Bulletin: TX2013007

Date:
August 14, 2013
To:
All Texas Issuing Offices
RE:
LEGISLATIVE UPDATES - 2013 Texas Legislative Analysis (Part 2)

Dear Associates:

Note: Due to the number of bills and the complexity of the analysis, the 2013 Legislative Bulletin is divided into 2 parts. This is part 2.

The 2013 Texas legislature considered some 6000 bills and passed 1462. Of these, 100 or so do or could affect the title insurance industry. Unless otherwise indicated all bills have an effective date of September 1, 2013.

PROBATE/TRUSTS

HB 2380: This bill establishes the principle that a will containing a forfeiture clause may be challenged for good cause and when the case is diligently prosecuted. It affects Section 64, Probate Code and Section 254.005 Estates Code.

What you should know:

Relying on a forfeiture clause to exclude a requirement that all devisees/children execute a deed to property will now be an extra hazardous risk within the first 4 years after death and requires Texas underwriter approval.

Signed by the governor June 14, 2013. 

HB 2621: This bill amends Sec. 122.107 and Sec. 122.051 of the Probate Code dealing with Disclaimers

            Section 122.051 requires any person disclaiming an interest in a decedent’s property to make a positive statement about any child support owed by that person.

            Section 122.107 allows the child support obligee to enforce any child support lien against estate property against distributees of the estate when there share is enhanced by the disclaimer.

What you should do:

You must examine the title to determine if there is an existing child support obligation owed by a party attempting to disclaim property that would otherwise pass by probate or intestacy. You may need to obtain a partial release of the subject property from any such child support obligation by the person obligated to pay it.

Signed by the governor June 14, 2013.

HB 2912: This bill is a comprehensive amendment of the Estates Code (which replaces the Probate Code) effective 1-1-2014. Although the bill makes many adjustments and changes language, primarily the changes affect heirship, provide new requirements for self-proving affidavits, power of sale for personal property, new guidelines for removing an independent executor, and adverse possession requirements for co-tenant heirs.

What you should do:

Examiners should become familiar with the new estates code as amended.

Signed by the governor June 14, 2013.

HB 2913: This bill is a comprehensive amendment to Chapter 111, Property Code, known as the Texas Trust Act. The changes include an updated definition of property, and appointment of trusts. Each of these updates is intended to clean up the current law regarding trusts.

What you should do:

Examiners should become familiar with the changes.

Signed by the governor June 14, 2013. 

SB 778: Amends Section 113.053, Property Code, to allow trustees to better meet the needs and desires of trust beneficiaries, including giving a trustee authority to purchase insurance for a beneficiary from an affiliate bank in order to obtain competitive pricing and allowing flexibility in the manner in which a trustee is compensated.

What you should know:

Be aware that a trustee can purchase insurance. However, generally this is not a title insurance issue.

Signed by the governor June 14, 2013.

SB 1240: This bill amends Subtitle C, Title 9, Property Code, by adding Chapter 124 creating Sec. 124.002. Property Code. COMPULSORY DIVESTMENT PROHIBITED. In a suit or other judicial proceeding the object or effect of which is to compel the partition of a mineral interest owned or claimed by a charitable trust, a sale or other action that would divest the charitable trust of the trust's ownership of a mineral interest may not be ordered unless the trust has refused to execute a mineral lease, the terms of which are fair and reasonable, to the plaintiff or petitioner in the proceeding.

What you should do:

Be aware of this amendment.

Signed by the governor June 14, 2013. 

MISCELLANEOUS/ODD

HB 912: Creates the Texas Privacy Act. Amends Subtitle B, Title 4, Government Code, by adding Chapter 423, ILLEGAL USE OF UNMANNED VEHICLE OR UNMANNED AIRCRAFT TO CAPTURE IMAGE.

Sec. 423.003. OFFENSE: ILLEGAL USE OF UNMANNED VEHICLE OR UNMANNED AIRCRAFT TO CAPTURE IMAGE. (a) Provides that a person commits an offense if the person uses an unmanned vehicle or unmanned aircraft to capture an image of an individual or privately owned real property in this state with the intent to conduct surveillance on the individual or property captured in the image or real property in this state, on which a primary or secondary school or a licensed child-care facility is operated or an individual located on that property, with the intent to conduct surveillance.

(b) Provides that an offense under this section is a Class C misdemeanor.

What you should do:

You should still be able to use a program like Google Earth to view properties.

Signed by the governor June 14, 2013.

HB 1086: Amends Section 92.008, Property Code dealing with disconnecting electrical utilities of tenants.

In 2009, the legislature passed H.B. 882 that prevented landlords from disconnecting utilities, but left them with eviction as the only remedy for nonpayment of electric bills by tenants.

H.B.1086 will allow landlords who bill tenants for electric service through submetering or prorating electric bills to disconnect a tenant's electric service for nonpayment of electric service so long as proper notice is given to the tenant, interruption would not be detrimental to the health of the tenant, and/or repayment options are available.

What you should know:

This is not a title insurance matter. It is listed for informational purposes only.

Signed by the governor June 14, 2013. 

MANUFACTURED HOUSING

SB 672:

Subchapter C, Chapter 1202, Occupations Code, is amended by adding Section 1202.107 to provide a 2-year statute of limitations on administrative or enforcement action against a manufacturer, builder, or third-party inspector of industrialized housing after the second anniversary of the date of the final on-site inspection of the industrialized housing conducted under Section 1202.203.

What you should do:

Does not apply directly to the insuring of industrialized housing.

Signed by the governor 5-10-2013.

RESTRICTIONS/PLATTING

HB 1553: Amends section 212.0146a of the local government code to expand the ability of a city to expedite the subdividing of property without vacating the plat from a city of more than 1.9 million (Houston and Dallas) to 1.3 (San Antonio).

What you should know:

Be aware of the change for properties in San Antonio.

Signed by the governor 5-18-2013, effective date 5-18-2013.

SB 194: Amends Subchapter A, Chapter 232, Local Government Code, by adding Section 232.0034 to provide the commissioners court with jurisdiction over a residential subdivision containing 1,000 or more lots is required to adopt infrastructure standards requiring a minimum of two means for ingress and egress by emergency vehicles and first responders in new residential subdivisions.

What you should do:

This change is prospective for subdivisions approved after 9-1-2013. Taking exception to subdivision restrictions fulfills title insurance requirements.

Signed by the governor June 14, 2013.

SB 198: See discussion of this bill under the POA section of this bulletin.

WATER

HB 1324: This bill amends among other sections Section 49.3076, Water Code relating to exclusion of land from certain water districts that fail to provide service to the land, clarifies and limits the authority of those districts with outstanding bonds payable from ad valorem taxes to impose taxes on excluded land, and provides for a financial review.

What you should know:

The subject matter of this bill is not a usual issue for title insurance.

Signed by the governor June 14, 2013. 

HB 1554: Deals with flood plain violations

Current law was uncertain as to whether a municipality may bring a civil action when enforcing a local ordinance regarding floodplain violations, such as violations related to non-permitted construction or fill placed in the floodplain. By amendments to Subchapter B, Chapter 54, Local Government Code The bill protects property owners susceptible to flash floods by authorizing a municipality to pursue civil remedies for floodplain ordinance violations. It also amends current law relating to the authority of municipalities to file a lien for the costs of abatement of a floodplain ordinance violation and provides a civil penalty. 

What you should do:

These issues are not matters of title insurance. However, it is a good business practice to point out to proposed insured information that property is in a floodplain if known. It is not a good practice to discuss with the insured the implications of that information.

Signed by the governor June 14, 2013.

NOTE:  THE FOLLOWING BILL ENACTS A MAJOR CHANGE IN TEXAS LAW AND AFFECTS CREATION OF CONTRACTS AND ASSESSMENTS FOR WATER AND ENERGY PROJECTS ON PRIVATE PROPERTY. IT IS IMPERATIVE THAT YOU READ AND UNDERSTAND THIS BILL.

SB 385: This bill amends Subtitle C, Title 12, Local Government Code, adding Chapter 399 authorizing assessments for water and energy improvements in regions designated by municipalities and counties.

For title insurance purposes the following section appears to be the most important: Sec. 399.005. WRITTEN CONTRACT FOR ASSESSMENT REQUIRED. A local government may impose an assessment under this chapter only under a written contract with the record owner of the real property to be assessed.

What you should know:

This bill clarifies existing law that allows counties and cities to be involved in water and energy improvement projects on commercial and residential properties. The bill amended existing law to clarify that a local government may provide funding by assessing the property under a written contract.

Company policy:

A written contract can take almost any form relative to commercial property. For residential homestead property, the contract should be in the form of a mechanic’s lien contract so that a proper lien for the assessment can be created under the Texas Constitution. Such contracts should be approved by a Texas underwriter.

Signed by the governor June 14, 2013. 

SB 567: Transfers the economic regulation of water and wastewater utilities from the Texas Commission on Environmental Quality (TCEQ) to the Public Utility Commission of Texas (PUC) and gives the Office of Public Utility Counsel (OPUC) authority to intervene in water rate cases on behalf of residential and small commercial customers. Additionally, the bill establishes investor-owned utility (IOU) classifications based on connection count thus ending the one-size-fits-all treatment for IOU rate setting. Under these proposed classes, the largest IOU would be distinguished from the smallest IOU and an IOU's proposed rate would not automatically go into effect until finally approved.

What you should know:

The subject matter of this bill is not a normal matter for title insurance. It was filed by the governor without his signature on 5-25-2013 and becomes law on 9-1-2013.

SB 611: This bill applies to water districts that include all or parts of four counties. For title insurance purposes, the most important aspect is as follows:

Section 51.309, Water Code, is amended to read as follows:

Sec. 51.309. LIEN AGAINST CROPS. (a)  The district shall  have a first lien, superior to all other liens, against all crops grown on a [each] tract of land in the district to secure the  payment of an [the] assessment imposed against the tract under Section 51.305(a), interest, and collection or attorney's fees.

(b) If the crops against which the district has a lien under this section are cultivated on a basis other than annual replanting, the owner of the crops shall record with the county clerk of the county where the land on which the crops are cultivated is located a legally sufficient description of the land, including a metes and bounds description or a plat reference.

What you should know:

The intent of the bill is to provide a lien for assessments against growing crops which are personal property and not a matter of title insurance. However, certain crops such as citrus trees and other crops that do not require annual replanting require that the lien be recorded with a proper legal description. In those cases, exception must be taken to the water district lien.

Signed by the governor 5-18-2013.

LOBBYING

HB 1422: Signed by the governor 2-24-2013.

Section 305.005, Government Code, is amended by adding Subsection (m) to read as follows:

(m) The registration form must include the full name and address of each person who compensates or reimburses the registrant or person acting as an agent for the registrant for services, including political consulting services, rendered by the registrant from:

(1) a political contribution as defined by Title 15, Election Code;

(2) interest received from a political contribution as defined by Title 15, Election Code; or

(3) an asset purchased with a political contribution as defined by Title 15, Election Code

What you should do:

Be aware that if you engage a lobbyist, your full name and address will be reported to the Texas Ethics Commission.

RECORDING/ FILING FEES

HB 1448: From the Bill Analysis:  Article 102.0173 (Court Costs; Justice Court Technology Fund), Code of Criminal Procedure, establishes a justice court technology fund in each county. A defendant convicted of a misdemeanor offense in a justice court must pay a $4 justice court technology fee. The fee is deposited into the county's justice court technology fund which is administered by or under the direction of a county commissioner’s court. This fund is used for information technology equipment, maintenance, and training in justice courts.

H.B. 1448 allows certain justice of the peace courts, with the approval of a commissioner’s court, to use the justice court technology fund to assist constables or another county department with technological enhancements or related costs if the enhancements are related to the operation or efficiency of a justice court.

The use of justice court technology funds would assist constables with technology upgrades, such as computers in the vehicles, air cards, software purchase, and ticket writers and in turn, will directly improve the operation of the justice court.

What you should know:

This bill should have no direct impact on title insurance. We mention it to show the number of bills in 2013 dealing with increases in fees and the uses to which those fees are put.

HB 1435: Several years ago the legislature recognized that owners of land would be interested in knowing if a landfill had formerly been operated on their land. This bill requires that the council of governments in the area must provide the notice and provide the county clerk with the notice including a legal description of the property. This amends Sections 363.064(b) and (c), Health and Safety Code.

What you should do:

If your title search finds that property is wholly or partially within the recorded landfill notice filed in the land records, you must show this notice as an exception to title. No environmental protection endorsement should be issued without underwriter approval.

Signed by the governor June 16, 2013.

HB 1513: From the Bill Analysis:

Interested parties contend that the revenue currently derived from district and county records archiving and management fees is insufficient to cover the archival of records in a timely manner. These interested parties assert that, by raising the caps on such fees, more old and deteriorating records can be archived, allowing courts to expand the automation of records, process old records, and load them onto their computer systems.

SECTION 1.04. Amends Sections 118.011(b) and (f), Local Government Code, as follows:

(b) Authorizes the county clerk to set and collect, for records management and preservation, a fee as provided by Section 118.0216 (Records Management and Preservation), Local Government Code, not to exceed $10, rather than $5.

(f) Requires the county clerk, if the commissioner’s court of the county adopts the fee as part of the county's annual budget, to collect a records archive fee in an amount not to exceed $10, rather than $5.

What you should do:

Be prepared to adjust your collection of recording fees as your commissioner’s court adopts a records archive fee. Signed by the governor June 16, 2013.

SB 1437: Dealing with electronic recording of documents

Amends Section 195.003, Local Government Code, by amending Subsection (a) and adding Subsection (a-1), as follows:

(a) Authorizes a municipal clerk, in addition to certain other persons, to file electronic documents or other documents electronically for recording with a county clerk that accepts electronic filing and recording under this chapter (Electronic Filing of Records With and Recording by County Clerk).

(a-1) Authorizes a county to authorize, in addition to persons listed under Subsection (a), a person to file electronic documents or other documents electronically for recording with a county clerk if the county enters into a memorandum of understanding with the person for that purpose. Provides that this subsection applies only to a county with a population of 500,000 or more.

What you should know:

This bill expands the ability of clerks to contract with other persons or entities to electronically file documents. Applies to counties with a population of 500,000 or more. Signed by the governor June 16, 2013.

INSURANCE

HB 2163: Annual Assessment of Non-domestic Insurers for Examination of Insurers

Amends Section 401.152, Insurance Code, by adding Subsection (a-1), as follows:

(a-1) Requires the Texas Department of Insurance (TDI) to also impose an annual assessment on insurers not organized under the laws of this state subject to examination as described by this section in an amount sufficient to meet all other expenses and disbursements necessary to comply with the laws of this state relating to the examination of insurers. Requires that the amount imposed under this subsection be computed in the same manner as the amount imposed under Section 401.151(c) (relating to requiring TDI to impose a certain annual assessment on insurers) for domestic insurers.

What you should know:

This change is designed to require insurers (all lines) licensed in Texas to bear the cost of the Texas Insurance Department. It has no direct effect on title agents.

Signed by the governor June 16, 2013.

SB 183: Relating to certain inquiries made by the Texas Department of Insurance to insurers under Section 38.001 Insurance Code.

Section 38.001, Insurance Code, is amended by amending Subsection (c) and adding Subsection (e) to read as follows:

(c) A person receiving an inquiry under Subsection (b) shall respond to the inquiry in writing not later than the 15th day after the date the inquiry is received. If the department receives written notice from the person that additional time is required to respond to the inquiry, the department shall grant a 10-day extension of the time to respond to the inquiry.

(e) The department shall maintain a record of all inquiries made by the department under this section.

What you should know:

Section 2551.001 expressly states that Subchapter A, chapter 38 Insurance Code applies to title insurance.

Signed by the governor June 16, 2013

SB 734: Deals with Captive Insurance Companies

Sec. 964.051. AUTHORITY TO WRITE DIRECT BUSINESS.

            Title insurance companies are prohibited from having captive insurance companies.

What you should do:

Be aware of the law.

Signed by the governor June 16, 2013.

SB 840: Liberalizes Texas law on rebating by casualty companies. It does not affect title insurance or P-53.

BUSINESS ENTITIES

SB 847: Relating to business entities and associations.

This bill makes changes to the Business Organization code in a number of locations. Such changes do not have material impact on title insurance. For title insuring purposes, the most important sections deal with Section 7.001(d) limiting the liability of partners and members of entities as provided in Chapter 125 of the Business Organizations Code and in subsections b and c of 7.001.

What this means for title insurance:

When offered an indemnity from a business entity that has satisfactory assets (as approved by a Texas underwriter), be aware that the entity’s documents may prevent reaching the assets of partners or managers except in extraordinary situations. In some cases, separate indemnities from these individuals or other entities may be required. An example of such matters would be the issuance of a non-imputation endorsement.

Signed by the governor 5-2-2013.

ROADS/BEACHES

HB 2612: Amends Sections 251.157(b), (c), (e), and (f), Transportation Code

This bill allows the county road supervisor to limit or prohibit the use of certain county roads by certain vehicles. The road must have notices provided as to the restrictions. In some cases vehicles affected are those that weight over 60,000 lbs.

What you should do:

This bill could affect the title industry’s ability to provide the T-23 access endorsement which insures that the property has actual vehicular access. While the exact quality of such vehicular access is not defined, it is a good practice that if you are dealing with property that fronts only a county road you should require the surveyor to state on the survey whether the road is limited as to certain types of vehicles. If the surveyor locates the limitation signs, you should inquire as to proposed use of the property and obtain underwriter approval.

Signed by the governor June 16, 2013.

HB 2623: Amends Chapter 61 of the Natural Resources Code relating to the authority of certain counties and the General Land Office to temporarily close a beach or beach access point because of space flight activities.

What you should do:

Be aware of the law. No exception is necessary because a temporary closing of a beach would be a matter excluded from coverage and we do not insure the actual beach, which is property of the state of Texas.

Signed by governor 5-24-2013, effective date 5-24-2013.

HB 3459: This bill deals with Section 61.001, et seq, Natural Resources Code.

From the Bill analysis:  Under the Open Beaches Act (Act), the beachfront line of vegetation (LOV) marks the landward boundary of the public use easement. Traditionally, if the LOV moved landward due to erosion or a storm, the public use easement was deemed to have migrated with the LOV. The recent Texas Supreme Court decision in Severance v. Patterson, however, held that when “avulsive events such as storms or hurricanes” dramatically move the LOV landward, the boundaries of the easement do not move with it. In other words, the public easement may be lost to the advancing ocean.

H.B. 3459: Amends the Act to bring clarity and structure to LOV determinations that follow the obliteration of the LOV by a meteorological event. Specifically, the bill gives the commissioner of the General Land Office the express authority to suspend LOV determinations for up to three years, which will allow time for the vegetation to recover and will provide for a more accurate assessment of a meteorological event’s impact on the LOV and public easement.

What you should do:

This bill does not affect lands that do not abut the Gulf of Mexico. Additionally, exclusion 4 e of Texas title insurance policies excludes this matter from coverage.

Signed by the governor June 16, 2013.

SB 1487: Abandonment of County Road serving a cemetery

Sec. 251.057. ABANDONMENT OF COUNTY ROAD. (a)  A county road is abandoned when its use has become so infrequent that one or more adjoining property owners have enclosed the road with a fence continuously for at least 20 years. The abandoned road may be reestablished as a public road only in the manner provided for establishing a new road.

The bill amends Subsection (b), Section 251.057, Transportation Code, to read as follows:

(b) This section does not apply to:

a road to a cemetery, unless a property owner whose property adjoins the road enclosed with a fence under Subsection  (a) files notice with the county clerk of the county in which the road is located that the owner agrees to provide reasonable access to the cemetery in accordance with Section 711.041, Health and Safety Code.

What you should do:

If your title examination or survey discovers that part of the property to be insured includes a public road that has been under fence for more than 20 years, exception should be taken to the cemetery and rights of the public to obtain access to the cemetery. Do not insure title to the formerly public road without underwriter approval.

Signed by the governor June 16, 2013.

POWERS OF ATTORNEY

HB 2918: Amends Section 752.051, Estates Code, as effective January 1, 2014.

This bill more closely conforms the Texas Power of Attorney Act to the uniform POA Act.

  • The power of attorney form itself has been amended to:

o    It provides notice to the maker of the continuing authority of the attorney in fact

o    It provides that the maker must initial:

§  Line N to grant all powers

§  The Specific line to grant only a specific power

§  Fail to initial or strike through the entire power to withhold it.

o    Allows the attorney in fact to make gifts, either outright or by the exercise of a power of appointment held by the maker

o    Specifies the duties of the attorney in fact.

Signed by the governor June 16, 2013.

What you should know:

This bill will greatly change the look of the statutory durable power of attorney. It is not the only form of power of attorney that can be used. We remain partial to the statutory form. Examiners and closers should be cautious that if Line N (all powers) or real estate matters are not initialed, then the power to deal with real estate is withheld. This is a major change in the law.

TITLE INSURANCE

HB 3106: Deals with Payments for title evidence in electric energy projects and with the ability of a title insurer to obtain reinsurance from a reinsurer that is not a title insurance company.

Sec. 2502.057. CERTAIN COMPENSATORY PAYMENTS RELATED TO   CERTAIN ELECTRIC ENERGY PROJECTS PERMITTED.

(a) This section applies with respect to a utility project that is:

(1) designed to produce, generate, transmit, distribute, sell, or furnish electric energy; and

(2) valued on completion at more than $25 million.

(b) A payment for furnishing title evidence for the issuance of a title insurance policy related to a project described by Subsection (a) may be:

(1) a flat fee or fee calculated on an hourly basis that:

(A) is payable on the date the title evidence is furnished; and

(B) does not exceed $25,000; or

(2) a portion of the title insurance premium:

(A) based on the percentage established by the  commissioner for payment by a title insurance company, title insurance agent, or direct operation for services performed by another title insurance company, title insurance agent, or direct operation; and

(B) payable on the date of the issuance of the policy for which the evidence is furnished.

(c) The payment must be:

(1) made by the proposed insured to the title insurance company, title insurance agent, or direct operation that furnishes the title evidence; and

(2) credited against the title insurance premium charged for the issuance of the title insurance policy for which the evidence is furnished.

(d) Nothing in this section may be construed to allow the payment of an amount in violation of the premium rates promulgated or the division of premium established by the commissioner.

(e) This section does not apply to a payment to a reinsurer for the assumption of reinsurance described by Subchapter G, Chapter 2551.

And

SECTION 2. Section 2551.305, Insurance Code, is amended by adding Subsection (e) to read as follows:

(e) Notwithstanding any other provision of this subchapter, a title insurance company may obtain reinsurance by a reinsurance treaty or other reinsurance agreement from an assuming insurer with a financial strength rating of B+ or better from the A. M. Best Company that meets the requirements of Subchapter C, Chapter 493, if the title insurance company has provided the department with an affidavit that:

(1) contains facts that demonstrate the title insurance company was unable after diligent effort to procure sufficient reinsurance from another title insurance company; and

(2) states the terms of the reinsurance treaty or other reinsurance agreement that the title insurance company will obtain.

What you should know:

Section one of the bill authorizes parties in certain utility projects to agree to a payment option. The company furnishing title evidence may be compensated by a flat fee or hourly fee payable on the date the evidence is furnished, but not to exceed $25,000. Another option is for the company to receive a portion of the title insurance premium, payable on the date the policy is issued. Providing payment options for title companies furnishing title evidence assures the availability of title insurance in rural areas and guarantees that the title agents involved in the transaction are adequately compensated.

Electrical energy projects can be of many types including nuclear, electric, solar, wind, geothermal, gas fired or other sources and can include transmissions lines and substations and cooling facilities.

Section two of the bill allows a title insurer to obtain reinsurance from an insurer other than a title insurance company by providing certain information to the Texas Insurance Department. This provision can greatly enhance the ability of the title insurance industry to insure the ever more expensive projects without straining the solvency of the industry.

Signed by the governor June 16, 2013.

HOMESTEAD

HB 3350: Section 373A.051 (a), Local Government Code.

From the bill analysis:

H.B. 3350 facilitates the ability of cities to use the housing preservation tools set forth in the State of Texas's Homestead Preservation District laws. The Homestead Preservation District laws were adopted by the Texas Legislature in 2005 to promote the ability of municipalities to increase homeownership, prevent the involuntary loss of homesteads by low- and moderate-income homeowners living in disadvantaged neighborhoods, and protect a municipality's interest in improving economic and social conditions within disadvantaged communities by enhancing the viability of home ownership among low- and moderate-income residents in areas experiencing economic pressures.

H.B. 3350 expands the areas in a municipality eligible for a homestead preservation district beyond areas adjoining a central business district. The geographic scope of areas eligible for a homestead district has become too narrow since the original passage of the legislation in 2005, in light of the rapid increase of housing prices in cities such as Austin and increased housing pressures on low-income families in many areas of the City. Specifically, HB 3350 eliminates the requirement that the district be adjacent to a central business district, expands the eligible size of the district from 25,000 residents to 75,000 residents, eliminates the 8,000 household limit, eliminates the requirement that owner-occupied households exceed 50 percent of the total households in the district, and eliminates a few other requirements that have limited the effectiveness of the State's Homestead Preservation District laws.

What you should do:

Be aware of Sec. 373A.054.Local Government Code ADDITIONAL METHODS OF INCREASING THE SUPPLY OF AFFORDABLE HOUSING. A municipality that designates a district under Section 373A.051 may provide tax-exempt bond financing, offer density bonuses, or provide other incentives to increase the supply of affordable housing and maintain the affordability of existing housing for low-income and moderate-income families.

You should require an attorney’s opinion from the city or county attorney as applicable that the proper steps to create a homestead district (and expand such district) are taken and that the city has the authority to provide whatever incentives that involve your transaction.

Signed by the governor June 16, 2013.

SJR 18: This constitutional amendment if approved by the votes would amend Art. 16 Section 50 a7 to allow a reverse mortgage to be used to purchase the property.

What you should know:

Both owners of the property being acquired must submit to counseling about the risks of a reverse mortgage and must receive a notice about such loans 12 days prior to closing. If passed the effective date would be 1-1-2014.

LEASES

SB 630: Amends Subchapter A, Chapter 92, and Property Code:

To require landlords to provide a tenant with a complete copy of the tenant's lease within three business days after it is signed by both parties. S.B. 630 also states that a landlord cannot retaliate against a tenant who establishes, attempts to establish, or participates in a tenant organization.

And to prohibit retaliatory lawsuits against tenants.

What you should know:

This bill should rarely impact title insurance transactions.

Signed by the governor June 16, 2013.

LIENS ON REAL PROPERTY ASSIGNMENT OF RENTS AND LEASES

SB 848: In 2011, the Texas Legislature passed the Assignment of Rents Act, S.B. 889, which clarified and made conforming changes to the law on perfecting a lien on proceeds from property. However, the Assignment of Rents Act requires clarification regarding the law's applicability to mineral interests and other technical changes conforming the law to the Property Code. S.B. 848 clarifies that the Assignment of Rents Act does not apply to mineral interests in real property. S.B. 848 also makes a number of technical corrections to the existing law so that it is uniform and consistent.

What you should know:

This Bill amends various sections of Chapter 64, Property Code.

What you should do:

If a loan transaction includes an assignment of rents and leases and you are asked to issue a T-27 Assignment of Rents and Leases Endorsement, the assignment should be reviewed to determine if it makes any reference to oil and gas interests or leases. If it does, exception should be taken on Schedule C of the Commitment and on Schedule B of the Policy as follows:

Notwithstanding anything to the contrary in the T-27 Assignment of Rents and Leases Endorsement to be issued in connection with this loan policy of title insurance, said endorsement does not provide coverage for any oil and gas leases or other interests contained in Assignment of Rents and Leases dated _______ and recorded _______________.

Signed by the governor June 16, 2013.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
TX2013006 LEGISLATIVE UPDATES - 2013 Texas Legislative Analysis (Part 1)
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None