Bill Text: TX HB2447 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to private transfer fee obligations.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-13 - Referred to Business & Industry [HB2447 Detail]

Download: Texas-2023-HB2447-Introduced.html

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88R4470 SHH-F
By: Darby H.B. No. 2447

A BILL TO BE ENTITLED
AN ACT
relating to private transfer fee obligations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 5.201, Property Code, is amended by
adding Subdivision (3-a) to read as follows:
(3-a) "Payee of record" means:
(A) the payee of a private transfer fee under a
private transfer fee obligation if there is only one payee; or
(B) the payee designated as payee of record by
multiple payees of a single private transfer fee under a private
transfer fee obligation, as required by Section 5.203(b).
SECTION 2. Section 5.203, Property Code, is amended by
amending Subsection (e) and adding Subsections (e-1) and (e-2) to
read as follows:
(e) A person who refiles or amends a notice under Subsection
(d) [(d)(2)] must include:
(1) the recording information of the original notice
and each subsequent notice filed as required by this section; and
(2) the legal description of the property subject to
the private transfer fee obligation.
(e-1) The legal description of property included in a notice
under this section must be sufficient to describe all encumbered
property. A description by reference to a previously recorded
document other than a recorded plat does not satisfy this
subsection.
(e-2) If the encumbered property is located in a platted
subdivision, the legal description of property included in a notice
under this section must:
(1) describe the subdivision and include the
subdivision's name and recording information; and
(2) itemize by lot and block reference each lot that is
subject to the private transfer fee obligation.
SECTION 3. Subchapter G, Chapter 5, Property Code, is
amended by adding Sections 5.2035, 5.2041, 5.2042, 5.2043, 5.2044,
and 5.2045 to read as follows:
Sec. 5.2035. ADDITIONAL COMPLIANCE REQUIREMENT:
NOTIFICATION OF SUBDIVISION PROPERTY OWNERS. (a) This section
applies to encumbered property located in a platted subdivision
used or developed primarily for use as one to four family
residences.
(b) The payee of record for an encumbered property to which
this section applies shall:
(1) on or before the date a notice required under
Section 5.203 is filed for record, mail a separate copy of the
notice to each owner of property in the subdivision by first class
mail, postage prepaid, at the mailing address shown for the owner in
the records of the central appraisal district of the county in which
the encumbered property is located;
(2) file for record with the notice the payee's sworn
affidavit affirming the copies of the notice were mailed in the time
and manner required by this section; and
(3) maintain auditable records showing compliance
with this section for at least five years and make those records
available at no charge to any owner of property in the subdivision.
(c) For purposes of Section 5.203(f), a payee of record's
failure to comply with this section constitutes failure to comply
with Section 5.203.
Sec. 5.2041. LIMITATIONS PERIOD FOR PAYEE CLAIM. (a) This
section applies to a suit:
(1) for payment of a private transfer fee payable as a
result of a transfer of encumbered property;
(2) to foreclose a lien securing a private transfer
fee obligation; or
(3) to contest the validity of a recorded termination
of the instrument creating a private transfer fee obligation.
(b) A person must bring a suit to which this section applies
not later than one year after the date of the sale or conveyance or
the date the termination was recorded.
(c) This section does not affect any other limitation
applicable to the payment of a private transfer fee, a private
transfer fee obligation, or the foreclosure of a lien securing a
private transfer fee or private transfer fee obligation.
Sec. 5.2042. REQUEST FOR STATUS OF PRIVATE TRANSFER FEE
OBLIGATION. (a) An owner of property described in a recorded
private transfer fee obligation may by mail request that the payee
of record designated in the most recent recorded notice of private
transfer fee obligation under Section 5.203 declare whether the
private transfer fee obligation is or is not currently effective.
(b) Not later than the 30th day after the date of the mailing
of a request under Subsection (a), the payee of record who receives
the request shall:
(1) deliver to the owner making the request a copy of a
sworn affidavit stating the status of the private transfer fee
obligation as currently effective or not currently effective and
made by:
(A) the payee of record, if the payee of record is
a natural person; or
(B) an individual who is an authorized
representative of the payee, if the payee is not a natural person;
and
(2) file the affidavit for record in the county where
the property is located.
(c) If a request is made under Subsection (a) and the payee
of record does not satisfy the requirements of Subsection (b) or the
affidavit delivered and recorded under Subsection (b) states that
the private transfer fee obligation is not effective:
(1) the private transfer fee obligation is terminated,
is not effective, and does not encumber any property described in
the private transfer fee obligation; and
(2) a private transfer fee is not due or payable with
respect to any future transfer of the owner's property or any other
property described in the private transfer fee obligation.
(d) A property owner who makes a request under Subsection
(a) may record at any time in the county where the property is
located a sworn affidavit that states the date the request was
mailed and includes a copy of the request. An affidavit described by
this subsection:
(1) is presumed to be true and correct; and
(2) may be conclusively relied on as true and correct
by any future grantees or lienholders.
Sec. 5.2043. ACTION AGAINST PAYEE AUTHORIZED. (a) The
owner of or any purchaser, lienholder, or other party having an
interest in or lien on affected property may bring an action under
this section against any payee of a private transfer fee
obligation, as shown in the most recent notice of private transfer
fee obligation recorded under Section 5.203, and any individual who
signed the relevant affidavit on behalf of the payee, if the payee
improperly:
(1) files a notice of private transfer fee obligation
under Section 5.203;
(2) files an affidavit described by Section 5.2042(b)
stating that the private transfer fee obligation is currently
effective; or
(3) files any other affidavit or notice asserting the
private transfer fee obligation is effective with respect to the
property, the owner, or any purchaser, lienholder, or other
interested party having an interest in or lien on the property.
(b) An owner or a purchaser, lienholder, or other interested
party who prevails in an action under this section is entitled:
(1) to declaratory relief determining that the private
transfer fee obligation, any right to receive a private transfer
fee, and any lien securing the private transfer fee obligation is
invalid and unenforceable with respect to the property; and
(2) to recover:
(A) the party's attorney's fees and court costs;
(B) actual damages; and
(C) exemplary damages of $10,000 for each
affected tract, with each subdivided lot constituting a separate
tract.
(c) Each payee and any individual who is determined to have
signed a false affidavit is jointly and severally liable for an
award under Subsection (b)(2).
(d) An action may be brought under this section in the same
suit by more than one owner of property described by the private
transfer fee obligation. Each prevailing owner is separately
entitled to recover under Subsection (b)(2).
(e) An action under this section regarding an affidavit
recorded under Section 5.2042(b) may be brought by the owner who
requested the affidavit or any person who acquired title to the
property after the request was made.
(f) In an action brought under this section against the
payee of record for the most recently filed notice of private
transfer fee obligation under Section 5.203:
(1) service on the payee of record is effective
service on all payees, without requiring joinder or service on any
other payee; and
(2) a judgment against the payee of record is binding
on each payee jointly and severally.
Sec. 5.2044. DECEPTIVE TRADE PRACTICE. The filing of a
notice under Section 5.203 with respect to a private transfer fee
obligation that has terminated or the making or filing of a false
affidavit under Section 5.2042(b) is a deceptive trade practice
under Subchapter E, Chapter 17, Business & Commerce Code, and is
actionable under that subchapter.
Sec. 5.2045. TIMING OF TERMINATION. (a) In any action to
enforce or to determine the validity or enforceability of a private
transfer fee obligation with respect to a transaction in which a
deed is executed, a termination of the obligation shall be
considered effective if:
(1) the termination is recorded before the deed is
recorded; or
(2) a grantor or grantee of the deed executes and
records an affidavit stating that it was the intention of the
parties to the deed that the deed was not executed, delivered, or
accepted, and that the property was not sold, conveyed,
transferred, or assigned, until after the recordation of the
termination.
(b) For purposes of Subsection (a), if a deed is executed in
a transaction in which a termination of a private transfer fee
obligation is executed, it is presumed that the termination was
executed before the conveyance.
SECTION 4. (a) Notwithstanding Section 5.2041, Property
Code, as added by this Act, a person may bring a suit described by
Subsection (a) of that section before September 1, 2024, in
connection with a sale or conveyance that occurred or a termination
of private transfer fee obligation that was recorded before
September 1, 2023.
(b) This section does not affect any other limitation
applicable to the payment of a private transfer fee, a private
transfer fee obligation, or the foreclosure of a lien securing a
private transfer fee or private transfer fee obligation.
SECTION 5. This Act takes effect September 1, 2023.