Bill Text: TX HB1833 | 2019-2020 | 86th Legislature | Enrolled

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Bill Title: Relating to the authority to transfer real property in the name of an entity.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2019-06-14 - Effective on 9/1/19 [HB1833 Detail]

Download: Texas-2019-HB1833-Enrolled.html

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H.B. No. 1833

AN ACT
relating to the authority to transfer real property in the name of
an entity.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 12, Property Code, is amended by adding
Section 12.019 to read as follows:
Sec. 12.019. AFFIDAVIT OF AUTHORITY TO TRANSFER. (a) In
this section:
(1) "Domestic entity," "foreign entity,"
"jurisdiction of formation," and "nonprofit entity" have the
meanings assigned by Section 1.002, Business Organizations Code.
(2) "Transfer" means a transaction to sell, exchange,
convey with or without covenants, quitclaim, release, surrender,
mortgage, encumber, partition or consent to partitioning,
subdivide, apply for zoning, rezoning, or other governmental
permits, plat or consent to platting, develop, grant options
concerning, lease or sublet, or otherwise dispose of an estate or
interest in real property or a right incident to real property.
(b) This section does not apply to:
(1) a domestic nonprofit entity or a foreign entity
that is:
(A) exempt from federal taxation under Section
501(a), Internal Revenue Code of 1986, by being listed as an exempt
entity under Section 501(c)(3) of that code; or
(B) described by Section 170(c)(1) or (2),
Internal Revenue Code of 1986; or
(2) a transaction involving the transfer of an estate
or interest in real property in an amount that exceeds $1 million.
(c) A domestic entity or foreign entity may execute and
record an affidavit identifying one or more individuals with
authority to transfer on behalf of the entity an estate or interest
in real property in the name of the entity if the entity is:
(1) a limited liability company, a limited
partnership, or a professional entity as defined by Section
301.003, Business Organizations Code; and
(2) active or in good standing under the laws of the
entity's jurisdiction of formation.
(d) An estate or interest in real property in the name of a
domestic entity or foreign entity may be transferred on behalf of
the entity by one or more individuals identified as authorized to do
so in an affidavit described by Subsection (c).
(e) Subject to Subsection (f), an affidavit described by
Subsection (c) must:
(1) be executed under penalty of perjury by an
individual who swears that the individual:
(A) is at least 18 years of age;
(B) is authorized to execute and deliver the
affidavit on behalf of the entity;
(C) is fully competent to execute the affidavit;
and
(D) understands that:
(i) third parties will rely on the
truthfulness of the statements made in the affidavit; and
(ii) the affidavit is made under penalty of
perjury; and
(2) state:
(A) the name of the domestic entity or foreign
entity that holds title to the real property and that the entity is
active or in good standing under the laws of the entity's
jurisdiction of formation;
(B) the address, including street address, of the
domestic entity's or foreign entity's principal place of business
in this state or, if the entity does not have a principal place of
business in this state, the address of the entity's principal place
of business in the state or country that is the entity's
jurisdiction of formation;
(C) the legal description of the real property an
estate or interest in which is to be transferred and specify the
nature of the transfer authorized; and
(D) the name and title of one or more individuals
authorized to transfer on the entity's behalf an estate or interest
in the real property described in the affidavit.
(f) An individual is authorized to execute an affidavit
described by Subsection (c) on behalf of a domestic entity that
files a franchise tax public information report under Section
171.203, Tax Code, if, on the date the affidavit is executed, the
individual:
(1) in the case of a limited liability company, is a
manager or member of the limited liability company;
(2) in the case of a limited partnership, is a general
partner of the limited partnership; or
(3) in the case of a professional entity, is a director
or officer of the applicable professional entity.
(g) Except as provided by Subsection (h), the individual
executing an affidavit described by Subsection (c) may not be the
individual identified in the affidavit as authorized to transfer an
estate or interest in the real property described in the affidavit.
(h) The individual executing the affidavit described by
Subsection (c) may be the individual identified in the affidavit as
authorized to transfer an estate or interest in the real property
described in the affidavit if:
(1) the entity is a limited liability company and the
affidavit includes a representation by the affiant that the affiant
is the sole member and manager of the limited liability company;
(2) the entity is a limited partnership and the
affidavit includes a representation by the affiant that the affiant
is the sole general partner of the limited partnership;
(3) the entity is a professional entity and the
affidavit includes a representation by the affiant that the affiant
is the sole director and officer of the applicable professional
entity; or
(4) the most recent franchise tax public information
report of the entity under Section 171.203, Tax Code, available on
the date the affidavit is executed identifies only the affiant and
no other person as an officer, director, member, manager, or
general partner of the entity.
(i) The affidavit must be recorded with the county clerk in
the county in which the real property is located. The county clerk
may collect a fee for recording an affidavit under this section in
the amount authorized for recording a transfer of real property.
(j) A person who in good faith acts in reliance on an
affidavit that complies with this section and that contains
transfer authority that has not been terminated under Subsection
(n) or has not expired under Subsection (o) is not liable to any
person for that act and may assume without inquiry the existence of
the facts contained in the affidavit if the person does not have
actual knowledge that any material representations contained in the
affidavit are incorrect.
(k) A person who in good faith enters into a transaction
involving the transfer of an estate or interest in real property
described in an affidavit that is described by Subsection (c) and
who relies on the affidavit, without actual knowledge that any
material representations contained in the affidavit are incorrect,
may enforce the transaction against the entity and the real
property described in the affidavit as if the representations
contained in the affidavit are correct if:
(1) the affidavit complies with this section; and
(2) the transfer authority specified in the affidavit
has not been terminated under Subsection (n) or has not expired
under Subsection (o).
(l) With respect to an affidavit described by Subsection
(c), this section does not limit the rights of an owner of an
interest in the entity against the affiant, the entity, or any
individual identified in the affidavit with authority to transfer
on behalf of the entity an estate or interest in real property in
the name of the entity.
(m) Nothing in this section:
(1) requires an individual to rely on an affidavit
described by Subsection (c);
(2) requires an entity to deliver an affidavit that
complies with this section in order for a transfer of an estate or
interest in real property on behalf of the entity to take effect;
(3) prohibits an entity from authorizing an individual
to transfer an estate or interest in real property on behalf of the
entity by a means other than an affidavit described by Subsection
(c); or
(4) shall be construed to validate a transfer of an
estate or interest in real property that is void by other law.
(n) An entity that executes and records an affidavit
described by Subsection (c) may terminate the transfer authority
specified in the affidavit at any time by recording a written
termination of the authority specified in the affidavit with the
county clerk in the county in which the real property is located.
The written termination must be in the form of an affidavit that:
(1) satisfies the requirements of Subsection (e) other
than Subsection (e)(2)(D);
(2) provides the recording information for the
affidavit that specifies the transfer authority being terminated;
and
(3) states that the authority to transfer an estate or
interest in real property as contained in the previously recorded
affidavit is terminated.
(o) The transfer authority contained in an affidavit that
complies with this section and that has not been terminated as
provided by Subsection (n) expires on the first anniversary of the
date on which the affidavit was recorded under Subsection (i).
(p) The transfer authority or the termination of the
transfer authority specified in an affidavit that is recorded under
Subsection (i) or (n) is effective on the date the county clerk
indexes the affidavit.
SECTION 2. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1833 was passed by the House on May 3,
2019, by the following vote: Yeas 141, Nays 0, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1833 on May 24, 2019, by the following vote: Yeas 140, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1833 was passed by the Senate, with
amendments, on May 22, 2019, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor