H.B. No. 207
AN ACT
relating to the exclusion of certain conveyances from
classification as sham or pretended sales.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 41, Property Code, is
amended by adding Section 41.0022 to read as follows:
Sec. 41.0022. CERTAIN CONVEYANCES NOT SHAM OR PRETENDED
SALES. (a) In this section:
(1) "Entity" means a domestic or foreign:
(A) corporation, professional corporation, or
professional association;
(B) limited liability company or professional
limited liability company; or
(C) limited partnership.
(2) "Parcel" means one or more parcels.
(b) The conveyance of a parcel not meeting the definition of
an urban homestead under Section 41.002(a) or (c) by an individual
to an entity in which the individual or individual's spouse has a
direct or indirect ownership interest is not a sham or pretended
sale, including a pretended sale under Section 50(c), Article XVI,
Texas Constitution, if:
(1) the deed conveying the parcel is recorded at least
30 days before the entity grants a mortgage, trust deed, or other
lien on the parcel;
(2) the individual does not reside on the parcel at the
time of the conveyance;
(3) the parcel is not contiguous to the parcel on which
the individual resides;
(4) the deed conveying the parcel does not contain a
condition of defeasance; and
(5) the individual recorded contemporaneously with
the deed an affidavit substantially in the form prescribed by
Subsection (d).
(c) An individual executing a deed under Subsection (b) is
estopped from claiming that:
(1) the conveyance is a sham or pretended sale,
including a pretended sale under Section 50(c), Article XVI, Texas
Constitution; or
(2) the individual had not abandoned homestead rights,
if any, in the parcel by executing the deed.
(d) At the time of recording a deed under Subsection (b), an
individual grantor of the deed shall record an affidavit containing
the following:
(1) a title caption stating "Affidavit Regarding
Conveyance To An Entity";
(2) the date of the affidavit;
(3) a description of the deed containing:
(A) the title of the deed;
(B) the date of the deed;
(C) the name and address of the individual
grantor; and
(D) the name and address of the entity grantee;
(4) a description of the parcel being conveyed to the
entity;
(5) a description of the parcel upon which the
individual currently resides;
(6) a statement that the parcel being conveyed is not
contiguous to the parcel upon which the individual currently
resides;
(7) a statement that the parcel upon which the
individual currently resides is not:
(A) located within the limits of a municipality
or its extraterritorial jurisdiction or a platted subdivision; or
(B) 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:
(i) electric;
(ii) natural gas;
(iii) sewer;
(iv) storm sewer; or
(v) water;
(8) a statement that:
(A) the individual is unmarried; or
(B) the individual is married, and including the
name of the individual's spouse;
(9) a statement that the individual or individual's
spouse owns a direct or indirect interest in the entity;
(10) a statement that the individual has executed the
deed conveying the parcel to the entity;
(11) a statement that the individual intends to vest
title in the entity;
(12) a statement that there are no written or oral
agreements regarding a defeasance of the parcel upon the passage of
time or occurrence or non-occurrence of any event;
(13) a statement that the individual acknowledges that
the individual will be estopped from claiming the conveyance to the
entity is a sham or pretended sale, including a pretended sale under
Section 50(c), Article XVI, Texas Constitution;
(14) a statement that the individual acknowledges that
the individual will be estopped from claiming the individual had
not abandoned homestead rights, if any, in the parcel by executing
the deed;
(15) a statement that the individual understands that
if the parcel is valued for ad valorem tax purposes as qualified
open-space land, the entity must reapply in its own name by the
applicable filing deadline; and
(16) a statement that the individual has had an
opportunity:
(A) to review the affidavit prior to the
affidavit's execution; and
(B) to consult with an attorney before the
affidavit's execution, whether or not the opportunity to consult
with an attorney was exercised.
(e) If the individual conveying a parcel under Subsection
(b) is married, the individual's spouse must join in the execution
of:
(1) the deed; and
(2) the affidavit described by Subsection (d).
(f) The entity or a lender for value may conclusively rely
on an affidavit described by Subsection (d).
(g) Notwithstanding any other provision of this section, a
transaction that does not meet the requirements of this section is
not invalid if the homestead has been abandoned or disclaimed as
provided by other provisions of law.
SECTION 2. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 207 was passed by the House on April
20, 2023, by the following vote: Yeas 144, Nays 2, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 207 on May 19, 2023, by the following vote: Yeas 140, Nays 0, 3
present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 207 was passed by the Senate, with
amendments, on May 16, 2023, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor