Texas Laws - Property Code
PROPERTY CODE
TITLE 12. MISCELLANEOUS SHARED REAL PROPERTY INTERESTS

Added by Acts 2015, 84th Leg., R.S., Ch. 554 (H.B. 2261), Sec. 2, eff. September 1, 2015. (13701)

Sec. 221.111. SUPERVISORY DUTIES. (13702)(1-click HTML)

(a) The person who enters into an agreement to facilitate the transfer or termination of a timeshare interest shall supervise, manage, and control all aspects of the services provided under the agreement. (13703)

(b) Any violation of this subchapter that occurs during the provision of services is considered a violation by the person who enters into the agreement and any affiliate, agent, or third-party representative of that person. (13704)

(c) Section 221.035 does not apply to a person providing services under this subchapter. (13705)

Added by Acts 2015, 84th Leg., R.S., Ch. 554 (H.B. 2261), Sec. 2, eff. September 1, 2015. (13706)

CHAPTER 222. TEXAS MEMBERSHIP CAMPING RESORT ACT (13707)(1-click HTML)

Sec. 222.001. SHORT TITLE. (13708)(1-click HTML)

This chapter may be cited as the Texas Membership Camping Resort Act. (13709)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13710)

Sec. 222.002. APPLICATION OF CHAPTER. (13711)(1-click HTML)

(a) This chapter applies to all membership camping resorts located in this state. (13712)

(b) Sections 222.003-222.013 also apply to membership camping resorts located outside this state but offered for sale in this state. (13713)

(c) This chapter does not affect a membership camping contract made before August 31, 1987. (13714)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13715)

Sec. 222.003. DEFINITIONS. (13716)(1-click HTML)

In this chapter: (13717)

(1) "Advertising" means a direct or indirect solicitation or inducement to purchase and includes but is not necessarily limited to a solicitation or inducement made by print or electronic media, through the mail, or by personal contact. (13718)

(2) "Amenities" means all common areas of real property occupied by a membership camping resort and includes but is not necessarily limited to camping sites, swimming pools, stables, tennis courts, recreation buildings, restrooms and showers, laundry rooms, trading posts, grocery stores, and maintenance facilities. (13719)

(3) "Blanket encumbrance" means a mortgage, deed of trust, option to purchase, or vendor's lien, an interest obtained under a contract or agreement of sale, or other financing lien or encumbrance granted by an operator that secures or evidences the obligation to pay money or to sell or convey any campgrounds located in this state that are made available to purchasers by the operator, and that authorizes, permits, or requires the foreclosure or other disposition of the affected campground. (13720)

(4) "Business day" means any day other than a Saturday, Sunday, or federal holiday. (13721)

(5) "Camping site" means a space designed and promoted for the purpose of locating a trailer, tent, tent trailer, pickup camper, recreational vehicle, or similar device designed for camping. (13722)

(6) "Dispose" or "disposition" means a voluntary transfer of any membership interest or membership right but does not include the transfer or release of a real estate lien or of a security interest. (13723)

(7) "Home resort" means the camping resort to which the purchaser has purchased a right of membership. The term does not include a resort that a purchaser may use as a result of a reciprocal program among operators. (13724)

(8) "Membership camping contract" means an agreement under which a purchaser pays for or becomes obligated to pay for a membership interest or membership right in a membership camping resort. (13725)

(9) "Membership camping contract broker" means a person who resells a membership camping contract to a new purchaser on behalf of the former purchaser. The term does not include a membership camping operator or that person's agent. (13726)

(10) "Membership camping resort disclosure statement" means a written statement that includes the information that is required by Section 222.006(b). (13727)

(11) "Membership camping resort" means real property owned or operated by a membership camping operator that is available for camping by purchasers of a membership right. (13728)

(12) "Membership interest" means a membership camping resort estate. (13729)

(13) "Membership right" means a license, contract right, or other right entitling a purchaser to use camping sites or amenities at a membership camping resort. (13730)

(14) "Offering" or "offer" means any advertisement, inducement, or solicitation and includes but is not necessarily limited to any attempt to encourage a person to purchase a membership interest or membership right. (13731)

(15) "Operator" means a person who owns or provides a camping site or an amenity to a purchaser. The term does not include: (13732)

(A) a person who owns or otherwise provides a mobile home park or a camping or recreational trailer park open to the general public with camping sites that are rented on a fee for use basis and who does not solicit purchases of membership camping contracts; or (13733)

(B) an outdoor service, facility, enterprise, or park that is owned or operated by or under the control of the United States, this state, or a political subdivision of this state. (13734)

(16) "Promotion" means any program or activity that is used to induce any person to attend a membership camping resort sales presentation. (13735)

(17) "Promotional disclosure statement" means a written statement that includes the information required by Section 222.006(a). (13736)

(18) "Purchaser" means a person, other than an operator, seller, or broker, who by means of voluntary transfer acquires a membership interest or membership right in a membership camping resort other than as security for an obligation. (13737)

(19) "Reciprocal company" means any person, including an operator, who operates a reciprocal program. (13738)

(20) "Reciprocal program disclosure statement" means a written statement that includes the information required by Section 222.006(c). (13739)

(21) "Reciprocal program" means any program under which the purchaser of a membership interest or membership right in a membership camping resort may use the facilities of a membership camping resort other than those of the purchaser's home resort. (13740)

(22) "Seller" means a person, including an operator, who in the ordinary course of business offers a membership interest or membership right for sale to the public but does not include a person who acquires a membership interest or membership right for his use and subsequently offers it for resale. (13741)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg., ch. 1039, Sec. 3.20, eff. Sept. 1, 1989. (13742)

Sec. 222.004. REGISTRATION; ADMINISTRATION. (13743)(1-click HTML)

(a) A person may not offer or dispose of a membership interest or membership right under a membership camping contract in this state unless the operator is registered with the secretary of state. If an operator also sells membership camping contracts, that operator must also comply with the registration requirements for membership camping contract brokers imposed by Section 222.005. (13744)

(b) A registration filed under this section must be on a form prescribed by the secretary of state and must include, to the extent applicable, the following information: (13745)

(1) the operator's name, address, and the organizational form of the operator's business, including the date and jurisdiction under which the business was organized, the name and address of each of its officers in this state, and the name and address of each membership camping resort located in this state that is owned or operated in whole or in part by the operator; (13746)

(2) a list of all owners of 10 percent or more of the capital stock of the operator's business if the operator is not required to report under the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a et seq.); (13747)

(3) a brief description and certified copy of the instrument creating the operator's ownership of or other right to use the membership camping resort and the amenities that are to be available for use by purchasers, together with a copy of any lease, license, franchise, reciprocal agreement, or other agreement entitling the operator to use the membership camping resort and the amenities, and any material provision of the agreement that restricts a purchaser's use of the membership camping resort or the amenities; (13748)

(4) a sample copy of each instrument to be delivered to a purchaser to evidence the purchaser's membership in the membership camping resort and a sample copy of each agreement that a purchaser is required to execute; (13749)

(5) financial statements of the operator for the most recent fiscal quarter; (13750)

(6) a narrative description of the promotional plan for the offering of membership interests or membership rights; (13751)

(7) a copy of any agreement between the operator and any person owning, controlling, or managing the membership camping resort; (13752)

(8) a complete list of the locations and addresses of any sales offices located in this state; (13753)

(9) the names of any other states or foreign countries in which a registration of the operator or the membership camping contract has been filed; (13754)

(10) complete information concerning any adverse order, judgment, or decree entered by any court or administrative agency in connection with a membership camping resort operated by the operator or in which the operator had an interest at the time of the order, judgment, or decree; (13755)

(11) a description of any blanket encumbrance on the membership camping resort; and (13756)

(12) a membership camping resort disclosure statement and any required reciprocal program disclosure statement required by Section 222.006. (13757)

(c) The registration must be signed by the operator, by an officer or general partner of the operator, or by another person who holds a power of attorney for this purpose from the operator. If the registration is signed under a power of attorney, a copy of the power of attorney must be included with the registration. The registration must be submitted with the registration fee set by the secretary of state pursuant to Section 222.010. (13758)

(d) The operator shall promptly file amendments to the registration reporting to the secretary of state any material and adverse change in any document contained in such registration. For the purposes of this subsection, a material and adverse change includes any change that significantly reduces or terminates either the applicant's or a purchaser's right to use the membership camping resort or any of the amenities described by the membership camping contract but does not include minor changes covering the use of the membership camping resort, its amenities, or any reciprocal program. (13759)

(e) The secretary of state shall investigate all matters relating to the registration and may in his discretion require a personal inspection of the proposed membership camping resort by any persons designated by him. (13760)

(f) The secretary of state may prescribe and publish forms necessary to carry out the provisions of this chapter. The secretary of state may not approve or disapprove any registration, and an operator may not represent to any person that the secretary of state endorses or approves the membership camping resort or membership camping contract. (13761)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg., ch. 1039, Sec. 3.21, eff. Sept. 1, 1989. (13762)

Sec. 222.005. REGISTRATION OF SELLERS AND MEMBERSHIP CAMPING CONTRACT BROKERS. (13763)(1-click HTML)

(a) A person may not offer a membership interest or membership right in a membership camping resort or resell membership camping contracts in this state unless the person is registered with the secretary of state. Each application for registration as a seller or membership camping contract broker must be in writing and must be signed by the applicant. (13764)

(b) The application must state: (13765)

(1) the name and address of the applicant; (13766)

(2) the name and place of business of the applicant's employer, if any; (13767)

(3) whether the applicant has been convicted of a felony or a misdemeanor involving moral turpitude and if so, the nature of the felony, where and when it was committed, and the disposition of the conviction; and (13768)

(4) whether the applicant has been refused a real estate broker's or salesman's license or any other occupational license in this or any other state or whether the applicant's license as a real estate broker or salesman in this or any other state has been revoked or suspended. (13769)

(c) The secretary of state may require any additional information that is reasonably necessary to determine the good moral character of an applicant for registration. (13770)

(d) Each application for registration as a seller or membership camping contract broker must be accompanied by the required registration fee set by the secretary of state pursuant to Section 222.010. (13771)

(e) The secretary of state may prescribe and publish forms to carry out the provisions of this section. (13772)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg., ch. 1039, Sec. 3.22, eff. Sept. 1, 1989. (13773)

Sec. 222.006. DISCLOSURE STATEMENTS. (13774)(1-click HTML)

(a) Before or at the time of the use of any promotion in connection with the offering of a membership interest or membership right in a membership camping resort, the person who intends to use the promotion shall include the following information in its advertisements to the prospective purchaser: (13775)

(1) a statement to the effect that the promotion is intended to solicit purchasers of membership interests or membership rights in a membership camping resort; (13776)

(2) the full name of the operator and seller of the membership interest or membership right in the membership camping resort; (13777)

(3) if applicable, the full name and address of any marketing company involved in the promotion of the membership camping resort; (13778)

(4) the complete rules of the promotion; (13779)

(5) the method of awarding, the odds of winning, and the approximate retail value of prizes, gifts, or other benefits under the promotion and the date by which each prize, gift, or other benefit will be awarded or conferred; (13780)

(6) any restrictions, qualifications, or other conditions that the recipient must satisfy before the recipient is entitled to receive a prize, gift, or other benefit, including: (13781)

(A) any deadline by which the recipient must visit the membership camping resort, attend the sales presentation, or contact a seller in order to receive the prize, gift, or other benefit; (13782)

(B) the date on which the offer expires; and (13783)

(C) any other conditions, including minimum age qualifications, financial qualifications, or a requirement that if the recipient is married both husband and wife must be present in order to receive the prize, gift, or other benefit; (13784)

(7) if applicable, a statement that the operator or seller reserves the right to provide a certificate with which to redeem or claim the prize, gift, or other benefit awarded and that the prize, gift, or other benefit shall be shipped or delivered to the recipient within 30 days following the mailing of the certificate; and (13785)

(8) if applicable, a statement that the operator or seller reserves the right to substitute a prize, gift, or other benefit of equal value for the prize, gift, or other benefit awarded if the item is not available to the operator or seller after the purchaser or prospect has complied with the provisions of the promotion. (13786)

(b) Before or at the time of the signing of any agreement or membership camping contract to acquire a membership interest or membership right in a membership camping resort, the operator shall provide a membership camping resort disclosure statement to the prospective purchaser and shall obtain from the purchaser a written acknowledgement of receipt of the membership camping resort disclosure statement. The membership camping resort disclosure statement must include: (13787)

(1) the name and address of the operator and the name and specific location of the membership camping resort; (13788)

(2) a description of the amenities, membership camping resort, and any project or development within which the membership camping resort is located or of which it is a part. The disclosure statement must also state the total number of camping sites in the membership camping resort and whether and under what circumstances that number may be increased or decreased; if a membership interest or membership right includes amenities not yet in existence, the disclosure statement must provide the approximate commencement and completion schedule of those proposed amenities; (13789)

(3) a description of the membership interests and membership rights currently available for disposition; (13790)

(4) a statement that a council of purchasers exists or is expected to be created or that such a council does not exist and is not expected to be created; if such a council exists or is reasonably contemplated, the disclosure statement must contain a description of its powers and responsibilities; (13791)

(5) the name and principal address of the managing entity; (13792)

(6) a description and amount of any current or expected dues, assessments, fees, taxes, or charges to be paid by purchasers for the use of amenities or for any other purpose; (13793)

(7) a description and amount of insurance coverage provided for the protection of the purchaser; and (13794)

(8) a statement that any deposit made in connection with the purchase of a membership interest or membership right will be held until expiration of any right to cancel the contract or any later time specified in the contract and will be returned to the purchaser if he elects to exercise his right of cancellation. (13795)

(c) Before or at the time of the signing of any agreement or membership camping contract in which a prospective purchaser is also offered participation in a reciprocal program, the operator shall also deliver to the prospective purchaser the reciprocal program disclosure statement of the reciprocal company whose reciprocal program is advertised or offered by the operator or seller in connection with the disposition. If participation in a reciprocal program is offered for the first time after a disposition has occurred, any person offering the participation shall also deliver a reciprocal program disclosure statement to the purchaser before the execution by the purchaser of any instrument relating to participation in the reciprocal program. In all cases, the person offering the participation shall obtain from the purchaser a written acknowledgement of receipt of the reciprocal program disclosure statement. The reciprocal program disclosure statement must include the following information: (13796)

(1) the name and address of the reciprocal company; (13797)

(2) if the reciprocal company is not the operator, a statement describing the legal relationship, if any, between the reciprocal company and the operator; (13798)

(3) a statement that the reciprocal program might terminate or become unavailable; (13799)

(4) whether membership or participation, or both, in the reciprocal program is voluntary or mandatory; (13800)

(5) a complete description of the required procedure for using the reciprocal program; (13801)

(6) the fee required for membership or participation, or both, in the reciprocal program and whether the fee is subject to change; (13802)

(7) a statement to the effect that participation in the reciprocal program is conditioned on compliance with the terms of a contract between the reciprocal company and the purchaser; and (13803)

(8) a statement in conspicuous and bold-faced print to the effect that all reciprocal campgrounds are arranged on a space-available basis and that neither the operator nor the reciprocal company guarantees that a particular reciprocal campground can be used. (13804)

(d) A disclosure statement need not be delivered in the case of: (13805)

(1) a gratuitous disposition of a membership interest or membership right; (13806)

(2) a disposition pursuant to a court order; (13807)

(3) a disposition by a governmental agency; (13808)

(4) a disposition by foreclosure or deed in lieu of foreclosure; (13809)

(5) a disposition that may be canceled by the purchaser without penalty at any time and for any reason; (13810)

(6) a disposition of a membership interest or membership right in a membership camping resort situated wholly outside this state under a contract executed wholly outside this state, if there has been no offering to the purchaser within this state; (13811)

(7) a disposition of a membership interest or membership right to a purchaser who is not a resident of this state under a contract executed wholly outside this state, if there has been no offering to the purchaser within this state; or (13812)

(8) the redisposition of a membership interest or membership right by a purchaser who acquired the interest or right for his personal use. (13813)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13814)

Sec. 222.007. CONTRACT. (13815)(1-click HTML)

(a) Each sale of a membership interest or membership right in a membership camping resort must be evidenced by a membership camping contract written in the language principally used in any promotional presentation made to the purchaser. The seller must give the purchaser a copy of the contract at the time it is signed. (13816)

(b) Each contract must contain the following: (13817)

(1) the name and address of the operator and the seller and the location of the membership camping resort; (13818)

(2) the signature of the operator or seller; (13819)

(3) the signature of the purchaser; (13820)

(4) the date on which the purchaser signs the contract; (13821)

(5) the name of the person who closed the transaction described in the membership camping contract; (13822)

(6) a brief description of the nature of the purchaser's interest in and right or license to use the membership camping resort; (13823)

(7) a summary or copy of the rules, restrictions, or covenants regulating the purchaser's use of the operator's properties, including a statement of whether and how the rules, restrictions, or covenants may be changed; (13824)

(8) any restraints on the transfer of the membership camping contract; (13825)

(9) any grounds for forfeiture of a purchaser's membership camping contract; (13826)

(10) if applicable, a statement of the purchaser's right to cancel the membership camping contract as provided by Section 222.008(c); (13827)

(11) a statement of whether the purchaser visited the location of the membership camping resort before signing the contract; and (13828)

(12) if applicable, a statement by the seller that if the purchaser timely exercises any right of cancellation under the contract, all payments made by the purchaser to the seller in connection with the contract shall be returned to the purchaser before the 21st day after the seller receives notice of cancellation as required under Section 222.008. (13829)

(c) The contract must also contain a brief description of the existing amenities available for use by purchasers at the home resort and of any proposed amenities or amenities not yet complete or fully functional. (13830)

(d) The contract must also contain a brief statement of the operator's ownership of or other right to use the camping properties represented to be available for use by purchasers, together with the duration of any lease, license, franchise, or reciprocal program entitling the operator to use the property, and material provisions of any agreements that restrict a purchaser's use of the property. (13831)

(e) The contract must be revised annually to include any changes to the information required by this section, if applicable. (13832)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13833)

Sec. 222.008. PURCHASER'S RIGHT TO CANCEL. (13834)(1-click HTML)

(a) A purchaser may cancel a membership camping contract to purchase a membership interest or membership right before the fourth business day after the contract is executed if the purchaser did not visit the location of the membership camping resort being offered for sale before the contract was signed. A purchaser may not waive his right of cancellation under this section. A contract containing a waiver is voidable by the purchaser. (13835)

(b) If a purchaser elects to cancel a membership camping contract under Subsection (a), he may do so by hand delivering notice of cancellation to the seller or by mailing notice by prepaid United States mail to the seller or to the seller's agent for service of process. Cancellation is without penalty, and all payments made by the purchaser before cancellation must be refunded before the 21st day after the date on which the seller receives notice of cancellation. (13836)

(c) If applicable, immediately before the space reserved in the contract for the signature of the purchaser, in bold-faced and conspicuous type or print that is larger than the type of print in the remaining text of the contract, substantially the following statement must appear: (13837)

"If you have not visited the location of the membership camping resort in which you are acquiring an interest or membership right, you may cancel this contract without penalty or obligation before the fourth business day after the date on which you signed this contract. If you decide to cancel this contract, you may do so by hand delivering notice of cancellation to the seller or by mailing notice by prepaid United States mail to the seller or the seller's agent for service of process. Your notice of cancellation is effective on the date sent or delivered to (name of seller) at (address of seller). A purchaser should not rely on statements other than those included in this contract and the disclosure statement." (13838)(1-click HTML)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13839)

Sec. 222.009. RECIPROCAL PROGRAM. (13840)(1-click HTML)

An operator does not incur any liability arising out of use, delivery, or publication by the operator to the purchaser of written information or audio-visual materials provided to it by the reciprocal company pursuant to Section 222.006; provided, however, that an operator is subject to liability arising out of the use, delivery, or publication to the purchaser of materials provided by the reciprocal company if the operator knows that the materials are inaccurate or false. (13841)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13842)

Sec. 222.010. FEES. (13843)(1-click HTML)

(a) The secretary of state shall set all fees imposed by this chapter in amounts reasonable and necessary to cover the costs of administering this chapter. (13844)

(b) The secretary of state shall deposit all fees received under this chapter in the state treasury to the credit of a special fund to be used in the administration of this chapter. (13845)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg., ch. 1039, Sec. 3.23, eff. Sept. 1, 1989. (13846)

Sec. 222.011. VIOLATIONS. (13847)(1-click HTML)

(a) A person commits a false, misleading, or deceptive act or practice within the meaning of Subsections (a) and (b), Section 17.46, Deceptive Trade Practices-Consumer Protection Act (Section 17.46, Business & Commerce Code), by engaging in any of the following acts: (13848)

(1) failing to disclose information concerning a membership interest or membership right required by Section 222.006; (13849)

(2) failing to provide a purchaser with a copy of the membership camping contract and any other document signed by the purchaser or the operator in connection with the purchase of a membership interest or membership right; (13850)

(3) making false or misleading statements of a material nature concerning camping sites or amenities available to the purchaser; (13851)

(4) predicting specific or immediate increases in the value of a membership interest or membership right without a reasonable basis for such predictions; (13852)

(5) making false or misleading statements of a material nature concerning the conditions under which a purchaser of a membership interest or membership right may use or occupy other membership camping resort camping sites or amenities; (13853)

(6) representing that a prize, gift, or other benefit will be awarded in connection with a promotion with intent not to award that prize, gift, or other benefit; (13854)

(7) representing that registration with the secretary of state under Section 222.004 constitutes approval or endorsement by the secretary of state of the operator, the membership camping contract, or the membership camping resort; (13855)

(8) offering or disposing of a membership interest or membership right under a membership camping contract without having complied with the registration requirements under Section 222.004; and (13856)

(9) offering for sale a membership interest or membership right in a membership camping resort without having complied with the registration requirements under Section 222.005. (13857)

(b) The provisions of this section are not exclusive and are in addition to provisions provided for in any other law. (13858)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. Amended by Acts 1989, 71st Leg. ch. 1039, Sec. 3.24, eff. Sept. 1, 1989. (13859)

Sec. 222.012. INSURANCE. (13860)(1-click HTML)

Before the disposition of any membership interest or membership right in a membership camping resort, the operator shall maintain the following insurance with respect to the membership camping resort: (13861)

(1) property insurance on any personal property for use by purchasers, other than personal property separately owned by a purchaser, insuring against all risks of direct physical loss commonly insured against in a total amount, after application of deductibles, of the insurable value of the personal property of the membership camping resort; and (13862)

(2) liability insurance covering all occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, and maintenance of the membership camping resort. (13863)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13864)

Sec. 222.013. EXEMPT FROM SECURITIES ACT. (13865)(1-click HTML)

The filing of a registration under this chapter exempts the sale of a membership interest or membership right in a membership camping resort subject to this chapter from registration under The Securities Act (Article 581-1 et seq., Vernon's Texas Civil Statutes). (13866)

Added by Acts 1989, 71st Leg., ch. 2, Sec. 13.03(d), eff. Aug. 28, 1989. (13867)

TITLE 13. DISCLAIMER OF PROPERTY INTERESTS (13868)(1-click HTML)

CHAPTER 240. TEXAS UNIFORM DISCLAIMER OF PROPERTY INTERESTS ACT (13869)(1-click HTML)

Sec. 240.001. SHORT TITLE. (13870)(1-click HTML)

This chapter may be cited as the Texas Uniform Disclaimer of Property Interests Act. (13871)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13872)

Sec. 240.002. DEFINITIONS. (13873)(1-click HTML)

In this chapter: (13874)

(1) "Charity" means a charitable entity or a charitable trust, as those terms are defined by Section 123.001. (13875)

(1-a) "Current beneficiary" and "presumptive remainder beneficiary" have the meanings assigned by Section 112.071. (13876)

(2) "Disclaim" means to refuse to accept an interest in or power over property, including an interest or power the person is entitled to: (13877)

(A) by inheritance; (13878)

(B) under a will; (13879)

(C) by an agreement between spouses for community property with a right of survivorship; (13880)

(D) by a joint tenancy with a right of survivorship; (13881)

(E) by a survivorship agreement, account, or interest in which the interest of the decedent passes to a surviving beneficiary; (13882)

(F) by an insurance, annuity, endowment, employment, deferred compensation, or other contract or arrangement; (13883)

(G) under a pension, profit sharing, thrift, stock bonus, life insurance, survivor income, incentive, or other plan or program providing retirement, welfare, or fringe benefits with respect to an employee or a self-employed individual; or (13884)

(H) by an instrument creating a trust. (13885)

(3) "Disclaimant" means: (13886)

(A) the person to whom a disclaimed interest or power would have passed had the disclaimer not been made; (13887)

(B) the estate to which a disclaimed interest or power would have passed had the disclaimer not been made by the personal representative of the estate; or (13888)

(C) the trust into which a disclaimed interest or power would have passed had the disclaimer not been made by the trustee of the trust. (13889)

(4) "Disclaimed interest" means the interest that would have passed to the disclaimant had the disclaimer not been made. (13890)

(5) "Disclaimed power" means the power that would have been possessed by the disclaimant had the disclaimer not been made. (13891)

(6) "Disclaimer" means the refusal to accept an interest in or power over property. (13892)

(7) "Estate" has the meaning assigned by Section 22.012, Estates Code. (13893)

(8) "Fiduciary" means a personal representative, a trustee, an attorney in fact or agent acting under a power of attorney, or any other person authorized to act as a fiduciary with respect to the property of another person. (13894)

(9) "Guardian" has the meaning assigned by Section 1002.012, Estates Code. (13895)

(10) Notwithstanding Section 311.005, Government Code, "person" means an individual, corporation, including a public corporation, business trust, partnership, limited liability company, association, joint venture, governmental entity, including a political subdivision, agency, or instrumentality, or any other legal entity. (13896)

(11) "Personal representative" has the meanings assigned by Sections 22.031 and 1002.028, Estates Code. (13897)

(12) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, recognized by federal law or formally acknowledged by a state. (13898)

(13) "Survivorship property" means property held in the name of two or more persons under an arrangement in which, on the death of one of the persons, the property passes to and is vested in the other person or persons. The term includes: (13899)

(A) property held by an agreement described in Section 111.001, Estates Code; (13900)

(B) property held by a community property survivorship agreement defined in Section 112.001, Estates Code; and (13901)

(C) property in a joint account held by an agreement described in Section 113.151, Estates Code. (13902)

(14) "Trust" has the meaning assigned by Section 111.003. (13903)

(15) "Ward" has the meaning assigned by Section 22.033, Estates Code. (13904)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13905)

Amended by: (13906)

Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 15, eff. September 1, 2017. (13907)

Sec. 240.003. APPLICABILITY OF CHAPTER. (13908)(1-click HTML)

This chapter applies to disclaimers of any interest in or power over property, whenever created. (13909)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13910)

Sec. 240.004. CHAPTER SUPPLEMENTED BY OTHER LAW. (13911)(1-click HTML)

(a) Unless displaced by a provision of this chapter, the principles of law and equity supplement this chapter. (13912)

(b) This chapter does not limit any right of a person to waive, release, disclaim, or renounce an interest in or power over property under a statute other than this chapter. (13913)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13914)

Sec. 240.005. UNIFORMITY OF APPLICATION AND CONSTRUCTION. (13915)(1-click HTML)

In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law, with respect to the subject matter of this chapter, among states that enact a law based on the uniform act on which this chapter is based. (13916)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13917)

Sec. 240.006. POWER TO DISCLAIM BY PERSON OTHER THAN FIDUCIARY. (13918)(1-click HTML)

(a) A person other than a fiduciary may disclaim, in whole or in part, any interest in or power over property, including a power of appointment. (13919)

(b) A person other than a fiduciary may disclaim an interest or power under this section even if the creator of the interest or power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim. (13920)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13921)

Sec. 240.007. POWER TO DISCLAIM POWER HELD IN FIDUCIARY CAPACITY BY PERSON DESIGNATED TO SERVE AS OR SERVING AS FIDUCIARY. (13922)(1-click HTML)

(a) Subject to Subsection (b) and except to the extent the person's right to disclaim is expressly restricted or limited by a law of this state or by the instrument creating the fiduciary relationship, a person designated to serve or serving as a fiduciary may disclaim, in whole or in part, any power over property, including a power of appointment and the power to disclaim, held in a fiduciary capacity. (13923)

(b) If a power being disclaimed under Subsection (a) by a person designated to serve or serving as a trustee affects the distributive rights of any beneficiary of the trust: (13924)

(1) the person may disclaim only on or after accepting the trust; (13925)

(2) the disclaimer must be compatible with the trustee's fiduciary obligations; and (13926)

(3) if the disclaimer is made on accepting the trust, the trustee is considered to have never possessed the power disclaimed. (13927)

(c) A person designated to serve or serving as a fiduciary may disclaim a power under this section even if the creator of the power imposed a spendthrift provision or similar restriction on transfer. (13928)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13929)

Sec. 240.008. POWER TO DISCLAIM BY FIDUCIARY ACTING IN FIDUCIARY CAPACITY. (13930)(1-click HTML)

(a) Subject to this section and except to the extent the fiduciary's right to disclaim is expressly restricted or limited by a law of this state or by the instrument creating the fiduciary relationship, a fiduciary acting in a fiduciary capacity may disclaim, in whole or in part, any interest in or power over property, including a power of appointment and the power to disclaim, that would have passed to the ward, estate, trust, or principal with respect to which the fiduciary was acting had the disclaimer not been made even if: (13931)

(1) the creator of the interest or power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim; or (13932)

(2) an instrument other than the instrument that created the fiduciary relationship imposed a restriction or limitation on the right to disclaim. (13933)

(b) Except as provided by Subsection (c), (d), or (f), a disclaimer by a fiduciary acting in a fiduciary capacity does not require court approval to be effective unless the instrument that created the fiduciary relationship requires court approval. (13934)

(c) The following disclaimers by a fiduciary acting in a fiduciary capacity are not effective unless approved by a court of competent jurisdiction: (13935)

(1) a disclaimer by a personal representative who is not an independent administrator or independent executor; (13936)

(2) a disclaimer by the trustee of a management trust created under Chapter 1301, Estates Code; (13937)

(3) a disclaimer by the trustee of a trust created under Section 142.005; or (13938)

(4) a disclaimer that would result in an interest in or power over property passing to the person making the disclaimer. (13939)

(d) A trustee acting in a fiduciary capacity may not disclaim an interest in property that would cause the interest in property not to become trust property unless: (13940)

(1) a court of competent jurisdiction approves the disclaimer; or (13941)

(2) the trustee provides written notice of the disclaimer in accordance with Section 240.0081. (13942)

(e) In the absence of a court-appointed guardian, without court approval, a natural guardian as described by Section 1104.051, Estates Code, may disclaim on behalf of a minor child of the natural guardian, in whole or in part, any interest in or power over property, including a power of appointment, that the minor child is to receive solely as a result of another disclaimer, but only if the disclaimed interest or power does not pass to or for the benefit of the natural guardian as a result of the disclaimer. (13943)

(f) Unless a court of competent jurisdiction approves the disclaimer, a disclaimer by a fiduciary acting in a fiduciary capacity must be compatible with the fiduciary's fiduciary obligations. A disclaimer by a fiduciary acting in a fiduciary capacity is not a per se breach of the fiduciary's fiduciary obligations. (13944)

(g) Possible remedies for a breach of fiduciary obligations do not include declaring an otherwise effective disclaimer void or granting other legal or equitable relief that would make the disclaimer ineffective. (13945)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13946)

Sec. 240.0081. NOTICE REQUIRED BY TRUSTEE DISCLAIMING CERTAIN INTERESTS IN PROPERTY; EFFECT OF NOTICE. (13947)(1-click HTML)

(a) A trustee acting in a fiduciary capacity may disclaim an interest in property that would cause the interest in property not to become trust property without court approval if the trustee provides written notice of the disclaimer to all of the current beneficiaries and presumptive remainder beneficiaries of the trust. (13948)

(b) For the purpose of determining who is a current beneficiary or presumptive remainder beneficiary entitled to the notice under Subsection (a), a beneficiary is determined as of the date the notice is sent. (13949)

(c) Except as provided by Subsection (e-1), in addition to the notice required under Subsection (a), the trustee shall give written notice of the trustee's disclaimer to the attorney general if: (13950)

(1) a charity is entitled to notice; (13951)

(2) a charity entitled to notice is no longer in existence; (13952)

(3) the trustee has the authority to distribute trust assets to one or more charities that are not named in the trust instrument; or (13953)

(4) the trustee has the authority to make distributions for a charitable purpose described in the trust instrument, but no charity is named as a beneficiary for that purpose. (13954)

(d) If the beneficiary has a court-appointed guardian or conservator, the notice required to be given by this section must be given to that guardian or conservator. If the beneficiary is a minor for whom no guardian or conservator has been appointed, the notice required to be given by this section must be given to a parent of the minor. (13955)

(e) The trustee is not required to provide the notice to a beneficiary who: (13956)

(1) is known to the trustee and cannot be located by the trustee after reasonable diligence; (13957)

(2) is not known to the trustee; (13958)

(3) waives the requirement of the notice under this section; or (13959)

(4) is a descendant of a beneficiary to whom the trustee has given notice if the beneficiary and the beneficiary's ancestor have similar interests in the trust and no apparent conflict of interest exists between them. (13960)

(e-1) The trustee is not required to give notice to the attorney general under Subsection (c) if the attorney general waives that requirement in writing. (13961)

(e-2) For purposes of Subsection (e)(3), a beneficiary is considered to have waived the requirement that notice be given under this section if a person to whom notice is required to be given with respect to that beneficiary under Subsection (d) waives the requirement that notice be given under this section. (13962)

(f) The notice required under Subsection (a) must: (13963)

(1) include a statement that: (13964)

(A) the trustee intends to disclaim an interest in property; (13965)

(B) if the trustee makes the disclaimer, the property will not become trust property and will not be available to distribute to the beneficiary from the trust; (13966)

(C) the beneficiary has the right to object to the disclaimer; and (13967)

(D) the beneficiary may petition a court to approve, modify, or deny the disclaimer; (13968)

(2) describe the interest in property the trustee intends to disclaim; (13969)

(3) specify the earliest date the trustee intends to make the disclaimer; (13970)

(4) include the name and mailing address of the trustee; (13971)

(5) be given not later than the 30th day before the date the disclaimer is made; and (13972)

(6) be sent by personal delivery, first-class mail, facsimile, e-mail, or any other method likely to result in the notice's receipt. (13973)

(g) A beneficiary is not considered to have accepted the disclaimed interest solely because the beneficiary acts or does not act on receipt of a notice provided under this section. (13974)

(h) If the trustee makes the disclaimer for which notice is provided under this section, the beneficiary does not lose the beneficiary's right, if any, to sue the trustee for breach of the trustee's fiduciary obligations in connection with making the disclaimer. Section 240.008(g) applies to remedies sought in connection with the alleged breach. (13975)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13976)

Amended by: (13977)

Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 16, eff. September 1, 2017. (13978)

Sec. 240.009. POWER TO DISCLAIM; GENERAL REQUIREMENTS; WHEN IRREVOCABLE. (13979)(1-click HTML)

(a) To be effective, a disclaimer must: (13980)

(1) be in writing; (13981)

(2) declare the disclaimer; (13982)

(3) describe the interest or power disclaimed; (13983)

(4) be signed by the person making the disclaimer; and (13984)

(5) be delivered or filed in the manner provided by Subchapter C. (13985)

(b) A partial disclaimer may be expressed as a fraction, percentage, monetary amount, term of years, limitation of a power, or any other interest or estate in the property. (13986)

(c) A disclaimer is irrevocable on the later of the date the disclaimer: (13987)

(1) is delivered or filed under Subchapter C; or (13988)

(2) takes effect as provided in Sections 240.051-240.056. (13989)

(d) A disclaimer made under this chapter is not a transfer, assignment, or release. (13990)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13991)

SUBCHAPTER B. TYPE AND EFFECT OF DISCLAIMER (13992)(1-click HTML)
Sec. 240.0501. DEFINITION. (13993)(1-click HTML)

In this subchapter, "future interest" means an interest that: (13994)

(1) takes effect in possession or enjoyment, if at all, later than the time at which the instrument creating the interest becomes irrevocable; and (13995)

(2) passes to the holder of the interest at the time of the event that causes the taker of the interest to be finally ascertained and the interest to be indefeasibly vested. (13996)

Added by Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 15, eff. September 1, 2015. (13997)

Sec. 240.051. DISCLAIMER OF INTEREST IN PROPERTY. (13998)(1-click HTML)

(a) This section and Sections 240.0511 and 240.0512 apply to a disclaimer of an interest in property other than a disclaimer subject to Section 240.052 or 240.053. (13999)

(b) If an interest in property passes because of the death of a decedent: (14000)

(1) a disclaimer of the interest: (14001)

(A) takes effect as of the time of the decedent's death; and (14002)

(B) relates back for all purposes to the time of the decedent's death; and (14003)

(2) the disclaimed interest is not subject to the claims of any creditor of the disclaimant. (14004)

(c) If an interest in property passes because of an event not related to the death of a decedent: (14005)

(1) a disclaimer of the interest: (14006)

(A) takes effect: (14007)

(i) as of the time the instrument creating the interest became irrevocable; or (14008)

(ii) in the case of an irrevocable transfer made without an instrument, at the time of the irrevocable transfer; and (14009)

(B) relates back for all purposes to the time the instrument became irrevocable or the time of the irrevocable transfer, as applicable; and (14010)

(2) the disclaimed interest is not subject to the claims of any creditor of the disclaimant. (14011)

(d) A disclaimed interest passes according to any provision in the instrument creating the interest that provides for: (14012)

(1) the disposition of the interest if the interest were to be disclaimed; or (14013)

(2) the disposition of disclaimed interests in general. (14014)

(e) If the instrument creating the disclaimed interest does not contain a provision described by Subsection (d) and: (14015)

(1) if the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist; or (14016)

(2) if the disclaimant is an individual: (14017)

(A) except as provided by Section 240.0511, if the interest is passing because of the death of a decedent, the disclaimed interest passes as if the disclaimant had died immediately before the time as of which the disclaimer takes effect under Subsection (b); or (14018)

(B) except as provided by Section 240.0512, if the interest is passing because of an event not related to the death of a decedent, the disclaimed interest passes as if the disclaimant had died immediately before the time as of which the disclaimer takes effect under Subsection (c). (14019)

  

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