S.B. No. 1320
AN ACT
relating to the execution of written instruments relating to
residential real estate transactions and deeds conveying
residential real estate in connection with certain transactions
involving residential real estate; providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 2, Business & Commerce Code, is amended by
adding Chapter 21 to read as follows:
CHAPTER 21. EXECUTION OF DEEDS IN CERTAIN TRANSACTIONS INVOLVING
RESIDENTIAL REAL ESTATE
Sec. 21.001. DEFINITION. In this chapter, "residential
real estate" means real property on which a dwelling designed for
occupancy for one to four families is constructed or intended to be
constructed.
Sec. 21.002. PROHIBITION OF EXECUTION OF DEEDS CONVEYING
RESIDENTIAL REAL ESTATE IN CERTAIN TRANSACTIONS. (a) A seller of
residential real estate or a person who makes an extension of credit
and takes a security interest or mortgage against residential real
estate may not, before or at the time of the conveyance of the
residential real estate to the purchaser or the extension of credit
to the borrower, request or require the purchaser or borrower to
execute and deliver to the seller or person making the extension of
credit a deed conveying the residential real estate to the seller or
person making the extension of credit.
(b) A deed executed in violation of this section is voidable
unless a subsequent purchaser of the residential real estate, for
valuable consideration, obtains an interest in the property after
the deed was recorded without notice of the violation, including
notice provided by actual possession of the property by the grantor
of the deed. The residential real estate continues to be subject to
the security interest of a creditor who, without notice of the
violation, granted an extension of credit to a borrower based on the
deed executed in violation of this section.
(c) A purchaser or borrower must bring an action to void a
deed executed in violation of this section not later than the fourth
anniversary of the date the deed was recorded.
(d) A purchaser or borrower who is a prevailing party in an
action to void a deed under this section may recover reasonable and
necessary attorney's fees.
Sec. 21.003. ACTION BY ATTORNEY GENERAL. (a) The attorney
general may bring an action on behalf of the state:
(1) for injunctive relief to require compliance with
this chapter;
(2) to recover a civil penalty of $500 for each
violation of this chapter; or
(3) for both injunctive relief and to recover the
civil penalty.
(b) The attorney general is entitled to recover reasonable
expenses incurred in obtaining injunctive relief or a civil
penalty, or both, under this section, including court costs and
reasonable attorney's fees.
(c) The court may make such additional orders or judgments
as are necessary to return to the purchaser a deed conveying
residential real estate that the court finds was acquired by means
of any violation of this chapter.
(d) In bringing or participating in an action under this
chapter, the attorney general acts in the name of the state and does
not establish an attorney-client relationship with another person,
including a person to whom the attorney general requests that the
court award relief.
(e) An action by the attorney general must be brought not
later than the fourth anniversary of the date the deed was recorded.
SECTION 2. Subsection (a), Section 121.005, Civil Practice
and Remedies Code, is amended to read as follows:
(a) An officer may not take the acknowledgment of a written
instrument unless the officer knows or has satisfactory evidence
that the acknowledging person is the person who executed the
instrument and is described in it. An officer may accept, as
satisfactory evidence of the identity of an acknowledging person,
only:
(1) the oath of a credible witness personally known to
the officer; [or]
(2) a current identification card or other document
issued by the federal government or any state government that
contains the photograph and signature of the acknowledging person;
or
(3) with respect to a deed or other instrument
relating to a residential real estate transaction, a current
passport issued by a foreign country.
SECTION 3. Section 24.004, Property Code, is amended to
read as follows:
Sec. 24.004. JURISDICTION; DISMISSAL. (a) Except as
provided by Subsection (b), a [A] justice court in the precinct in
which the real property is located has jurisdiction in eviction
suits. Eviction suits include forcible entry and detainer and
forcible detainer suits.
(b) A justice court does not have jurisdiction in a forcible
entry and detainer or forcible detainer suit and shall dismiss the
suit if the defendant files a sworn statement alleging the suit is
based on a deed executed in violation of Chapter 21, Business &
Commerce Code.
SECTION 4. This Act takes effect September 1, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1320 passed the Senate on
April 28, 2011, by the following vote: Yeas 31, Nays 0;
May 24, 2011, Senate refused to concur in House amendment and
requested appointment of Conference Committee; May 27, 2011, House
granted request of the Senate; May 29, 2011, Senate adopted
Conference Committee Report by the following vote: Yeas 31,
Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1320 passed the House, with
amendment, on May 20, 2011, by the following vote: Yeas 147,
Nays 2, one present not voting; May 27, 2011, House granted request
of the Senate for appointment of Conference Committee;
May 29, 2011, House adopted Conference Committee Report by the
following vote: Yeas 112, Nays 15, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor