Texas Laws - Property Code
PROPERTY CODE
TITLE 4. ACTIONS AND REMEDIES

(C) reasonable costs to move from the residence; and (2337)

(3) conditioned on the payment of the purchase price, the homeowner shall tender a special warranty deed to the contractor, free of all liens and claims to liens as of the date the title is transferred to the contractor, and without damage caused by the homeowner. (2338)

(d) An offer to purchase a claimant's home that complies with this section is considered reasonable absent clear and convincing evidence to the contrary. (2339)

Added by Acts 2003, 78th Leg., ch. 458, Sec. 2.05, eff. Sept. 1, 2003. (2340)

Sec. 27.005. LIMITATIONS ON EFFECT OF CHAPTER. (2341)(1-click HTML)

This chapter does not create a cause of action or derivative liability or extend a limitations period. (2342)

Added by Acts 1989, 71st Leg., ch. 1072, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1999, 76th Leg., ch. 189, Sec. 7, eff. Sept. 1, 1999. (2343)

Sec. 27.006. CAUSATION. (2344)(1-click HTML)

In an action to recover damages resulting from a construction defect, the claimant must prove that the damages were proximately caused by the construction defect. (2345)

Added by Acts 1993, 73rd Leg., ch. 797, Sec. 6, eff. Aug. 30, 1993. (2346)

Sec. 27.007. DISCLOSURE STATEMENT REQUIRED. (2347)(1-click HTML)

(a) A written contract subject to this chapter, other than a contract between a developer of a condominium and a contractor for the construction or repair of a residence or appurtenance to a residence in a condominium, must contain in the contract a notice printed or typed in 10-point boldface type or the computer equivalent that reads substantially similar to the following: (2348)

"This contract is subject to Chapter 27 of the Texas Property Code. The provisions of that chapter may affect your right to recover damages arising from a construction defect. If you have a complaint concerning a construction defect and that defect has not been corrected as may be required by law or by contract, you must provide the notice required by Chapter 27 of the Texas Property Code to the contractor by certified mail, return receipt requested, not later than the 60th day before the date you file suit to recover damages in a court of law or initiate arbitration. The notice must refer to Chapter 27 of the Texas Property Code and must describe the construction defect. If requested by the contractor, you must provide the contractor an opportunity to inspect and cure the defect as provided by Section 27.004 of the Texas Property Code." (2349)

(b) If a contract does not contain the notice required by this section, the claimant may recover from the contractor a civil penalty of $500 in addition to any other remedy provided by this chapter. (2350)

(c) This section does not apply to a contract relating to a home required to be registered under Section 426.003. (2351)

Added by Acts 1999, 76th Leg., ch. 189, Sec. 8, eff. Sept. 1, 2000. Amended by Acts 2003, 78th Leg., ch. 458, Sec. 2.06, eff. Sept. 1, 2003. (2352)

Amended by: (2353)

Acts 2007, 80th Leg., R.S., Ch. 750 (H.B. 3147), Sec. 2, eff. September 1, 2007. (2354)

Acts 2007, 80th Leg., R.S., Ch. 843 (H.B. 1038), Sec. 4, eff. September 1, 2007. (2355)

CHAPTER 28. PROMPT PAYMENT TO CONTRACTORS AND SUBCONTRACTORS (2356)(1-click HTML)

Sec. 28.001. DEFINITIONS. (2357)(1-click HTML)

In this chapter: (2358)

(1) "Contractor" means a person who contracts with an owner to improve real property or perform construction services for an owner. (2359)

(2) "Improve" means to: (2360)

(A) build, construct, effect, erect, alter, repair, or demolish any improvement on, connected with, or beneath the surface of real property; (2361)

(B) excavate, clear, grade, fill, or landscape real property; (2362)

(C) construct a driveway or roadway; (2363)

(D) furnish any material, including trees or shrubbery, for the purpose of taking any action described by Paragraphs (A)-(C) of this subdivision; or (2364)

(E) perform any labor on or in connection with an improvement. (2365)

(3) "Improvement" includes all or any part of: (2366)

(A) a building, structure, erection, alteration, demolition, or excavation on, connected with, or beneath the surface of real property; and (2367)

(B) the act of clearing, grading, filling, or landscaping real property, including constructing a driveway or roadway or furnishing trees or shrubbery. (2368)

(4) "Owner" means a person or entity, other than a governmental entity, with an interest in real property that is improved, for whom an improvement is made, and who ordered the improvement to be made. (2369)

(5) "Real property" includes lands, leaseholds, tenements, hereditaments, and improvements placed on the real property. (2370)

(6) "Subcontractor" means a person who contracts to furnish labor or material to, or has performed labor or supplied materials for, a contractor or another subcontractor in connection with a contract to improve real property. (2371)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2372)

Sec. 28.002. PROMPT PAY REQUIRED. (2373)(1-click HTML)

(a) If an owner or a person authorized to act on behalf of the owner receives a written payment request from a contractor for an amount that is allowed to the contractor under the contract for properly performed work or suitably stored or specially fabricated materials, the owner shall pay the amount to the contractor, less any amount withheld as authorized by statute, not later than the 35th day after the date the owner receives the request. (2374)

(b) A contractor who receives a payment under Subsection (a) or otherwise from an owner in connection with a contract to improve real property shall pay each of its subcontractors the portion of the owner's payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor's interest in the owner's payment. The payment required by this subsection must be made not later than the seventh day after the date the contractor receives the owner's payment. (2375)

(c) A subcontractor who receives a payment under Subsection (b) or otherwise from a contractor in connection with a contract to improve real property shall pay each of its subcontractors the portion of the payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor's interest in the payment. The payment required by this subsection must be made not later than the seventh day after the date the subcontractor receives the contractor's payment. (2376)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 1, eff. Sept. 1, 1999. (2377)

Sec. 28.003. EXCEPTION FOR GOOD FAITH DISPUTE; WITHHOLDING. (2378)(1-click HTML)

(a) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 110 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner. (2379)

(b) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to real property, excluding a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 100 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner. (2380)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 2, eff. Sept. 1, 1999. (2381)

Sec. 28.004. INTEREST ON OVERDUE PAYMENT. (2382)(1-click HTML)

(a) An unpaid amount required under this chapter begins to accrue interest on the day after the date on which the payment becomes due. (2383)

(b) An unpaid amount bears interest at the rate of 1-1/2 percent each month. (2384)

(c) Interest on an unpaid amount stops accruing under this section on the earlier of: (2385)

(1) the date of delivery; (2386)

(2) the date of mailing, if payment is mailed and delivery occurs within three days; or (2387)

(3) the date a judgment is entered in an action brought under this chapter. (2388)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2389)

Sec. 28.005. ACTION TO ENFORCE PAYMENT. (2390)(1-click HTML)

(a) A person may bring an action to enforce the person's rights under this chapter. (2391)

(b) In an action brought under this chapter, the court may award costs and reasonable attorney's fees as the court determines equitable and just. (2392)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2393)

Sec. 28.006. NO WAIVER. (2394)(1-click HTML)

(a) Except as provided by Subsection (b), an attempted waiver of a provision of this chapter is void. (2395)

(b) A written contract between an owner and a contractor for improvements to or construction of a single-family residence may provide that the payment required under Section 28.002(a) be made not later than a date that occurs before the 61st day after the date the owner receives the payment request. Notwithstanding Section 28.004(b), an unpaid amount under contract subject to this subsection that allows payment later than the date otherwise required under Section 28.002(a) bears interest at the rate of 1-1/2 percent each month. (2396)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2397)

Sec. 28.007. LEGAL CONSTRUCTION. (2398)(1-click HTML)

(a) This chapter may not be interpreted to void a contractor's or subcontractor's entitlement to payment for properly performed work or suitably stored materials. (2399)

(b) Nothing in this statute shall be interpreted to change the rights and obligations set forth in Chapter 53, Property Code. (2400)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. (2401)

Sec. 28.008. EXCEPTION FOR FAILURE OF LENDER TO DISBURSE FUNDS. (2402)(1-click HTML)

The date of payment required of the owner pursuant to Section 28.002(a) shall change from the 35th day after the date the owner receives the payment request to the fifth day after the date the owner receives loan proceeds, in the event that: (2403)

(1) the owner has obtained a loan intended to pay for all or part of a contract to improve real property; (2404)

(2) the owner has timely and properly requested disbursement of proceeds from that loan; and (2405)

(3) the lender is legally obligated to disburse such proceeds to the owner, but has failed to do so within 35 days after the date the owner received the contractor's payment request. (2406)

Added by Acts 1993, 73rd Leg., ch. 479, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 805, Sec. 3, eff. Sept. 1, 1999. (2407)

Sec. 28.009. RIGHT TO SUSPEND WORK. (2408)(1-click HTML)

(a) If an owner fails to pay the contractor the undisputed amount within the time limits provided by this chapter, the contractor or any subcontractor may suspend contractually required performance the 10th day after the date the contractor or subcontractor gives the owner and the owner's lender written notice: (2409)

(1) informing the owner and lender that payment has not been received; and (2410)

(2) stating the intent of the contractor or subcontractor to suspend performance for nonpayment. (2411)

(b) For purposes of Subsection (a), the contractor or subcontractor must give the owner's lender the written notice only if: (2412)

(1) the owner has obtained a loan intended to pay for all or part of the construction project; (2413)

(2) the lender has remitted funds, including acquisition funds, for construction purposes; (2414)

(3) the loan obtained: (2415)

(A) is evidenced by a promissory note secured by a deed of trust recorded in the real property records of the county in which the real property that is the subject of the contract is located; and (2416)

(B) is not only for the acquisition of personal property or secured only by a security instrument; (2417)

(4) the owner or lender, at the lender's option: (2418)

(A) securely posts not later than the 10th day after the date construction commences a sign on the project site in a prominent place accessible to each contractor, subcontractor, and supplier that states the lender's name, address, and the person to whom any notice should be sent; and (2419)

(B) maintains the sign during the pendency of the construction project; (2420)

(5) not later than the 10th day after the date construction commences, the owner or lender, at the lender's option, provides a written copy of the notice prescribed by Subdivision (4) to the contractor and any subcontractor or supplier identified by the contractor by depositing the notice properly addressed in the United States mail, first class, postage paid; and (2421)

(6) not later than the 10th day after the date a subcontractor or supplier performs labor or furnishes materials or equipment for the construction project, the owner, contractor, or subcontractor provides a written copy of the notice prescribed by Subdivision (4) to the subcontractor or supplier. (2422)

(c) A contractor or subcontractor who suspends performance as provided by this section is not: (2423)

(1) required to supply further labor, services, or materials until the person is paid the amount provided by this chapter, plus costs for demobilization and remobilization; or (2424)

(2) responsible for damages resulting from suspending work if the contractor or subcontractor has not been notified in writing before suspending performance that payment has been made or that a good faith dispute for payment exists. (2425)

(d) A notification that a good faith dispute for payment exists provided under Subsection (c) must include a list of specific reasons for nonpayment. If a reason specified includes labor, services, or materials provided by a subcontractor that are not provided in compliance with the contract, the subcontractor is entitled to a reasonable opportunity to: (2426)

(1) cure the listed items; or (2427)

(2) offer a reasonable amount to compensate for listed items that cannot be promptly cured. (2428)

(e) This section does not apply to: (2429)

(1) a contract for the construction of or improvements to a detached single-family residence, duplex, triplex, or quadruplex; or (2430)

(2) a contract to improve real property for a governmental entity. (2431)

(f) The rights and remedies provided by this section are in addition to rights and remedies provided by this chapter or other law. (2432)

Added by Acts 1999, 76th Leg., ch. 805, Sec. 4, eff. Sept. 1, 1999. (2433)

Sec. 28.010. EXEMPTION FOR MINERAL DEVELOPMENT AND OILFIELD SERVICES. (2434)(1-click HTML)

(a) This chapter does not apply to any agreement: (2435)

(1) to explore, produce, or develop oil, natural gas, natural gas liquids, synthetic gas, sulphur, ore, or other mineral substances, including any lease or royalty agreement, joint interest agreement, production or production-related agreement, operating agreement, farmout agreement, area of mutual interest agreement, or other related agreement; (2436)

(2) for any well or mine services; or (2437)

(3) to purchase, sell, gather, store, or transport oil, natural gas, natural gas liquids, synthetic gas, or other hydrocarbon substances by pipeline or by a fixed, associated facility. (2438)

(b) In this section: (2439)

(1) "Agreement" includes a written or oral agreement or understanding: (2440)

(A) to provide work or services, including any construction, operating, repair, or maintenance services; or (2441)

(B) to perform a part of the services covered by Paragraph (A) or an act collateral to those services, including furnishing or renting equipment, incidental transportation, or other goods and services furnished in connection with those services. (2442)

(2) "Well or mine services" includes: (2443)

(A) drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, purchasing, gathering, storing, or transporting oil or natural gas, brine water, fresh water, produced water, condensate, petroleum products, or other liquid commodities, or otherwise rendering services in connection with a well drilled to produce or dispose of oil, gas, or other minerals or water; and (2444)

(B) designing, excavating, constructing, improving, or otherwise rendering services in connection with an oil, gas, or other mineral production platform or facility, mine shaft, drift, or other structure intended directly for use in exploring for or producing a mineral. (2445)

Added by Acts 1999, 76th Leg., ch. 805, Sec. 4, eff. Sept. 1, 1999. (2446)

CHAPTER 29. FORCED SALE OF OWNER'S INTEREST IN CERTAIN REAL PROPERTY AS REIMBURSEMENT FOR PROPERTY TAXES PAID BY CO-OWNER ON OWNER'S BEHALF (2447)(1-click HTML)

Sec. 29.001. APPLICATION OF CHAPTER. (2448)(1-click HTML)

This chapter applies only to real property that is not exempt from forced sale under the constitution or laws of this state and is: (2449)

(1) received by a person as a result of the death of another person: (2450)

(A) by inheritance; (2451)

(B) under a will; (2452)

(C) by a joint tenancy with a right of survivorship; or (2453)

(D) by any other survivorship agreement in which the interest of the decedent passes to a surviving beneficiary other than an agreement between spouses for community property with a right of survivorship; or (2454)

(2) owned in part by a nonprofit organization that is exempt from federal income tax under Section 501(a), Internal Revenue Code of 1986, and its subsequent amendments, by being listed as an exempt organization under Section 501(c)(3), Internal Revenue Code of 1986, and its subsequent amendments, that: (2455)

(A) has been incorporated in this state for at least one year; (2456)

(B) has a corporate purpose to develop affordable housing that is stated in the articles of incorporation or charter; (2457)

(C) has at least one-fourth of its board of directors residing in the county in which the property is located; and (2458)

(D) engages primarily in the building, repair, rental, or sale of housing for low-income individuals or families. (2459)

Added by Acts 1995, 74th Leg., ch. 981, Sec. 1, eff. Aug. 28, 1995. Amended by Acts 2001, 77th Leg., ch. 891, Sec. 1, eff. Sept. 1, 2001. (2460)

Sec. 29.002. PETITION FOR FORCED SALE. (2461)(1-click HTML)

(a) A person, including a nonprofit organization, that owns an undivided interest in real property to which this chapter applies may file in the district court in a county in which the property is located a petition for a court order to require another owner of an undivided interest in that property to sell the other owner's interest in the property to the person if: (2462)

(1) the person has paid the other owner's share of ad valorem taxes imposed on the property for any three years in a five-year period or, in the case of a nonprofit organization, has paid the other owner's share of ad valorem taxes imposed on the property for any two years in a three-year period; and (2463)

(2) the other owner has not reimbursed the person for more than half of the total amount paid by the person for the taxes on the owner's behalf. (2464)

(b) The petition must contain: (2465)

(1) a description of the property; (2466)

(2) the name of each known owner of the property; (2467)

(3) the interest held by each known owner of the property; (2468)

(4) the total amount paid by the petitioner for the defendant's share of ad valorem taxes imposed on the property; and (2469)

(5) if applicable, the amount paid by the defendant to the petitioner to reimburse the petitioner for paying the defendant's share of ad valorem taxes imposed on the property. (2470)

Added by Acts 1995, 74th Leg., ch. 981, Sec. 1, eff. Aug. 28, 1995. Amended by Acts 2001, 77th Leg., ch. 891, Sec. 1, eff. Sept. 1, 2001. (2471)

Sec. 29.003. HEARING ON PETITION FOR FORCED SALE. (2472)(1-click HTML)

At a hearing on a petition filed under Section 29.002, the petitioner must prove by clear and convincing evidence that: (2473)

(1) the petitioner has paid the defendant's share of ad valorem taxes imposed on the property that is the subject of the petition for any three years in a five-year period or, in the case of a nonprofit organization, the petitioner has paid the defendant's share of ad valorem taxes imposed on the property that is the subject of the petition for any two years in a three-year period; (2474)

(2) before the date on which the petition was filed the petitioner made a demand that the defendant reimburse the petitioner for the amount of the defendant's share of ad valorem taxes imposed on the property paid by the petitioner; and (2475)

(3) the defendant has not reimbursed the petitioner more than half of the amount of money the petitioner paid on the defendant's behalf for the defendant's share of ad valorem taxes imposed on the property. (2476)

Added by Acts 1995, 74th Leg., ch. 981, Sec. 1, eff. Aug. 28, 1995. Amended by Acts 2001, 77th Leg., ch. 891, Sec. 1, eff. Sept. 1, 2001. (2477)

Sec. 29.0035. DEMAND TO UNKNOWN DEFENDANT. (2478)(1-click HTML)

If the address or identity of the defendant is unknown, the demand of the petitioner for reimbursement from the defendant required by Section 29.003(2) may be met by publication in a newspaper in the county in which the property is located once each week for four consecutive weeks, with the final publication occurring not later than the 30th day before the date on which the petition is filed. The publication must contain the demand for reimbursement and: (2479)

(1) a general description of the property involved; (2480)

(2) the legal description of the property according to the survey of the property, including the number of the lot and block or any other plat description that may be of record if the property is located in a municipality; (2481)

(3) the county in which the property is located; (2482)

(4) the interest of the defendant; and (2483)

(5) the name and address of the petitioner. (2484)

Added by Acts 2001, 77th Leg., ch. 891, Sec. 2, eff. Sept. 1, 2001. (2485)

Sec. 29.004. COURT-ORDERED SALE. (2486)(1-click HTML)

On completion of the hearing on a petition filed under Section 29.002, if the court is satisfied that the petitioner has made the requisite proof under Section 29.003, the court shall enter an order that divests the defendant's interest in the real property that is the subject of the petition and that orders the petitioner to pay to the defendant an amount computed by subtracting the outstanding amount of money the defendant owes to the petitioner for payment of the defendant's share of ad valorem taxes imposed on the property from the fair market value of the defendant's interest in the property as determined by an independent appraiser appointed by the court. The court's order may also direct the defendant to execute and deliver to the petitioner a deed that conveys to the petitioner the defendant's interest in the property. (2487)

Added by Acts 1995, 74th Leg., ch. 981, Sec. 1, eff. Aug. 28, 1995. (2488)

CHAPTER 30. WRIT OF ASSISTANCE FOR REPOSSESSION OF AIRCRAFT (2489)(1-click HTML)

Sec. 30.01. DEFINITIONS. (2490)(1-click HTML)

In this chapter: (2491)

(1) "Aircraft" means a self-propelled motor vehicle that can be used to transport a person by flight in the air. (2492)

(2) "Repossession" means the recovery of an aircraft that has been sold under a security agreement containing a repossession clause authorizing the lender to recover the aircraft if the borrower defaults under the agreement. (2493)

(3) "Repossession agent" means an individual who is authorized to engage in a repossession for a lender. (2494)

Added by Acts 2015, 84th Leg., R.S., Ch. 1125 (H.B. 3901), Sec. 1, eff. September 1, 2015. (2495)

Sec. 30.02. WRIT OF ASSISTANCE FOR REPOSSESSION OF AIRCRAFT. (2496)(1-click HTML)

(a) A writ of assistance for the repossession of an aircraft authorizes a peace officer to assist and protect a repossession agent in gaining possession of the aircraft while the agent: (2497)

(1) secures the aircraft on site; or (2498)

(2) prepares the aircraft, which may include a mechanical inspection, for removal from the site by flight or otherwise to another location. (2499)

(b) A writ of assistance for the repossession of an aircraft is valid for 30 days. (2500)

(c) A justice court may grant unlimited extensions of a writ of assistance issued under this chapter. (2501)

Added by Acts 2015, 84th Leg., R.S., Ch. 1125 (H.B. 3901), Sec. 1, eff. September 1, 2015. (2502)

Sec. 30.03. PETITION FOR WRIT OF ASSISTANCE. (2503)(1-click HTML)

(a) A repossession agent may file a petition in a justice court for a writ of assistance for the repossession of an aircraft. (2504)

(b) The repossession agent is entitled to the writ if the repossession agent establishes that: (2505)

(1) the aircraft is subject to the proposed repossession; and (2506)

(2) the repossession agent is authorized to engage in the repossession. (2507)

(c) The petition for the writ must include a copy of: (2508)

(1) the security agreement relating to the aircraft; (2509)

(2) the notice of default under the security agreement sent by the lender to the borrower; (2510)

(3) the instrument in which a power of attorney for the repossession is granted to the repossession agent by the lender; and (2511)

(4) the results of a title search of the Federal Aviation Administration's records for the aircraft. (2512)

Added by Acts 2015, 84th Leg., R.S., Ch. 1125 (H.B. 3901), Sec. 1, eff. September 1, 2015. (2513)

TITLE 5. EXEMPT PROPERTY AND LIENS (2514)(1-click HTML)

SUBTITLE A. PROPERTY EXEMPT FROM CREDITORS' CLAIMS (2515)(1-click HTML)

CHAPTER 41. INTERESTS IN LAND (2516)(1-click HTML)
SUBCHAPTER A. EXEMPTIONS IN LAND DEFINED (2517)(1-click HTML)
Sec. 41.001. INTERESTS IN LAND EXEMPT FROM SEIZURE. (2518)(1-click HTML)

(a) A homestead and one or more lots used for a place of burial of the dead are exempt from seizure for the claims of creditors except for encumbrances properly fixed on homestead property. (2519)

(b) Encumbrances may be properly fixed on homestead property for: (2520)

(1) purchase money; (2521)

(2) taxes on the property; (2522)

(3) work and material used in constructing improvements on the property if contracted for in writing as provided by Sections 53.254(a), (b), and (c); (2523)

(4) an owelty of partition imposed against the entirety of the property by a court order or by a written agreement of the parties to the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding; (2524)

(5) the refinance of a lien against a homestead, including a federal tax lien resulting from the tax debt of both spouses, if the homestead is a family homestead, or from the tax debt of the owner; (2525)

(6) an extension of credit that meets the requirements of Section 50(a)(6), Article XVI, Texas Constitution; or (2526)

(7) a reverse mortgage that meets the requirements of Sections 50(k)-(p), Article XVI, Texas Constitution. (2527)

(c) The homestead claimant's proceeds of a sale of a homestead are not subject to seizure for a creditor's claim for six months after the date of sale. (2528)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985; Acts 1993, 73rd Leg., ch. 48, Sec. 2, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 121, Sec. 1.01, eff. May 17, 1995; Acts 1995, 74th Leg., ch. 121, Sec. 2.01; Acts 1997, 75th Leg., ch. 526, Sec. 1, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 516, Sec. 1, eff. Sept. 1, 2001. (2529)

Sec. 41.002. DEFINITION OF HOMESTEAD. (2530)(1-click HTML)

(a) If used for the purposes of an urban home or as both an urban home and a place to exercise a calling or business, the homestead of a family or a single, adult person, not otherwise entitled to a homestead, shall consist of not more than 10 acres of land which may be in one or more contiguous lots, together with any improvements thereon. (2531)

(b) If used for the purposes of a rural home, the homestead shall consist of: (2532)

(1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or (2533)

(2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres, which may be in one or more parcels, with the improvements thereon. (2534)

(c) A homestead is considered to be urban if, at the time the designation is made, the property is: (2535)

(1) located within the limits of a municipality or its extraterritorial jurisdiction or a platted subdivision; and (2536)

(2) served by police protection, paid or volunteer fire protection, and at least three of the following services provided by a municipality or under contract to a municipality: (2537)

(A) electric; (2538)

(B) natural gas; (2539)

(C) sewer; (2540)

(D) storm sewer; and (2541)

(E) water. (2542)

(d) The definition of a homestead as provided in this section applies to all homesteads in this state whenever created. (2543)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985; Acts 1989, 71st Leg., ch. 391, Sec. 2, eff. Aug. 28, 1989; Acts 1999, 76th Leg., ch. 1510, Sec. 1, eff. Jan. 1, 2000; Acts 1999, 76th Leg., ch. 1510, Sec. 2, eff. Sept. 1, 1999. (2544)

Sec. 41.0021. HOMESTEAD IN QUALIFYING TRUST. (2545)(1-click HTML)

(a) In this section, "qualifying trust" means an express trust: (2546)

(1) in which the instrument or court order creating the express trust provides that a settlor or beneficiary of the trust has the right to: (2547)

(A) revoke the trust without the consent of another person; (2548)

(B) exercise an inter vivos general power of appointment over the property that qualifies for the homestead exemption; or (2549)

(C) use and occupy the residential property as the settlor's or beneficiary's principal residence at no cost to the settlor or beneficiary, other than payment of taxes and other costs and expenses specified in the instrument or court order: (2550)

(i) for the life of the settlor or beneficiary; (2551)

(ii) for the shorter of the life of the settlor or beneficiary or a term of years specified in the instrument or court order; or (2552)

(iii) until the date the trust is revoked or terminated by an instrument or court order recorded in the real property records of the county in which the property is located and that describes the property with sufficient certainty to identify the property; and (2553)

(2) the trustee of which acquires the property in an instrument of title or under a court order that: (2554)

(A) describes the property with sufficient certainty to identify the property and the interest acquired; and (2555)

(B) is recorded in the real property records of the county in which the property is located. (2556)

(b) Property that a settlor or beneficiary occupies and uses in a manner described by this subchapter and in which the settlor or beneficiary owns a beneficial interest through a qualifying trust is considered the homestead of the settlor or beneficiary under Section 50, Article XVI, Texas Constitution, and Section 41.001. (2557)

(c) A married person who transfers property to the trustee of a qualifying trust must comply with the requirements relating to the joinder of the person's spouse as provided by Chapter 5, Family Code. (2558)

(d) A trustee may sell, convey, or encumber property transferred as described by Subsection (c) without the joinder of either spouse unless expressly prohibited by the instrument or court order creating the trust. (2559)

(e) This section does not affect the rights of a surviving spouse or surviving children under Section 52, Article XVI, Texas Constitution, or Part 3, Chapter VIII, Texas Probate Code. (2560)

Added by Acts 2009, 81st Leg., R.S., Ch. 984 (H.B. 3767), Sec. 1, eff. September 1, 2009. (2561)

Sec. 41.003. TEMPORARY RENTING OF A HOMESTEAD. (2562)(1-click HTML)

Temporary renting of a homestead does not change its homestead character if the homestead claimant has not acquired another homestead. (2563)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985. (2564)

Sec. 41.004. ABANDONMENT OF A HOMESTEAD. (2565)(1-click HTML)

If a homestead claimant is married, a homestead cannot be abandoned without the consent of the claimant's spouse. (2566)

Added by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985. (2567)

Sec. 41.005. VOLUNTARY DESIGNATION OF HOMESTEAD. (2568)(1-click HTML)

(a) If a rural homestead of a family is part of one or more parcels containing a total of more than 200 acres, the head of the family and, if married, that person's spouse may voluntarily designate not more than 200 acres of the property as the homestead. If a rural homestead of a single adult person, not otherwise entitled to a homestead, is part of one or more parcels containing a total of more than 100 acres, the person may voluntarily designate not more than 100 acres of the property as the homestead. (2569)

(b) If an urban homestead of a family, or an urban homestead of a single adult person not otherwise entitled to a homestead, is part of one or more contiguous lots containing a total of more than 10 acres, the head of the family and, if married, that person's spouse or the single adult person, as applicable, may voluntarily designate not more than 10 acres of the property as the homestead. (2570)

(c) Except as provided by Subsection (e) or Subchapter B, to designate property as a homestead, a person or persons, as applicable, must make the designation in an instrument that is signed and acknowledged or proved in the manner required for the recording of other instruments. The person or persons must file the designation with the county clerk of the county in which all or part of the property is located. The clerk shall record the designation in the county deed records. The designation must contain: (2571)

(1) a description sufficient to identify the property designated; (2572)

(2) a statement by the person or persons who executed the instrument that the property is designated as the homestead of the person's family or as the homestead of a single adult person not otherwise entitled to a homestead; (2573)

(3) the name of the current record title holder of the property; and (2574)

(4) for a rural homestead, the number of acres designated and, if there is more than one survey, the number of acres in each. (2575)

(d) A person or persons, as applicable, may change the boundaries of a homestead designated under Subsection (c) by executing and recording an instrument in the manner required for a voluntary designation under that subsection. A change under this subsection does not impair rights acquired by a party before the change. (2576)

(e) Except as otherwise provided by this subsection, property on which a person receives an exemption from taxation under Section 11.43, Tax Code, is considered to have been designated as the person's homestead for purposes of this subchapter if the property is listed as the person's residence homestead on the most recent appraisal roll for the appraisal district established for the county in which the property is located. If a person designates property as a homestead under Subsection (c) or Subchapter B and a different property is considered to have been designated as the person's homestead under this subsection, the designation under Subsection (c) or Subchapter B, as applicable, prevails for purposes of this chapter. (2577)

(f) If a person or persons, as applicable, have not made a voluntary designation of a homestead under this section as of the time a writ of execution is issued against the person, any designation of the person's or persons' homestead must be made in accordance with Subchapter B. (2578)

(g) An instrument that made a voluntary designation of a homestead in accordance with prior law and that is on file with the county clerk on September 1, 1987, is considered a voluntary designation of a homestead under this section. (2579)

Added by Acts 1987, 70th Leg., ch. 727, Sec. 1, eff. Aug. 31, 1987. Amended by Acts 1993, 73rd Leg., ch. 48, Sec. 3, eff. Sept. 1, 1993; Acts 1993, 73rd Leg., ch. 297, Sec. 1, eff. Aug. 1, 1993; Acts 1997, 75th Leg., ch. 846, Sec. 1, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1510, Sec. 3, eff. Jan. 1, 2000. (2580)

Sec. 41.0051. DISCLAIMER AND DISCLOSURE REQUIRED. (2581)(1-click HTML)

(a) A person may not deliver a written advertisement offering, for a fee, to designate property as a homestead as provided by Section 41.005 unless there is a disclaimer on the advertisement that is conspicuous and printed in 14-point boldface type or 14-point uppercase typewritten letters that makes the following statement or a substantially similar statement: (2582)

THIS DOCUMENT IS AN ADVERTISEMENT OF SERVICES. IT IS NOT AN OFFICIAL DOCUMENT OF THE STATE OF TEXAS. (2583)

(b) A person who solicits solely by mail or by telephone a homeowner to pay a fee for the service of applying for a property tax refund from a tax appraisal district or other governmental body on behalf of the homeowner shall, before accepting money from the homeowner or signing a contract with the homeowner for the person's services, disclose to the homeowner the name of the tax appraisal district or other governmental body that owes the homeowner a refund. (2584)

(c) A person's failure to provide a disclaimer on an advertisement as required by Subsection (a) or to provide the disclosure required by Subsection (b) is considered a false, misleading, or deceptive act or practice for purposes of Section 17.46(a), Business & Commerce Code, and is subject to action by the consumer protection division of the attorney general's office as provided by Section 17.46(a), Business & Commerce Code. (2585)

Added by Acts 2001, 77th Leg., ch. 341, Sec. 1, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1191, Sec. 1, 2, eff. Sept. 1, 2003. (2586)

Sec. 41.006. CERTAIN SALES OF HOMESTEAD. (2587)(1-click HTML)

(a) Except as provided by Subsection (c), any sale or purported sale in whole or in part of a homestead at a fixed purchase price that is less than the appraised fair market value of the property at the time of the sale or purported sale, and in connection with which the buyer of the property executes a lease of the property to the seller at lease payments that exceed the fair rental value of the property, is considered to be a loan with all payments made from the seller to the buyer in excess of the sales price considered to be interest subject to Title 4, Finance Code. (2588)

(b) The taking of any deed in connection with a transaction described by this section is a deceptive trade practice under Subchapter E, Chapter 17, Business & Commerce Code, and the deed is void and no lien attaches to the homestead property as a result of the purported sale. (2589)

(c) This section does not apply to the sale of a family homestead to a parent, stepparent, grandparent, child, stepchild, brother, half brother, sister, half sister, or grandchild of an adult member of the family. (2590)

Added by Acts 1987, 70th Leg., ch. 1130, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.84, eff. Sept. 1, 1999. (2591)

Sec. 41.007. HOME IMPROVEMENT CONTRACT. (2592)(1-click HTML)

(a) A contract for improvements to an existing residence described by Section 41.001(b)(3) must contain: (2593)

(1) the contractor's certificate of registration number from the Texas Residential Construction Commission if the contractor is required to register as a builder with the commission; (2594)

(2) the address and telephone number at which the owner may file a complaint with the Texas Residential Construction Commission about the conduct of the contractor if the contractor is required to register as a builder with the commission; and (2595)

(3) the following warning conspicuously printed, stamped, or typed in a size equal to at least 10-point bold type or computer equivalent: (2596)

"IMPORTANT NOTICE: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW." (2597)

(b) A violation of Subsection (a) of this section is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under the provisions of the Deceptive Trade Practices-Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code). (2598)

(c) A provision of a contract for improvements to an existing residence described by Section 41.001(b)(3) that requires the parties to submit a dispute arising under the contract to binding arbitration must be conspicuously printed or typed in a size equal to at least 10-point bold type or the computer equivalent. (2599)

(d) A provision described by Subsection (c) is not enforceable against the owner unless the requirements of Subsection (c) are met. (2600)

Added by Acts 1987, 70th Leg., ch. 116, Sec. 1, eff. Sept. 1, 1987. Renumbered from Sec. 41.005 by Acts 1989, 71st Leg., ch. 2, Sec. 16.01(30), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd Leg., ch. 48, Sec. 4, eff. Sept. 1, 1993. (2601)

Amended by: (2602)

Acts 2007, 80th Leg., R.S., Ch. 843 (H.B. 1038), Sec. 5, eff. September 1, 2007. (2603)

Sec. 41.008. CONFLICT WITH FEDERAL LAW. (2604)(1-click HTML)

To the extent of any conflict between this subchapter and any federal law that imposes an upper limit on the amount, including the monetary amount or acreage amount, of homestead property a person may exempt from seizure, this subchapter prevails to the extent allowed under federal law. (2605)

Added by Acts 1999, 76th Leg., ch. 1510, Sec. 4. (2606)

SUBCHAPTER B. DESIGNATION OF A HOMESTEAD IN AID OF ENFORCEMENT OF A JUDGMENT DEBT (2607)(1-click HTML)
Sec. 41.021. NOTICE TO DESIGNATE. (2608)(1-click HTML)

If an execution is issued against a holder of an interest in land of which a homestead may be a part and the judgment debtor has not made a voluntary designation of a homestead under Section 41.005, the judgment creditor may give the judgment debtor notice to designate the homestead as defined in Section 41.002. The notice shall state that if the judgment debtor fails to designate the homestead within the time allowed by Section 41.022, the court will appoint a commissioner to make the designation at the expense of the judgment debtor. (2609)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985; Acts 1987, 70th Leg., ch. 727, Sec. 2, eff. Aug. 31, 1987. (2610)

Sec. 41.022. DESIGNATION BY HOMESTEAD CLAIMANT. (2611)(1-click HTML)

At any time before 10 a.m. on the Monday next after the expiration of 20 days after the date of service of the notice to designate, the judgment debtor may designate the homestead as defined in Section 41.002 by filing a written designation, signed by the judgment debtor, with the justice or clerk of the court from which the writ of execution was issued, together with a plat of the area designated. (2612)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985. (2613)

Sec. 41.023. DESIGNATION BY COMMISSIONER. (2614)(1-click HTML)

(a) If a judgment debtor who has not made a voluntary designation of a homestead under Section 41.005 does not designate a homestead as provided in Section 41.022, on motion of the judgment creditor, filed within 90 days after the issuance of the writ of execution, the court from which the writ of execution issued shall appoint a commissioner to designate the judgment debtor's homestead. The court may appoint a surveyor and others as may be necessary to assist the commissioner. The commissioner shall file his designation of the judgment debtor's homestead in a written report, together with a plat of the area designated, with the justice or clerk of the court not more than 60 days after the order of appointment is signed or within such time as the court may allow. (2615)

(b) Within 10 days after the commissioner's report is filed, the judgment debtor or the judgment creditor may request a hearing on the issue of whether the report should be confirmed, rejected, or modified as may be deemed appropriate in the particular circumstances of the case. The commissioner's report may be contradicted by evidence from either party, when exceptions to it or any item thereof have been filed before the hearing, but not otherwise. After the hearing, or if there is no hearing requested, the court shall designate the homestead as deemed appropriate and order sale of the excess. (2616)

(c) The commissioner, a surveyor, and others appointed to assist the commissioner are entitled to such fees and expenses as are deemed reasonable by the court. The court shall tax these fees and expenses against the judgment debtor as part of the costs of execution. (2617)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985; Acts 1987, 70th Leg., ch. 727, Sec. 3, eff. Aug. 31, 1987. (2618)

Sec. 41.024. SALE OF EXCESS. (2619)(1-click HTML)

An officer holding an execution sale of property of a judgment debtor whose homestead has been designated under this chapter may sell the excess of the judgment debtor's interest in land not included in the homestead. (2620)

Amended by Acts 1985, 69th Leg., ch. 840, Sec. 1, eff. June 15, 1985; Acts 1987, 70th Leg., ch. 727, Sec. 4, eff. Aug. 31, 1987. (2621)

CHAPTER 42. PERSONAL PROPERTY (2622)(1-click HTML)
Sec. 42.001. PERSONAL PROPERTY EXEMPTION. (2623)(1-click HTML)

(a) Personal property, as described in Section 42.002, is exempt from garnishment, attachment, execution, or other seizure if: (2624)

(1) the property is provided for a family and has an aggregate fair market value of not more than $100,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property; or (2625)

(2) the property is owned by a single adult, who is not a member of a family, and has an aggregate fair market value of not more than $50,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property. (2626)

(b) The following personal property is exempt from seizure and is not included in the aggregate limitations prescribed by Subsection (a): (2627)

(1) current wages for personal services, except for the enforcement of court-ordered child support payments; (2628)

(2) professionally prescribed health aids of a debtor or a dependent of a debtor; (2629)

(3) alimony, support, or separate maintenance received or to be received by the debtor for the support of the debtor or a dependent of the debtor; and (2630)

(4) a religious bible or other book containing sacred writings of a religion that is seized by a creditor other than a lessor of real property who is exercising the lessor's contractual or statutory right to seize personal property after a tenant breaches a lease agreement for or abandons the real property. (2631)

(c) Except as provided by Subsection (b)(4), this section does not prevent seizure by a secured creditor with a contractual landlord's lien or other security in the property to be seized. (2632)

(d) Unpaid commissions for personal services not to exceed 25 percent of the aggregate limitations prescribed by Subsection (a) are exempt from seizure and are included in the aggregate. (2633)

(e) A religious bible or other book described by Subsection (b)(4) that is seized by a lessor of real property in the exercise of the lessor's contractual or statutory right to seize personal property after a tenant breaches a lease agreement for the real property or abandons the real property may not be included in the aggregate limitations prescribed by Subsection (a). (2634)

Acts 1983, 68th Leg., p. 3522, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1991, 72nd Leg., ch. 175, Sec. 1, eff. May 24, 1991; Acts 1997, 75th Leg., ch. 1046, Sec. 1, eff. Sept. 1, 1997. (2635)

Amended by: (2636)

Acts 2007, 80th Leg., R.S., Ch. 444 (H.B. 167), Sec. 1, eff. September 1, 2007. (2637)

Acts 2015, 84th Leg., R.S., Ch. 793 (H.B. 2706), Sec. 1, eff. September 1, 2015. (2638)

Sec. 42.002. PERSONAL PROPERTY. (2639)(1-click HTML)

(a) The following personal property is exempt under Section 42.001(a): (2640)

(1) home furnishings, including family heirlooms; (2641)

(2) provisions for consumption; (2642)

(3) farming or ranching vehicles and implements; (2643)

(4) tools, equipment, books, and apparatus, including boats and motor vehicles used in a trade or profession; (2644)

(5) wearing apparel; (2645)

(6) jewelry not to exceed 25 percent of the aggregate limitations prescribed by Section 42.001(a); (2646)

(7) two firearms; (2647)

(8) athletic and sporting equipment, including bicycles; (2648)

(9) a two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver's license or who does not hold a driver's license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person; (2649)

(10) the following animals and forage on hand for their consumption: (2650)

(A) two horses, mules, or donkeys and a saddle, blanket, and bridle for each; (2651)

(B) 12 head of cattle; (2652)

(C) 60 head of other types of livestock; and (2653)

(D) 120 fowl; and (2654)

(11) household pets. (2655)

(b) Personal property, unless precluded from being encumbered by other law, may be encumbered by a security interest under Subchapter B, Chapter 9, Business & Commerce Code, or Subchapter F, Chapter 501, Transportation Code, or by a lien fixed by other law, and the security interest or lien may not be avoided on the ground that the property is exempt under this chapter. (2656)

Acts 1983, 68th Leg., p. 3522, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1991, 72nd Leg., ch. 175, Sec. 1, eff. May 24, 1991; Acts 1993, 73rd Leg., ch. 216, Sec. 1, eff. May, 17, 1993; Acts 1997, 75th Leg., ch. 165, Sec. 30.245, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 414, Sec. 2.36, eff. July 1, 2001; Acts 1999, 76th Leg., ch. 846, Sec. 1, eff. Aug. 30, 1999. (2657)

Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS PLANS. (2658)(1-click HTML)

(a) In addition to the exemption prescribed by Section 42.001, a person's right to the assets held in or to receive payments, whether vested or not, under any stock bonus, pension, annuity, deferred compensation, profit-sharing, or similar plan, including a retirement plan for self-employed individuals, or a simplified employee pension plan, an individual retirement account or individual retirement annuity, including an inherited individual retirement account, individual retirement annuity, Roth IRA, or inherited Roth IRA, or a health savings account, and under any annuity or similar contract purchased with assets distributed from that type of plan or account, is exempt from attachment, execution, and seizure for the satisfaction of debts to the extent the plan, contract, annuity, or account is exempt from federal income tax, or to the extent federal income tax on the person's interest is deferred until actual payment of benefits to the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A, 457(b), or 501(a), Internal Revenue Code of 1986, including a government plan or church plan described by Section 414(d) or (e), Internal Revenue Code of 1986. For purposes of this subsection, the interest of a person in a plan, annuity, account, or contract acquired by reason of the death of another person, whether as an owner, participant, beneficiary, survivor, coannuitant, heir, or legatee, is exempt to the same extent that the interest of the person from whom the plan, annuity, account, or contract was acquired was exempt on the date of the person's death. If this subsection is held invalid or preempted by federal law in whole or in part or in certain circumstances, the subsection remains in effect in all other respects to the maximum extent permitted by law. (2659)

(b) Contributions to an individual retirement account that exceed the amounts permitted under the applicable provisions of the Internal Revenue Code of 1986 and any accrued earnings on such contributions are not exempt under this section unless otherwise exempt by law. Amounts qualifying as nontaxable rollover contributions under Section 402(a)(5), 403(a)(4), 403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before January 1, 1993, are treated as exempt amounts under Subsection (a). Amounts treated as qualified rollover contributions under Section 408A, Internal Revenue Code of 1986, are treated as exempt amounts under Subsection (a). In addition, amounts qualifying as nontaxable rollover contributions under Section 402(c), 402(e)(6), 402(f), 403(a)(4), 403(a)(5), 403(b)(8), 403(b)(10), 408(d)(3), or 408A of the Internal Revenue Code of 1986 on or after January 1, 1993, are treated as exempt amounts under Subsection (a). Amounts qualifying as nontaxable rollover contributions under Section 223(f)(5) of the Internal Revenue Code of 1986 on or after January 1, 2004, are treated as exempt amounts under Subsection (a). (2660)

(c) Amounts distributed from a plan, annuity, account, or contract entitled to an exemption under Subsection (a) are not subject to seizure for a creditor's claim for 60 days after the date of distribution if the amounts qualify as a nontaxable rollover contribution under Subsection (b). (2661)

(d) A participant or beneficiary of a plan, annuity, account, or contract entitled to an exemption under Subsection (a), other than an individual retirement account or individual retirement annuity, is not prohibited from granting a valid and enforceable security interest in the participant's or beneficiary's right to the assets held in or to receive payments under the exempt plan, annuity, account, or contract to secure a loan to the participant or beneficiary from the exempt plan, annuity, account, or contract, and the right to the assets held in or to receive payments from the plan, annuity, account, or contract is subject to attachment, execution, and seizure for the satisfaction of the security interest or lien granted by the participant or beneficiary to secure the loan. (2662)

(e) If Subsection (a) is declared invalid or preempted by federal law, in whole or in part or in certain circumstances, as applied to a person who has not brought a proceeding under Title 11, United States Code, the subsection remains in effect, to the maximum extent permitted by law, as to any person who has filed that type of proceeding. (2663)

(f) A reference in this section to a specific provision of the Internal Revenue Code of 1986 includes a subsequent amendment of the substance of that provision. (2664)

Added by Acts 1987, 70th Leg., ch. 376, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1122, Sec. 1, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 963, Sec. 1, eff. Aug. 28, 1995; Acts 1999, 76th Leg., ch. 106, Sec. 1, eff. Sept. 1, 1999. (2665)

Amended by: (2666)

Acts 2005, 79th Leg., Ch. 130 (H.B. 330), Sec. 1, eff. May 24, 2005. (2667)

Acts 2005, 79th Leg., Ch. 130 (H.B. 330), Sec. 2, eff. May 24, 2005. (2668)

Acts 2011, 82nd Leg., R.S., Ch. 933 (S.B. 1810), Sec. 1, eff. June 17, 2011. (2669)

Acts 2013, 83rd Leg., R.S., Ch. 91 (S.B. 649), Sec. 2, eff. September 1, 2013. (2670)

Sec. 42.0022. EXEMPTION FOR COLLEGE SAVINGS PLANS. (2671)(1-click HTML)

(a) In addition to the exemption prescribed by Section 42.001, a person's right to the assets held in or to receive payments or benefits under any of the following is exempt from attachment, execution, and seizure for the satisfaction of debts: (2672)

(1) any fund or plan established under Subchapter F, Chapter 54, Education Code, including the person's interest in a prepaid tuition contract; (2673)

(2) any fund or plan established under Subchapter G, Chapter 54, Education Code, including the person's interest in a savings trust account; or (2674)

(3) any qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986, as amended. (2675)

(b) If any portion of this section is held to be invalid or preempted by federal law in whole or in part or in certain circumstances, this section remains in effect in all other respects to the maximum extent permitted by law. (2676)

Added by Acts 2003, 78th Leg., ch. 113, Sec. 1, eff. Sept. 1, 2003. (2677)

Sec. 42.003. DESIGNATION OF EXEMPT PROPERTY. (2678)(1-click HTML)

(a) If the number or amount of a type of personal property owned by a debtor exceeds the exemption allowed by Section 42.002 and the debtor can be found in the county where the property is located, the officer making a levy on the property shall ask the debtor to designate the personal property to be levied on. If the debtor cannot be found in the county or the debtor fails to make a designation within a reasonable time after the officer's request, the officer shall make the designation. (2679)

(b) If the aggregate value of a debtor's personal property exceeds the amount exempt from seizure under Section 42.001(a), the debtor may designate the portion of the property to be levied on. If, after a court's request, the debtor fails to make a designation within a reasonable time or if for any reason a creditor contests that the property is exempt, the court shall make the designation. (2680)

Acts 1983, 68th Leg., p. 3524, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1991, 72nd Leg., ch. 175, Sec. 1, eff. May 24, 1991. (2681)

Sec. 42.004. TRANSFER OF NONEXEMPT PROPERTY. (2682)(1-click HTML)

(a) If a person uses the property not exempt under this chapter to acquire, obtain an interest in, make improvement to, or pay an indebtedness on personal property which would be exempt under this chapter with the intent to defraud, delay, or hinder an interested person from obtaining that to which the interested person is or may be entitled, the property, interest, or improvement acquired is not exempt from seizure for the satisfaction of liabilities. If the property, interest, or improvement is acquired by discharging an encumbrance held by a third person, a person defrauded, delayed, or hindered is subrogated to the rights of the third person. (2683)

(b) A creditor may not assert a claim under this section more than two years after the transaction from which the claim arises. A person with a claim that is unliquidated or contingent at the time of the transaction may not assert a claim under this section more than one year after the claim is reduced to judgment. (2684)

(c) It is a defense to a claim under this section that the transfer was made in the ordinary course of business by the person making the transfer. (2685)

Acts 1983, 68th Leg., p. 3524, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1991, 72nd Leg., ch. 175, Sec. 1, eff. May 24, 1991. (2686)

Sec. 42.005. CHILD SUPPORT LIENS. (2687)(1-click HTML)

Sections 42.001, 42.002, and 42.0021 of this code do not apply to a child support lien established under Subchapter G, Chapter 157, Family Code. (2688)

Added by Acts 1991, 72nd Leg., 1st C.S., ch. 15, Sec. 4.07, eff. Sept. 1, 1991. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 7.56, eff. Sept. 1, 1997. (2689)

CHAPTER 43. EXEMPT PUBLIC PROPERTY (2690)(1-click HTML)
Sec. 43.001. EXEMPT PUBLIC LIBRARY. (2691)(1-click HTML)

A public library is exempt from attachment, execution, and forced sale. (2692)

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2693)

Sec. 43.002. EXEMPT PROPERTY. (2694)(1-click HTML)

The real property of the state, including the real property held in the name of state agencies and funds, and the real property of a political subdivision of the state are exempt from attachment, execution, and forced sale. A judgment lien or abstract of judgment may not be filed or perfected against the state, a unit of state government, or a political subdivision of the state on property owned by the state, a unit of state government, or a political subdivision of the state; any such judgment lien or abstract of judgment is void and unenforceable. (2695)

Added by Acts 1997, 75th Leg., ch. 159, Sec. 1, eff. May 20, 1997. (2696)

CHAPTER 44. TAXATION OF RETIREMENT BENEFITS BY ANOTHER STATE (2697)(1-click HTML)
Sec. 44.001. DEFINITION. (2698)(1-click HTML)

In this chapter, "pension or other retirement plan" includes: (2699)

(1) an annuity, pension, or profit-sharing or stock bonus or similar plan established to provide retirement benefits for an officer or employee of a public or private employer or for a self-employed individual; (2700)

(2) an annuity, pension, or military retirement pay plan or other retirement plan administered by the United States; and (2701)

(3) an individual retirement account. (2702)

Added by Acts 1993, 73rd Leg., ch. 95, Sec. 1, eff. May 7, 1993. (2703)

Sec. 44.002. PROPERTY EXEMPT. (2704)(1-click HTML)

All property in this state is exempt from attachment, execution, and seizure for the satisfaction of a judgment or claim in favor of another state or political subdivision of another state for failure to pay that state's or that political subdivision's income tax on benefits received from a pension or other retirement plan. (2705)

Added by Acts 1993, 73rd Leg., ch. 95, Sec. 1, eff. May 7, 1993. (2706)

Sec. 44.003. LIEN NOT CREATED. (2707)(1-click HTML)

A claim or judgment in favor of another state or political subdivision of another state for failure to pay that state's or that political subdivision's income tax on benefits received from a pension or other retirement plan may not be a lien on any property in this state owned by a resident of this state. (2708)

Added by Acts 1993, 73rd Leg., ch. 95, Sec. 1, eff. May 7, 1993. (2709)

SUBTITLE B. LIENS (2710)(1-click HTML)

CHAPTER 51. PROVISIONS GENERALLY APPLICABLE TO LIENS (2711)(1-click HTML)
Sec. 51.0001. DEFINITIONS. (2712)(1-click HTML)

In this chapter: (2713)

(1) "Book entry system" means a national book entry system for registering a beneficial interest in a security instrument that acts as a nominee for the grantee, beneficiary, owner, or holder of the security instrument and its successors and assigns. (2714)

(2) "Debtor's last known address" means: (2715)

(A) for a debt secured by the debtor's residence, the debtor's residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002; or (2716)

(B) for a debt other than a debt described by Paragraph (A), the debtor's last known address as shown by the records of the mortgage servicer of the security instrument unless the debtor provided the current mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002. (2717)

(3) "Mortgage servicer" means the last person to whom a mortgagor has been instructed by the current mortgagee to send payments for the debt secured by a security instrument. A mortgagee may be the mortgage servicer. (2718)

(4) "Mortgagee" means: (2719)

(A) the grantee, beneficiary, owner, or holder of a security instrument; (2720)

(B) a book entry system; or (2721)

(C) if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record. (2722)

(5) "Mortgagor" means the grantor of a security instrument. (2723)

(6) "Security instrument" means a deed of trust, mortgage, or other contract lien on an interest in real property. (2724)

(7) "Substitute trustee" means a person appointed by the current mortgagee or mortgage servicer under the terms of the security instrument to exercise the power of sale. (2725)

(8) "Trustee" means a person or persons authorized to exercise the power of sale under the terms of a security instrument in accordance with Section 51.0074. (2726)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2727)

Amended by: (2728)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 1, eff. June 15, 2007. (2729)

Sec. 51.001. EFFECT ON OTHER LIENS. (2730)(1-click HTML)

Except as provided by Chapter 59, this subtitle does not affect: (2731)

(1) the right to create a lien by special contract or agreement; or (2732)

(2) a lien that is not treated in this subtitle, including a lien arising under common law, in equity, or under another statute of this state. (2733)

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2734)

Sec. 51.0011. DEFAULT ARISING FROM DELINQUENT AD VALOREM TAXES: INSTALLMENT AGREEMENTS. (2735)(1-click HTML)

(a) Notwithstanding any agreement to the contrary, a debtor is not in default under a deed of trust or other contract lien on real property used as the debtor's residence for the delinquent payment of ad valorem taxes if: (2736)

(1) the debtor gave notice to the mortgage servicer of the intent to enter into an installment agreement with the taxing unit under Section 33.02, Tax Code, for the payment of the taxes at least 10 days before the date the debtor entered into the agreement; and (2737)

(2) the property is protected from seizure and sale and a suit may not be filed to collect a delinquent tax on the property as provided by Section 33.02(d), Tax Code. (2738)

(b) A mortgage servicer who receives a notice described by Subsection (a)(1) may pay the taxes subject to the installment agreement at any time. (2739)

(c) A mortgage servicer who receives a notice described by Subsection (a)(1) and gives the debtor notice that the mortgage servicer intends to accelerate the note securing the deed of trust or other contract lien as a result of the delinquency of the taxes that are subject to the installment agreement must rescind the notice if the debtor enters into the agreement not later than the 30th day after the date the debtor delivers the notice. (2740)

Added by Acts 2013, 83rd Leg., R.S., Ch. 935 (H.B. 1597), Sec. 4, eff. September 1, 2013. (2741)

Sec. 51.002. SALE OF REAL PROPERTY UNDER CONTRACT LIEN. (2742)(1-click HTML)

(a) Except as provided by Subsection (a-1), a sale of real property under a power of sale conferred by a deed of trust or other contract lien must be a public sale at auction held between 10 a.m. and 4 p.m. of the first Tuesday of a month. Except as provided by Subsection (h), the sale must take place at the county courthouse in the county in which the land is located, or if the property is located in more than one county, the sale may be made at the courthouse in any county in which the property is located. The commissioners court shall designate the area at the courthouse where the sales are to take place and shall record the designation in the real property records of the county. The sale must occur in the designated area. If no area is designated by the commissioners court, the notice of sale must designate the area where the sale covered by that notice is to take place, and the sale must occur in that area. (2743)

(a-1) If the first Tuesday of a month occurs on January 1 or July 4, a public sale under Subsection (a) must be held between 10 a.m. and 4 p.m. on the first Wednesday of the month. (2744)

(b) Except as provided by Subsection (b-1), notice of the sale, which must include a statement of the earliest time at which the sale will begin, must be given at least 21 days before the date of the sale by: (2745)

(1) posting at the courthouse door of each county in which the property is located a written notice designating the county in which the property will be sold; (2746)

(2) filing in the office of the county clerk of each county in which the property is located a copy of the notice posted under Subdivision (1); and (2747)

(3) serving written notice of the sale by certified mail on each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt. (2748)

(b-1) If the courthouse or county clerk's office is closed because of inclement weather, natural disaster, or other act of God, a notice required to be posted at the courthouse under Subsection (b)(1) or filed with the county clerk under Subsection (b)(2) may be posted or filed, as appropriate, up to 48 hours after the courthouse or county clerk's office reopens for business, as applicable. (2749)

(c) The sale must begin at the time stated in the notice of sale or not later than three hours after that time. (2750)

(d) Notwithstanding any agreement to the contrary, the mortgage servicer of the debt shall serve a debtor in default under a deed of trust or other contract lien on real property used as the debtor's residence with written notice by certified mail stating that the debtor is in default under the deed of trust or other contract lien and giving the debtor at least 20 days to cure the default before notice of sale can be given under Subsection (b). The entire calendar day on which the notice required by this subsection is given, regardless of the time of day at which the notice is given, is included in computing the 20-day notice period required by this subsection, and the entire calendar day on which notice of sale is given under Subsection (b) is excluded in computing the 20-day notice period. (2751)

(e) Service of a notice under this section by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service. (2752)

(f) Each county clerk shall keep all notices filed under Subdivision (2) of Subsection (b) in a convenient file that is available to the public for examination during normal business hours. The clerk may dispose of the notices after the date of sale specified in the notice has passed. The clerk shall receive a fee of $2 for each notice filed. (2753)

(f-1) If a county maintains an Internet website, the county must post a notice of sale filed with the county clerk under Subsection (b)(2) on the website on a page that is publicly available for viewing without charge or registration. (2754)

(g) The entire calendar day on which the notice of sale is given, regardless of the time of day at which the notice is given, is included in computing the 21-day notice period required by Subsection (b), and the entire calendar day of the foreclosure sale is excluded. (2755)

(h) For the purposes of Subsection (a), the commissioners court of a county may designate an area other than an area at the county courthouse where public sales of real property under this section will take place that is in a public place within a reasonable proximity of the county courthouse as determined by the commissioners court and in a location as accessible to the public as the courthouse door. The commissioners court shall record that designation in the real property records of the county. A designation by a commissioners court under this section is not a ground for challenging or invalidating any sale. A sale must be held at an area designated under this subsection if the sale is held on or after the 90th day after the date the designation is recorded. The posting of the notice required by Subsection (b)(1) of a sale designated under this subsection to take place at an area other than an area of the courthouse remains at the courthouse door of the appropriate county. (2756)

(i) Notice served on a debtor under this section must state the name and address of the sender of the notice and contain, in addition to any other statements required under this section, a statement that is conspicuous, printed in boldface or underlined type, and substantially similar to the following: "Assert and protect your rights as a member of the armed forces of the United States. If you are or your spouse is serving on active military duty, including active military duty as a member of the Texas National Guard or the National Guard of another state or as a member of a reserve component of the armed forces of the United States, please send written notice of the active duty military service to the sender of this notice immediately." (2757)

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 18, Sec. 3(b), eff. Oct. 2, 1984; Acts 1987, 70th Leg., ch. 540, Sec. 1, eff. Jan. 1, 1988; Acts 1993, 73rd Leg., ch. 48, Sec. 5, eff. Sept. 1, 1993; Acts 2003, 78th Leg., ch. 554, Sec. 2, eff. Jan. 1, 2004. (2758)

Amended by: (2759)

Acts 2005, 79th Leg., Ch. 533 (H.B. 961), Sec. 1, eff. June 17, 2005. (2760)

Acts 2005, 79th Leg., Ch. 555 (H.B. 1235), Sec. 1, eff. September 1, 2005. (2761)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 2, eff. June 15, 2007. (2762)

Acts 2011, 82nd Leg., R.S., Ch. 252 (H.B. 1127), Sec. 2, eff. January 1, 2012. (2763)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 1, eff. September 1, 2011. (2764)

Acts 2013, 83rd Leg., R.S., Ch. 52 (H.B. 584), Sec. 1, eff. September 1, 2013. (2765)

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 17.001, eff. September 1, 2013. (2766)

Acts 2013, 83rd Leg., R.S., Ch. 642 (H.B. 699), Sec. 2, eff. October 1, 2013. (2767)

Acts 2017, 85th Leg., R.S., Ch. 133 (H.B. 1128), Sec. 3, eff. September 1, 2017. (2768)

Sec. 51.0021. NOTICE OF CHANGE OF ADDRESS REQUIRED. (2769)(1-click HTML)

A debtor shall inform the mortgage servicer of the debt in a reasonable manner of any change of address of the debtor for purposes of providing notice to the debtor under Section 51.002. (2770)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2771)

Sec. 51.0025. ADMINISTRATION OF FORECLOSURE BY MORTGAGE SERVICER. (2772)(1-click HTML)

A mortgage servicer may administer the foreclosure of property under Section 51.002 on behalf of a mortgagee if: (2773)

(1) the mortgage servicer and the mortgagee have entered into an agreement granting the current mortgage servicer authority to service the mortgage; and (2774)

(2) the notices required under Section 51.002(b) disclose that the mortgage servicer is representing the mortgagee under a servicing agreement with the mortgagee and the name of the mortgagee and: (2775)

(A) the address of the mortgagee; or (2776)

(B) the address of the mortgage servicer, if there is an agreement granting a mortgage servicer the authority to service the mortgage. (2777)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2778)

Amended by: (2779)

Acts 2005, 79th Leg., Ch. 555 (H.B. 1235), Sec. 2, eff. September 1, 2005. (2780)

Sec. 51.003. DEFICIENCY JUDGMENT. (2781)(1-click HTML)

(a) If the price at which real property is sold at a foreclosure sale under Section 51.002 is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency, any action brought to recover the deficiency must be brought within two years of the foreclosure sale and is governed by this section. (2782)

(b) Any person against whom such a recovery is sought by motion may request that the court in which the action is pending determine the fair market value of the real property as of the date of the foreclosure sale. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include, but is not limited to, the following: (1) expert opinion testimony; (2) comparable sales; (3) anticipated marketing time and holding costs; (4) cost of sale; and (5) the necessity and amount of any discount to be applied to the future sales price or the cashflow generated by the property to arrive at a current fair market value. (2783)

(c) If the court determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons against whom recovery of the deficiency is sought are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no party requests the determination of fair market value or if such a request is made and no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2784)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower prior to the lender bringing an action at law for any deficiency owed by the borrower. Notwithstanding the foregoing, the credit required by this subsection shall not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2785)

Added by Acts 1991, 72nd Leg., ch. 12, Sec. 1, eff. April 1, 1991. (2786)

Sec. 51.004. JUDICIAL FORECLOSURE--DEFICIENCY. (2787)(1-click HTML)

(a) This section applies if: (2788)

(1) real property subject to a deed of trust or other contract lien is sold at a foreclosure sale under a court judgment foreclosing the lien and ordering the sale; and (2789)

(2) the price at which the real property is sold is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency. (2790)

(b) Any person obligated on the indebtedness, including a guarantor, may bring an action in the district court in the county in which the real property is located for a determination of the fair market value of the real property as of the date of the foreclosure sale. The suit must be brought not later than the 90th day after the date of the foreclosure sale unless the suit is brought by a guarantor who did not receive actual notice of the sale before the date of sale, in which case the suit must be brought by the guarantor not later than the 90th day after the date the guarantor received actual notice of the sale. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include: (2791)

(1) expert opinion testimony; (2792)

(2) comparable sales; (2793)

(3) anticipated marketing time and holding costs; (2794)

(4) cost of sale; and (2795)

(5) the necessity and amount of any discount to be applied to the future sales price or the cash flow generated by the property to arrive at a fair market value as of the date of the foreclosure sale. (2796)

(c) If the finder of fact determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons obligated on the indebtedness, including guarantors, are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2797)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower before the lender brings an action at law for any deficiency owed by the borrower. However, the credit required by this subsection does not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2798)

Added by Acts 1991, 72nd Leg., ch. 361, Sec. 1, eff. June 5, 1991. (2799)

Sec. 51.005. JUDICIAL OR NONJUDICIAL FORECLOSURE AFTER JUDGMENT AGAINST GUARANTOR--DEFICIENCY. (2800)(1-click HTML)

(a) This section applies if: (2801)

(1) the holder of a debt obtains a court judgment against a guarantor of the debt; (2802)

(2) real property subject to a deed of trust or other contract lien securing the guaranteed debt is sold at a foreclosure sale under Section 51.002 or under a court judgment foreclosing the lien and ordering the sale; (2803)

(3) the price at which the real property is sold is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency; and (2804)

(4) a motion or suit to determine the fair market value of the real property as of the date of the foreclosure sale has not been filed under Section 51.003 or 51.004. (2805)

(b) The guarantor may bring an action in the district court in the county in which the real property is located for a determination of the fair market value of the real property as of the date of the foreclosure sale. The suit must be brought not later than the 90th day after the date of the foreclosure sale or the date the guarantor receives actual notice of the foreclosure sale, whichever is later. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include: (2806)

(1) expert opinion testimony; (2807)

(2) comparable sales; (2808)

(3) anticipated marketing time and holding costs; (2809)

(4) cost of sale; and (2810)

(5) the necessity and amount of any discount to be applied to the future sales price or the cash flow generated by the property to arrive at a fair market value as of the date of the foreclosure sale. (2811)

(c) If the finder of fact determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons obligated on the indebtedness, including guarantors, are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2812)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower before the lender brings an action at law for any deficiency owed by the borrower. However, the credit required by this subsection does not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2813)

Added by Acts 1991, 72nd Leg., ch. 361, Sec. 1, eff. June 5, 1991. (2814)

Sec. 51.006. DEED-OF-TRUST FORECLOSURE AFTER DEED IN LIEU OF FORECLOSURE. (2815)(1-click HTML)

(a) This section applies to a holder of a debt under a deed of trust who accepts from the debtor a deed conveying real property subject to the deed of trust in satisfaction of the debt. (2816)

(b) The holder of a debt may void a deed conveying real property in satisfaction of the debt before the fourth anniversary of the date the deed is executed and foreclosed under the original deed of trust if: (2817)

(1) the debtor fails to disclose to the holder of the debt a lien or other encumbrance on the property before executing the deed conveying the property to the holder of the debt in satisfaction of the debt; and (2818)

(2) the holder of the debt has no personal knowledge of the undisclosed lien or encumbrance on the property. (2819)

(c) A third party may conclusively rely upon the affidavit of the holder of a debt stating that the holder has voided the deed as provided in this section. (2820)

(d) If the holder elects to void a deed in lieu of foreclosure as provided in this section, the priority of its deed of trust shall not be affected or impaired by the execution of the deed in lieu of foreclosure. (2821)

(e) If a holder accepts a deed in lieu of foreclosure, the holder may foreclose its deed of trust as provided in said deed of trust without electing to void the deed. The priority of such deed of trust shall not be affected or impaired by the deed in lieu of foreclosure. (2822)

Added by Acts 1995, 74th Leg., ch. 1020, Sec. 1, eff. Aug. 28, 1995. (2823)

Sec. 51.007. TRUSTEE UNDER DEED OF TRUST, CONTRACT LIEN OR SECURITY INSTRUMENT. (2824)(1-click HTML)

(a) The trustee named in a suit or proceeding may plead in the answer that the trustee is not a necessary party by a verified denial stating the basis for the trustee's reasonable belief that the trustee was named as a party solely in the capacity as a trustee under a deed of trust, contract lien, or security instrument. (2825)

(b) Within 30 days after the filing of the trustee's verified denial, a verified response is due from all parties to the suit or proceeding setting forth all matters, whether in law or fact, that rebut the trustee's verified denial. (2826)

(c) If a party has no objection or fails to file a timely verified response to the trustee's verified denial, the trustee shall be dismissed from the suit or proceeding without prejudice. (2827)

(d) If a respondent files a timely verified response to the trustee's verified denial, the matter shall be set for hearing. The court shall dismiss the trustee from the suit or proceeding without prejudice if the court determines that the trustee is not a necessary party. (2828)

(e) A dismissal of the trustee pursuant to Subsections (c) and (d) shall not prejudice a party's right to seek injunctive relief to prevent the trustee from proceeding with a foreclosure sale. (2829)

(f) A trustee shall not be liable for any good faith error resulting from reliance on any information in law or fact provided by the mortgagor or mortgagee or their respective attorney, agent, or representative or other third party. (2830)

Added by Acts 1999, 76th Leg., ch. 1304, Sec. 1, eff. Sept. 1, 1999. (2831)

Sec. 51.0074. DUTIES OF TRUSTEE. (2832)(1-click HTML)

(a) One or more persons may be authorized to exercise the power of sale under a security instrument. (2833)

(b) A trustee may not be: (2834)

(1) assigned a duty under a security instrument other than to exercise the power of sale in accordance with the terms of the security instrument; or (2835)

(2) held to the obligations of a fiduciary of the mortgagor or mortgagee. (2836)

Added by Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 3, eff. June 15, 2007. (2837)

Sec. 51.0075. AUTHORITY OF TRUSTEE OR SUBSTITUTE TRUSTEE. (2838)(1-click HTML)

(a) A trustee or substitute trustee may set reasonable conditions for conducting the public sale if the conditions are announced before bidding is opened for the first sale of the day held by the trustee or substitute trustee. (2839)

(b) A trustee or substitute trustee is not a debt collector. (2840)

(c) Notwithstanding any agreement to the contrary, a mortgagee may appoint or may authorize a mortgage servicer to appoint a substitute trustee or substitute trustees to succeed to all title, powers, and duties of the original trustee. A mortgagee or mortgage servicer may make an appointment or authorization under this subsection by power of attorney, corporate resolution, or other written instrument. (2841)

(d) A mortgage servicer may authorize an attorney to appoint a substitute trustee or substitute trustees on behalf of a mortgagee under Subsection (c). (2842)

(e) The name and a street address for a trustee or substitute trustees shall be disclosed on the notice required by Section 51.002(b). (2843)

(f) The purchase price in a sale held by a trustee or substitute trustee under this section is due and payable without delay on acceptance of the bid or within such reasonable time as may be agreed upon by the purchaser and the trustee or substitute trustee if the purchaser makes such request for additional time to deliver the purchase price. The trustee or substitute trustee shall disburse the proceeds of the sale as provided by law. (2844)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2845)

Amended by: (2846)

Acts 2005, 79th Leg., Ch. 1231 (H.B. 1234), Sec. 1, eff. September 1, 2005. (2847)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 4, eff. June 15, 2007. (2848)

Acts 2009, 81st Leg., R.S., Ch. 323 (H.B. 655), Sec. 1, eff. September 1, 2009. (2849)

Sec. 51.0076. EFFECTIVE DATE OF APPOINTMENT. (2850)(1-click HTML)

The appointment or authorization of a trustee or substitute trustee made in a notice of sale is effective as of the date of the notice if the notice: (2851)

(1) complies with Sections 51.002 and 51.0075(e); (2852)

(2) is signed by an attorney or agent of the mortgagee or mortgage servicer; and (2853)

(3) contains a statement in all capital letters, boldface type, to read as follows: (2854)

THIS INSTRUMENT APPOINTS THE SUBSTITUTE TRUSTEE(S) IDENTIFIED TO SELL THE PROPERTY DESCRIBED IN THE SECURITY INSTRUMENT IDENTIFIED IN THIS NOTICE OF SALE THE PERSON SIGNING THIS NOTICE IS THE ATTORNEY OR AUTHORIZED AGENT OF THE MORTGAGEE OR MORTGAGE SERVICER. (2855)

Added by Acts 2015, 84th Leg., R.S., Ch. 653 (H.B. 2063), Sec. 2, eff. September 1, 2015. (2856)

Sec. 51.008. CERTAIN LIENS ON REAL PROPERTY. (2857)(1-click HTML)

(a) A lien on real property created under this code or another law of this state in favor of a governmental entity must be recorded as provided by Chapters 11 and 12 in the real property records of the county in which the property or a portion of the property is located unless: (2858)

(1) the lien is imposed as a result of failure to pay: (2859)

(A) ad valorem taxes; or (2860)

(B) a penalty or interest owed in connection with those taxes; or (2861)

(2) the law establishing the lien expressly states that recording the lien is not required. (2862)

(b) Any notice of the lien required by law must contain a legal description of the property. (2863)

(c) This section does not apply to: (2864)

(1) a lien created under Section 89.083, Natural Resources Code; (2865)

(2) a state tax lien under Chapter 113, Tax Code; or (2866)

(3) a lien established under Chapter 61 or 213, Labor Code. (2867)

Added by Acts 2001, 77th Leg., ch. 827, Sec. 1, eff. Sept. 1, 2001. (2868)

Sec. 51.009. FORECLOSED PROPERTY SOLD "AS IS". (2869)(1-click HTML)

A purchaser at a sale of real property under Section 51.002: (2870)

(1) acquires the foreclosed property "as is" without any expressed or implied warranties, except as to warranties of title, and at the purchaser's own risk; and (2871)

(2) is not a consumer. (2872)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2873)

Sec. 51.015. SALE OF CERTAIN PROPERTY OWNED BY MEMBER OF THE MILITARY. (2874)(1-click HTML)

(a) In this section: (2875)

(1) "Active duty military service" means: (2876)

(A) service as a member of the armed forces of the United States; and (2877)

(B) with respect to a member of the Texas National Guard or the National Guard of another state or a member of a reserve component of the armed forces of the United States, active duty under an order of the president of the United States. (2878)

(1-a) "Assessment" and "assessments" have the meanings assigned by Sections 82.113(a) and 209.002, as applicable. (2879)

(2) "Dwelling" means a residential structure or manufactured home that contains one to four family housing units. (2880)

(3) "Military servicemember" means: (2881)

(A) a member of the armed forces of the United States; (2882)

(B) a member of the Texas National Guard or the National Guard of another state serving on active duty under an order of the president of the United States; or (2883)

(C) a member of a reserve component of the armed forces of the United States who is on active duty under an order of the president of the United States. (2884)

(4) "Person" has the meaning assigned by Section 311.005, Government Code. (2885)

(b) This section applies only to an obligation: (2886)

(1) that is secured by a mortgage, deed of trust, or other contract lien, including a lien securing payment of an assessment or assessments, as applicable, on real property or personal property that is a dwelling owned by a military servicemember; (2887)

(2) that originates before the date on which the servicemember's active duty military service commences; and (2888)

(3) for which the servicemember is still obligated. (2889)

(c) In an action filed during a military servicemember's period of active duty military service or during the nine months after the date on which that service period concludes to foreclose a lien or otherwise enforce an obligation described by Subsection (b), the court may after a hearing and on the court's own motion, and shall on the application by a servicemember whose ability to comply with the obligations of the contract secured by the lien is materially affected by the servicemember's military service: (2890)

(1) stay the proceedings for a period of time as justice and equity require; or (2891)

(2) adjust the obligations of the contract secured by the lien to preserve the interests of all parties. (2892)

(d) A sale, foreclosure, or seizure of property under a mortgage, deed of trust, or other contract lien described by Subsection (b) may not be conducted during the military servicemember's period of active duty military service or during the nine months after the date on which that service period concludes unless the sale, foreclosure, or seizure is conducted under: (2893)

(1) a court order issued before the sale, foreclosure, or seizure; or (2894)

(2) an agreement that complies with Subsection (e). (2895)

(e) A military servicemember may waive the servicemember's rights under this section only as provided by this subsection. The waiver must be: (2896)

(1) in writing in at least 12-point type; (2897)

(2) executed as an instrument separate from the obligation to which the waiver applies; and (2898)

(3) made under a written agreement: (2899)

(A) executed during or after the servicemember's period of active duty military service; and (2900)

(B) specifying the legal instrument to which the waiver applies and, if the servicemember is not a party to the instrument, the servicemember concerned. (2901)

(f) A person commits an offense if the person knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by Subsection (d). An offense under this subsection is a Class A misdemeanor. (2902)

(g) On application to a court, a dependent of a military servicemember is entitled to the protections of this section if the dependent's ability to comply with an obligation that is secured by a mortgage, deed of trust, or other contract lien on real property or personal property that is a dwelling is materially affected by the servicemember's military service. (2903)

(h) A court that issues a stay or takes any other action under this section regarding the enforcement of an obligation that is subject to this section may grant a similar stay or take similar action with respect to a surety, guarantor, endorser, accommodation maker, comaker, or other person who is or may be primarily or secondarily subject to the obligation. (2904)

(i) If a judgment or decree is vacated or set aside wholly or partly under this section, the court may also set aside or vacate, as applicable, the judgment or decree with respect to a surety, guarantor, endorser, accommodation maker, comaker, or other person who is or may be primarily or secondarily subject to the obligation that is subject to the judgment or decree. (2905)

(j) This section does not prevent a waiver in writing by a surety, guarantor, endorser, accommodation maker, comaker, or other person, whether primarily or secondarily liable on an obligation, of the protections provided under Subsections (h) and (i). A waiver described by this subsection is effective only if it is executed as an instrument separate from the obligation with respect to which it applies. If a waiver under this subsection is executed by an individual who after the execution of the waiver enters active duty military service, or by a dependent of an individual who after the execution of the waiver enters active duty military service, the waiver is not valid after the beginning of the period of the active duty military service unless the waiver was executed by the individual or dependent during the applicable period described by 50 U.S.C. App. Section 516, as that section existed on January 1, 2009. (2906)

Added by Acts 2009, 81st Leg., R.S., Ch. 992 (H.B. 3857), Sec. 1, eff. June 19, 2009. (2907)

Amended by: (2908)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 2, eff. September 1, 2011. (2909)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 3, eff. September 1, 2011. (2910)

Sec. 51.016. RESCISSION OF NONJUDICIAL FORECLOSURE SALES. (2911)(1-click HTML)

(a) This section applies only to a nonjudicial foreclosure sale of residential real property conducted under Section 51.002. In this subsection, "residential real property" means: (2912)

(1) a single family home, duplex, triplex, or quadraplex; or (2913)

(2) a unit in a multiunit residential structure in which title to an individual unit is transferred to the owner of the unit under a condominium or cooperative system. (2914)

(b) Not later than the 15th calendar day after the date of a foreclosure sale, a mortgagee, trustee, or substitute trustee may rescind the sale under this section if: (2915)

(1) the statutory requirements for the sale were not satisfied; (2916)

(2) the default leading to the sale was cured before the sale; (2917)

(3) a receivership or dependent probate administration involving the property was pending at the time of sale; (2918)

(4) a condition specified in the conditions of sale prescribed by the trustee or substitute trustee before the sale and made available in writing to prospective bidders at the sale was not met; (2919)

(5) the mortgagee or mortgage servicer and the debtor agreed before the sale to cancel the sale based on an enforceable written agreement by the debtor to cure the default; or (2920)

(6) at the time of the sale, a court-ordered or automatic stay of the sale imposed in a bankruptcy case filed by a person with an interest in the property was in effect. (2921)

(c) On or before the 15th calendar day after the date of the sale, the party rescinding the sale shall: (2922)

(1) serve a written notice of rescission that describes the reason for the rescission and includes recording information for any affected trustee's or substitute trustee's deed that was recorded on: (2923)

(A) the purchaser, if the mortgagee is not the purchaser; and (2924)

(B) each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt; and (2925)

(2) file each notice for recording in the real property records of the county in which all or a part of the property is located. (2926)

(d) A notice required by Subsection (c) must be served by certified mail. Service of the notice is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the purchaser or debtor, as applicable, at the purchaser's or debtor's last known address, as applicable. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service. (2927)

(e) Not later than the fifth calendar day after the date a foreclosure sale is rescinded under this section, the mortgagee shall return to the purchaser by certified mail, electronic or wire transfer, or courier service with delivery tracking the amount of the bid paid by the purchaser for the property at the sale. The debtor shall return to the trustee the amount of any excess proceeds received by the debtor from the sale. The return of the bid amount is considered made on the date: (2928)

(1) the bid amount is deposited postage prepaid in the United States mail or with the courier service addressed to the purchaser at the purchaser's last known address; or (2929)

(2) the electronic or wire transfer is ordered. (2930)

(f) The rescinding mortgagee, trustee, or substitute trustee shall cause to be filed for recording in the real property records of the county where the notice required under Subsection (c) was recorded an affidavit stating the date the bid amount was returned together with the certified mail, electronic or wire transfer, or courier service delivery tracking information. (2931)

(g) An affidavit executed and filed in accordance with Subsection (f) is prima facie evidence of the return of the bid amount and of the authority of the maker of the affidavit. A bona fide purchaser, lender, or other person acquiring an interest in the property or an insurer of title is entitled to rely conclusively on the record of the filed affidavit and notice, and any subsequent purchaser in good faith and for value is entitled to bona fide purchaser protection. (2932)

(h) The rescission of a foreclosure sale under this section restores the mortgagee and the debtor to their respective title, rights, and obligations under any instrument relating to the foreclosed property that existed immediately prior to the sale. (2933)

(i) A rescission of a foreclosure sale under this section is void as to a creditor or to a subsequent purchaser for a valuable consideration without notice unless notice of the rescission has been acknowledged, sworn to, or proved and filed for recording as required by law. A rescission of a foreclosure sale under this section evidenced by an unrecorded instrument is binding on a party to the instrument, on the party's heirs, and on a subsequent purchaser who does not pay a valuable consideration or who has notice of the instrument. (2934)

(j) No action challenging the effectiveness of a rescission under this section may be commenced unless the action is filed on or before the 30th calendar day after the date the notices of rescission required by Subsection (c) are filed for recording. A lis pendens notice based on the rescission not recorded within that period has no effect. This subsection does not affect the limitations period for an action claiming damages resulting from the rescission. (2935)

(k) If the foreclosure sale is rescinded under this section for a reason listed in Subsection (b), other than a stay described by Subsection (b)(6), the court in a civil action filed by the purchaser challenging the effectiveness of the rescission or claiming damages resulting from the rescission may only award as damages to the purchaser the amount of the bid paid for the property by the purchaser at the sale that has not been refunded to the purchaser, plus interest on that amount at the rate of 10 percent per year. Notwithstanding any other law, the court may not order specific performance of the sale as a remedy for the purchaser. Interest awarded under this subsection ceases to accrue on the fourth day after the date the mortgagee deposits the amount of the damages awarded in the United States mail or with a courier for delivery to the purchaser. (2936)

(l) If a foreclosure sale is rescinded under this section for a reason provided by Subsection (b)(6), the court in a civil action filed by the purchaser challenging the effectiveness of the rescission or claiming damages resulting from the rescission may only award as damages to the purchaser the amount of the bid paid for the property by the purchaser at the sale that has not been refunded to the purchaser. (2937)

(m) Nothing in this section prohibits the rescission of a sale by agreement of the affected parties on other terms or a suit to rescind a sale not rescinded under this section. (2938)

  

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