HBA-ATS S.B. 378 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 378
By: Nixon
Civil Practices
5/20/1999
Engrossed



BACKGROUND AND PURPOSE 
        
Currently, ambiguity exists over several aspects of judgments against the
partial owner of real property.  Significant and confusing legal questions
regarding property titles may result when the other owner or owners of the
property attempt to sell the property, when an owner dies without a will,
or when heirs have any outstanding pending judgments. 

S.B. 378 establishes a statutory procedure for the payment of a judgment of
abstract or judgment lien levied against an owner of an undivided interest
in real property. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 31, Civil Practice and Remedies Code, by adding
Section 31.009, as follows: 

Sec.  31.009.  PAYMENT OF JUDGMENT AGAINST UNDIVIDED INTEREST IN REAL
PROPERTY.  (a) Enumerates the four conditions that must exist for this
section to apply: 

  _the owner of an undivided interest in real property (owner), alone or
with the other owners of the real property (property), is selling and
conveying title to the property or the undivided interest in the property
to another person under a written contract and the consideration under the
contract is money, secured loans assumed or existing on the property, or
both money and secured loans; 
  _the interest of the owner is subject to an abstract of judgment or
judgment lien, or the abstract of judgment or judgment lien names that
person as the judgment debtor; 
  _the interest of the owner which is subject to the abstract of judgment
or judgment lien that attaches to the interest or that names the owner as
the judgment debtor does not exceed a 50 percent undivided interest in the
property; and 
  _the abstract of judgment or judgment lien does not name the owner of any
other undivided interest in the property as a judgment debtor and does not
purport to attach to the interest of the owner of any other undivided
interest in the property. 

(b) Provides that the owner, before the owner is entitled to pay for
partial release of the judgment to a court, must send a letter to the
judgment creditor (creditor) of the judgment. Provides that the letter is
to be sent to four locations by registered or certified mail, return
receipt requested. 

(c) Sets forth the contents of the owner's letter to the creditor:

  _the legal description of the property;
   _the percentage, fraction, or amount of undivided interest in the
property owned or claimed by the owner as evidenced by a copy of a title
report, title commitment, deed, or other written evidence of title; 
  _a copy of the written contract to sell the property or the undivided
interest of the owner; 
  _a statement of the total sales price of the undivided interest of the
owner or proportionate share of the sales price of the property equivalent
to the undivided interest of the owner in the property if sold in
conjunction with other owners of the property, without reduction for any
costs, expenses, debts, or other amounts paid by or on behalf of the owner,
and any offset; 
  _an affidavit in the letter or included with the letter stating that the
contract is a bona fide sale; and 
  _an offer to pay by cash, wire of funds, or cashier's check the sales
price of the undivided interest of the owner or proportionate share of the
sales price of the property equivalent to the undivided interest of the
owner in the property if sold in conjunction with other owners of the
property in return for a release of the abstract of judgment or judgment
lien. 

(d) Authorizes the owner to file certain documents and payment with the
court that rendered the abstract of judgment or judgment lien, if the
creditor fails to respond to the letter by furnishing a release of the
abstract of judgment or judgment lien on or before the 15th day after the
letter was sent.  Those documents are: 

  _an affidavit stating that the owner has complied with this section and
is entitled to a release of the abstract of judgment or judgment lien, the
owner provided the letter and offered payment of the sales price of the
undivided interest of the owner, without reduction for any costs, expenses,
debts, or other amounts paid by or on behalf of the owner and without
reduction for any offset, and the creditor has not responded to the letter
by furnishing a release; 
  _a copy of the contract to sell the property or undivided interest of the
owner in the property; 
  _a copy of the letter sent under this section and any document included
with the letter; 
  _payment of the amount of the sales price of the undivided interest of
the owner or proportionate share of the sales price of the property
equivalent to the undivided interest of the owner in the  property if sold
in conjunction with other owners of the property; and 
  _any written correspondence received from the creditor or the creditor's
attorney in response to the letter; and a copy of the deed executed or to
be executed by the owner under the contract. 

(e) Requires the owner to send a copy of the affidavit under Subsection (d)
by registered or certified mail, return receipt requested, to the creditor
and creditor's last attorney as shown in the creditor's pleadings or other
court record at the four addresses listed in Subsection (b) before the
sixth day after the affidavit is filed with the court. 

(f) Requires the owner to prepare a recordable release of the abstract of
judgment or judgment lien describing the owner's undivided interest.  Sets
forth the required language of the owner's release.  Requires the judge or
clerk of the court to execute the release on behalf of the creditor and
issue the release to the owner on or after the 15th day after the owner
files the affidavit with the court and before the 31st day after the owner
files the affidavit with the court, unless the judge determines that the
owner is not entitled to a release.    Sets forth the required content of
the executed release. 

(g) Requires the court to hold the owner's payment and interest earned on
that payment in trust for the creditor.  Requires the court clerk to
deposit the trust funds and any interest earned by the funds in the clerks'
trust fund account.  Requires the clerk to pay these monies to the creditor
or the creditor's successors.  Authorizes the clerk to presume that  the
funds are payable to the creditor unless the clerk is furnished with a
written assignment of the judgment.  Provides that funds held in the
clerk's trust fund account are subject to escheat under Chapter 72
(Abandonment of Personal Property), Property Code. 

(h) Authorizes a purchaser or lender to conclusively rely on the partial
release of abstract of judgment or judgment lien and take title to the
owner's undivided interest free and clear of the abstract or lien.
Prohibits the purchaser or lender from being required to determine if the
owner has complied with this section. 

(i) Defines "judgment creditor."

SECTION 2.  (a) Effective date:  September 1, 1999.
  
(b) Provides that this Act applies to the payment of judgments against
undivided interests in real property, for which acceptable notice is given,
before, on, or after  September 1, 1999. 

SECTION 3.Emergency clause.