Legislative Update

Real Estate Law

Compiled by John H. "Jack" Miller III and Michael A. Jacobs

This article contains a summary of bills enacted by the 88th Texas Legislature related to real estate law and should not be relied on as a complete list of bills affecting this area or a full description of any bill. The summaries below are extracted from a report prepared for the State Bar of Texas Real Estate, Probate & Trust Law Section by the Texas Real Estate and Probate Institute; the report was authored by John H. “Jack” Miller and Michael Jacobs and the following other Texas lawyers: James L. Dougherty Jr., Claire M. Barber, Samantha Dyal, Sarah P. Senterfitt, Richard A. Crow, Mark McPherson, John Absher, John P. Barnes, Kacy Cigarroa, Lorin Williams Combs, Stephen A. Cooney, Mark Hines, Jerry Lott Jr., Tom Misteli, Christy Pennington, Lindsey Jandal Postula, Ashlee Ross, Stephen B. “Steve” Schulte, Jason Smith, James I. Wiedemer, and Brenda A. Hard-Wilson.

HB 2127 amends the Agriculture Code, Finance Code, and Property Code among other codes. The bill, effective September 1, 2023, is called the “Death Star” bill by its opponents and properly known as the Texas Regulatory Consistency Act. HB 2127 specifically prohibits municipalities and counties from adopting, maintaining, or enforcing ordinances or rules that are inconsistent with state law by adding preemption language. HB 2127 adds the following preemption language to the Property Code in new Section 1.004(a), which reads as follows:

“Unless expressly authorized by another statue, a municipality or county may not adopt, enforce, or maintain an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of this code. An ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this code.”

New subsection 1.004(b) to the Property Code indicates that an ordinance, order, or rule regulating evictions or otherwise prohibiting, restricting, or delaying delivery of a notice to vacate or filing of a suit to recover possession of premises is a field occupied by the Property Code.

HB 2022 amends Property Code Sections 27.001, 27.002(b), 27.003, 27.0042(a), and 27.006; adds Property Code Sections 27.008 and 27.009; and repeals Property Code Sections 27.004(l), 27.0042(b), and 27.007(c). The bill, effective September 1, 2023, revises several definitions concerning residential construction liability and removes cross-references to the Texas Residential Construction Commission Act.

HB 3485 adds Government Code Section 2251.0521 and Property Code Section 28.0091. The bill is effective September 1, 2023. The bill allows contractors and subcontractors under public and private contracts to not proceed with additional work under a contract if they have not received a fully signed change order for the work and the value of all additional work not described in such order plus the value of any previous additional work for which there was no fully signed change order exceeds 10% of the original contract amount. The contactor or subcontractor who doesn’t proceed with additional work is not responsible for damages caused by not proceeding.

HB 207 amends Property Code Section 41.0022. The bill is effective September 1, 2023. HB 207 establishes that certain qualified conveyances by individuals to entities, including conveyances by an individual to certain related entities (entities that are partially or wholly owned directly or indirectly by the individual or the individual’s spouse) and conveyances of parcels that are not urban homesteads, are not shams or pretended sales. HB 207 clarifies that those transactions, and/or related liens, may not be determined to be void under Texas law including Texas Constitution Article XVI, Section 50(c) and, as a result, individuals are estopped from claiming sham or pretended sale or claiming homestead rights to avoid the conveyance or a related lien. HB 207 does not apply to parcels with residences of less than 10 acres that are urban homesteads under Section 41.002(a) of the Texas Property Code. There is not a corresponding constitutional amendment to go with HB 207 that would amend the constitution. To satisfy the definition of the statute, the conveyance must (1) take place at least 30 days prior to granting a lien; (2) not be the individual’s residence at the time of the conveyance; (3) not be a parcel contiguous to the individual’s residence; (4) not include conditions of defeasance (a provision that the conveyance will be null and void if some condition is occurs); and (5) be accompanied by a recorded “Affidavit Regarding Conveyance To An Entity” that must include several statements by the individual, including evidence that the transaction meets all of the foregoing conditions; that the individual after having reviewed the affidavit and having an opportunity to meet with an attorney, acknowledges that they are estopped from claiming that the transaction is a sham or pretended sale or that the individual has not abandoned homestead rights; that the individual understands that, if the parcel is specially taxed an open space land, “the entity must reapply in its own name by the applicable filing deadline.”

SB 62 amends Property Code Sections 51.002(f) through (1) and adds Tax Code Section 34.015, Subsection (c-1). The bill is effective September 1, 2023. The bill requires counties to post notices of foreclosure sales and the date, time, and location of such sales on their website where they post “other auction information.” SB 62 requires the county assessor-collector for each county to post a form to be used (or a link to the comptroller’s form if that is allowed) to request the county assessor-collector to state whether there are any delinquent property taxes owed for the applicable property.

SB 1259 amends Property Code Section 92.0563(e). The bill is effective September 1, 2023. The bill increases the maximum judgment amount that a justice court may award a tenant for certain residential rental disputes from $10,000 to $20,000, excluding interest and court costs.

HB 3536 amends Property Code, Section 93.013(a). The bill is effective September 1, 2023. The bill adds the operation of a non-compliant massage establishment to the Property Code’s list of unlawful activities for which a commercial landlord may terminate a tenant’s right of possession and recover possession of the leased premises.

SB 801 adds Property Code Section 114.087 and amends Property Code Section 5.028(a). The bill is effective September 1, 2023. The bill provides that, effective as of the date of the original instrument, unless the trust is a legal entity under state law, the trustee of a trust is the named party to an instrument to which the trust is a party. The trustee is not required to be identified by a correction deed under Section 5.028 of the Property Code, although a correction instrument making a nonmaterial change may be used to correct the identity of a trustee. SB 801 also creates a presumption that a recorded certification of trust under Section 114.086 correctly identifies the trust and the trustee. SB 801 allows a lender and a good faith purchaser for value to rely on the certification of trust and applies to instruments executed on, before, or after September 1, 2023.

HB 886 amends Property Code Section 209.0094. The bill is effective September 1, 2023. The bill requires a property owners’ association to provide multiple notices of delinquency to a property owner before filing an assessment lien. The first notice is to be provided by either first class mail or email. The second must be provided by certified mail, return receipt requested at least 30 days after the first notice is given. An assessment lien may be filed 90 days after the second notice is sent. HB 886 applies only to an assessment that becomes delinquent on or after September 1, 2023.

HB 1558 adds Property Code Chapter 216. The bill, effective June 12, 2023, creates a procedure for older subdivisions to extend and amend restrictions in limited cases where the subdivision has no available process to make such changes, including the removal of discriminatory restrictions. HB 1558 defines “older subdivision” as a subdivision described by a recorded map or plat filed before 1947. HB 1558 applies to an older subdivision that (1) is located partially or fully in a municipality with a population greater than two million; (2) does not have a written procedure to extend or amend restrictions; and (3) has a single, non-mandatory property owners’ association.

SB 1650 amends Estates Code Sections 751.002(5), 751.00201, 751.133, 751.251, 752.001(a), and 752.107; amends Property Code Section 240.008; and repeals Estates Code Sections 751.052 and 751.133(b). The bill, effective September 1, 2023, relates to durable powers of attorney and the construction of certain powers conferred in those durable powers of attorney. SB 1650 changes “person” to “individual” in various definitions. The bill revokes the powers and authority granted in a power of attorney upon the court appointment of a permanent guardian of the estate for a ward; suspends the powers and authority granted in a power of attorney upon the court appointment of a temporary guardian of the estate, unless the court affirms the effectiveness of the power of attorney; and requires the agent whose powers are revoked to deliver the assets of the ward to the guardian of the estate. SB 1650 allows a principal or agent, guardian, conservator, or other fiduciary acting for the principal, a beneficiary, a governmental agency, and a person who demonstrates interest in the principal’s welfare or estate to bring an action requesting a court to construe or determine the validity or enforceability of a durable power of attorney or review an agent’s conduct under a durable power of attorney and award attorneys’ fees and costs. The bill also adds a provision limiting the authority granted in a power of attorney to be subject to the terms of an agreement governing or relating to an entity or entity ownership interest, and to the extent the agent is permitted by law, to act for the principal.

Jack MillerJOHN H. “JACK” MILLER III is the principal and founder of Jack Miller Law. He is the chair of the Real Estate Legislative Affairs Committee under the Texas Real Estate and Probate Institute and a self-described
“real estate geek.”

Michael JacobsMICHAEL A. JACOBS has served on the State Bar of Texas Real Estate, Probate & Trust Law Section Real Estate Legislative Affairs Committee for almost 30 years, including as co-chair. He is certified in both commercial real estate law and residential real estate law by the Texas Board of Legal Specialization.

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