Changes to Practice Notes

Chapter 1Ethics and Professional Conduct

§ 1.2Sources of Interpretation of Rules

Added paragraph for Rule 1.05(c)(9) of the Texas Disciplinary Rules of Professional Conduct regarding confidential information.

§ 1.5Establishing Attorney-Client Relationship

Made changes throughout section to account for members and limited liability companies.

§ 1.5:3Legal Fees

Included reference to recovery of reasonable attorney’s fees under Tex. Civ. Prac. & Rem. Code § 38.001.

§ 1.5:6Record Retention and Destruction

This section has been amended to elaborate on safe handling of highly sensitive information.

§ 1.6:2Confidentiality

This section has been revised to reflect new Texas Disciplinary Rules of Professional Conduct Rule 1.16.

§ 1.11Duty to Report Ethical Violation; Peer Assistance Program Alternative

This section has been revised to reflect new language in Texas Disciplinary Rules of Professional Conduct Rule 8.03.

Chapter 2Laws Affecting Real Estate

§ 2.2Abstracts of Judgment

Added sentence regarding Tex. Prop. Code § 52.0012.

§ 2.16Annexation

Added commentary regarding landowner consent to annexation in Tex. Loc. Gov’t Code §§ 43.004, 212.172.

§ 2.18Appraisers

Added paragraph to reflect new Tex. Civ. Prac. & Rem. Code § 16.013.

§ 2.20Architects

Added new sentence regarding an architect’s standard of care under Tex. Civ. Prac. & Rem. Code § 130.0021.

§ 2.47Condemnation and Eminent Domain

Revised paragraph to reflect amended Tex. Gov’t Code § 402.031.

§ 2.51Conspicuous Text

Revised paragraph to reflect repealed laws.

§ 2.53Construction Contracts

Added paragraph to reflect new Tex. Civ. Prac. & Rem. Code § 38.0015.

§ 2.69Disclosures and Notices

Added paragraph to reflect new Tex. Prop. Code § 92.0135.

§ 2.70Discrimination

Added paragraph to reflect new Tex. Prop. Code § 5.0261.

§ 2.122Handguns

Revised section to reflect Firearm Carry Act of 2021.

Added paragraph to reflect new Tex. Prop. Code § 5.020.

§ 2.126Historic Landmarks or Districts

This is a new section.

§ 2.136Implied Title Covenants

Revised paragraph language.

§ 2.143Judgment Liens

Added sentence to reflect homestead affidavits in amended Tex. Prop. Code § 52.0012.

§ 2.155Limitations

Amended first paragraph to reflect amended Tex. Prop. Code § 53.158.

§ 2.156Limited Liability Companies

Revised paragraph language to reflect amended Tex. Bus. Orgs. Code §§ 101.601, 101.622.

§ 2.205Quitclaim Deeds

This is a new section.

§ 2.225Rule against Perpetuities

Revised paragraph language to reflect amended Tex. Prop. Code § 112.036.

§ 2.242Statutes of Repose

Revised paragraph language to reflect amended Tex. Civ. Prac. & Rem. Code §§ 16.008(b), 16.009(b).

Chapter 3Preparation, Execution, Proof, and Recording of Documents

§ 3.8:5Electronic/Digital Signatures

This is a new section.

§ 3.12Requirements for Valid Certificate of Acknowledgment

Added paragraph about state-of-disaster declarations related to COVID-19 pandemic.

§ 3.14Filing of Documents

Added paragraphs related to county clerk requirements.

Chapter 5Deeds, Bills of Sale, and Other Transfers

§ 5.6Quitclaim

Added new sentence at end of final paragraph regarding new Tex. Prop. Code § 13.006.

§ 5.8Correction Deed

Added discussion about Broadway National Bank.

Chapter 6Promissory Notes

§ 6.3:3 Annual Interest Rate

Added further discussion about index rate.

§ 6.4:7Reamortization

Added further discussion about index rate regarding reamortization.

Chapter 7Letters of Credit

§ 7.4Parties to a Letter-of-Credit Transaction

Added discussion about Lexon Insurance Co.

§ 7.6Differences between ISP98 and UCP

Elaborated on discussion of UCP and ISP98.

Chapter 8Deeds of Trust

§ 8.5:3Statute Applicable to Wraparound Mortgages for Certain Residential Real Estate Transactions

This section has been added.

Chapter 10Ancillary Loan Documents

§ 10.15Certification of Trust

Added reference to new form 10-29.

§ 10.19Assignment of Architect’s Contract and Consent; Assignment of Construction Contract and Consent

The title of this section has been revised.

Added reference to new form 10-27.

Chapter 11Home Equity Loan Documents

§ 11.1Home Equity Loan General Considerations

Paragraph has been added referring to new form 11-10.

§ 11.7Restriction against Recourse Debt

Added discussion regarding Melton.

Chapter 16Water Rights Conveyancing Documents

Renumbered forms have been corrected throughout chapter.

§ 16.1Introduction

New commentary has been added on the natural water cycle.

§ 16.3:3Other Due Diligence

Paragraph has been added referring to new form 16-1.

§ 16.8:3Other Due Diligence

Paragraph has been added referring to new form 16-19.

§ 16.12Groundwater Rights Sales Contract, Deed, Easement, and Related Forms; Place for Recordation

Revised basic sales documents listed to reflect new and renumbered forms.

§ 16.42Groundwater Rights Sales Contract, Deed, and Related Forms; Place for Recordation

Revised basic sales documents listed to reflect new and renumbered forms.

Chapter 18Residential Construction Contract Documents

§ 18.1General Considerations

Added discussion about Texas House Bill 2237 taking effect on January 1, 2022. The new changes apply to original contracts entered on or after January 1, 2022, and exist concurrently with previous law.

§ 18.3:1Homestead and Mechanic’s Liens

Revised “husband and wife” to “spouses.”

§ 18.3:4Owner Liability to Mechanic’s Lien Claimants and Owner Retainage or Reservation

Revised language regarding “retainage” and “reserved funds.”

Added discussion about contracts entered into on or after January 1, 2022.

Added reference to new related forms in chapter 21.

§ 18.7:7Affidavit of Completion

Added discussion about contracts entered into on or after January 1, 2022.

Chapter 19Commercial Construction Contract Documents

§ 19.1General Considerations

This section has been added.

§ 19.4Contract Price

This section has been added.

§ 19.4:3Cautions

This section has been added.

§ 19.4:4 Construction Trust Fund Statute

This section has been added.

§ 19.4:5Owner Liability to Mechanic’s Lien Claimants and Owner Retainage or Reservation

This section has been added.

§ 19.4:6Commencement

This section has been added.

§ 19.4:7Postcommencement

This section has been added.

§ 19.4:8Completion

This section has been added with references to new forms in this chapter.

§ 19.4:9Other Considerations

This section has been added.

§ 19.5Lien Waivers and Bills-Paid Affidavits

This section has been completely rewritten.

§ 19.7:2Indemnity

A new paragraph has been added at the start of this section.

§ 19.11 Instructions for Completing Forms and Inclusion of Exhibits

This section has been added.

Chapter 21Involuntary Mechanic’s Lien Documents

§ 21.1:1Generally

Added discussion about Texas House Bill 2237 taking effect on January 1, 2022. The new changes apply to original contracts entered on or after January 1, 2022, and exist concurrently with previous law.

§ 21.2General Considerations for Statutory Liens

Added sentence at end of section for contracts entered into on or after January 1, 2022, related to amended Tex. Prop. Code § 53.001(8).

§ 21.3:2First-Tier Subcontractors and Suppliers

Added sentence at end of section for contracts entered into on or after January 1, 2022, related to amended Tex. Prop. Code § 53.003.

§ 21.3:3Second-Tier and Lower-Tier Subcontractors and Suppliers

Added sentence at end of section for contracts entered into on or after January 1, 2022, related to amended Tex. Prop. Code § 53.056.

§ 21.4:2Derivative Claimants: First- and Second-Tier Claims, Statutory Retainage, Statutory Reservation, and Fund Trapping

Section title has been revised.

Provides discussion in new paragraph at beginning of section related to language change from “retainage” to “reservation.”

§ 21.5:2Notice to Original Contractor by Second-Tier Claimant

Added discussion for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

§ 21.5:5Special Notices

Added discussion for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

§ 21.6Time Limits for Contractual Retainage Claims

Added discussion for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

§ 21.7Time Limits for Notices of Claims Other than for Contractual Retainage

Added discussion for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

§ 21. 8Deadlines for Filing Lien Affidavit

Added discussion for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

§ 21.8:6Original Contract Entered into on or after January 1, 2022

This section has been added and subsequent sections have been renumbered.

§ 21.9Timetables Outlining Deadlines

Added discussion and charts for differences between contracts entered into before January 1, 2022, and those entered into on or after this date.

Chapter 23Restrictive Covenants and Property Owners’ Associations

§ 23.1:3Limitations of Covenants and Restrictions

Added several new paragraphs at end of section discussing amended Tex. Prop. Code § 202.021, new Tex. Prop. Code § 202.022, and amended Tex. Prop. Code § 202.023.

§ 23.2Property Owners’ Association

Added paragraph discussing new rules on recording management certificates or amendments.

§ 23.2:1Governance of Property Owners’ Associations

Added new paragraph at end of section discussing amended Tex. Prop. Code § 209.0051(e).

§ 23.2:2Enforcement of Covenants and Rules and Collection of Assessments

Added new paragraph at end of section discussing amended Tex. Prop. Code §§ 202.006(a), 209.007.

Added additional discussion about Tex. Prop. Code § 209.0064.

Added new paragraphs discussing Tex. Prop. Code § 209.0065.

§ 23.2:3Resale Certificates

Added new paragraphs at end of section discussing amended Tex. Prop. Code § 207.004.

§ 23.2:3Resale Certificates

Added new paragraphs at end of section discussing new Tex. Prop. Code § 209.0065.

Chapter 25Leases

§ 25.1:4Cautions: Risk Allocation

Added paragraph referring to more information on risk allocation in chapter 17 of this manual.

§ 25.5:2Right to Terminate Residential Leases in Certain Circumstances

Added new paragraph at end of section regarding floodplains.

§ 25.5:3Notice for Dwelling Located in Floodplain

This section has been added.

§ 25.5:4Security Deposit in Residential Lease

This section has been added and all subsequent sections have been renumbered.

§ 25.9:4Implied Warranty of Suitability in a Commercial Lease

This section has been added.

§ 25.9:5Doctrine of Independent Covenants; Tenant’s Right to Terminate for Landlord’s Material Breach

This section has been added.

Appendix

Third-Party Legal Opinion Letters

Added new sources in first paragraph.

Changes to Forms—2022

Chapter 1Ethics and Professional Conduct

Form 1-5Letter Disclosing Potential Risks and Requesting Consent to Representation

Made changes throughout form to account for members and limited liability companies.

Form 1-16Letter Amending Engagement Agreement

This form has been added.

Chapter 4Sales Contracts and Transaction Guide

Form 4-6Notice of Obligation to Pay Improvement District Assessment

Amended form to reflect Hotel Properties, new Tex. Prop. Code § 5.014, and amended Tex. Loc. Gov’t Code § 372.0035

Chapter 7Letters of Credit

Form 7-1Checklist

This form has been added, and previous forms 7-1 and 7-2 have been renumbered accordingly.

Chapter 10Ancillary Loan Documents

Form 10-18Additional Clauses for Loan Agreements

Added clause 10-18-7.

Form 10-27Assignment of Construction Contract and Consent

This form has been added.

Form 10-28Loan Agreement (Construction)

This form has been added.

Form 10-29Inter Vivos Revocable Trust Review Checklist

This form has been added.

Chapter 11Home Equity Loan Documents

Form 11-10Texas Home Equity Attorney Opinion, Checklist, and Lender Certification

This form has been added.

Chapter 14Foreclosure Documents

Form 14-12Notice of Trustee’s Sale (Mortgagee)

Added signature block for attorney/authorized agent of mortgagee as substitute trustee (if applicable).

Form 14-13Notice of Trustee’s Sale (Mortgage Servicer)

Added signature block for attorney/authorized agent of mortgagee as substitute trustee (if applicable).

Chapter 16Water Rights Conveyancing Documents

Form 16-1Checklist for Acquiring Groundwater Right

This form has been added, and previous form 16-1 and subsequent forms have been renumbered accordingly.

Form 16-19Checklist for Acquiring Surface Water Right

This form has been added, and previous chapter 16 forms have been renumbered accordingly.

Chapter 18Residential Construction Contract Documents

Form 18-1Contractor’s Disclosure Statement for Residential Construction

Added new options if contract in question was entered into on or after January 1, 2022.

Form 18-4Residential Construction Contract

Added new options if contract in question was entered into on or after January 1, 2022.

Form 18-7Owner Affidavit of Completion

Added new options if contract in question was entered into on or after January 1, 2022.

Chapter 19Commercial Construction Contract Documents

Form 19-1Commercial Construction Contract (Guaranteed Maximum Price)

Removed exhibits D through L, with each exhibit becoming its own form.

Form 19-2Commercial Construction Contract (Stipulated Sum)

Removed exhibits D through L, with each exhibit becoming its own form.

Form 19-3Insurance and Bond Requirements

This form has been added; was previously Exhibit D.

Form 19-4Contractor Bills-Paid Affidavit

This form has been added; was previously Exhibit E.

Form 19-5Subcontractor Bills-Paid Affidavit

This form has been added; was previously Exhibit F.

Form 19-6Conditional Partial Release During Construction

This form has been added; was previously Exhibit G.

Form 19-7Unconditional Partial Release During Construction

This form has been added; was previously Exhibit H.

Form 19-8Conditional Final Release

This form has been added; was previously Exhibit I.

Form 19-9Contractor [Final] Bills-Paid Affidavit

This form has been added; was previously Exhibit J.

Form 19-10Subcontractor [Final] Bills-Paid Affidavit

This form has been added; was previously Exhibit K.

Form 19-11Unconditional Release on Final Payment

This form has been added; was previously Exhibit L.

Form 19-12Affidavit of Commencement

This form has been added.

Form 19-13Change Order

This form has been added.

Form 19-14Owner Affidavit of Completion

This form has been added.

Chapter 20Contractual Mechanic’s Lien Documents

Form 20-1Mechanic’s Lien Contract

Item A.4 has been revised to reflect requirements in Tex. Prop. Code §§ 53.081, 53.101.

Form 20-5Additional Clauses for Contractual Mechanic’s Liens

Language throughout form has been updated from retainage to reserved funds.

Language in item 5 of clause 20-5-4 has been revised.

Language in item 5 of clause 20-5-5 has been revised.

Chapter 21Involuntary Mechanic’s Lien Documents

Form 21-2Notice of Claim to Owner and Original Contractor

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-3Notice to Owner Regarding Liens against Homestead Property

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-4Affidavit Claiming Mechanic’s and Materialman’s Lien

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-5Cover Letter Sending Copy of Lien Affidavit

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-6Notice Regarding Specially Fabricated Materials

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-8Notice of Retainage Agreement

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-15Notice of Termination of Work or Abandonment of Performance by Original Contractor or Owner

This form has been revised to reflect contracts entered into before January 1, 2022.

Form 21-16Affidavit Claiming Mechanic’s and Materialman’s Lien

This form has been added as a new version of form 21-4, but revised to reflect contracts entered into on or after January 1, 2022.

Form 21-17Cover Letter Sending Copy of Lien Affidavit

This form has been added as a new version of form 21-5, but revised to reflect contracts entered into on or after January 1, 2022.

Form 21-18Notice of Claim for Unpaid Labor or Materials

This form has been added as a new version of forms 21-2 and 21-6, but revised to reflect contracts entered into on or after January 1, 2022.

Form 21-19Notice to Owner Regarding Liens against Homestead Property

This form has been added as a new version of form 21-3, but revised to reflect contracts entered into on or after January 1, 2022.

Form 21-20Notice of Claim for Unpaid Retainage

This form has been added as a new version of forms 21-7 and 21-8, but revised to reflect contracts entered into on or after January 1, 2022.

Form 21-21Notice of Termination of Work or Abandonment of Performance by Original Contractor or Owner

This form has been added as a new version of form 21-15, but revised to reflect contracts entered into on or after January 1, 2022.

Chapter 23Restrictive Covenants and Property Owners’ Associations

Form 23-7Management Certificate

This form was revised to include website address and transfer fee blocks.

Chapter 24Condominium Documents

Form 24-18Records Production and Copying Policy

This form has been added.

Chapter 25Leases

Form 25-1Basic Lease

This form has been revised to reflect successors and assigns.

Added language regarding attaching an insurance addendum.

Form 25-2Retail Lease

This form has been revised to reflect successors and assigns.

Added language regarding attaching an insurance addendum.

Form 25-3Office Lease

This form has been revised to reflect successors and assigns.

Added language regarding attaching an insurance addendum.

Form 25-5Residential Lease

This form has been revised to reflect successors and assigns.

Revised section D.11 regarding security deposits.

Added language regarding attaching an insurance addendum.

Form 25-6Industrial Lease

This form has been revised to reflect successors and assigns.

Added language regarding attaching an insurance addendum.

Form 25-7Hunting Lease

This form has been revised to reflect successors and assigns.

Form 25-8Agricultural Lease

This form has been revised to reflect successors and assigns.

Form 25-9Grazing Lease

This form has been revised to reflect successors and assigns.

Form 25-10Cell Tower Lease

This form has been revised to reflect successors and assigns.

Form 25-38Notice for Dwelling Located in Floodplain

This form has been added.

Form 25-39Notice for Dwelling Where Flooding Has Occurred

This form has been added.

Chapter 26Miscellaneous Documents

Form 26-27Homestead Affidavit as Release of Judgment Lien

This form has been substantially revised.

Form 26-42Certificate of Mailing of Homestead Affidavit as Release of Judgment Lien

This form has been added.

Form 26-43Affidavit Contradicting Homestead Affidavit as Release of Judgment Lien

This form has been added.