached to or installed in real property);
3.the Home Solicitation Transactions Act, (gives consumers the right to cancel a transaction involving real property);
4.the Real Estate License Act, (requires the licensing of persons who sell, exchange, purchase, or lease real estate); (requires the licensing of persons who inspect real property); the Texas Appraiser Licensing and Certification Act, (requires the licensing of real estate appraisers);
5.the Service Contract Regulatory Act, (regulates persons who sell service contracts);
6.the Manufactured Housing Standards Act, (requires the licensing of persons who install manufactured housing), (regulates “industrialized housing” or modular homes);
7.the Truth in Lending Act, , and its accompanying Regulation Z, (requires certain consumer disclosures by creditors of the costs and terms of consumer credit and provides certain remedies for consumers, including the right of rescission of certain credit transactions secured by a lien on the consumer’s principal dwelling); see also section 2.271 below; and
8.the Real Estate Settlement Procedures Act, , and its accompanying Regulation X, (requires certain consumer disclosures for mortgage loan transactions secured by a lien on one-to-four family residential real property that otherwise meet the definition of a “federally related mortgage loan” set out in and also prohibits unlawful kickbacks, referral fees, and unearned fees in connection with federally related mortgage loans). See also section 2.212 below.
The requirements for creating an enforceable residential contract for deed, the notice requirements to enforce a default, and numerous requirements imposed on sellers under such a contract are found in subchapter D of chapter 5 of the Texas Property Code. . See section 2.64 below regarding DTPA actions for failure to deliver required disclosures.
The Real Estate Forms Committee has removed the instructions and explanations for residential contracts for deed. These transactions are heavily regulated, and in the majority of circumstances the risks and consequences of failure of compliance outweigh the usefulness of the transaction in light of the fact that the same result can be accomplished by a note, deed, and deed of trust.
The U.S. copyright laws extend to visual arts and architectural works and prohibit modification or destruction of visual arts in certain circumstances. See , . Owners of buildings may alter or destroy a building embodying an architectural work. .
§ 2.60Corporate Transparency Act
The Corporate Transparency Act (the “Act”) was enacted in 2021 (at ) and regulations () (the “Regulations”) were promulgated in 2022 to assist the United States in tracing ownership of entities to reduce the opportunity for criminals, terrorists, and others to hide behind entity ownership to engage in money laundering, terrorism funding, and other illicit purposes.
Effective January 1, 2024, many existing and newly formed entities are required to submit reports to the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury identifying certain of their “beneficial owners” and their “company applicants” (each as defined in the Act and Regulations). The entities are required to update information about their beneficial owners as changes occur. Generally, a beneficial owner is someone who owns 25 percent or more of the ownership interests of the entity or who otherwise exerts substantial control over the entity. Attorneys should be aware that “company applicants” may include themselves and their paralegals or other persons who participate in filing documents to create entities subject to the Act and Regulations. Information to be submitted includes name, address, birthdate, and identifying information such as a current driver’s license or passport number. It is possible to apply for a unique “FinCEN identifier” and use that in filings instead of the required personal information.
Entities existing before January 1, 2024, had until December 31, 2024, to file the required reports; entities formed on or after January 1, 2024, but before January 1, 2025, had ninety days from their formation to file the required information; and entities formed on or after January 1, 2025, have thirty days from their formation to file the required information. At the time of publication, the FinCEN website states the following:
All entities created in the United States—including those previously known as “domestic reporting companies”—and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN. Existing foreign companies that must report their beneficial ownership information have at least an additional 30 days . . . to do so.
Updated information is available at www.fincen.gov/boi. While the Act and Regulations exempt certain entities from the reporting obligation, including certain nonprofits, publicly held companies, large entities, certain insurance and accounting companies, and other specifically listed categories of entities, many corporations, limited liability companies, and other entities that are created by filing a document with a secretary of state or American Indian tribe will be subject to reporting requirements.
Penalties for failures or delays in filing can be substantial, including a potential civil fine of $500 for each day of the failure as well as a fine of not more than $10,000 with two years of imprisonment.
The Act and Regulations are detailed and should be studied carefully. FinCEN provides guidance in the forms of answers to frequently asked questions (FAQs) and publication of a Small Entity Compliance Guide. Both are available at www.fincen.gov/boi. See section 1.13 in this manual for clauses that attorneys may wish to include in their engagement letters and entity documentation regarding the obligation to provide information required to comply with reporting requirements.
The formation and governance of corporations are governed by . Corporations may buy, sell, and otherwise deal with real property.. They are prohibited, however, from engaging in specified combinations of businesses: owning land and raising cattle and operating stockyards and packing meat; and operating both a petroleum-producing business and an oil pipeline business in the state. . A corporation cannot be organized to operate a bank, trust company, savings association, insurance company, cemetery company (except as authorized by the Health and Safety Code), or abstract or title company. .
Unless otherwise provided in the governing documents, the governing entity may authorize by resolution a disposition of property without the approval of the members or owners of the entity. . If a corporation conveys land under authority of its governing documents, the deed must be signed by an officer or attorney-in-fact.. A corporation may convey or mortgage its property for any lawful purpose, except if prohibited by law or by the corporation’s charter or bylaws. No corporate seal is required for a valid deed. .
Condominium owners’ associations for condominium regimes formed after December 31, 1993—and those formed before January 1, 1994, that opt to be governed exclusively by Texas Property Code chapter 82 under section 82.002(a)(1)—must be formed as for-profit or nonprofit corporations. .
See also sections 2.35 above and 2.111, 2.159, 2.184, and 2.196 below.
§ 2.62Covenants Not to Compete
Covenants not to compete are governed by the provisions of .
§ 2.63Criminal Record Checks of Employees
Criminal record checks of employees of residential dwelling projects are permitted under the provisions of .
§ 2.64Deceptive Trade Practices–Consumer Protection Act (DTPA)
The Texas Deceptive Trade Practices–Consumer Protection Act () applies to certain types of real estate transactions. Waivers of the Act’s protection are permitted only if in compliance with . See also section 2.222 below. A violation of the provisions of the Texas Property Code pertaining to home improvement contracts may be brought as a DTPA action (), as may a seller’s failure to deliver a property disclosure statement before execution of some contracts for deed to convey residential property (). See also for a DTPA action under the Texas Timeshare Act ().
The legal requirements for deeds are addressed in . See also chapter 5 in this manual.
Deeds transferring an interest in real property to or from an individual are required to include the confidentiality notice set out in . See section 3.17 in this manual.
Instruments that correct a conveyance of real property should comply with . Whether the change to the instrument is material or nonmaterial will dictate the process needed to make the correction. See section 5.8 in this manual.
The Texas Real Property Transfer on Death Act authorizes an individual to execute and record a transfer on death deed to make a revocable transfer of the transferor’s interest in real property to one or more designated beneficiaries, including alternate beneficiaries, effective at the transferor’s death. See . In the 86th legislative session, the statutory forms for the transfer on death deed and the revocation of transfer on death deed were removed from chapter 114 of the Texas Estates Code. Acts 2019, 86th Leg., R.S., ch. 337, § 3.2 (S.B. 874), eff. Sept. 1, 2019. The Estates Code continues to authorize use of transfer on death deeds and revocation of transfer on death deeds but no longer prescribes statutory language. See also the Texas Transfer Toolkit at www.texasatj.org/texas-transfer-toolkit, published by the Texas Access to Justice Commission overseen by the Texas Supreme Court, which includes a transfer on death deed form. See sections 2.267 and 5.11 in this manual.
Foreclosure of liens is addressed in and . See also the separate discussion at section 2.109 below.
Deeds of trust transferring an interest in real property to or from an individual are required to include the confidentiality notice set out in . See section 3.17 in this manual.
§ 2.67Deficiency Litigation After Foreclosure
A suit for a deficiency following a foreclosure sale conducted under must be brought within two years and is governed by . See also section 2.109 below.
§ 2.68Disaster Recovery Relief
The Texas Division of Emergency Management coordinates the state emergency management plan. lays out the responsibilities of the division.
§ 2.69Disclaimer of Interest in Decedent’s Estate
A person desiring to disclaim an interest in a decedent’s estate must comply with .
§ 2.70Disclosure of Interested Parties When Contracting with Governmental Entities
A governmental entity or state agency may not enter into a contract with a business entity if the contract requires a vote by the governing body of the governmental entity or state agency, the contract has a value of at least $1 million, or the contract is for services that would require a person to register as a lobbyist, unless the business entity submits a disclosure of interested parties to the governmental entity or state agency at the time the business entity submits the signed contract to the governmental entity or state agency. . The disclosure of interested parties must be submitted on an electronic form prescribed by the Texas Ethics Commission. See . The required Form 1295 and filing instructions can be found on the Texas Ethics Commission website at www.ethics.state.tx.us/resources/FAQs/FAQ_Form1295.php. See also section 2.230 below.
Numerous statutory disclosure and notice requirements affect real estate transactions.
1.A seller of residential real property comprising not more than one dwelling unit must give the purchaser of the property a signed, written notice, substantially in statutory form, concerning the condition of the property, including known defects or malfunctions of building structural components and building materials; working condition of various systems, appliances, smoke detectors, and other enumerated items; and the existence of various undesirable conditions such as termite damage, lead-based paint, radon gas, and a single blockable main drain in a swimming pool or hot tub. The notice must be delivered on or before the effective date of any executory sales contract binding the purchaser and, if the seller fails to provide the notice by the effective date, the purchaser may rescind the contract for any reason within seven days after receiving the notice. . The notice was revised effective September 1, 2023, to require additional disclosures about fuel gas piping, black iron pipe, corrugated stainless steel tubing, and copper. See . See form 4-23 in this manual.
2.Real estate brokers have a number of disclosure obligations, including the nature of their principal-agent relationship, as well as any applicable intermediary status, to prospective buyers, sellers, landlords, and tenants; knowledge of latent defects; the advisability of obtaining a title policy; as well as nondisclosure requirements. , ; .
3.A seller is obligated to make certain disclosures if the property is located in a water or utility district. , . See form 4-19. See also effective September 1, 2023, which adopts a required form of notice and repeals portions of .
4.Sellers in certain municipalities must disclose the presence of restrictive covenants affecting the property. (Enforcement of Land Use Restrictions Contained in Plats and Other Instruments). See form 4-12.
5.The presence of underground storage tanks must be disclosed to purchasers in accordance with . See form 4-11.
6.There are disclosure requirements in the Texas Timeshare Act, .
7.The Texas Membership Camping Resort Act has disclosure requirements. See .
8.There are disclosures required by the Interstate Land Sales Full Disclosure Act, , and .
9.Disclosures concerning home insulation are required by . See form 4-7.
10.Disclosures concerning asbestos are required by and . See the appropriate forms in chapters 25 and 26. See also form 4-9.
11.A seller of vacant land must include in the contract a certain bold-faced notice about potential rollback taxes. A number of exemptions apply, including an exemption if a separate paragraph in the contract addresses rollback tax liability. . See form 4-15.
12.A seller of unimproved residential property must provide the buyer with a written disclosure of certain subsurface conditions, such as pipelines, in certain circumstances. This notice is not required if the seller is obligated under the contract to furnish a title insurance commitment and if the buyer is entitled to terminate if objections to the commitment are not cured before closing. .
13.A seller of a single-family residence must give notice to a prospective buyer if the residence is subject to membership in a property owners’ association, restrictive covenants have been recorded, and an assessment lien may be foreclosed for failure to pay assessments. . See form 23-10.
14.A seller must disclose that the land may be included in the extraterritorial jurisdiction of a municipality and thereby subject to annexation. . See form 4-16.
15.Contractors are required to give the owner a disclosure statement before the owner executes a residential construction contract. . See form 18-1.
16.Residential mortgage loan originators have certain disclosure obligations to residential mortgage loan applicants, including the nature of the relationship between the residential mortgage loan originator and the applicant, the duties the residential mortgage loan originator has to the applicant, and how the residential mortgage loan originator will be compensated, as well as the terms under which an interest rate lock-in fee will be refundable. , . The Savings and Mortgage Lending Commissioner by rule has promulgated a standard form entitled “Residential Mortgage Loan Originator Discloser.” .
17.A seller of unimproved real property located outside a municipality’s jurisdiction must provide a statutory notice to a purchaser that the extension of water or sewer services may require additional expense and delay to obtain. . See form 4-17.
18.Sellers of real property within an agricultural development district must give the purchaser written notice to that effect. . The district must file a copy of the form for notice required by section 60.063 with the county clerk in each county in which all or part of the district is located. . The statute charges each agricultural district with the responsibility to prepare its own form.
19.Disclosures concerning home loans and high-cost home loans (loans with an interest rate of 12 percent or greater per year), including disclosures regarding individual or group credit life or disability insurance, are required by chapter 343 of the Finance Code. . See also section 10.14 in this manual.
20.Texas Property Code section 11.008 provides that an instrument transferring an interest in real property to or from an individual must include a statutorily described notice that appears on the top of the first page of the instrument in twelve-point bold-faced type or twelve-point uppercase letters and reads substantially as follows:
Notice of confidentiality rights: If you are a natural person, you may remove or strike any or all of the following information from any instrument that transfers an interest in real property before it is filed for record in the public records: your Social Security number or your driver’s license number.
. “Instrument” is defined, for purposes of this statute, as “a deed, deed of trust, or any other record recorded by a county clerk related to real property, including a mineral lease, a mechanic’s lien, and the release of a mechanic’s lien.”
The validity of an instrument as between the parties to the instrument and the notice provided by the instrument is not affected by a party’s failure to include the notice required under this section. .
The county clerk may not under any circumstance reject an instrument presented for recording solely because the instrument fails to comply with this section. Other than the duty to redact an individual’s social security number as required by , the county clerk has no duty to ensure that an instrument presented for recording does not contain an individual’s social security number. .
21.A person who proposes to sell or otherwise convey property located in a public improvement district established pursuant to chapters 372 (municipality) or 382 (county) of the Local Government Code must first give written notice to the purchaser. The purchaser must acknowledge receipt of the notice before the effective date of the contract. See . If the notice is not timely provided, the purchaser may terminate the contract. . If the notice is provided before closing and the purchaser elects to close, the purchaser waives its rights to terminate or seek damages. At closing, the seller and purchaser must execute a separate copy of the notice in recordable form to be recorded in the deed records in the county where the property is located. , .
The form of notice may also be found in a service plan filed with the applicable municipality or county. . Whether a property is located in a public improvement district may be determined by review of the city or county website, the county appraisal district or county tax assessor’s website if the county tax assessor-collector collects the taxes, or the state comptroller’s website. Texas Property Code section 5.0145 sets out the remedies which may be available if notice is not given when required.
22.If all or part of a subdivision for which a plat is required under chapter 232 of the Local Government Code is located within a future transportation corridor identified in an agreement between the Texas Department of Transportation and a county under section 201.619 of the Transportation Code, each purchase contract or lease between the subdivider and a purchaser or lessee of land in the subdivision must contain a conspicuous statement that the land is located within the area of the alignment of a transportation project as shown in the final environmental decision document that is applicable to the future transportation corridor. . See form 4-20.
23.With a number of exceptions, a seller of property that will be conveyed subject to a lien must make required disclosures to the prospective purchaser at least seven days before the earlier of the effective date of the conveyance or the execution of the contract for the conveyance. The failure to give the notice does not invalidate a conveyance, but the purchaser may pursue other remedies available unless the person required to give notice reasonably believes and takes any necessary action to ensure that each lien for which notice was not provided will be released on or before the thirtieth day after the date on which title to the property is transferred. Among the excepted transactions for which the disclosure is not required are those in which the purchaser obtains a title policy and those in which the purchaser has purchased interests in real property four or more times during the preceding twelve months. .
24.A person registered under the Residential Mortgage Loan Servicer Registration Act () and acting as a servicer of loans secured by a lien on residential real estate located in Texas must provide a statutory notice informing the borrower of each such residential mortgage loan that complaints about servicing of the loan should be sent to the Department of Savings and Mortgage Lending. .
25.A person who sells property for which a certificate of mold remediation has been issued pursuant to section 1958.154 of the Texas Occupations Code must deliver to the purchaser copies of each certificate of mold remediation issued for the property with the preceding five years. .
26.A seller of commercial or residential property adjoining an impoundment of water, including a reservoir or lake constructed and maintained under chapter 11 of the Texas Water Code that has storage capacity of at least 5,000 acre-feet at the impoundment’s normal operating level, must give to the purchaser notice of fluctuations for various reasons, including an entity lawfully exercising its right to the water stored in the impoundment or drought or flood conditions. . See form 4-21.
27.Certain for-profit entities may record an affidavit identifying one or more individuals authorized to transfer an estate or interest in real property on behalf of the entity. . Further limitations and requirements are contained in .
28.A landlord must provide a tenant a written notice whether the landlord is or is not aware that the dwelling rented to the tenant is located in a hundred-year flood plain. In addition, if a landlord knows that flooding has damaged any portion of the dwelling during the preceding five-year period, the landlord must provide an additional notice. The forms of notices are prescribed by statute. .
Other situations may require disclosures. See sections 2.5, 2.17, 2.43, 2.44, 2.49, 2.52, and 2.58 above and 2.106, 2.113, 2.119, 2.131, 2.132, 2.143, 2.147, 2.153, 2.180, 2.232, 2.271, and 2.284 below.
A restriction in a deed or other instrument affecting real property that prohibits the use, sale, lease, or transfer on account of race, color, religion, or national origin is void and unenforceable. . Municipalities may also adopt fair housing ordinances, which may have enforcement procedures and remedies that vary from state and federal law. . The Texas Workforce Commission civil rights division has the authority to hear certain types of discrimination complaints. . See also sections 2.16 above and 2.88 and 2.99 below.
Cities and counties may not prohibit housing discrimination against a person “because the person’s lawful source of income to pay rent includes funding from a federal housing assistance program,” but ordinances or regulations protecting veterans from discrimination may not be invalidated by cities or counties. .
A person who owns real property or an interest in real property which includes in its chain of title a recorded conveyance instrument containing a discriminatory provision, or a person with permission from the owner, may request removal of the discriminatory provision by filing with the county clerk a motion verified by affidavit containing certain required information. A court having jurisdiction must rule on the motion, which may be ex parte and based on only the review of the questioned provision. The court’s ruling and findings of fact must be filed with the county clerk. .
See section 2.100 below.
§ 2.74Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act, codified as amended in scattered sections of U.S.C. (Pub. L. No. 111-203, 124 Stat. 1376), is sweeping financial reform legislation intended in pertinent part to “protect consumers from abusive financial services practices” thought by Congress to have significantly contributed to the 2007–2009 national financial crisis. The Act, comprising some sixteen titles, was signed into law on July 21, 2010. It was extensively amended on May 28, 2018.
Titles IX (dealing with securitization of mortgage loans), X (establishing the Consumer Financial Protection Bureau), and XIV (containing extensive amendments to the Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Equal Credit Opportunity Act reforming residential mortgage origination, underwriting, appraisal, and servicing practices) are particularly pertinent to residential real estate finance transactions. See the discussion in chapter 12 in this manual.
Chapter 374 of the Health and Safety Code regulates performance standards for both existing and new dry cleaning facilities. .
Due-on-sale provisions are addressed in the Garn-St. Germain Depository Institutions Act of 1982, , and the regulations promulgated thereunder at , including preemption of certain conflicting state laws.
§ 2.77Durable Powers of Attorney
Durable powers of attorney are governed by –752. Unless a time limitation is specifically stated in the instrument creating it, the passage of time does not cause a durable power of attorney to lapse. . The durable power of attorney between spouses terminates on divorce or annulment except in certain situations. . A court’s appointment of a permanent guardian for the principal’s estate terminates the durable power of attorney on the guardian’s qualification. A court may suspend the powers of an agent under a durable power of attorney during the term of a temporary guardianship. .
A durable power of attorney must be in writing, be signed by a principal who is an adult, be acknowledged, and contain the following phrase or words of similar import: “This power of attorney is not affected by subsequent disability or incapacity of the principal.” . The attorney-in-fact or agent has a fiduciary duty to the principal to timely inform the principal of all actions taken, account for his actions, maintain appropriate records, and provide an accounting on demand by the principal. .
sets forth a statutory form of durable power of attorney. When using the statutory form, the principal will need to initial each specific power to be granted or initial the line to grant all powers. A durable power of attorney that confers authority with respect to real property empowers the agent to perform those acts described in . Durable powers of attorney used in real estate transactions must be recorded in the county or counties in which the real property is located not later than thirty days after the instrument signed by the agent is recorded. See . Several other important requirements for such powers of attorney are addressed in the statute. A form of durable power of attorney for use in real estate transactions incorporating the statutory requirements is included in chapter 26 in this manual.
Unless expressly provided otherwise, pipeline easements created by grant or power of eminent domain for the benefit of a single common carrier pipeline for which the power of eminent domain is available are presumed to create an easement in favor of the common carrier pipeline that extends a width of fifty feet as to each pipeline laid under the easement before January 1, 1994. . The presumption is rebuttable. Persons who acquire pipeline easements and rights-of-way for others must be registered, licensed, or exempt from licensing by the Real Estate License Act. A notice promulgated by the Texas Real Estate Commission must be delivered to the grantor of the easement before the easement is granted. .
§ 2.79Economically Distressed Counties
See section 2.45 above.
The Texas Economic Development Act provides certain ad valorem tax benefits to encourage economic development. .
See section 2.99 below.
Texas has adopted the Uniform Electronic Transactions Act, which is intended to facilitate electronic commerce. . The Uniform Electronic Transactions Act does not apply to transactions that are otherwise covered by the laws governing the execution of wills and testamentary trusts or by the Uniform Commercial Code. . Electronic funds transfers are governed by chapter 4A of the Uniform Commercial Code. .
§ 2.83Electronic Filing of Documents
Statutes authorizing and otherwise relating to the electronic filing of documents in the public records include and . Chapter 9 of the Texas Business and Commerce Code, while no longer explicitly authorizing electronic filing, is clearly written to accommodate it. For example, in most places the revision refers to “authenticating” rather than “signing” a record. The revised Code also provides that “communication of a record to a filing office . . . constitutes filing.” . Filing by means other than in writing is contemplated by ; see also .
Texas has also adopted the Uniform Real Property Electronic Recording Act. . Under the Act, a “document” includes information stored in an electronic or other medium that is retrievable in perceivable form. . A document received by a county clerk in electronic form is eligible to be recorded in the real property records. If another law requires as a condition of recording that a document be on paper or other tangible medium, the requirement is satisfied by an electronic document that complies with the Act. . An electronic signature is an electronic sound, symbol, or process attached to or logically associated with a document executed or adopted by a person with the intent to sign the document. . An acknowledgment may be similarly satisfied by an electronic signature. . Licensed attorneys, lending institutions, title insurance companies, and state agencies may record electronically. County clerks are authorized (but not required) to implement the Act. . The Act also amends provisions of the Local Government Code pertaining to electronic recording and directs the Texas State Library and Archives Commission to adopt rules to promote uniformity within the state and among other states that adopt similar laws. .
The Electronic Government Task Force has launched an Internet portal to provide access to electronic government services in Texas. It is found at www.texas.gov; it provides forms and applications from various agencies and access to filing and payment of sales tax. Authority for oversight by the TexasOnline Authority is provided in .
See section 2.48 above.
The Endangered Species Act can be found at . The provisions of the statute may limit the development of real property in areas that include the habitats of endangered species.
§ 2.86Engineer’s Liens Against Real Estate
An engineer’s lien against real estate is addressed in .
Numerous federal and state environmental statutes affect real estate transactions. Among the most important federal laws are—
1.the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, , relating primarily to liability for cleanup of inactive hazardous waste sites (see also sections 2.128 and 2.150 below);
2.the Resource Conservation and Recovery Act, as amended by the Hazardous and Solid Waste Amendments of 1984 and the Land Disposal Program Flexibility Act of 1996, , relating primarily to active waste treatment, storage, or disposal facilities, including underground storage tanks (see also section 2.274 below);
3.the Federal Water Pollution Control Act, also known as the Clean Water Act, , governing, among other things, the regulation of wetlands, stormwater, and point-source water pollution (see also sections 2.247 and 2.299 below);
4.the federal Clean Air Act, , requiring permits for many types of operations, regulating certain asbestos materials and emissions, and prohibiting certain types of chemicals, such as chlorofluorocarbons (CFCs), that deplete the ozone layer. The regulations dealing with CFCs are in . Related regulations include the asbestos-based National Emission Standards for Hazardous Air Pollutants at ;
5.the Endangered Species Act, ;
6.the Asbestos Hazard Emergency Response Act of 1986, , and regulations, ;
7.asbestos regulations under the Occupational Safety and Health Act, (general industry standard), and (construction standard);
8.the Residential Lead-Based Paint Hazard Reduction Act of 1992, also known as Title X of the Housing and Community Development Act () (see section 2.153 below);
9.the Safe Drinking Water Act, ; and
10.the Toxic Substances Control Act, , regulating polychlorinated biphenyls and other substances.
Important state environmental statutes and regulations include—
1.the Solid Waste Disposal Act, (concerns the disposal of hazardous and certain nonhazardous wastes), including the statute regulating developments over abandoned landfills, (see the separate discussion of this statute at section 2.147 below), and the voluntary cleanup program (also known as a Brownfields statute), (see section 2.291 below);
2.the Texas Clean Air Act, , requiring air permits for many types of industrial and construction operations and regulating air emissions and various other hazardous substances and activities;
3.the Texas Hazardous Substances Spill Prevention and Control Act, ;
4.the Texas Underground and Above-ground Storage Act, as amended, (see also section 2.274 below);
5.the Coastal Public Lands Management Act of 1973, as amended, , and regulations at (see also section 2.44 above);
6.the Texas Environmental, Health, and Safety Audit Privilege Act, ;
7.the Texas Asbestos Health Protection Act, ;
8.the Texas Railroad Commission’s Operator Cleanup Program and regulations at ; and
9., providing enhanced safety oversight and inspections of ammonium nitrate storage facilities by permitting entry by local or state fire authorities and providing enhanced storage requirements.
In addition, there are numerous environmental provisions that bear on the ownership, operation, and development of real estate properties in the Texas Health and Safety Code, the Texas Natural Resources Code, the Texas Parks and Wildlife Code, and the Texas Water Code. Newly added provisions of the Local Government Code forbid holding an election for voter approval of a home-rule charter provision establishing a comprehensive rule or policy statement that purports to address climate change or the municipality’s environmental impact, including water and energy use and air pollution, unless the legislature adopts a resolution approving the proposed provision. , .
§ 2.88Equal Credit Opportunity
The Equal Credit Opportunity Act, implemented by Regulation B, , provides a cause of action against a creditor who discriminates against an applicant for credit (1) on the basis of the applicant’s race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to enter into a binding contract), (2) because all or part of the applicant’s income derives from any public assistance program, or (3) because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. See . Regulation B also establishes rules for a creditor’s collection, evaluation, and use of information in connection with a credit application and requires a creditor to notify applicants of action taken on their applications concerning the creditor’s approval of, counter-offer to, or denial of credit generally within thirty days after receiving a completed application. Proper use of sample notification forms set out in Appendix C of Regulation B constitutes full compliance with various requirements of the Act. Effective July 21, 2011, model forms C1 through C5 were revised to include a notice that a credit score was used to make an adverse credit decision and to include certain information about credit scores to comply with amended content requirements of the Fair Credit Reporting Act. Notifications must be in writing and contain a statement of specific reasons for any adverse action taken on the credit application and a statutory notice set forth in section 701(a) of the Act. Creditors furthermore must provide consumers with a copy of any property appraisal report used to evaluate an application for credit that is to be secured by a lien on a dwelling. See .
§ 2.89Equal Housing Opportunity
See sections 2.8 above and 2.99 below.
Escheat of real and personal property to the state is governed by . See also section 2.1 above.
An unpaid federal estate tax becomes a lien on the gross estate of the decedent. .
Eviction actions (also known as forcible-entry-and-detainer actions) are governed by and , . permits an owner of a multifamily residential property to be represented by a nonlawyer in the appeal of an eviction suit for nonpayment of rent. . Unless expressly authorized by statute, a municipality or county may not adopt, enforce, or maintain an ordinance, order, or rule regulating evictions or otherwise prohibiting, restricting, or delaying delivery of a notice to vacate or filing a suit to recover possession of the premises. .
See section 2.275 below.
§ 2.94Exempt Property and Liens
See section 2.27 above.
§ 2.95Extraterritorial Jurisdiction
The extraterritorial jurisdiction of municipalities is governed by . See also section 2.71 above.
§ 2.96Failed Depository Institutions
If a bank, savings and loan association, or other depository institution is placed in receivership or conservatorship, one may record at any time an affidavit or memorandum of a sale, transfer, purchase, or acquisition agreement between the receiver or conservator and another depository institution. If the transfer involves an interest in land or in a mortgage vested according to the real property records in the failed depository institution, a recorded affidavit or memorandum is constructive notice of the transfer. .
§ 2.97Fair Credit Reporting Act
The federal Fair Credit Reporting Act has been amended to require any financial institution that (1) extends credit to an individual and (2) regularly and in the ordinary course of business reports negative information to a credit bureau to give a clear and conspicuous written notice to its individual customers about reporting negative information.
The term financial institution is broadly defined to include “any institution the business of which is engaging in financial activities as described in section 1843(k)” of the Bank Holding Company Act of 1956, whether affiliated with a bank or not. . Thus the term financial institution includes not only institutions regulated by federal banking agencies but also other entities, such as merchant creditors and debt collectors, that extend credit to individuals and report negative information. See .
A financial institution must give the required notice to an individual customer before, or no later than thirty days after, reporting the negative information to a credit bureau. After giving the notice, the institution may report additional negative information to a credit bureau for the same transaction, extension of credit, account, or customer without giving additional notice. If a financial institution gives a customer a notice before reporting negative information, the institution is not required to actually report negative information about the customer to a credit bureau. A financial institution generally may give the notice about reporting negative information on or with any notice of default, billing statement, or other material provided to an individual customer as long as the notice is clear and conspicuous. The notice may not be included in the initial disclosures required to be given by section 127(a) of the federal Truth in Lending Act (). A financial institution complies with the notice requirement if the institution uses a model notice promulgated by the Board of Governors of the Federal Reserve System. The format of a model notice may be rearranged. For model notices, see clauses 14-7-2 and 14-7-3 in this manual.
Creditors also are required to give a “risk-based pricing” notice when, based on the consumer’s credit report, the creditor provides credit to the consumer on materially less favorable terms than terms available to a substantial proportion of consumers through that creditor. Creditors who conduct periodic reviews of existing accounts and increase the annual percentage rate of interest charged consumers based on findings of a deteriorated consumer credit report must also provide the consumer with an account review risk-based pricing notice. Effective July 21, 2011, the notices must contain the credit score of the consumer and certain information about credit scores if a credit score of the consumer is used in setting the material terms of the credit. Model forms in may be used for compliance with risk-based pricing and credit score disclosure requirements. Consumers who receive a risk-based pricing notice must be informed that they are entitled to a free consumer credit report to confirm the report’s accuracy or to dispute the accuracy or completeness of any information in the report. As an alternative to providing a risk-based pricing notice, creditors instead may provide all credit applicants with a free credit score and certain required information about credit scores.
§ 2.98Fair Debt Collection Practices
The federal Fair Debt Collection Practices Act () and the Texas Debt Collection Practices Act () regulate efforts to collect debts from consumers. Each act requires collection notices to contain information about the debt and how to dispute it. Attorneys are subject to most provisions of each act. However, an attorney collecting a debt on behalf of a client is not considered a “third-party debt collector” under the Texas Debt Collection Practices Act unless the attorney employs non-attorneys who regularly solicit debts for collection or make frequent contact with debtors to collect or adjust debts. . Each act also prohibits types of communications that might be considered harassment. Creditors and debt collectors usually have the right to collect on a debt from the assets of a decedent’s estate but, effective August 29, 2011, are prohibited from contacting relatives of a deceased debtor, other than a spouse or legal representative of the estate, who may lack either the authority to pay the debt from the decedent’s estate or the legal obligation to pay the debt. See 76 Fed. Reg. 44,915 (July 27, 2011). Trustees and substitute trustees are not considered debt collectors. .
The federal Fair Housing Act () and the Texas Fair Housing Act () forbid (1) discrimination in the sale, rental, or financing of housing on the basis of race, color, religion, national origin, sex, handicap, or familial status; (2) the refusal to permit modifications of existing premises at the expense of the handicapped person or reasonable accommodations in rules, policies, practices, or services, if necessary to afford handicapped persons equal opportunity for, or full enjoyment of, the use of the premises; and (3) the failure to make special accommodations for handicapped persons in certain multifamily dwellings designed and constructed for first occupancy after March 13, 1991. Regulations setting out the particular handicapped access requirements for new multifamily housing structures can be found at . Municipalities may also adopt fair housing ordinances, which may have enforcement procedures and remedies that vary from state and federal law. .
The Texas Fair Housing Act and the federal Fair Housing Act both prohibit housing that is limited specifically to the elderly and that excludes families and young children, unless certain minimum design and eligibility requirements are met. The state requirements can be found in . The federal requirements can be found at and .
The Texas Family Code has several provisions that relate to real property transfers, including enforcement of a division of property (); right to future property (); division of property following a decree of divorce (); the Uniform Premarital Agreement Act (); partition or exchange of community property (); rules of marital property liability (); homestead rights (); child support liens (); and prohibition by a temporary restraining order of the transfer, assignment, mortgage, encumbrance, or alienation of any real property of the parties to a dissolution of marriage without the prior authorization of the court (). The Texas Constitution also addresses the issue of separate and community property between spouses. . provides that a written agreement incident to divorce or annulment may be set out in the final decree or incorporated by reference, each of which will have equal effect and validity.
§ 2.101Federal Lien Registration Act
Texas has adopted the Uniform Federal Lien Registration Act, , which governs the procedures for filing notices of federal liens, including tax liens, against real property. See also section 2.102 below.
If notice of a junior federal tax lien has been filed at least thirty days before a scheduled foreclosure sale, written notice of the sale under a deed of trust, forfeiture under a contract for deed, or receipt of a deed in lieu of foreclosure must be given, by registered or certified mail or by personal service, to the Internal Revenue Service at least twenty-five days before the transfer. Without this notice, the transfer will be made subject to the federal tax lien. If proper notice is given, the United States is limited to a right to redeem the property within 120 days after the date of sale. See ; . See the form of notice to the IRS of nonjudicial sale in chapter 14 in this manual.
The Texas Agriculture Code sets out certain requirements for cleared and cultivated lands, including the maintenance of fences of adequate substance and size, the minimum interspersing and sizes of gates located in such fence lines, and the removal of boundary line fences or damages to them. .
The Texas Transportation Code regulates fence setback, height, and visibility requirements for fences located on land adjacent to a road or highway in the state highway system and in certain municipalities. .
The Texas Local Government Code requires emergency gate access in multiunit housing complexes located outside municipal boundaries. . A county may also require a multiunit housing project within its jurisdiction to have easily identifiable addresses on each building. .
§ 2.104Financing Statement, Fraudulent Filing
The circumstances under which a party is considered to have fraudulently filed a financing statement and the penalties for doing so are addressed in . See also section 2.116 below.
Certain financing statements filed by an inmate or inmate’s representative are presumptively fraudulent. For restrictions on filing financing statements by such parties, refer to and , .
A record of a mortgage or other interest in real property is effective as a financing statement against fixtures if the requirements of are met. The priority of fixture filings is addressed in . There is also an interaction between personal property leases and fixtures that should be noted. See . Mechanic’s and materialman’s liens on removable improvements, including fixtures, take priority over a deed-of-trust lien even if the deed of trust was recorded before the inception of such liens. See ; see also First National Bank v. Whirlpool Corp., 517 S.W.2d 262, 269 (Tex. 1974).
The National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, and the National Flood Insurance Reform Act of 1994, , provide flood, mudslide, and flood-related erosion insurance protection to property owners. In specified flood-prone areas, local governments are required to enforce special land use and building restrictions to minimize flood damage. If a loan secured by improved real estate in such an area is made, increased, extended, or renewed by a federally insured or federally regulated lender, the buyer must be notified in writing of the flood hazards a reasonable time before closing. . Regulations implementing the flood insurance program are found at . See also (county’s power affecting flood control); (participation in federal flood insurance policy); (Flood Control and Insurance Act).
§ 2.107Forced Sale of Co-Owner’s Interest
The forced sale of a co-owner’s interest in real property for reimbursement of property taxes is subject to the provisions of .
§ 2.108Forcible Entry and Detainer
See section 2.92 above.
Nonjudicial foreclosure sales of real property are governed by , , , , and (applicable to residential real property). If a security agreement covers both real and personal property, the personal property may be foreclosed under the Uniform Commercial Code, or both the real and personal property may be foreclosed in accordance with the procedures applicable to the real property. . Certain redemption rights apply to the foreclosure of a condominium unit for failure to pay assessments (see ), to foreclosures by a property owners’ association (), to tax foreclosures (, ), and to foreclosures of property subject to a federal tax lien (). See section 2.102 above.
A trustee or substitute trustee conducting a sale of residential real property may contract with an attorney to administer or perform the trustee’s or substitute trustee’s functions, or with an auction company to arrange, manage, sponsor, or advertise a public sale. .
Deficiency litigation brought after a nonjudicial foreclosure sale must be filed within two years and is governed by the provisions of . Deficiency litigation brought after a judicial foreclosure sale must be filed within ninety days and is governed by the provisions of . A guarantor may institute litigation to contest the deficiency amount remaining after a judicial or nonjudicial foreclosure sale within ninety days after the later of the date of the foreclosure sale or receipt of actual notice of the foreclosure sale. . Evictions after a foreclosure sale should be instituted in accordance with , and .
A deed-of-trust foreclosure may also be permitted under limited circumstances after a deed in lieu of foreclosure has been accepted by the lienholder. .
Litigation against the trustee named in a deed of trust, contract lien, or security instrument is subject to the procedures and defenses in .
Home equity loan foreclosures are governed by , . The Texas Supreme Court has issued model forms for these foreclosures. See section 14.2:17 in this manual. Expedited foreclosure proceedings may be available to allow the foreclosure of a contract lien under . See . In these expedited proceedings, the court has the ability to order mediation before foreclosure. See .
A foreclosure may be subject to the preference provisions of federal bankruptcy law. See .
See also sections 2.42, 2.44, 2.67, 2.101, and 2.102 above and 2.128 and 2.144 below.
§ 2.110Foreclosure Limitations Concerning FDIC Interests
If the Federal Deposit Insurance Corporation (FDIC) has a property interest, including a security interest, lien, or mortgage interest, in property that would be extinguished through foreclosure, condemnation, partition, or suit to quiet title, foreclosure must be by judicial sale if the United States is to be a named party or, if the sale is under a junior lien, the government’s consent is required to eliminate that interest, with the government having a one-year right of redemption for certain liens eliminated by foreclosure of a superior lien. See ; . The holder of a superior lien may make a written request to have a junior lien, other than a tax lien, in favor of the United States extinguished if it appears that the sale proceeds will be insufficient to satisfy the government’s lien or that the lien has been satisfied by lapse of time or has otherwise become unenforceable. .
Foreign entities are governed by chapter 9 of the Texas Business Organizations Code.
§ 2.112Foreign Ownership of Agricultural Property
See section 2.10 above.
§ 2.113Foreign Ownership of Real Property
Numerous federal and state laws affect real estate conveyances involving foreign persons. provides that aliens have the same real and personal property rights as U.S. citizens, but this broad statement was limited by S.B. 2116 of the 2021 Texas legislature, which restricted foreign ownership of energy infrastructure such as solar farms. See Acts 2021, 87th Leg., R.S., ch. 975, § 3 (S.B. 2116), eff. Sept. 1, 2021. S.B. 2116 has been codified in chapter 2275 of the Texas Government Code and chapter 117 of the Texas Business and Commerce Code. Land owned by nonresident aliens or foreign governments may not be eligible under some circumstances for appraisal as open-space or qualified timberland. , . The International Investment and Trade Services Survey Act () and the Agricultural Foreign Investment Disclosure Act of 1978 () also affect these types of transactions.
The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA, Pub. L. No. 115-232), gave the Committee on Foreign Investment in the United States (CFIUS) the power to review and block, or set aside after completion, leases and acquisitions by foreigners of U.S. real estate located near air and marine ports, military facilities, and other sensitive government properties. CFIUS is composed of various agencies and organized in the Treasury Department. CFIUS has recently designated numerous areas in Texas as being within the areas in which it can review and potentially set aside some real estate leases or acquisition transactions (89 Fed. Reg. 58653 et seq., concerning 31 C.F.R. pt. 802 (July 19, 2024)). The areas designated in Texas are one-mile radius areas around some bases and 100-mile radius areas around others. The one-mile radius areas are around Naval Air Station, Corpus Christi; Red River Army Depot, Texarkana; Ellington Field Joint Reserve Base, Houston; Fort Bliss, El Paso; and Fort Cavazos (previously named Fort Hood), Killeen. The 100-mile radius areas are around Goodfellow AFB, San Angelo; Joint Base, San Antonio (previously named Fort Sam Houston together with previously named Lackland, Randolph, and Kelly Air Force Bases); Dyess AFB, Abilene; and Laughlin AFB, Del Rio. This means that transactions and leases of more than 10,000 square feet in San Antonio and Austin, as well as large areas of west Texas from the border of Mexico to the border of Oklahoma, are subject to review. No notice of such leases or transactions is required to be given by the participants before or after the fact, but the authority of CFIUS may be exercised to set aside a transaction after it is completed. Attorneys might consider whether to advise the client about these risks.
Statutes requiring financial institutions to keep records and reports on monetary transactions are at . Internal Revenue Service requirements for submitting returns, as applied to foreign persons with “direct investments” in real property interests in the United States, are at . Anyone purchasing realty in the United States from a foreign individual or entity must, with few exceptions, withhold a portion of the sales price and report and pay it over to the IRS within twenty days of the date of transfer. See ; . Nonforeign affidavits addressing the requirements of section 1445 are included at forms 26-19 and 26-20 in this manual. These affidavits are suggested for use in all transactions.
Real property may be subject to forfeiture if associated with criminal activities under the Controlled Substances Act. See . The Texas Controlled Substances Act () and the Code of Criminal Procedure provisions relating to forfeiture of contraband () may also apply to such cases. Real property is also subject to forfeiture under the Racketeer Influenced and Corrupt Organizations Act. See .
The Business Opportunity Act applies to the sale of franchises. .
A person commits a criminal offense if, with intent to harm or defraud, he holds a purported lien against real or personal property that is fraudulent and fails to release the lien. . Knowingly presenting for filing a financing statement that is forged, contains a material false statement, or is groundless is also a criminal offense. . Actions on fraudulent liens can be found in , . Liability and causes of action for fraudulent liens can be found in . provides that mechanic’s lien claimants under chapter 53 of the Texas Property Code are not liable under this section unless they act with intent to defraud.
A person commits a criminal offense if he knowingly or intentionally signs and presents for filing or causes to be presented for filing an assumed name certificate if the document indicates that the person signing the document has the authority to act on behalf of the entity for which the document is presented and the person does not have that authority, if the document contains a materially false statement, or if the document is forged. . See also section 2.24 above.
Certain filings by inmates and their representatives are presumptively fraudulent. For restrictions on filings by such parties, refer to and , .
§ 2.117Fraudulent Representations and Promises
A person who makes a material false representation or false promise in a transaction involving real property is liable to the person defrauded for actual (and perhaps punitive) damages, attorney’s fees, and court and other costs. . A violation of section 27.01 that relates to the transfer of title to real estate is a false, misleading, or deceptive act or practice as defined by , and any public remedy under , is available for a violation of that section.
Texas has adopted the Uniform Fraudulent Transfer Act in . The fraudulent conveyance section of federal bankruptcy law is found at .
§ 2.119FTC Anti-Holder-in-Due-Course Rule
Certain consumer credit contracts must comply with the notice requirements of . A copy of the relevant notice is included in chapter 20 in this manual.
Future estates are governed by .
See section 2.279 below.
§ 2.122Good Faith and Fair Dealing
No statute or common law imposes a duty of good faith and fair dealing in contracts in Texas, English v. Fischer, 660 S.W.2d 521 (Tex. 1983), but contracts governed by the Uniform Commercial Code (UCC) must comply with the good-faith obligation of . In addition, the obligation of good faith under the UCC cannot be disclaimed by agreement, but contracting parties can define the standards by which the performance of good faith is to be measured, as long as the standards are not manifestly unreasonable. .
No instrument may be recorded unless the mailing address of each grantee appears in the instrument or in a separate writing attached to the instrument or a penalty is paid. . However, the failure to comply with this provision will not invalidate the instrument as between the parties, and acceptance by the clerk creates a presumption that the law was satisfied. . See section 2.213 below.
See section 2.46 above.
Persons at least twenty-one years of age who can legally possess a firearm are able to carry a handgun, concealed, or openly in a holster, in nonprohibited public places. Enacted as the Firearm Carry Act of 2021, 87(R) HB 1927 (2021). . An individual may obtain a license to carry a handgun. . Handguns are prohibited as a matter of law for certain types of private and public properties, including schools (except for licensed holders at institutions of higher education), polling places, courts, government offices, racetracks, and secured areas of airports. . The statute does not affect the right of an employer to prohibit handguns on the premises of the business (). Property owners’ associations are not allowed to include or enforce any policy that would prohibit or restrict any person who is otherwise authorized from lawfully possessing, transporting, or storing a firearm, any part of a firearm, or firearm ammunition, or prohibit or restrict the otherwise lawful discharge of a firearm. . Signs indicating that handguns are prohibited on site are required for certain alcoholic beverage establishments, hospitals, and nursing homes. . The signs required by this section must meet specific requirements of size, language, and location. Private property owners are allowed to prohibit the carrying of concealed or openly carried handguns on their property if they provide proper legal notice that entry on the property by a license holder with a concealed or openly carried handgun is forbidden. Notice may be given orally, in writing with a statutory warning, or by signage with the statutory warning in English and Spanish in block letters at least one inch in height displayed in a conspicuous manner clearly visible to the public. A person with a license to carry a handgun who enters a property with a firearm after receiving oral or written notice to leave or where the required signage is posted commits a criminal trespass. Exceptions and defenses to prosecution are contained in the statutes criminalizing the conduct. , . An instrument granting an access easement may not restrict or prohibit an easement holder or an easement holder’s guest from possessing, carrying, or transporting a firearm over the servient estate while using the easement for the easement’s purpose. This does not apply to a pipeline, electric transmission, or utility easement. The owner of a servient estate may not enforce a restrictive covenant in an instrument granting an access easement over the servient estate that restricts or prohibits the easement holder or the easement holder’s guest from possessing, carrying, or transporting a firearm over the servient estate while using the easement for the easement’s purpose. .
See section 2.16 above.
§ 2.127Hart-Scott-Rodino Antitrust Improvements Act
Certain large transactions may require advance approval from the Federal Trade Commission under the terms of the Hart-Scott-Rodino Antitrust Improvements Act, .
A lien is created in favor of the state under on real property that is the subject of hazardous waste cleanup actions by the state. A federal lien also arises under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. See .
§ 2.129Historic Landmarks or Districts
A municipality may regulate designated places and areas of historical, cultural, or architectural significance. . A municipality that has established a process for designating such places may not designate a property as a local historic landmark or include the property within a local historic district unless the owner of the property consents or, if the owner does not consent, the designation or inclusion is approved by a three-fourths vote of the municipality’s governing body and the zoning, planning, or historical commission of the municipality. .
The Texas Historical Commission regulates the listing and preservation of historic structures in the state under the provisions of . Counties also have certain rights and responsibilities regarding historic structures, sites, and resources. . Liability for adversely affecting historic structures is addressed in . Many counties and local municipalities also have historic or landmark commissions that regulate historic structures in their jurisdiction.
The homestead may be used to secure “equity” loans, including equity loans with line-of-credit terms, reverse mortgages, and the conversion and refinancing of a personal property lien on a manufactured home. . Section 50(f) permits the refinancing of a home equity loan only with another equity loan, a reverse mortgage, or a new loan that satisfies the requirements of section 50(f)(2). Section 50(a)(6)(F) allows for a home equity line of credit with certain limitations. Equity loans may be made for any purpose and must meet a number of constitutional and statutory requirements. A lien that does not satisfy a definition under section 50 is not valid against the homestead, and there is no statute of limitations for bringing an action against a void lien. Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542 (Tex. 2016). Home equity documents for secondary mortgage loans are regulated by the Office of Consumer Credit Commissioner and must be in plain language. . See also section 2.163 below.
For a more extensive discussion of the issues in home equity lending, see chapter 11 in this manual.
§ 2.132Home Improvement Contracts
There are notice requirements for home improvement contracts on homestead property (, ) and for liens claimed under these contracts (). See sections 2.169 and 2.222 below.
§ 2.133Home Mortgage Disclosure Act of 1975
Financial institutions that make federally related home mortgage loans must compile and make available information to enable citizens and government agencies to determine whether the institutions are fulfilling their obligations to serve the housing needs of the communities and neighborhoods in which they are located. See .
The Texas Home Solicitations Transaction Act may apply if the consumer’s obligation is entered into at a location other than the contractor’s place of business. If the Act applies, certain notices are required. . See form 4-5 in this manual.
Homestead rights are generally addressed in , , and . A homestead is protected from forced sale for all debts except for liens securing the following: some or all of the purchase money, the taxes due thereon, an owelty of partition, new construction or home improvements, home equity, a reverse mortgage, and the conversion and refinancing of a personal property lien on a manufactured home to a lien on real property. . The amount of land that may be claimed as homestead depends on whether it is urban or rural and, if rural, whether it is claimed by a family or a single person. See . Absent unusual circumstances or a judicial declaration that one spouse is incapacitated, the consent of both spouses is required if a homestead is sold or encumbered, regardless of whether it is characterized as community or separate property. .
provides for the voluntary designation of a homestead. This section and , , , , set forth the requirements for making such a designation.
Under certain circumstances a lien to recover remediation costs may attach to a homestead. , .
The state may be able to recover the costs of nursing home care paid by Medicaid from the homestead of the patient unless certain criteria are met. .
Federal laws may preempt these statutes.
See also sections 2.2 and 2.131 above, chapter 11 in this manual, and section 20.1:2.
The requirements and parameters of hotel occupancy taxes in the state are described in and .
See section 2.167 below.
The imposition of impact fees is governed by .
§ 2.139Implied Title Covenants
Unless the deed expressly provides otherwise, use of the word grant or convey in a deed implies only that the grantor covenants (a) that before the execution of the conveyance the grantor has not conveyed the estate or any interest in the estate to a person other than the grantee and (b) that at the time of the execution of the conveyance the estate is free from encumbrances. An implied covenant may be the basis for a lawsuit as if it had been expressed in the conveyance. . An “encumbrance” includes a tax, an assessment, and a lien on real property. .
Texas law limits the validity of indemnity agreements in certain situations, including in construction contracts and certain indemnities by a contractor with respect to an architect’s negligence and by an architect with respect to an owner’s negligence. See section 17.2:4 in this manual. Also see section 2.54 above.
§ 2.141Innocent-Purchaser Defense
The federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 establishes an innocent-landowner defense to environmental liability under certain circumstances, provided a purchaser has exercised “all appropriate inquiry” in its investigation of the property. See , .
A lender must either endorse an insurance claim payment concerning personal property or provide a written statement of the reason it refuses to endorse within fourteen business days after receiving a request for the endorsement. . –.056 address restrictions against cancellation and nonrenewal of commercial liability policies. Sellers of goods or services who reasonably expect to be paid wholly or partly from the proceeds of property insurance claims are prohibited from allowing or assisting the insured person’s failure to pay the applicable insurance deductible. . Insurers must provide disclosures on flood coverage to commercial and residential property insurance policyholders. . The Texas Windstorm Insurance Association (TWIA) has been extended until 2031 and , relating to a reporting requirement by TWIA to the Texas Department of Insurance, has been repealed.
§ 2.143Interstate Land Sales Full Disclosure Act
The Interstate Land Sales Full Disclosure Act requires filings and disclosures in some circumstances if there are sales or leases of twenty-five or more lots as part of a common promotional plan in interstate commerce or by use of the mail. See . Regulations promulgated under the Act can be found at .
§ 2.144IRS Information Return (Foreclosures)
Under certain circumstances persons who lend money secured by property and who later acquire an interest in the property in satisfaction of the debt or have reason to know that the property has been abandoned must file an information return with the Internal Revenue Service and send a statement to the debtor. The information return must be filed by February 28, and the statement to the debtor provided by January 31, of the year following the calendar year in which the lender acquires the property or knows or has reason to know of the abandonment. See ; .
§ 2.145Joint Tenancy with Right of Survivorship
A joint tenancy with the right of survivorship may be created by written agreement of property owners. . However, a joint tenancy between spouses concerning community property is governed by different statutory requirements. See section 2.47 above. For both types of property on the death of any cotenant, the practitioner should determine if title companies will accept the result of the joint tenancy agreement or if court adjudication and confirmation of the result is necessary. Adjudication or confirmation of joint tenancy with right of survivorship in community property is discussed at .
A recorded and properly indexed abstract of judgment constitutes a lien on the defendant’s real property (including after-acquired property) located in the county in which the abstract is recorded and indexed. . The lien continues for ten years after the abstract is recorded and indexed, but if the judgment becomes dormant during that period for lack of a writ of execution, the lien ceases to exist. . Dormancy and revival of judgments are controlled by . But see the special provisions for the duration and revival of judgment liens in favor of the state or a state agency at .
Texas has adopted the Uniform Enforcement of Foreign Judgments Act () and the Uniform Federal Lien Registration Act (). Generally, federal judgments and those of other states are treated like Texas judgments. See ; , ; . Texas has also adopted the Uniform Foreign Country Money-Judgment Recognition Act, .
An abstract of judgment generally does not constitute a lien against a homestead at the time the abstract is recorded and indexed.. For special procedures for effecting a release of a judgment lien against the homestead by statutory affidavit by the judgment debtor, refer to . provides that a homestead affidavit and a certificate of mailing (both in the form prescribed by the statute) may be filed by a judgment debtor as a release of a judgment lien on homestead property.
For special restrictions on the filing of abstracts of judgment by inmates or their representatives, refer to .
An owner or lessee must obtain a permit before development of a tract located over a closed municipal solid waste landfill, file a notice of the former use in the real property records, and give notice to prospective buyers or lessees. . The statute also requires that, before development can be undertaken, certain soil testing be conducted of any tract of one acre or more to determine whether it is located over a closed landfill. .
There are two types of commercial landlord’s liens. One is statutory, arising by operation of law. The other is contractual, created by agreement of the parties as a provision of the lease. The contractual landlord’s lien constitutes a security agreement under article 9 of the Uniform Commercial Code. . The statutory landlord’s lien gives the landlord a preference lien on the property of the tenant or subtenant in the building for rent that is due and for rent that is to become due during the current twelve-month period succeeding the date of the beginning of the rental agreement or an anniversary of that date. . The lien is unenforceable for rent on a commercial building that is more than six months past due unless a lien statement is filed with the county clerk. . The statutory lien can be foreclosed only through judicial proceedings; the contractual lien, depending on its terms, may be foreclosed through either judicial or nonjudicial proceedings.
A residential landlord’s lien against a tenant’s nonexempt personal property is provided in . An agricultural landlord’s lien is available in .
§ 2.149Landlord-Tenant Relationship
The landlord-tenant relationship is subject to the Texas Property Code. Chapter 91 contains provisions generally applicable to landlords and tenants. Chapter 92 covers residential tenancies. Chapter 93 covers commercial tenancies. Chapter 94 covers manufactured home community tenancies. If a tenant holds over after termination of a lease, the landlord’s remedies include, among others, filing a forcible detainer action () and enforcing a lien against the tenant’s property (, ). Other landlord-tenant related provisions to note are the prohibition against subletting and assignment (, ); landlord’s duty to mitigate damages (, ); repair provisions (, ); landlord’s duty to provide a complete copy of the lease (, ); security deposits (, , ); late fees (, ); rental applications (); lockout (, , ); and utility interruptions (, , ).
The Texas Property Code addresses the liability of a residential landlord for failure to install smoke alarms () and security devices ().
See sections 2.1, 2.5, 2.63, and 2.148 above and 2.164 and 2.243 below. See also chapter 25 in this manual.
Several statutory provisions address landowner liability in different contexts. The Comprehensive Environmental Response, Compensation, and Liability Act governs owner liability for hazardous substances. See . Other state and federal statutes have similar provisions. Statutes concerning limitations on a landowner’s liability include (liability for recreational use, such as hunting and community gardens); (liability to a contractor); and (liability of governmental units).
§ 2.151Landowner’s Bill of Rights
The Landowner’s Bill of Rights, prepared by the Office of the Attorney General of Texas, is a statement of the rights a real property owner has if condemnation of his real property is sought. The statement may be viewed at the Attorney General’s website at www.texasattorneygeneral.gov/sites/default/files/files/divisions/general-oag/landowners-bill-of-rights.pdf. The Texas Property Code requires a governmental or private entity with eminent domain authority to provide the Landowner’s Bill of Rights statement to the property owner as part of the condemnation process. . See also section 2.48 above.
The business of landscape architecture is regulated under . The lien of a person who provides landscaping services is addressed in .
§ 2.153Lead-Based Paint Disclosures
In 1992, Congress adopted the Residential Lead-Based Paint Hazard Reduction Act, also known as Title X of the Housing and Community Development Act. The lead-based paint provisions are codified at (the regulations are published in ). Sellers and landlords must provide purchasers and tenants of residential properties constructed before 1978 with a “Lead Warning Statement,” in the form provided in , in large type and on a separate sheet of paper from the contract. The required warning statements, prescribed in , are included in chapters 4 (for sales) and 25 (for leases) in this manual. The related state statute is found at . This law applies to all “child-occupied facilities,” including day-care centers and preschool and kindergarten classrooms, occupied by the same child, six years of age or younger, for three hours or more, twice a week.
A person may lack legal capacity to contract for and deal with real property without the supervision of a guardian appointed under the Texas guardianship statutes. Tex. Est. Code tit. 3. In dealing with a guardian in a real estate transaction, the attorney should carefully review the guardianship order. “An incapacitated person for whom a guardian is appointed retains all legal and civil rights and powers except those designated by court order as legal disabilities by virtue of having been specifically granted to the guardian.” . Additionally, there must be an annual determination whether the guardianship should be continued, modified, or terminated. . addresses the management of property recovered on behalf of a minor or incapacitated person through a suit by a next friend. See also section 2.174 below.
Letters of credit are governed by the provisions of and may also be subject to customs and practices, such as Uniform Customs and Practices for Documentary Credits (UCP 600) and International Standby Practices (ISP98), each promulgated by the International Chamber of Commerce. See chapter 7 in this manual.
Public libraries are exempt from attachment, execution, or forced sale. .
The duties of a life tenant of real property are set out in .
An action to recover real property conveyed by an instrument containing certain technical defects must be brought within two years of the recordation of the instrument. . An action to foreclose a real property vendor’s lien or deed-of-trust lien must be brought and a nonjudicial sale must be completed within four years after the cause of action accrues. . A suit to foreclose a mechanic’s lien must be commenced not later than the first anniversary of the last day the claimant may file its lien affidavit, unless the claimant and owner enter into and file of record an agreement to extend limitations, in which case they can agree to extend for up to two years. For a claim arising from a residential construction project, suit must be commenced within one year after the last day for filing the lien affidavit or within one year after completion, termination, or abandonment of the work under the original contract, whichever is later. . A suit on a deficiency judgment after a real property foreclosure must be brought within two years of the foreclosure sale. . A contractual limitations period shorter than two years is void, except in a contract relating to the sale or purchase of a business entity if the consideration involved is greater than $500,000. .
The limitations periods on actions on negotiable instruments are governed by . The limitations periods on actions on nonnegotiable instruments are governed by , .
See also section 2.6 above.
§ 2.159Limited Liability Companies
Limited liability companies are governed by the Texas Business Organizations Code generally and by title 3 more specifically. . See also sections 2.35, 2.61, and 2.111 above and 2.184 and 2.196 below. The company agreement for a limited liability company may establish one or more designated series of members, managers, membership interests, or assets that (a) have separate rights, powers, or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations or (b) have separate business purposes or investment objectives. A limited liability company may establish a protected series or registered series and has certain powers to act in the name of the protected series or registered series. Specific provisions in the Code deal with distributions, allocations, liabilities of members, and other matters relating to a protected series or registered series. –.622.
§ 2.160Limited Liability Partnerships
Limited liability partnerships are governed by the Texas Business Organizations Code generally and by title 4 more specifically. See . In Texas, a limited liability partnership is either a preexisting general partnership or a preexisting limited partnership that registers with the secretary of state as a limited liability partnership and complies with other statutory requirements.
Foreign limited liability partnerships are governed by and are subject to . Texas law does not define what constitutes “transacting business in Texas” for the purposes of the requirement of that “[b]efore transacting business in this state, a foreign limited liability partnership must file an application for registration in accordance with this section and Chapters 4 and 9.” , however, does contain a list of activities not constituting transacting business in Texas. See also . See section 2.111 above.
§ 2.161Liquidated Damages Clauses
Liquidated damages provisions regarding the sale of goods must comply with the requirements of .
A party seeking affirmative relief in an action involving title to real property, the establishment of an interest in real property, or the enforcement of an encumbrance against real property may file notice of the pending action with the clerk of the county in which the land is located. .
A form of notice of lis pendens is available as form 26-35 in this manual. The person filing such a notice must serve a copy of the notice on each party to the action who has an interest in the real property affected by the notice no later than three days after the notice is filed. . Under certain conditions and on motion of a party, the court may cancel the lis pendens anytime during the proceeding. . Under certain other conditions for lis pendens filed after September 1, 2009, and on motion of a party, the court must expunge the notice of lis pendens. . A recorded lis pendens for which no certified copy of an order expunging the notice of lis pendens has been recorded constitutes notice of the litigation. .
For a certified copy of an order expunging a notice of lis pendens that is recorded on or after September 1, 2017, after such certified copy of the order has been recorded, an interest in the real property covered by the notice of lis pendens may be transferred or encumbered free of all matters asserted or disclosed in the notice and all claims or other matters asserted or disclosed in the action in connection with which the notice was filed. .
A loan agreement in which the amount involved exceeds $50,000 is not enforceable unless the agreement is in writing and signed by the party to be bound. .
“Loan agreement” means one or more promises, promissory notes, agreements, undertakings, security agreements, deeds of trust or other documents, or commitments, or any combination of those actions or documents, pursuant to which a financial institution loans or delays repayment of or agrees to loan or delay repayment of money, goods, or another thing of value or to otherwise extend credit or make a financial accommodation. The term does not include a promise, promissory note, agreement, undertaking, document, or commitment relating to:
(A)a credit card or charge card; or
(B)an open-end account intended or used primarily for personal, family, or household use.
. also requires a financial institution to give a statute-of-frauds type of notice for loans exceeding $50,000 and to post notices informing borrowers of the provisions of section 26.02. Construction mortgages should clearly identify that they are securing a construction loan to take advantage of the priority provisions of . See also , which prohibits the preparation of deeds, deeds of trust, notes, mortgages, and other documents affecting title to real property for compensation unless the preparer is an attorney licensed in Texas or is qualified under one of the other listed exemptions. See also section 2.272 below.
The Texas Finance Code provides rules relating to loan documents used in home equity loans, which are administered by the Office of Consumer Credit Commissioner. . For a more extensive discussion of the issues in home equity lending, see chapter 11 in this manual.
The Texas Tax Code prohibits a lender from requiring a borrower to waive its right to an agricultural or open-space tax exemption as a condition to a loan or to agree to pay the lender for any losses suffered by the lender due to change of use and loss of this exemption. , .
Certain loan documents transferring an interest in real property to or from an individual are required to include the confidentiality notice set out in . See section 3.17 in this manual.
Several other sections also address the preparation of loan documents, including 2.66 and 2.109 above and 2.168, 2.169, 2.271, and 2.283 below.
Lockouts of residential tenants are governed by , . Commercial tenant lockouts are governed by .
See sections 2.1 and 2.90 above.
§ 2.166Low-Income Affordable Housing Tax Credits
See section 2.8 above.
The Texas Manufactured Housing Standards Act (TMHSA) regulates manufactured housing through the Texas Department of Housing and Community Affairs. . Title to manufactured homes, the perfection and release of manufactured housing liens, and the cancellation of manufactured housing titles are governed by the TMHSA. Both the TMHSA and the Texas Property Code address the question of when a manufactured home is personal property and when it is real property. ; , , . For a more extensive discussion of manufactured housing, see section 5.15:6 in this manual.
Property Code chapter 63 clarifies the status of a lien on a manufactured home when the manufactured home is converted to real property. . Property Code chapter 94 regulates lease agreements in manufactured-home communities entered into on or after April 1, 2002. .
Texas permits the filing of a master form mortgage under . A master assignment of financing statements is permitted under the terms of .
Mechanic’s liens, which may arise in favor of a variety of contractors, workers, and those providing material for construction or for improvements to property, may be either constitutional or statutory. The constitutional lien derives from . Statutory liens derive from . See chapters 20 and 21 in this manual.
The mechanic’s lien procedures and rights may also apply to persons who perform labor or materials for the demolition of a structure under a written contract. .
On public construction projects, a mechanic’s lien cannot be established against public buildings, structures, or grounds, but subcontractors may have a lien on money, bonds, or warrants due the contractor for the improvements if the prime contract does not exceed $25,000 if with a governmental entity other than a municipality or joint board created under the Transportation Code or $50,000 if with a municipality or joint board. . The McGregor Act, , establishes procedures for the protection of performance- and payment-bond beneficiaries who have a direct contractual relationship with the prime contractor or a subcontractor on a public construction project. The Miller Act, as amended by the Construction Industry Payment Act of 1999, pertains to bonding requirements for construction, alteration, or repair of federal works. .
Certain mechanic’s lien documents transferring an interest in real property to or from an individual must contain the confidentiality notice set out in . See section 3.17 in this manual.
See section 2.191 below.
The Servicemembers Civil Relief Act (formerly the Soldiers’ and Sailors’ Civil Relief Act) requires that, under some circumstances, enforcement of certain civil liabilities and legal proceedings, including foreclosures, be suspended while armed forces personnel are on active duty. . Delinquency dates for property taxes may also be extended. . Deferred delinquent tax that is not paid on or before the date the deferral period expires accrues interest and does not incur a penalty. .
Texas Property Code section 51.015 also affords certain protections to military servicemembers—during active duty military service and during the nine months thereafter—against collection actions for enforcement of real estate loans secured by the servicemember’s dwelling and made to that servicemember before his or her active duty military service commenced. .
Notices of special rights afforded servicemembers are required in suits to evict (), in the sale of real property under a power of sale or other contractual lien (), and in the notice that must be provided before certain enforcement actions by property owners’ associations (). Leases that do not contain notice of a servicemember’s right to terminate may lead to the release of liability for unpaid rent. .
Chapter 92 of the Texas Natural Resources Code provides procedures to designate drill sites on land proposed to be subdivided. . preempts the regulation of oil and gas operations by municipalities and other political subdivisions. A municipality or other political subdivision may not enact or enforce an ordinance that bans, limits, or otherwise regulates oil and gas operations within the boundaries or extraterritorial jurisdiction of the municipality or other political subdivision, except for an ordinance that (1) regulates only aboveground activities, (2) is commercially reasonable, (3) does not effectively prohibit an oil and gas operation conducted by a reasonably prudent operator, and (4) is not otherwise preempted by state or federal law. , (c). An ordinance is considered prima facie to be commercially reasonable if the ordinance has been in effect for at least five years and has allowed oil and gas operations to continue during that time period. .
§ 2.173Mini-Storage Warehouses
See section 2.235 below.
Minors do not have the legal capacity to enter into contracts. The age of majority is eighteen years. , . Marriage removes the disabilities of minority. . Under certain circumstances, the disabilities can be judicially removed. . Unless the disability is removed by marriage or by court decree, a guardian must be appointed under terms of the Texas Estates Code to administer real property owned by the minor. . Under certain conditions, a parent may petition the court for an order to sell the minor’s property instead of having a guardian appointed. . A next friend may also manage property of a minor recovered in a lawsuit if the minor has no guardian. . See also sections 2.154 above and 2.279 below.
See section 2.167 above.
§ 2.176Mold Assessors and Remediators
Mold remediation and other activities that affect indoor air quality, such as mold assessments, are governed by chapter 1958 of the Texas Occupations Code. A Mold Assessment and Remediation Advisory Board has been created with duties such as advising on those and related matters. .
Sections 544.301–.305 of the Insurance Code prohibit certain underwriting decisions based on previous mold claims or damages and applies to any insurer that writes residential property insurance in Texas. . An insurer may not make an underwriting decision based on previous mold claims or damages if mold remediation was performed on the property and either a certificate of mold remediation was issued or a subsequent inspection by an independent assessor or adjustor revealed no evidence of mold damage..
See section 2.37 above.
§ 2.178Mortgage Electronic Registration Systems (MERS)
For all practical purposes, Mortgage Electronic Registration Systems, Inc. (MERS) is nothing more than a “book entry system” or “utility” for the real estate finance industry that is intended to eliminate the need for executing and recording assignments when mortgage loans and related servicing rights are sold in the secondary market. MERS is an electronic registration system that tracks the bundle of rights that are transferred when the various beneficial interests associated with real estate loans are bought and sold on the secondary market like stocks and bonds and commodities like coffee, gold, and oil futures.
To invoke the protections of the real property recording statutes in the official land title records, MERS acts as the mortgagee of record for each security instrument that secures a loan registered on the MERS System. Security instruments must contain particular language naming MERS as original mortgagee. MERS maintains a web-based, electronic book entry registration system that tracks the beneficial ownership and servicing rights associated with any registered real estate loan. The mortgage servicer, who is responsible for all the daily administrative details required to service a borrower’s loan, inputs all loan level data and changes into MERS.
MERS does not buy, sell, transfer, or assign real estate loans and is not the owner, holder, or servicer of the beneficial ownership and servicing rights associated with loans registered on MERS. As long as a loan is registered on the MERS System, MERS is the mortgagee of record in the real property records, and no assignment or transfer of lien is necessary, regardless of the number of times a registered loan is bought or sold.
MERSCORP, Inc., is a private corporation owned and sponsored by the Mortgage Bankers Association of America; the American Land Title Association; the Federal National Mortgage Association; the Federal Home Loan Mortgage Corporation; the Department of Veterans Affairs; the U.S. Department of Housing and Urban Development; nearly every Tier-1 lender; the major title insurance underwriters; and the three major rating agencies for mortgage-backed securities, Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings.
Intentionally or knowingly making a materially false or misleading written statement to obtain a mortgage loan is a violation of section 32.32 of the Texas Penal Code. Punishment ranges from a class C misdemeanor to a first-degree felony. Intentionally or knowingly making a materially false or misleading written statement in providing an appraisal of real property for compensation also violates section 32.32 of the Texas Penal Code and is subject to the same range of punishment. .
Lenders, mortgage bankers, and licensed mortgage brokers must provide all applicants for a home loan a written notice of penalties for making false or misleading written statements containing the promulgated language set out in section 343.105 of the Texas Finance Code, or substantially similar language, at the time of loan closing. See . Also see form 10-19 in this manual. The notice must be a separate document in at least a fourteen-point typeface. Borrowers must sign the notice and verify that all statements and representations contained in their written loan applications regarding their identity, employment, annual income, and intent to occupy the residential real property securing the home loan are true and correct as of the date of loan closing. The failure to provide the notice in compliance with the statute expressly does not affect the validity of the home loan or its enforceability by any holder.
§ 2.180Mortgage Loan Originators
Use of the term mortgage broker has been discontinued for purposes of state licensing and registration of mortgage loan originators to conform to terminology established by the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009. . Companies engaged in or conducting the business of originating residential mortgage loans (mortgage companies) must be licensed under and comply with the Residential Mortgage Loan Company Licensing and Registration Act while individuals must be licensed under and comply with the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act, administered by the Department of Savings and Mortgage Lending. , . An applicant must designate an individual licensed as a residential mortgage loan originator under chapter 157 of the Texas Finance Code as the company’s qualifying individual as required by sections 156.2041 through 156.2044 of the Texas Finance Code. A registered mortgage loan originator who does not hold certain listed licenses or a person licensed as a mortgage loan originator in another state may have the temporary authority to act as a mortgage loan originator for up to 120 days upon satisfaction of a number of requirements. ; see .
An individual licensed under chapter 157 may not be licensed or act as a residential loan originator unless the individual enrolls in the Nationwide Mortgage Licensing System and Registry (or is sponsored by an appropriate entity), obtains a valid unique identifier under that system, and otherwise complies with the applicable requirements of chapter 180 of the Texas Finance Code and rules adopted thereunder by the Texas Finance Commission to carry out the intent of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008, .
A licensed residential mortgage loan originator is not required to obtain a regulated loan license under chapter 342 of the Texas Finance Code to make, negotiate, or transact a secondary mortgage loan subject to that chapter. . Mortgage bankers, as defined in section 156.002(8) of the Texas Finance Code, are exempt from chapter 156 if registered under chapter 157. Depository institutions, their regulated subsidiaries, and entities regulated by the Farm Credit Administration are exempt from chapter 156. .
Residential mortgage loan originator compensation, including the practice by creditors of paying mortgage loan originators a yield-spread premium based on the interest rate of a residential mortgage loan or paying compensation based on loan terms other than the principal loan amount, is restricted under amendments to Regulation Z, (Truth in Lending).
Entities and individuals exempt from the licensing requirement are listed in , , .
Residential mortgage companies and loan originators must comply with rules and regulations adopted by the Finance Commission. . The commissioner is authorized to enforce compliance with the subject licensing regulations through powers granted under chapters 156 and 157 of the Texas Finance Code. Unlicensed activity is punishable as a class B misdemeanor.
§ 2.181Municipal Utility Districts (MUDs)
Municipal utility districts are governed by the provisions of . See also section 2.284 below.
§ 2.182Naturally Occurring Radioactive Materials (NORM)
The Texas Railroad Commission regulates NORM waste resulting from oil and gas operations. .
Survey lines may not cross navigable streams, which are defined as those retaining “an average width of 30 feet from the mouth up.” , . See also , which controls the validity of patents to and awards of land lying across or partly across watercourses, navigable streams, beds, and abandoned beds of watercourses. See also section 2.295 below.
Nonprofit corporations are governed by the Texas Business Organizations Code generally and by chapter 22 more specifically. . The sale, lease, exchange, or mortgage of property belonging to a domestic entity is controlled by . Most property owners’ associations that are incorporated are organized as nonprofit organizations. See . See also sections 2.35, 2.61, 2.111, and 2.159 above and 2.196 and 2.280 below.
§ 2.185Non–Real Estate Taxes Affecting Real Estate
The purchaser of a business or stock of goods must withhold from the purchase price adequate funds to pay taxes that may be owed by the seller (for example, unpaid hotel, parking revenue, sales, and corporate franchise taxes of the seller) until the seller provides a receipt of payment from the comptroller. . See also section 2.136 above.
§ 2.186North American Free Trade Agreement (NAFTA)
In September 2018, the United States, Mexico, and Canada reached an agreement to replace the North American Free Trade Agreement (NAFTA) with the United States–Mexico–Canada Agreement (USMCA). NAFTA remained in force pending the ratification of the USMCA by all three governments. The USMCA entered into force on July 1, 2020, replacing NAFTA. Certain provisions of the USMCA may affect real property and finance transactions. The text of the USMCA is available on the Office of the United States Trade Representative website at https://ustr.gov/usmca. The USMCA has curtailed NAFTA’s protections for investors engaging in cross-border investment with party countries. See also section 2.113 above and section 2.282 below.
§ 2.187Notarial Seals, Out-of-State
The failure of a non-Texas notary public to attach an official seal to a document will not render the document invalid if a seal is not required in the jurisdiction in which the document is acknowledged. ; . The secretary of state annually compiles a list of states that require notarial seals to validate the certificate of acknowledgment and will make the list available to all county clerks by January 1 of each year. . See also section 2.4 above.
Notary qualifications and requirements are found in . Notaries may not represent or imply that they are attorneys. . The notary’s book is public information and must be available for inspection at reasonable times. . By administrative rule, however, notaries public may not record in the public record the identification number on the signer’s identification card used. . Notaries may certify copies of documents not recordable in the public records and may take depositions. . Notaries may authenticate a paper or tangible copy of an electronic record to enable recording. . The form of declaration of authenticity is set out in . Application of a printed seal by a notary public is not required on an electronically transmitted certificate of acknowledgment if the same information as contained in the seal is set forth. ; . See section 2.4 above. Recent changes to the definition of “physical presence” provide for remote online and remote ink notarization by notaries who have obtained licenses to do so. Certain audiovisual and timing requirements apply. See , esp. subch. C.
Statutory provisions relating to common and public nuisances are in , , and . Many municipalities have local ordinances relating to nuisances.
The law governing the appraisal of “qualified open-space land” for ad valorem taxes is found in . The Texas Tax Code prohibits a lender from requiring a borrower to waive its right to an agricultural or open-space tax exemption as a condition to a loan or to agree to pay the lender for any losses suffered by the lender due to change of use and loss of this exemption. , . See also section 2.5 above.
Astronomical Observatories: The commissioners court of a county within fifty-seven miles of the McDonald Observatory must adopt orders regulating the installation and use of outdoor lighting in any unincorporated territory and adopt orders establishing standards relating to outdoor lighting in proposed subdivisions to minimize the interference with observatory activities. The commissioners court of a county within five miles of the George Observatory or the Stephen F. Austin Observatory may restrict artificial outdoor lighting in any unincorporated territory of the county and establish standards relating to artificial outdoor lighting in proposed subdivisions to minimize the interference with observatory activities. . A municipality must regulate by ordinance the installation and use of outdoor lighting to protect against its use in a way that interferes with scientific astronomical research of an observatory. . A municipality must by ordinance establish standards relating to proposed subdivisions to minimize interference with observatory activities. .
Military Installations: Sections 240.032 and 240.0325 of the Texas Local Government Code authorize the commissioners court of a county with a population of more than one million that has at least five United States military bases and any county adjacent to that county that is within five miles of a United States Army installation, base, or camp, on request of the commanding officer, to adopt orders regulating the installation and use of outdoor lighting within five miles of the installation, base, or camp in unincorporated territory of the county. There are exceptions for installations in place before the effective date of the order for electric utilities, electric cooperatives, gas utilities, surface coal mining, telecommunications providers, and manufacturing facilities required by the Texas Commission on Environmental Quality to hold a permit and for tracts of land used as a single residence outside the boundaries of a private subdivision, tracts of land maintained for agricultural use, activity that takes place on a tract of land maintained for agricultural use, structures or related improvements located on a tract of land maintained for agricultural use, or a correctional facility operated by or under a contract with the Texas Department of Criminal Justice. , .
The Texas Civil Practice and Remedies Code addresses the subject of trespass by outdoor signs in . Municipalities are authorized to relocate, reconstruct, and remove signs under . The owner of a sign may be entitled to be compensated for the costs associated with the relocation, reconstruction, or removal. . However, a municipality cannot regulate a private landowner’s right to put political signage on the landowner’s property. . The Texas Highway Commission regulates highway signs under , while recognizing the authority of cities and counties to regulate highway signs in certain circumstances.
A landlord who issues a parking permit to a residential tenant must issue the permit for a term that is coterminous with the tenant’s lease term and may not terminate or suspend the permit until the date the tenant’s right of possession ends. . A neighborhood may petition a county or municipality to post signs prohibiting the overnight parking of commercial vehicles by complying with . See section 2.265 below.
§ 2.194Parks and Recreational Projects
Cities and towns are restricted in certain instances from selling or encumbering parks and other recreational projects without authorization by a majority vote of qualified voters. .
A joint owner or claimant of real property or an interest in real property or a joint owner of personal property may compel a partition of the interest or the property among the joint owners or claimants. and . addresses the partition of heirship property. Unless waived by the parties, a nonexclusive access easement shall be granted on partition of property under chapter 23. . Texas Property Code chapter 23A specifically addresses and controls partition of “heirs’ property.”
Partnerships are governed generally by title 4 of the Texas Business Organizations Code. Chapters 151 and 154 apply to both general and limited partnerships. Chapter 152 applies to general partnerships, and chapter 153 applies to limited partnerships.
The sale, lease, exchange, or mortgage of property belonging to a domestic entity is controlled by . Every partner is an agent for the partnership, and any act done in the usual course of business, including the execution of instruments, binds the partnership and the partners. .
If a partner conveys partnership real property without authority and the transaction is not in the usual course of business, the partnership may recover the property from the grantee but not from a bona fide purchaser from the grantee for value without knowledge of the lack of authority. .
Title to partnership property for general partnerships is governed by .
See also sections 2.35, 2.61, 2.111, 2.159, and 2.184 above.
§ 2.197Personal Property Leases
Personal property leases are governed by the provisions of . In addition, addresses rental-purchase agreements of consumer personal property.
The Texas Structural Pest Control Act is found in .
See section 2.78 above.
See section 2.249 below.
See section 2.77 above.
§ 2.202Private Mortgage Insurance Notice
Lenders that require borrowers to purchase mortgage guaranty insurance must provide annually a prescribed statutory notice about the right to cancel. .
§ 2.203Private Property Rights
Private real property owners have certain rights under state law to challenge state and local regulations and governmental actions that result in a taking of their property. . Governmental entities are required to prepare a written takings impact assessment of proposed governmental action that may result in a taking. Failure to do so may render the action void. . Private real property owners have certain rights to reacquire property taken through eminent domain. . Before a governmental entity with eminent domain authority begins negotiating with a property owner to acquire real property, the entity must provide a landowner’s bill of rights statement provided by . .
See also sections 2.48 and 2.151 above and 2.289 below.
The licensing of property inspectors is addressed in the Real Estate License Act. . Property inspections may be conducted, in part, by electricians, plumbers, carpenters, and others, such as engineers, in their respective fields; provided, however, a person must be licensed if that person represents to the public that the person is in the business of inspecting real property on behalf of a seller or buyer. .
§ 2.205Property Owners’ Associations
The Texas Residential Property Owners Protection Act applies to residential subdivisions that are subject to restrictions that authorize a property owners’ association to collect regular or special assessments and that require mandatory membership in the association. . The Act also regulates the foreclosure of an assessment lien and provides a right of redemption after foreclosure. . In addition, the Property Code affords certain rights to property owners’ associations in cities or counties that meet various specified minimum population requirements to amend, extend, or supplement deed restrictions and to establish assessment lien mechanisms. . The statute also sets out certain other statutory powers of property owners’ associations. Property owners’ associations are subject to the state open meetings and open records laws in very limited circumstances. , . Property owners’ associations are required to deliver a resale certificate to owners, purchasers of a property in a subdivision, or title companies on demand. The resale certificate must include information relevant to the specific property as well as to the subdivision as a whole. . Property owners’ associations are prohibited from adopting or enforcing a restriction that would prohibit or regulate the occasional sale of lemonade or other nonalcoholic beverages by a person under the age of eighteen. . Property owners’ associations are also not allowed to adopt or enforce a policy that would prohibit or restrict any person who is otherwise authorized from lawfully possessing, transporting, or storing a firearm, any part of a firearm, or firearm ammunition, or prohibit or restrict the otherwise lawful discharge of a firearm. .
Condominium property owners’ associations are not governed by chapters 207 and 209; rather, condominiums formed after December 31, 1993, are governed by Texas Property Code chapter 82. Condominiums formed before January 1, 1994, are generally governed by Texas Property Code chapter 81 and selected provisions of chapter 82 set forth in section 82.002(c), unless they amend the condominium declaration and elect to be governed solely by all of chapter 82.
§ 2.206Property Tax Consultants
Chapter 1152 of the Texas Occupations Code provides for the registration of property tax consultants. A property tax consultant is a person who performs or supervises the performance of property tax consulting services for compensation. Property tax consulting services means preparing for another person a rendition statement or property record, representing another person in a property tax protest, consulting or advising another person concerning the preparation of a rendition statement or property report or acting on behalf of another person in a protest under the Tax Code, negotiating or entering into an agreement with an appraisal district on behalf of another person, or acting as the agent of a property owner in connection with certain property tax matters. .
With certain exceptions, a person engaging in the business of making, transacting, or negotiating property tax loans, or a person making property tax loans who contracts for, charges, or receives, directly or indirectly, a charge, including interest, compensation, consideration, or any other amount authorized under the statute, must be licensed by the Texas Consumer Credit Commissioner. . The lender must provide the commission records to investigate compliance with the laws, an audit of net assets, and access to the lender’s place of business for inspection. The commission is also authorized to prescribe filing documents necessary when a property tax lender pays property taxes for another person. .
Effective September 1, 2021, after the fourth anniversary of the date a quitclaim deed for real property is recorded in the deed records of the county in which the real property is located, the quitclaim deed (1) does not affect the question of the good faith of a subsequent purchaser or creditor and (2) is not notice to a subsequent purchaser or creditor of any unrecorded conveyance of, transfer of, or encumbrance on the real property. . For quitclaims recorded before September 1, 2021, the law remains that a grantee cannot qualify as a bona fide purchaser for value under the Texas recording statutes. Moreover, a quitclaim cannot support a claim of adverse possession under the five-year statute of limitations. .
See section 2.19 above.
§ 2.210Real Estate Investment Trusts (REITs)
Real estate investment trusts are governed by the Texas Business Organizations Code generally and by title 5 more specifically. .
§ 2.211Real Estate License Act
The Real Estate License Act, , authorizes the Texas Real Estate Commission to regulate the actions of brokers, salespersons, real estate inspectors and appraisers, and others. It also contains numerous other provisions relating to real estate transactions involving brokers or salespersons.
§ 2.212Real Estate Settlement Procedures Act (RESPA)
The Real Estate Settlement Procedures Act (RESPA), , and its implementing Regulation X, , apply to mortgage loan transactions that are secured by a lien on residential real property designed principally for occupancy by one to four families and that otherwise meet the definition of a “federally related mortgage loan” set out in . Certain loans, such as business purpose loans and various construction loans with a term of less than two years, are exempt from coverage. . The Consumer Financial Protection Bureau (CFPB) has rulemaking and enforcement authority for RESPA and sets forth the requirements for the provision of clear and accurate disclosures to consumers. For most transactions subject to RESPA, The CFPB combined the disclosure requirements of RESPA and the Truth in Lending Act and its implementing Regulation Z into new forms (TILA-RESPA Integrated Disclosures or “TRID”). Under TRID, a loan estimate form must be provided at the time of application, and a closing disclosure form must be provided before and at consummation.
For home equity lines of credit or reverse mortgages, a good-faith estimate (GFE) must be provided at the time of application, and a HUD-1 settlement statement must be provided at consummation.
Section 8 of RESPA prohibits kickbacks, referral fees, and unearned fees in connection with federally related mortgage loans. Violators of section 8 may be found civilly liable for treble damages to persons charged for settlement services involved in the violation and criminally liable for both a statutory fine and imprisonment. Referrals of settlement services to affiliates are permitted as an exception to the section 8 prohibitions under strict guidelines for affiliated business arrangements set out in . Sample forms of required consumer disclosures are illustrated in appendix H to Regulation Z, in public guidance documents published in the Federal Register from time to time by the Department of Housing and Urban Development, and as published by the CFPB. See also the discussion in chapter 12 in this manual.
The Texas Property Code addresses the recording of instruments used in property transactions. See . A document to be recorded may be either a paper document or a tangible copy of an electronic record that has been declared true and correct as provided in , . A form of declaration of authenticity for recording an electronic record is provided in . The rerecording of instruments is permitted under the terms of if the record was lost, destroyed, or removed and is effective from the date of original recordation. See also section 2.65 above.
Various federal laws and regulations, including Internal Revenue Service regulations, require the retention of records that affect or involve realty. Records that must be retained under state law may be destroyed after three years, unless otherwise provided. .
§ 2.215Recreational Projects and Recreational Use
See sections 2.36, 2.150, and 2.194 above and 2.263 below.
After foreclosure of an assessment lien, condominium unit owners and residential property owners have certain rights of redemption. See (condominium unit owners);(residential property owners). Redemption rights after a tax foreclosure sale are governed by . A certificate of redemption properly issued by the United States may be recorded. .
If a contract or statute requires that notice be delivered by registered mail, certified mail will also suffice unless registered mail is required by law to provide insurance against loss. .
§ 2.218Release of Lien by Affidavit
If a mortgagee holds a mortgage on one-to-four-family residential property, or on other real property where the original face amount of the debt is less than $1.5 million, and the mortgagee or its mortgage servicer fails to execute a release of the mortgage, an authorized officer of a title insurance company or a title insurance agent may execute and record an affidavit in a form substantially similar to the affidavit prescribed by . An uncontroverted affidavit, executed and recorded as provided in the statute, operates as a release of the mortgage. .
§ 2.219Release of Lien by Attorney or Others
allows the agent or attorney of record to release an abstract of judgment by recording a return or copy of the return on an execution issued on the judgment that is certified by the officer making the return and that complies with the requirements of section 52.005 or a receipt, acknowledgement, or release signed by the party (or his agent or attorney of record) entitled to receive payment of the judgment and that is acknowledged or otherwise proven for record. allows a release by discharge under bankruptcy laws. authorizes judges to release liens when the amount due is paid to the court. If a judgment creditor refuses to accept payment of a judgment or refuses to execute a release of judgment after accepting payment, the court may hold a hearing to determine whether a release should be issued. . permits authorized title insurance companies and title insurance agents to file affidavits of record as a substitute for an executed release by the lienholder under certain circumstances. See also sections 2.2 and 2.146 above. See also requiring a mortgage servicer or mortgagee to file a release of lien securing a home loan within sixty days of the loan payoff, or earlier if requested by the mortgagor in writing on or before the twentieth day after the payoff date.
§ 2.220Reporting of Transactions
Promulgated in 2024 and set to be effective December 1, 2025, a federal regulation potentially involving many real estate transactions and also potentially imposing duties on the attorneys who are representing clients in those transactions deserves attention. 89 Fed. Reg. 70258 (Aug. 29, 2024), to be codified in 31 C.F.R. ch. X. The regulation has been issued by an agency within the Treasury Department known as the Financial Crimes Enforcement Network (FinCEN). The Treasury Department believes that there is substantial activity in the United States involving the purchase and sale of residential real estate as a way to hide or launder money from drug dealing, foreign corruption and theft, terroristic funding sources, and the like. This program has been promulgated by regulation to help stop that activity.
The statutory basis of authority is the Bank Secrecy Act (particularly its anti–money laundering provisions), which is the common name of the Currency and Foreign Transactions Reporting Act of 1970, as amended. ; –1960; –5314. In some ways, the regulation is similar to the Corporate Transparency Act in that it requires identification of the individual persons who are the beneficial owners of entities and requires that the reporting party investigate any entities which might own other entities in order to get to the human individual beneficial owners.
The regulations would apply to residential transactions of one-to-four family residences and land that is intended to become one-to-four family residential and residential cooperatives. The regulations would apply if:
1.the property involved is a one-to-four family residential property or a co-op apartment or is planned to become such property;
2.the consideration for the conveyance is either all cash or some cash provided by a lender which is not itself subject to the Treasury’s anti-money laundering rules; and
3.the buyer is an entity (very broadly defined) or a trust.
If a transaction is subject to the regulations—and the Treasury estimates that 850,000 transactions will be subject during the first year of the regulations’ effect—someone involved in the transaction is responsible for filing a report giving information about the property, the seller, the lender (if any), and, most importantly, the identity of the buyer and the beneficial owners of the buyer. There is a “cascade” of responsibility for doing the investigation and the filing, which starts with those who provide settlement services (that is, the local title company in most cases), title insurance underwriters, or, of most interest to Texas lawyers, a lawyer who drafts the deed of conveyance or who records the deed. That means a lawyer who represents a party to the transaction could have an obligation to report what might be confidential information about the lawyer’s client. The parties named in the “cascade” may, according to the rule, agree among themselves who will do the filing. An attorney may wish to assure that someone higher in the “cascade” of responsibility is handling the reporting.
Again, the effective date of the regulation is December 1, 2025. FinCEN is adopting a report form to be utilized for subject transactions.
§ 2.221Republic of Texas Liens
See section 2.116 above.
§ 2.222Residential Construction Liability
Liability for damages arising out of defects in residential construction projects is addressed in the Residential Construction Liability Act ().
§ 2.223Residential Rental Locators
The Real Estate License Act requires that residential rental locators be licensed as brokers or salespersons, with certain exceptions. , , , , .
Any clause not in contravention of law may be inserted into an instrument of conveyance. . Restrictive covenants that require the use of wood shingles for structures on residential properties or that are discriminatory on the basis of race, color, religion, or national origin are void. , . Restrictive covenants that are at odds with certain water conservation initiatives are void. . In an action based on breach of a restrictive covenant, the prevailing party who asserted the action may recover attorney’s fees in addition to the party’s costs and claim. .
The governing body of a municipality that does not have zoning ordinances or that has a population of 1.5 million or more may elect application of (“Enforcement of Land Use Restrictions Contained in Plats and Other Instruments”) for enforcement of restrictive covenants. The municipality may require any person who sells or conveys restricted property located within the municipality first to give the purchaser written notice of the restrictions and of the municipality’s right to enforce them. . A municipal utility district may enforce restrictive covenants. .
permits enforcement of certain restrictive covenants not requiring a structural change in a justice court, although a justice court is prohibited from granting a writ of injunction.
See also sections 2.46, 2.72, and 2.205 above.
A reverse mortgage is a type of home equity loan authorized by the Texas Constitution that permits homeowners, age sixty-two or older, to borrow without recourse, based on the equity in their homesteads. .
See section 2.131 above.
In a credit transaction that involves a principal residence and that is subject to the Truth in Lending Act, the consumer may have a right to rescind the transaction within a certain period. The consumer must be notified of this right. .
See section 2.281 below.
§ 2.228Roadway Forming County Boundary
confers concurrent jurisdiction over roadways forming a common county boundary.
§ 2.229Rule Against Perpetuities
, provides that perpetuities are not allowed. The principal statutory provision incorporating the rule against perpetuities is found in . The rule as applied to trusts is addressed in , which was amended in 2021 to provide that an interest in the trust must vest (a) for an irrevocable trust with an effective date on or after September 1, 2021, not later than three hundred years after the effective date of the trust, and (b) for an irrevocable trust with an effective date before September 1, 2021, not later than twenty-one years after some life in being at the time of the creation of the interest, plus a period of gestation. The period in clause (a) above may apply if the trust instrument provides that the interest vests under the provisions of the statute applicable as of the date the interest vests.
§ 2.230Sale of Trust Property to Governmental Entities
A governmental entity may not purchase real property held in trust unless the trustee submits to the governing body of the governmental entity a copy of the trust agreement identifying the true owner of the property. . See also section 2.70 above.
See section 2.59 above.
The Securities Act of 1933 () and the Texas Securities Act (–4008.105) may apply to group ownership of real estate in which passive investors furnish capital and rely on a promoter to make the investment successful. These statutes generally require certain disclosures to the passive investors and prohibit the use of fraudulent devices or schemes in connection with the sale of securities.
The Texas Property Code addresses the rights and requirements associated with security deposits in residential leases () and in commercial leases (). creates an alternative fee in lieu of a security deposit for residential leases.
Security interests in many categories of personal property are governed by . For a more extensive discussion of security interests, see chapter 9 in this manual.
§ 2.235Self-Service Storage Facilities
The Texas Property Code governs the creation and perfection of liens against property held in self-service storage facilities or mini-warehouse facilities. .
§ 2.236Seller’s Disclosure of Property Condition
See section 2.71 above.
The sale of sewer service to the public is regulated under . No retail utility may provide sewer service to the public without first receiving a certificate of convenience and necessity (CCN) from the Texas Commission on Environmental Quality (TCEQ), with the exception of municipalities (which may provide retail service to areas within their corporate limits without a CCN, provided such areas are not within the certificated area of another retail utility provider). .
Certain owners with property within a proposed service area will receive notice of new applications for certificates and amendments to existing certificate applications. . Certain owners may “opt out” or exclude their property from the CCN application. . Certain owners may petition the TCEQ for a release from a CCN if they can demonstrate that the certificate holder conditions the provision of service on the payment of costs not properly allocable directly to the petitioner’s service request. . Each certificate holder must record a map and a boundary description of the certificated area in the real property records of each applicable county. .
Convicted sex offenders must register their residences with, and certain notices must be provided to, law enforcement authorities. .
A convicted sex offender may not own an interest in, be employed by, be an independent contractor for, or be an officer or director of a sexually oriented business. .
§ 2.239Shopping Center Stores, Open on Sundays
A clause in a shopping center lease that requires a store to be open when another store in the center is open does not apply on Sundays unless the lease expressly states that it applies on Sundays. .
A landlord’s obligation to install smoke alarms in residential leased premises is governed by .
§ 2.241Soldiers’ and Sailors’ Civil Relief Act
The Soldiers’ and Sailors’ Civil Relief Act has been renamed the Servicemembers Civil Relief Act. See section 2.171 above.
Numerous special districts created by state statutes affect real estate transactions. Among the most important are conservation districts, drainage districts, fresh water supply districts, hospital districts, irrigation districts, levee improvement districts, municipal management districts, municipal utility districts, navigation districts, utility and reclamation districts, and water control and improvement districts. Statutes creating and governing special districts can be found in the Texas Local Government Code, Texas Health & Safety Code, and the Texas Water Code. The 2003 Texas legislature created a Special District Local Laws Code, organized so that each special district’s local law is contained in a single, separate chapter. The Code is a revision of Texas statutes compiled only to make special district laws more accessible and understandable.
Real property leases between state entities and private parties are governed by the requirements of and .
To be enforceable, the following types of transactions, among others, must be in writing: contracts for the sale of real estate; conveyances of an interest in land, including an estate of inheritance, a freehold interest, and an estate for a term longer than one year; agreements to pay a commission for certain real property transactions; and agreements that will not be performed within one year from the date they are made. ; . See also section 2.163 above, relating to a notice that must be given to claim a statute-of-frauds defense in connection with a loan.
See chapter 3 in this manual for comments and suggestions relating to the preparation of documents used in any conveyance of real property.
See section 2.158 above.
The ten-year statute of repose for registered or licensed architects, engineers, interior designers, and landscape architects is found at ; for persons who construct or repair improvements to real property, at ; and for surveyors, at . Except for claims arising out of contracts with the Texas Department of Transportation, a project that receives state or federal funds for designated highway or mass transit spending, or certain civil works projects, a governmental entity must bring a suit against registered or licensed architects, engineers, interior designers, and landscape architects and against persons who construct or repair improvements to real property within eight years after substantial completion of the project. , .
Construction sites of five acres or more must comply with the general stormwater permit requirements found in 57 Fed. Reg. 41,176–41,190 (1992). See . Construction sites of between one and five acres are addressed by the rules published in 64 Fed. Reg. 68,722 (1999). The general permits for industrial activities were published in 57 Fed. Reg. 41,236 (1992). A new multisector permit for industrial activities was published in 65 Fed. Reg. 64,746 (2000) as corrected in 66 Fed. Reg. 1675 and 16,233 (2001). Certain industrial and other uses may have other stormwater permit requirements under the National Pollutant Discharge Elimination System permit program under the Clean Water Act. Certain large metropolitan areas may implement stormwater permitting programs in compliance with the Clean Water Act. . See section 2.87 above.
Cities have the authority to assess landowners for the costs to improve streets and sidewalks. . Cities may grant the use of streets for private purposes under the provisions of . Suits for relief from street closings are regulated by , . authorizes the Texas Transportation Commission to construct and maintain state highways. applies to municipalities. address various aspects of county roads, including the ability of a county road supervisor to limit or prohibit the use of certain county roads by vehicles that may damage the road. . County roads may be abandoned in some cases in which the use becomes infrequent and one of the adjoining property owners has fenced the property for a continuous period of more than twenty years. .
Counties may establish substantive requirements for subdivision plats for tracts outside the extraterritorial jurisdiction of municipalities. , , . Cities have the same power over subdivisions within their corporate limits. . Generally, counties and cities are required to enter into a written agreement that identifies the entity authorized to regulate subdivision plats in the city’s extraterritorial jurisdiction. . If counties and cities do not enter into a written agreement before the dates specified in , the parties must arbitrate the disputed issues. .
Special subdivision requirements apply to populous counties (, ), counties near the Mexican border (), and to certain economically distressed counties (). See also sections 2.45 and 2.58 above.
Special subdivision requirements also apply to replats of golf courses in certain counties. .
A subdivision plat, replat, or amended plat or replat may not be recorded unless (1) it is approved by the entity authorized to regulate subdivisions, (2) it has attached to it an original tax certificate from each taxing unit with jurisdiction over the tract indicating that no delinquent ad valorem taxes are owed on the tract, and (3) it has attached to it the documents required by or , if applicable. . If the subdivision plat, replat, or amended plat or replat is filed after September 1 of a year, the plat, replat, or amended plat or replat must also have attached to it a tax receipt from each taxing unit with jurisdiction over the tract indicating that taxes for the current year have been paid or a statement from the collector indicating that taxes for the current year have not been calculated. . The tax collector is required, on request, to give the property owner or his agent a statement indicating that taxes for the current year have not been calculated. .
Note that tracts within the extraterritorial jurisdiction of a city may require approval from both the city and the county. See . The cancellation and revision of certain subdivision plats are governed by , . County-approved subdivision plats terminate on January 1 of the fifty-first year after the year approved if none of the platted land has been sold by that date. .
A property description based on a pending but unrecorded subdivision plat may be used in a sales contract, contract for deed, or deed only if certain conditions are met. .
In counties with populations of 65,000 or more, if all or part of a subdivision plat is revised to provide for another subdivision within all or part of the earlier subdivision, the restrictions that apply to the earlier subdivision apply to the newly created subdivision. .
Municipalities and counties are authorized to require as a condition of platting that a registered engineer certify the adequacy of groundwater. , .
Counties may require that plat applications include a digital map that meets certain criteria, provided that the necessary “digital mapping technology” is “reasonably accessible.” , , .
§ 2.250Subletting or Assignment
Subletting or assignment of leased premises is prohibited without the prior consent of a landlord. .
See section 2.285 below.
Legal obligations between principals and sureties are governed by the provisions of . The Insurance Code governs construction payment bonds issued by surety companies. See . Performance and payment bonds are governed by and .
Regulation and licensing of land surveyors are provided by the Board of Professional Engineers and Land Surveyors. . The Professional Land Surveying Practices Act is contained in .
The circumstances under which a surveyor’s lien attaches to real estate are addressed in .
§ 2.254Survival of Representations and Warranties
The four-year statute of limitations applies to suits for misrepresentations and breaches of warranties. . Contracts that purport to limit the time in which to bring suit on the contract to less than two years are void. The provision does not apply to transactions relating to the sale or purchase of a business entity of more than $500,000. .
§ 2.255Surviving Spouse of Mortgagor
Chapter 343 of the Texas Finance Code requires a residential mortgage servicer to provide to the surviving spouse of the mortgagor the loan number, the current balance, whether any amounts are delinquent, and what amount, if any, is held in escrow, within thirty days of receiving a request for the loan information. A request from a surviving spouse must include statutory language, a death certificate of the mortgagor, an affidavit from a disinterested party in a form similar to an affidavit of heirship as set forth in , and an affidavit from the surviving spouse stating the property is the surviving spouse’s primary residence.
§ 2.256Swimming Pools and Spas
Pools in multifamily residential projects must have enclosures that comply with . Municipalities also may adopt ordinances governing pool enclosures. . Effective September 1, 2020, the International Swimming Pool and Spa Code, as it existed on May 1, 2019, has been adopted as a uniform code for use in municipalities in the state. The Code applies to all construction, alteration, remodeling, enlargement, and repair of swimming pools and spas in a municipality that elects to regulate pools or spas. A municipality may establish procedures for the adoption of local amendments to the Code. .
The Property Redevelopment and Tax Abatement Act permits tax abatements in reinvestment zones. . See also sections 2.5, 2.136, 2.185, and 2.190 above.
Telecommunications companies have certain rights of access to private commercial buildings under the Texas Utilities Code. See especially . A telecommunications provider is defined as a person who has been issued a certificate of convenience and necessity or certificate of operating authority by the Public Utility Commission. .
Federal law prohibits transactions with persons who commit, threaten to commit, or support terrorism. See Exec. Order No. 13,224, 66 Fed. Reg. 49,079 (Sept. 25, 2001). Additional terrorism regulations are governed by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury. . Prohibited transactions include those with specially designated terrorists (), terrorism list governments (), and foreign terrorist organizations (). A “Specially Designated Nationals List” is administered by OFAC and is accessible online at https://sanctionslist.ofac.treas.gov/Home/SdnList.
§ 2.260Texas Department of Housing and Community Affairs
The Texas Department of Housing and Community Affairs is the principal agency in the state that administers programs of housing assistance and development for individuals and families of low, very low, and extremely low income and families with moderate income. Its general enabling statute can be found at .
§ 2.261Texas General Land Office
Use of evidence to demonstrate superior title to land based on records filed in the General Land Office is addressed in .
See section 2.5 above.
Timeshare projects coming into existence on or after August 26, 1985, must comply with the terms of the Texas Timeshare Act, .
The business of title insurance is governed by the Texas Title Insurance Act, –2704. Insuring forms, rate rules, procedural rules, administrative rules, and claims handling principles and procedures are set out in the “Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas” promulgated by the Texas Department of Insurance in accordance with Tex. Ins. Code tit. 11.
§ 2.265Towing of Motor Vehicles
governs the removal of unauthorized vehicles from a parking facility or public roadway, the establishment of reserved parking spaces, the enforcement of parking restrictions in parking lots and garages, the towing of unauthorized vehicles from private property, and the regulation of towing companies and parking-facility owners.
§ 2.266Trademark and Trade-Name Rights
Trademark and trade-name rights are addressed in the provisions of . The Lanham Act, , is the primary federal trademark statute.
The Texas Real Property Transfer on Death Act, , authorizes an individual to make a revocable transfer to one or more designated beneficiaries, including alternate beneficiaries, effective at the transferor’s death, by executing and recording a transfer on death deed. During the transferor’s lifetime, a transfer on death deed does not affect any right, title, or interest of the transferor in the property; vest any legal or equitable title in a designated beneficiary; or subject the property to the claims of creditors of any designated beneficiary. Notwithstanding the recording of a transfer on death deed, the transferor retains the right to transfer or encumber the property, any present or future homestead rights, and any present or future ad valorem tax exemptions to which the transferor is entitled. A transfer on death deed does not affect the rights of creditors of the transferor, secured or unsecured, nor does it trigger any due-on-sale clause. A transfer on death deed does not affect the eligibility for public assistance of either the transferor or any designated beneficiary. In the 86th legislative session, the statutory forms for the transfer on death deed and the revocation of transfer on death deed were removed from chapter 114 of the Texas Estates Code. Acts 2019, 86th Leg., R.S., ch. 337, § 3.2 (S.B. 874), eff. Sept. 1, 2019. The Estates Code continues to authorize use of transfer on death deeds and revocation of transfer on death deeds but no longer prescribes statutory language. See section 5.11 in this manual. See also the Texas Transfer Toolkit published by the Texas Access to Justice Commission overseen by the Texas Supreme Court, which includes a Transfer on Death Deed form. See www.texasatj.org/texas-transfer-toolkit.
Certain adjacent counties are authorized to create a regional county transportation authority. .
Trespass to try title is a statutory action to establish title to real property. ; . A declaratory judgment action can be maintained if the sole title issue is the determination of the boundary between adjoining properties. .
The Texas Trust Code, , governs express trusts. Trustees have certain management rights if environmental problems arise on properties held in trust under , even if the trust instrument does not expressly authorize such actions. A trustee may grant an agent authority to act for the trustee with respect to real property transactions unless the governing instrument prohibits the trustee from hiring agents. . See also section 2.31 above.
The Truth in Lending Act, , and its implementing Regulation Z, , promote the informed use of consumer credit by requiring disclosures about the terms and cost of credit transactions. The Act applies to individuals or businesses that regularly offer or extend credit to consumers, including mortgage credit secured by a lien on real property, if the credit is primarily for personal, family, or household purposes and is subject to a finance charge or payable by a written agreement in more than four installments. The Consumer Financial Protection Bureau (CFPB) is the government agency with rulemaking and enforcement authority for the Act.
Creditors subject to the Act generally are persons who regularly extend consumer credit that is subject to a finance charge and to whom the credit obligation is initially payable. See Creditors must make written disclosures for each credit transaction at the time of application, before consummation, and at consummation that reflect the terms of the actual legal obligation between the parties and show the calculated annual percentage rate, finance charge, and other material disclosures of the cost of credit within permitted tolerances for accuracy. Additional written disclosures are required at the time of application for variable rate transactions in which the annual percentage rate may increase after loan consummation. Certain credit transactions secured by a lien on a consumer’s principal dwelling are subject to rescission, and creditors must provide consumers written notices of their rights of rescission of those transactions at consummation. Special disclosure rules and limitations on permitted terms apply to certain home mortgage transactions secured by a consumer’s principal dwelling in which the annual percentage rate or total points and fees charged the consumer exceed standards set out in the Act. Advertising rules intended to ensure that advertisements promoting credit provide accurate and balanced information about rates, payments, and other loan features apply to all home mortgage loans subject to the Act. Sample forms of various required consumer disclosures are illustrated in appendix H to Regulation Z. Creditors failing to comply with requirements of the Act may be subject to civil liability, administrative penalties, and, in the case of willful and knowing violations, criminal liability.
§ 2.272Unauthorized Preparation of Real Estate Documents
The Texas Government Code prohibits the preparation of deeds, deeds of trust, notes, mortgages, and other instruments affecting title to real property for compensation unless the preparer is an attorney licensed in Texas or qualifies under one of the other listed exemptions. . Texas law broadly construes the meaning of a charge of compensation for this purpose. See Hexter Title & Abstract Co. v. Grievance Committee, 179 S.W.2d 946, 952 (Tex. 1944); (1988). Written materials, books, printed forms, Internet sites, computer software, and similar products are excluded from the definition of the unauthorized practice of law if the items clearly and conspicuously state that the products are not a substitute for the advice of an attorney licensed to practice law in Texas. . This exclusion does not affect the applicability or enforceability of chapter 83 and such products or similar media expressly cannot be used in violation of the prohibitions of that chapter against the unauthorized preparation of real estate documents. However, a “landman” may provide certain “land services” related to mineral rights and other energy sources. , .
See sections 2.1 and 2.90 above.
§ 2.274Underground and Aboveground Storage Tanks
Underground storage tanks and certain above-ground tanks must be registered with the Texas Commission on Environmental Quality. See ; . Underground tanks must also meet certain technical specifications under the provisions of . In Texas, an owner of land having an underground storage tank must disclose the existence of the tank to prospective purchasers. . Section 26.342 of the Water Code defines the owner of an underground storage tank for liability purposes. .
§ 2.275Underground Facility Damage Prevention and Safety Act
The Underground Facility Damage Prevention and Safety Act, , provides for a “one-call” statewide notification service for the location of underground facilities. All excavators in Texas must notify the notification center of their intention to excavate or be subject to penalties.
§ 2.276Uniform Commercial Code
The Texas version of the Uniform Commercial Code can be found in chapters 1 through 9 of the Texas Business and Commerce Code.
§ 2.277Uniform Electronic Transactions Act
The Uniform Electronic Transactions Act, establishes the enforceability of electronic records and signatures in electronic transactions.
§ 2.278Uniform Principal and Income Act
The Uniform Principal and Income Act, , determines the allocation of principal and income for trusts.
§ 2.279Uniform Transfers to Minors Act
Texas has adopted the Uniform Transfers to Minors Act, . The Act establishes the terms, conditions, manner, and effect of making transfers to minors.
§ 2.280Uniform Unincorporated Nonprofit Association Act
Unincorporated nonprofit organizations in Texas are governed by the Texas Business Organizations Code generally and chapter 252 of that code more specifically. See . provides for a recorded statement of authority for an association to transfer and hold title to real estate.
An “association” is defined as an entity governed as a cooperative association, an unincorporated nonprofit association, or a for-profit professional association. .
A “nonprofit association” is defined as an unincorporated organization, other than one created by a trust, consisting of three or more members joined by mutual consent for a common, nonprofit purpose. A form of joint tenancy, tenancy in common, or tenancy by the entirety does not by itself establish a nonprofit association, regardless of whether the co-owners share use of the property for a nonprofit purpose. .
§ 2.281Uniform Vendor and Purchaser Risk Act
adopts the Uniform Vendor and Purchaser Risk Act and allocates responsibility for risk of loss between buyers and sellers, depending on whether legal title and possession have been transferred. However, the parties may by contract allocate the risk differently. .
§ 2.282United States–Mexico–Canada Agreement (USMCA)
In September 2018, the United States, Mexico, and Canada reached an agreement to replace the North American Free Trade Agreement (NAFTA) with the United States–Mexico–Canada Agreement (USMCA). NAFTA remained in force pending the ratification of the USMCA by all three governments. The USMCA entered into force on July 1, 2020, replacing NAFTA. Certain provisions of the USMCA may affect real property and finance transactions. The text of the USMCA is available on the Office of the United States Trade Representative website at https://ustr.gov/usmca. The USMCA has curtailed NAFTA’s protections for investors engaging in cross-border investment with party countries. See also sections 2.113 and 2.186 above.
When using any document that extends credit, attorneys should consider the implications of state and federal usury laws. See ; . See section 2.286 below.
§ 2.284Utility District Disclosures
Any person selling or transferring property located in a water, sewer, or other district with taxing authority must give a prospective purchaser notice of the current tax rate and amount of authorized bonded indebtedness and whether the property is located in a municipality’s extraterritorial jurisdiction before or at the time of the execution of the contract. A separate copy of the notice must be executed at closing and recorded. . See the form of utility district disclosure in chapter 4 in this manual. See also sections 2.71 and 2.181 above.
§ 2.285Utility Submetering and Nonmetering
The Texas Water Code requires that multiunit facilities built after January 1, 2003, be submetered or individually metered and imposes certain requirements before conversion of an existing facility to submetering or allocated billing. , . The Water Code also limits the right of certain condominium managers and landlords of apartments, manufactured-home rental communities, and commercial multiple-use facilities to charge tenants for utility expenses without proper evidence to show how the utility expenses were calculated. These provisions also limit rent increases before the installation of submeters and provide tenants means of enforcement. .
Buildings with five or more dwelling units, including apartments and condominium units, constructed after 1997 must be separately metered or submetered for electricity. .
Utility disconnections by landlords are also limited under the provisions of (for residential tenancies) and (for commercial tenancies).
§ 2.286Variable Interest Rates
The Alternative Mortgage Transaction Parity Act of 1982, , was enacted to give nonfederally chartered housing creditors the same ability to devise alternatives to fixed-rate financing as federal institutions have. It permits nonfederally chartered lenders to make, purchase, and enforce certain mortgage transactions in which the interest rate can change as long as the transactions comply with federal regulations. See also section 2.283 above.
§ 2.287Vendor and Purchaser Risk Act
See section 2.281 above.
Venue for “major transactions” (in which the consideration is more than $1 million) may be determined by the parties. . Venue for actions for the recovery of real property or an estate or interest in real property, for partition of real property, to remove encumbrances from the title to real property, for recovery of damages to real property, or to quiet title to real property is in the county in which all or a part of the property is located. . See also , regarding partition actions. Venue for most suits between landlord and tenant is in the county in which all or part of the property is located. . Venue for trust-related actions is governed by . Venue provisions are addressed generally in chapter 15 of the Civil Practice and Remedies Code. The Property Code contains venue provisions for suits alleging a breach of fiduciary duty by a fiduciary or managerial agent of a charitable trust (); actions to enforce rights or obligations under condominium association declarations, bylaws, or rules (); condemnation proceedings (); and partition actions ().
Chapter 245 of the Local Government Code regulates the issuance of local permits and provides that, if a series of permits is required for a project, the rules, regulations, and other requirements in effect at the time the application for the first permit is filed shall be the sole basis for considering all subsequent permits to complete the project. . Permit holders may take advantage of new rules or changes to the law that enhance a project. . A municipality may adopt a moratorium on the development of residential or commercial property only if it finds a need to prevent a shortage of essential public facilities or that the moratorium is justified because existing commercial development laws are inadequate to protect the public health, safety, or welfare of its residents. Notice and hearing procedures are required. . Certain types of regulations are exempt from the application of chapter 245. See .
After annexing an area, a municipality may not prohibit a person from (1) continuing to use land in the area in the manner in which the land was being used on the date the annexation proceedings were instituted if the land use was legal at that time or (2) beginning to use land in the area in the manner that was planned for the land before the ninetieth day before the effective date of the annexation if certain conditions are met. . These prohibitions also apply to municipalities incorporated after September 1, 2003. . See also section 2.203 above.
The Visual Artists Rights Act of 1990 (VARA), , protects the reputations of certain visual artists and the works of art they create. With numerous exceptions, VARA grants three rights: the right of attribution; the right of integrity; and in the case of works of visual art of “recognized stature,” the right to prevent destruction. .
§ 2.291Voluntary Cleanup Program
Texas has a voluntary cleanup statute, also known as a Brownfields statute, in . Regulations for the voluntary cleanup program are published at .
Under chapter 61 of the Texas Labor Code and chapter 113 of the Texas Tax Code, if the Texas Workforce Commission (TWC) determines that an employer owes unpaid wages to an employee, the TWC is authorized to file an administrative lien against the employer’s property to secure the payment of the unpaid wages. See . Section 61.0825 of the Texas Labor Code provides that such wage liens have priority over all other liens against the same property, except for a lien securing the payment of ad valorem taxes. See .
A warehouseman’s lien for property removed from a tenant’s premises is governed by . See also section 2.235 above.
Groundwater districts and water rights are subject to the Texas Water Code. A district has the authority to collect assessments, pursuant to , including the ability to place a lien on real and personal property. . As a condition of service, a water district may require a service applicant or developer to grant permanent recorded easements for the construction and maintenance of the facilities necessary for service. . Under certain circumstances, a landowner can petition a water district board to have his property deannexed from a water district. . See also section 2.284 above.
§ 2.295Watercourse Forming County Boundary
provides concurrent jurisdiction over a watercourse that forms a county boundary.
The sale of potable water to the public is regulated under . See also section 2.237 above.
Water-well drillers are regulated under , and water-well pump installers are regulated under .
Counties with populations of 2.1 million or more may adopt rules to regulate the placement of private water wells in unincorporated areas of the county. See .
It is a public nuisance in the unincorporated area of a county to allow weeds to grow within three hundred feet of another residence or commercial establishment. . Municipalities may require property owners to keep property free from weeds. .
Wetlands are regulated under section 404 of the Clean Water Act, codified at . Under section 1344, dredging and filling activities in wetlands are prohibited unless a permit is obtained from the Army Corps of Engineers or other statutory exceptions apply.
A will may be admitted to probate as a muniment of title if the court is satisfied that there are no unpaid debts, excluding debts secured by liens on real estate. . Title to real estate can be transferred by a duly probated will. , . Subject to the payment of certain debts, the estate devised or bequeathed in a lawful will vests immediately in the devisees or legatees when the testator dies. . See also section 2.7 above.
Completed structures in coastal counties are required to comply with the state windstorm building specifications and inspection program to qualify for windstorm and hail insurance through the Texas Windstorm Insurance Association. This program is administered by the State Board of Insurance. See also section 2.34 above.
A restrictive covenant that requires the use of wood shingles on a residential building is void under Texas law. .
The authority of municipalities to establish and regulate zoning in their territorial jurisdictions is governed by the provisions of . Certain counties also have limited authority to impose zoning regulations in unincorporated areas. .
The authority of municipalities and other political subdivisions to regulate oil and gas operations within the state is expressly preempted in favor of the state’s authority to regulate all such operations. Such operations include exploration and production, processing, drilling, hydraulic fracturing, transporting (including by pipelines), disposal, plugging of wells, and remediation activities. Commercially reasonable regulation by municipalities and other political subdivisions of aboveground activities, such as fire safety regulations, emergency response, and traffic control measures that would not prohibit operations by a reasonably prudent operator are permitted. .
Alcantara, Ramona Kantack, David H. Brock, Fred D. Cawyer, and Jack W. Hawthorne, III. “ADA Issues in Real Estate.” In Advanced Real Estate Law Course, 2017. Austin: State Bar of Texas, 2017.
Alsup, J. Alton. “Preparation of Documents Affecting Title to Texas Real Property as the Unauthorized Practice of Law.” In Advanced Real Estate Law Course, 2008. Austin: State Bar of Texas, 2008.
Anderson, Arthur J. “Government Takings: What the Government Can Do to Your Client.” In Advanced Real Estate Law Course, 2005. Austin: State Bar of Texas, 2005.
———. “Zoning and Property Rights: When Does Zoning Become a Protected Property Interest?” In Advanced Real Estate Law Course, 2001. Austin: State Bar of Texas, 2001.
Barron, Paul, and Michael A. Berenson. Federal Regulation of Real Estate and Mortgage Lending. 4th ed. 3 vols. St. Paul, MN: West, 2004. Supplement 2016.
Craddock, Daniel K. “Construction Liens, Mechanics Liens, and Bonds: A Guide for Lenders and Developers.” In Mortgage Lending Institute, 2005. Austin: University of Texas School of Law, 2005.
Dougherty, James L., Jr. “Overview of Local Land Use Regulation.” In Advanced Real Estate Strategies Course, 2008. Austin: State Bar of Texas, 2008.
Haley, Steven C. “Texas Homestead Law.” In Advanced Real Estate Law Course, 2016. Austin: State Bar of Texas, 2016.
Howell, Jay D., Jr., and David B. Brooks. Property Taxes. 4th ed. Texas Practice Series 21–21A. St. Paul, MN: West, 2001. Supplement 2016.
Jacobus, Charles J. Texas Real Estate Law. 11th ed. Cengage Learning, 2012.
Kurtz, Sheldon F., Herbert Hovenkamp, and Carol Necole Brown. Cases and Materials on American Property Law. 6th ed. American Casebook Series. St. Paul, MN: West 2012.
Leopold, Aloysius A. Land Titles and Title Examination. 3rd ed. Texas Practice Series 3–5A. St. Paul, MN: West, 2005. Supplement 2016.
———. Marital Property and Homesteads. Texas Practice Series 38–39. St. Paul, MN: West, 1993. Supplement 2016.
Lipstet, Ira A. “Texas Sales & Property Tax.” In Advanced Real Estate Law Course, 2007. Austin: State Bar of Texas, 2007.
Malone, Linda A. Environmental Regulation of Land Use. St. Paul, MN: West, 2013. Supplement 2015.
McCarthy, Misty. “Rules and Regulations of Title XIV of the Dodd-Frank Act.” In Mortgage Lending Institute, 2013. Austin: University of Texas School of Law, 2013.
Melamed, Richard. “A Selection of State and Federal Statutes Affecting Real Estate That Are Not in the Property Code.” In Advanced Real Estate Law Course, 2021. Austin: State Bar of Texas, 2021.
Miller, Walter D. “Statutory Notices for Texas Contracts of Sale.” In Real Estate Law 101 Course, 2018. Austin: State Bar of Texas, 2018.
Saegert, Jerry C. “Annotated Due Diligence Checklist with Sample Consultant Forms and Glossary of Terms.” In Advanced Real Estate Strategies Course, 2007. Austin: State Bar of Texas, 2007.
Shelton, R. Walton. “Environmental Law 101.” In Advanced Real Estate Law Course, 2007. Austin: State Bar of Texas, 2007.
U.S. Department of Agriculture. AFIDA FSA-153 Form. www.fsa.usda.gov/programs-and-services/economic-and-policy-analysis/afida/for-filers.
Wolf, Michael Allan, ed. Powell on Real Property. Rev. ed. 17 vols. New York: Matthew Bender & Co., 2002. Supplemented.
Wren, Michael A. “Basics of Property Taxes for the Real Estate Lawyer.” In Real Estate Law 101 Course, 2018. Austin: State Bar of Texas, 2018.