Electronic Filing to be Compulsory in Bexar County on January 1, 2014

Trey Wilson, Lawyer in San Antonio, Texas wrote:

On December 11, 2013, the Supreme Court of Texas rendered an Order compelling electronic or "E" filing in all Texas counties by July 1, 2016.  The Order applies to civil cases (including family cases) in the district courts, statutory county courts, constitutional county courts and statutory probate courts on a graduated schedule based on population.

As a County with a population of more than 500,000, E-filing will be mandatory in Bexar County on January 1, 2014. Once a county is subject to mandatory E-filing, attorneys must E-file all documents in civil cases through TexFile. Unrepresented persons are permitted, but not required to E-file.

TexFile is billed as following the " toll-road model, but drastically reduc[ing] the cost of e-filing and electronic service.

The transition should be interesting for attorneys and court clerks, alike.

Understanding the Limitations of the Quitclaim Deed in Texas

With surprising frequency, Texans seeking to transfer title to real estate without the assistance of an experienced real estate lawyer utilize Quitclaim Deeds (sometimes erroneously called "quick claim deeds"). Perhpas this is because of the wide availability of these forms on the internet, and in free databases. However, there are many pitfalls associated with using the Quitclaim Deed, and its limitations are plenty.

The essence of a quitclaim deed is an effort to pass any title, interest or claim of the grantor, but not professing that such title is valid, nor containing any warranty or covenants for title. See Porter v. Wilson, 389 S.W.2d 650, 655-56 (Tex.1965). A quitclaim deed is not a conveyance or a muniment of title. Adamson v. Doornbos, 587 S.W.2d 445, 447-48 (Tex.Civ.App.—Beaumont 1979, no writ).

By itself, a Quitclaim Deed does not establish any title in those holding the deed, but merely passes the interest of the grantor (if any) in the property.

Stated simply, a Quitclaim Deed suffices only to give the grantee whatever title that grantor has. If the Grantor has no title to the property interest in question, then none passes.

NEW COURT OPINION -- REAL ESTATE COMMISSIONS CAN BE RECOVERED FROM UNLICENSED "BROKERS" BUT ONLY BY THOSE WHO PAID THEM

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

In Texas, persons engaging on certain real estate activities for a commission or other consideration are generally required to hold a license or certificate of registration issued by the Texas Real Estate Commission (TREC). TEX. OCC. CODE ANN. § 1101.351(a). In particular, broker functions, including negotiating or attempting to negotiate the listing, sale, exchange, purchase or lease of real estate, usually require a TREC license. TEX. OCC. CODE ANN. § 1101.002(1)(A)(iii). NOTE: There are notable exceptions to the rule including attorneys (See TRELA §1101.005(1), and persons selling their own property (regulated real estate brokerage activities must be "for another" person or entity. This means that persons who are buying, selling or leasing their own property do not need a license; they are acting for themselves and not for another person).

In fact, Section 1101.758 of the Real Estate License Act (RELA) establishes that it is a crime for an unlicensed person to engage in activity for which a real estate license is required.  

Further there exists a statute expressly creating a PRIVATE CAUSE OF ACTION, and right to file suit, against persons who receive a commission or other consideration as a result of acting as a broker or salesperson without holding a license or certificate of registration issued by TREC. TEX. OCC. CODE ANN. § 1101.754.  Under that statute, an unlicensed person is  liable to an "aggrieved person" for a penalty of not less than the amount of money received or more than three times the amount of money received. Id. The statute, however, does not define the term "aggrieved person."

In an opinion issued earlier this week (May 14, 2013) the Houston Court of Appeals (1st District) interpreted TEX. OCC. CODE ANN. § 1101.754 to mean "that the aggrieved person must have paid that commission to have standing to pursue a private cause of action under RELA." See Shanklin vs. Bassoe Offshore USA, Inc. Tex. App. 1st Dist [Houston] 2013.  Thus, the Court reasoned, a person does not have standing under the statute unless the payed  a commission "because a claimant is aggrieved by the specific conduct of the person receiving a commission without having a license." See Id.

If you have paid a real estate commission to an unlicensed person (including a TREC licensee whose license is suspended), you should contact an experienced real estate litigation attorney to evaluate whether you might recover that commission under Section 1101.754 or another provision of law.  NOTE: Conducting real estate brokerage activity with an inactive license is considered a violation subject to sanctions. [TRELA §1101.351(c)]

Texas Deeds Must Contain Adequate Property Descriptions

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Texas law reporters are brimming with cases involving failed sales or transfers of land based on vague, confusing or just plain wrong descriptions the real property intended to be conveyed.  Under Texas law, inadequate property descriptions -- particularly those that don't identify the property location -- will render a deed or other conveyance document ineffectual. This is true because location is an essential element of a deed, without which the deed is void. See Wilson v. Fisher, 144 Tex. 53, 188 S.W.2d 150, 152 (1945). 

To be sufficient, a writing conveying title must provide within itself, or by reference to some other existing writing in existence at the time of the deed, the means or information by which the land being conveyed can be identified with reasonable certainty. Williams v. Ellison, 493 S.W.2d 734, 736 (Tex.1973). This has been termed the "nucleus of description" theory. 

"If enough appears in the description so that a party familiar with the locality can identify the premises with reasonable certainty, it will be sufficient." Gates v. Asher, 154 Tex. 538, 541, 280 S.W.2d 247, 248 (1955) (citations omitted).  Likewise, "if there appears in the instrument enough to enable one by pursuing an inquiry based upon the information contained in the deed to identify the particular property to the exclusion of others, the description  will be held sufficient." Templeton v. Dreiss, 961 S.W.2d 645, 658 (Tex.App.-San Antonio 1998, pet. denied). However, "a deed purporting to convey land, which describes it only by quantity and as being part of a larger tract (i.e. "25 acres out of he King Ranch"), with nothing whereby to identify what specific portion of the larger tract is intended to be conveyed, is VOID for uncertainty of description." Smith v. Sorelle, 126 Tex. 353, 358-59, 87 S.W.2d 703, 705 (1935).

San Antonio's Fourth Court of Appeals addressed the "nucleus of description" theory in a real estate case it considered in 2009. In that case, Gaut v. Daniel, 293 S.W.3d 764, 767 (Tex. App. — San Antonio 2009), the Court considered a 1990 deed conveying 28 acres in Duval County. The acreage in question was part of a larger (399.5 acre) tract, but the deed conveying the property, which purported to contain surveyor's notes, failed to identify any discernible location of the 28 acre tract.  The Court's holding:  "Because nothing identifies which 28 acres out of the 399.5 are being conveyed, the deed is void" Gaut, 293 S.W.3d at 770.

With the significant rush to obtain, break and transfer property interests, including deeds and leases, caused by the boom in the Eagle Ford shale and other oil and gas formations in Texas, sufficiency of property descriptions have become of preeminent importance. 

In an interesting case decided by the 5th Circuit appeals court in 2012, Chesapeake Exploration  unsuccessfully attempted to invalidate its agreement to purchase deep rights held by Peak Energy Corporation in certain oil and gas leases    Coe v. Chesapeake Exploration, L.L.C., 695 F.3d 311, 316 (5th Cir. 2012). When the price of natural gas plummeted several months later, Chesapeake refused to honor its commitment. When Peak filed suit, Chesapeake argued that the parties' agreement was unenforceable under the Texas statute of frauds and fatally indefinite based upon the flawed property descriptions. The district court disagreed, rendering judgment in favor of Peak and its principals and awarding them damages in the amount of more $19 million. This judgment was affirmed by the appeals court.

Thus, persons drafting deeds and other conveyance documents, as well as those contemplating the sufficiency of existing deed documents, must be mindful of the nucleus of description theory. 

HOA Embezzlement Prevention Bill (HB 3803) To Be Heard Today

San Antonio HOA Lawyer Trey Wilson wrote:

State Representative Ruth Jones-McClendon's HB 3803 is set for public hearing today before the House Committee on Business and Industry. 

As I previously wrote, the Bill (filed on 3/8/13) seeks to prevent Board-member fraud and embezzlement of HOA funds through a series of money management procedures and local government regulation. Pundits have predicted substantial testimony concerning the Bill.

It should be an interesting day, as sentiments on both sides of the Bill are strong. Among the most important concerns regarding the Bill are its financial implications upon the Texas Attorney General, cities and counties who would be granted regulatory authority over HOAs. According to the Fiscal Note prepared by the Legislative Budget Board, local governments, including the City of Houston, are uncertain about the financial impact of this new-found authority. 

  

New Bill Proposes Local Government Control and Attorney General Oversight of HOAs

San Antonio HOA Lawsuit Lawyer Trey Wilson wrote:

State Rep. Ruth Jones McClendon of San Antonio has filed legislation that would cede control over Texas Homeowners Associations/Property Owners Associations to cities and counties, with oversight and monitoring to be conducted by the Texas Attorney General's office.

The initiative -- HB 3803 --  is captioned as "Relating to the municipal and county regulation of and the oversight by the attorney general of property owners ’ associations and unit owners ’ associations; providing penalties."

This bill would authorize Texas cities (in city limits and ETJ) and counties (in unincorporated areas) to regulate HOAs on a variety of matters of "municipal concern," and to require registration with the applicable unit of local government. Other portions of the bill affect the way HOA funds are deposited and maintained (in trust accounts) and contain new bonding and insurance requirements for HOAs and their directors. 

Sections 3 and 4 of the bill are particularly dangerous to Texas HOAs because they would require the Texas AG's office to monitor HOAs and investigate complaints about them.  These provisions expressly provide for notification to the AG in the event of embezzlement of HOA funds.   A particularly interesting, if unclear, section of the bill directs the AG to monitor the banking institution where HOAs maintain the newly-required trust accounts. 

The bill was filed on March 8, and was referred to the House Committee on Business & Industry on March 21.

If enacted, this legislation would modify the Texas Local Government Code and Chapter 82 of the Texas Property Code. 

Chief Justice of Texas Supreme Court transmits "Call to Arms" to Legislature

On March 6, 2013, Chief Justice Wallace Jefferson addressed the Texas Legislature in the annual "State of the Judiciary" presentation.  Although traditionally considered a "health and funding" check on our state's courts, Justice Wallace characterized his speech this year as a "Call to Arms."

In his heartfelt address, which can definitely be considered as a departure from tradition, Justice Jefferson focused on a few universally important questions:

Is our system of justice is working for the people it has promised to serve? 

Do we have liberty and justice for all? 

Or have we come to accept liberty and justice only for some? 

With brutal honesty, Jefferson admitted that in many areas, the Texas judiciary falls far short of the standards set by a justice and equality-loving populace:

For those who can afford legal services, we have a top-notch judicial system. Highly qualified lawyers help courts dispense justice fairly and efficiently. But that kind of representation is expensive. A larger swath of litigation exists in which the contestants lack wealth, insurance is absent, and public funding is not available. Some of our most essential rights – those involving families, homes, and livelihoods – are the least protected. Veterans languish for months before their disability, pension, and educational benefits arrive. As a result of the recent financial crisis, lower- and middle-income homeowners and tenants face foreclosure and eviction. Ever-increasing numbers of consumers and small businesses have filed for bankruptcy. And few can afford a lawyer to guide them through these crises. 

The full transcript of the speech can be found HERE. It is most definitely worth a read.