HB4063 - Relating to the filing and release of record of a unilateral memorandum of contract concerning residential property.

      H.B. No. 4063         AN ACT   relating to the filing and release of record of a unilateral   memorandum of contract concerning residential property.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 12, Property Code, is amended by adding   Section 12.020 to read as follows:           Sec.   12.020.     FILING AND RELEASE OF UNILATERAL MEMORANDUM OF   CONTRACT CONCERNING RESIDENTIAL PROPERTY. (a)   In this section:                 (1)     "Residential property" means the real property and   existing improvements for a single-family house, duplex, triplex,   or quadruplex or a unit in a multiunit structure used for   residential purposes in which title to the individual units is   transferred to the owners under a condominium system.                 (2)     "Unilateral memorandum of contract" means a   written document that is signed only by a person who is not an owner   of the residential property and asserts that the person has entered   into a contract with an owner of residential property for the   purchase of an interest in the property, for an option to purchase   an interest in the property, for a right of first refusal or first   offer to purchase an interest in the property, or for a right to   match any offer to purchase an interest in the property.   The term   does not include a deed or a document granting a right of first   refusal pursuant to a condominium declaration.           (b)     A person who files for recording a unilateral memorandum   of contract concerning residential property shall:                 (1)     provide to the county clerk the person's mailing   address and a certificate of mailing that substantially complies   with Subsection (h) for recording with the unilateral memorandum of   contract; and                 (2)     not later than the date the person files the   memorandum with the county clerk, send a copy of the filed   memorandum and a letter notifying the owner of the property of the   filing of the memorandum by registered or certified mail, return   receipt requested, to:                       (A)  the address of the property; and                       (B)     any mailing address shown for the owner on   the filed memorandum, in the real property records for the   property, or in the records of the relevant appraisal district with   respect to the property.           (c)     An owner of residential property who receives a letter   described by Subsection (b) or otherwise has notice of a recorded   unilateral memorandum of contract concerning the property may file   for recording in the real property records of the county in which   the property is located:                 (1)     an affidavit that substantially complies with   Subsection (i); and                 (2)     a certificate of mailing that substantially   complies with Subsection (j).           (d)     An owner of residential property who files an affidavit   under Subsection (c) shall send a copy of the filed affidavit and a   letter notifying the person who filed the unilateral memorandum of   contract of the filing of the affidavit. The letter and the copy of   the affidavit must be sent by registered or certified mail, return   receipt requested, to:                 (1)     the address provided to the county clerk by the   person who filed the memorandum; and                 (2)     the address of any other person referenced in the   memorandum other than the property owner.           (e)     Subject to Subsection (f) and except as provided by   Subsection (g):                 (1)     an affidavit filed under Subsection (c) serves as   a release of record of a contract, option, or right asserted to   exist by the unilateral memorandum of contract referenced in the   affidavit; and                 (2)  after the affidavit is recorded:                       (A)     the memorandum and any information derived or   that could be derived from the memorandum does not:                             (i)     constitute constructive or actual   notice of any contract, option, or right concerning the residential   property that is asserted to exist by the memorandum;                             (ii)     create any duty of inquiry in a person   with respect to the residential property described in the   memorandum; or                             (iii)     affect the validity of a conveyance   to a purchaser for value or of a mortgage to a lender for value;                       (B)     a contract, option, or right asserted to   exist by the memorandum is not enforceable against a purchaser or   lender described by Paragraph (A)(iii), regardless of whether the   purchaser or lender knew of the memorandum; and                       (C)     an interest in the residential property may   be transferred or encumbered free of all interests asserted in the   memorandum.           (f)     If an owner of residential property has filed an   affidavit and certificate of mailing under Subsection (c) and a   contradicting affidavit is not filed under Subsection (g):                 (1)     a bona fide purchaser or a mortgagee for value or a   successor or assign of a bona fide purchaser or mortgagee for value   may rely conclusively on the affidavit filed by the owner under   Subsection (c) on and after the 45th day after the date the   certificate of mailing was recorded; and                 (2)     the sole remedy available in an action brought to   enforce a person's rights asserted under the unilateral memorandum   of contract referenced in the affidavit is money damages.           (g)     An affidavit filed under Subsection (c) does not serve   as a release of record of a contract, option, or right asserted to   exist by a unilateral memorandum of contract filed for recording   under this section with respect to a purchaser or mortgagee of the   residential property that acquires the purchaser's or mortgagee's   interest from the owner if, not later than the 45th day after the   date a certificate of mailing was recorded under Subsection (c),   the person who filed the memorandum files for recording in the real   property records of the county in which the residential property is   located a contradicting affidavit asserting that:                 (1)     the affidavit or certificate of mailing filed by   the owner under Subsection (c) is untrue; or                 (2)     another reason exists as to why the memorandum   serves as a valid notice of record of a contract for the purchase of   an interest in residential property, for an option to purchase an   interest in the property, for a right of first refusal or first   offer to purchase an interest in the property, or for a right to   match any offer to purchase an interest in the property.           (h)     A certificate of mailing filed under Subsection (b) must   be in substantially the following form:   CERTIFICATE OF MAILING OF NOTICE OF FILED UNILATERAL MEMORANDUM OF   CONTRACT           Before me, the undersigned authority, on this day personally   appeared __________ ("Affiant(s)") (insert name(s) of Affiant(s))   who, being first duly sworn, upon oath state(s):                 (1)     My name is/Our names are __________ (insert   name(s) of Affiant(s)).                 (2)     On the ____ day of __________, 20__, Affiant(s)   caused a Unilateral Memorandum of Contract asserting the existence   of a contract for the purchase of an interest in residential   property, for an option to purchase an interest in residential   property, for a right of first refusal or first offer to purchase an   interest in residential property, or for a right to match any offer   for the purchase of an interest in residential property   ("Property") to be recorded in __________ (refer to affidavit   recording information) ("Memorandum").                 (3)     On the ____ day of __________, 20__, Affiant(s)   sent a copy of the Memorandum and a letter notifying the owner of   the residential property referenced in the Memorandum ("Property")   of the filing of the Memorandum, by registered or certified mail,   return receipt requested, to:                       (A)  the address of the Property; and                       (B)     any mailing address shown for the owner of   the Property on the Memorandum, in the real property records for the   Property, or in the records of the relevant appraisal district with   respect to the Property.                 (4)  Attached to this certificate are:                       (A)     a true and correct copy of the letter   described by Subdivision (3) of this certificate; and                       (B)     proof of mailing of the letter as described   by Subdivision (3) of this certificate.           Signed on the _____ day of __________, 20_____.           ____________________           ____________________           (Signature of Affiant(s))           State of __________           County of __________   SWORN TO AND SUBSCRIBED before me on the _________ day of   __________, 20___.   My commission expires:   ______________________   ______________________________   Notary Public, State of Texas   Notary's printed name:   _____________________________           (i)     An affidavit filed under Subsection (c) must be in   substantially the following form:   AFFIDAVIT FOR RELEASE OF UNILATERAL MEMORANDUM OF CONTRACT           Before me, the undersigned authority, on this day personally   appeared __________ ("Affiant(s)") (insert name(s) of Affiant(s))   who, being first duly sworn, upon oath state(s):                 (1)     My name is/Our names are __________ (insert   name(s) of Affiant(s)). I/We own the following described   residential property ("Property"):   (describe the residential property)                 (2)     This affidavit is made for the purpose of   effecting a release of a contract for the purchase of an interest in   the Property, an option to purchase an interest in the Property, a   right of first refusal or first offer to purchase an interest in the   Property, or a right to match any offer to purchase an interest in   the Property under a contract asserted to exist by that unilateral   memorandum of contract recorded in __________ (refer to recording   information of unilateral memorandum of contract) ("Unilateral   Memorandum of Contract").             &#xA0 [Text truncated for display. Full text available on Congress.gov.]