The Dummy’s Half Hour !
“Tough Legal Questions” or “How would YOU Answer These Easy Inquiries?”
TECHNOLOGY AND THE LAW
Can a valid, enforceable Real Estate Contract be entered via e-mail? Answer: Yes, by complying with UETA, effective 1/1/02. (Chapter 43 of the Texas Business and Commerce Code.)
REAL ESTATE LICENSE QUESTION
Must a trustee, acting under a deed of trust, have to be licensed under the Texas Real Estate Licensing Act? (Section 1101.002, Texas Occupations Code) If so, is the trustee exempt from the Licensing Act? (Section 1101.005) Best answers? Yes and No.
Licensing Requirement Section 1101.002
A person, who for valuable consideration, or with the expectation thereof, Sells or offers to sell real estate or Auctions or agrees to auction real estate.
Exemptions under Real Estate Licensing Act (Employee Status)
Query: For whom does the trustee work… the mortgagor or the mortgagee? An owner or his employees in renting or leasing the owner’s real estate, A salesperson employed by a property owner in the sale of structures and land provided the structures are erected by owner in the due course of business. Query: But. who is the owner?
Exemptions Continued…
Attorneys (clearly an exception), Those acting under a Power of Attorney, Those acting (1)under a court order, (2)under the authority of a will, or (3) a written trust instrument. The answer may lie with an examination of the fiduciary duty.
Fiduciary Duties
Does the attorney-in-fact acting under a power of attorney owe the owner (grantor of power) a fiduciary duty when selling real property? Does the trustee, acting under a conventional trust instrument, owe the beneficiaries a fiduciary duty in same situation? Does the trustee, acting under D/T owe either the mortgagee or mortgagor a fiduciary duty?
Rent and Security Deposits
Question: Under any circumstances, can the landlord take, withhold or deduct all or a part of the rent from the tenant’s security deposit? (Question applies to both residential and commercial leases.)
Definitions
Sections 92.102 and 93.004 of Property Code: “A security deposit is any advance of money, other than an advance payment of rent, intended to secure performance under the lease.”
Usage of Security Deposit
Sections 92.104 and 93.006: “The LL may deduct damages and charges resulting from a breach of the lease.” Cannot deduct for normal wear and tear. Dummy: The “charges” for breaching the lease is the unpaid rent!
There’s More (Implied Right to Deduct)
If landlord makes a deduction from the security deposit, the LL must give a itemized list of the deductions to the tenant, together with the balance of the deposit, if no rent is owed when the tenant surrenders possession. Query: So, how does the tenant know if there was a rent deduction until he or she pays the full amount of the rent? Then, obviously, no rent deduction should appear.
There’s Even More
Section 92.108: A tenant may not withhold payment of last month’s rent on grounds that the security deposit covers the unpaid rent. If the tenant does so, tenant liable for three times the amount of rent wrongfully withheld. (Query: Is this a two-way street?)
And What about This?
Section 94.104 (Mfg. Home Tenancies) contains the following language. “A landlord who receives a security deposit or rent prepayment for a manufactured home lot…” Does this language indicate the two are alike or different?
The following is a Five-Part Question
Please withhold the obvious answer until the last question appears!
(1) Disclosure Question
If you are the seller of real estate and you engage the services of a real estate licensee, must you disclose to the potential buyer that you have a real estate license?
(2) Disclosure Question
If you are the seller of real estate and you do not engaged the services of a real estate licensee, (FSBO), must you disclose to the potential buyer that you have a real estate license?
(3) Disclosure Question
If you are the purchaser of real estate and you engage the services of a real estate licensee, must you disclose to the potential seller that you have a real estate license?
(4) Disclosure Question
If you are the purchaser of real estate and you do not engage the services of a real estate licensee, must you disclose to the potential seller that you have a real estate license?
(5) Disclosure Question
Do the same rules apply to licensees who rent property either as a tenant or a landlord? Would the rule apply to co-signers of lease agreements for a student in college?
Title 22, Part 23, Chapter 535.144 of the Texas Admin. Code
A licensee, when engaging in a real estate transaction on his or her behalf, is obligated to inform any person with whom the licensee deals that he or she is a licensed real estate agent acting on his or her own behalf in the sale or rental of property.
When and How must the Disclosure be made?
The disclosure must appear in the contract or rental agreement, or in a disclosure by any other writing given prior to entering the contract of sale or the rental agreement. A licensee shall not use the licensee’s expertise to the disadvantage of the person with whom he or she deals.
Estimating Property Taxes
New House. Closing in September. No previous assessments on property with house. “The property taxes shall be prorated based on an estimate or the actual taxes from the previous year on the property.” There ain’t no previous assessment and no estimates available. Must buyer pay all the taxes?
Query
When does a real estate sales contract become valid and enforceable? The day it is signed by seller? The day the signed contract is delivered to the buyer? The day contract is escrowed? The day the buyer knows the seller signed the contract?
THAT’S ALL FOLKS!
Let the next Dummy Talk.
Condemnation Hubanek v. San Jacinto Gas Tx S. Ct. 7/2/04
This case greatly affects the way property and property rights will be valued in future condemnation cases.
Legal Restraints
Public Purpose (Public Benefit) Public Necessity (Amt. Taken) Just Compensation (Now in Doubt) (Does it mean how much will be paid or how much the owner will receive?) Due Process --Outlined in Chapter 21 of the Texas Property Code– (Definitely has changed.)
Due Process (Three Stages)
Bona Fide Attempt to Purchase (Negotiate in Good Faith based on Fair Market Value). Special Commissioners Hearing after Parties “Unable to Agree” in Stage 1. Judicial Appeal all the way to Texas Supreme Court.
Facts in Case
Inadequate offer tendered to landowner not based on FMV. Offered to purchase more property and/or property rights than could be condemned. Landowners do not show up at Special Commissioners Hearing.
Issues on Appeal
Does the BFA to Purchase require the offer to be based on Fair Market Value? (Negotiations in good faith) If the BFA Rule is violated, does it deprive the court of jurisdiction and require dismissal of the lawsuit?
Answers
“The dollar amount of the condemnor’s offer should not be scrutinized nor compared with other indications of value. A single offer by the condemnor satisfies the requirement regardless of the amount.” The answer to the question is NO…WHY?
Judicial Economy
“It is not necessary to have two trials to reach the ultimate and only determination contemplated by the statute, which is the determination of the value of the property condemned.” However, this approach devaluates property and property rights in condemnation. Phase 1 is now history. There is no more negotiations for the purchase.
Jurisdictional Question
“Negotiating in Good Faith is no longer required to confer jurisdiction on the court.” “The modern direction of policy is to reduce the vulnerability of final judgments to attack on ground that the tribunal lacked subject matter jurisdiction.” If the court messes up, the landowner loses.
New Remedy in Lieu of Dismissal
“Dismissal of the lawsuit, as the courts have done in the past, does not achieve the purpose of settling the issue by negotiations.”??? The goal may be accomplished by abating (suspending the proceedings) until the requirement is satisfied.
Continued
“If, at the end of a reasonable period of time, the condemnor has not made an offer (any offer for any amount), the condemnation proceedings should be dismissed.” How dumb can a condemnor be not to make an offer?
Issue
Does the offer to purchase have to match the property and property rights that can subsequently be taken by condemnation? Answer: NO The parties must negotiate for the same physical property and the same general use.
Before 7/2/04
First Stage: The Offer to Purchase had to be based on fair market value. Failure to Negotiate in Good Faith required dismissal of the lawsuit and start all over. (Big Punishment) Offer to purchase had to reflect the property and property rights to be condemned.
Before and After 7/2/04
Condemnor may take possession of tract and start construction at the conclusion of Stage 2. Any expenses the landowner outlays in contesting the case are nonrecoverable. Appraiser needed in Stage 2. Appraiser and Attorney needed in Stage 3.
BOTTOM LINE
What did decision do to property values? Because the costs of contesting a inadequate offer are not recoverable, economically speaking, the condemnor need offer only the fair market value less the anticipated costs of contesting offer. No incentive exists to make an offer based on FMV!!
Voice of an Expert
“It makes no economic sense to appeal to the courts (enter State 3) unless the amount in controversy exceeds $50,000. Most pipeline cases are less than $5,000.” Property rights just got devaluated!!
Disclosure Question
Must a licensee disclose “things” the licensee “Should Have Known” under the DTPA? Must a licensee disclose “things” the licensee “Should Have Known” about the property under the common law?
Apparent Answer
If a fiduciary or confidential relationship exists between two parties where one party is accustomed to being guided by the judgment or advice of the other or is justified in placing confidence in the other, then the duty placed on the fiduciary may rise to disclosing things that should have been known.
RIGHTS OF SURFACE OWNER
What are the rights of surface owner who owns no minerals? What are the rights of a surface owner who own no water rights?
COTENANTS AND ADVERSE POSSESSION
One cotenant cannot adversely possess another without first “repudiating the other’s title.” How do you repudiate another cotenant’s title by conveyance? Is “Ouster” the same as “Repudiation?”
“OUSTER” Sadler v. Duvall, 815 SW2d 285
“Ouster” is wrongful disposition or exclusion of a party from real estate. It is notorious and unequivocal act by which one cotenant deprives another of right to common and equal possession and enjoyment of property.
“Ouster by Conveyance”
“When a party (purchaser) procures title from a contenant that conveys the entire tract upon which the contenancy exists, such a conveyance constitutes ouster and amounts to disseizin of nonparticipating contenant’s interest.”
EXCEPTION TO SADLER
Rau v. Christy, 383 SWd 957, held that such a conveyance is not an ouster when the purchaser originally entered as a tenant on the land. Walker v. Walker, 602 SWd 582, held the execution and recordation of an oil and gas lease with a warrant of title constitued constructive notice of repudiation.
ACCRETION, RELICTION AND EROSION
Boundary lines marked by streams follow the stream if accretion, reliction and erosion cause the change in the water course. Does the same rule apply to boundaries along man-made lakes when the wind action, not the water movement, causes accretion?
BUILDER WARRANTIES
Can the builder’s warranties for new home construction be waived if the builder is a family friend? Not under the RCLA effective 9/1/03. Neither the “limited statutory warranties and building and performance standards” nor the “warranty of habitability” may be waived. These to be created by the Texas Residential Construction Com.
EVICTING TENANTS
Chapter 24 of the TX Property Code contains the procedure for evicting residential, commercial and manufactured-home-community tenants. But what is the procedure for evicting (removing) the tenant’s manufactured home?
Purchasing Mineral Interests at Tax Sale
Mineral interests are not taxed until production begins. Once production begins, minerals are taxed according to respective revenue interests in well or unit. If you purchase a delinquent working interest, what happens when the well quits producing?
Tax Sales and Mineral Interests Cont.
If you purchase a delinquent mineral owner’s interest, what happens when the well quits producing and the lease terminates, ie, the leasehold reverts to the mineral owner? Do you (the purchaser at the tax sale) receive all the minerals in the tract or just in the well unit? Do you receive ALL the mineral interests or just the amount equal to the royalty?
“ENTREPRENEURIAL PROFIT”
What is it? How can it reduce recovery under a title insurance policy?