Articles Posted in Real Estate Law

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It is not uncommon in Texas for a landowner, for example, someone who has inherited property, to find that the property is landlocked and without access to a public road. Sometimes access to the landlocked property is offered by a friendly neighbor. However, in the absence of an adjoining property owner who will allow or sell an easement from the landlocked property to a public road, the owner of the landlocked property is forced to go to court to obtain what is called an “easement of necessity”. The Texas Fifth Circuit Court of Appeals recently discussed the criteria for an easement of necessity in the case of The Staley Family Partnership, Ltd. v. David Stiles, et al.


The Staley Family Partnership owns a 10 acre tract of land (“the Staley Tract”) bordered by Honey Creek or its tributaries on the west, south and east located in Collin County, Texas. The Staley Tract was initially part of larger tract (the “Helms Tract”) conveyed to Thompson Helms by the State of Texas in 1853. In 1855, a portion of the Helms Tract was transferred to Robert Skaggs and the remaining 404 acres of the Helms Tract was divided by the probate court in 1866. The probate court awarded Axia Helms a 152 acre tract, James Helms a 142 acre tract and Frances Helms a 110 acre tract (the “Frances Tract”).

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In a case that many Texas landowners have been following closely through the courts, the Texas Supreme Court recently published a decision concerning whether a county can be held liable for an impermissible taking of property when the county allows for land development that the county knows will cause substantial flooding to nearby properties and fails to take steps to mitigate or control that flooding.

The Texas Supreme Court Opinion

Harris County Flood District and Harris County v. Kerr et al.   involved nearly four hundred homes in the upper White Oak Bayou watershed in Harris County, Texas that were flooded when severe storms passed through the area. The homeowners sued the county and the Harris County Flood Control District based on an inverse condemnation claim. The homeowners asserted that the county and the district did not take steps to control flooding as new developments were created in the White Oak Bayou. A flood control plan was actually developed in the 1980’s, but was never fully implemented by the county, and this plan acknowledged that the unmitigated development of the land in the Bayou would produce serious flooding problems in the area. As a result of a boom in development in the White Oak Bayou, and because of the the county’s failure to adequately control flooding, many homes were flooded. The Plaintiff homeowners claimed that the flooding was a unconstitutional taking of their property that is prohibited by Article I, Section 17 of the Texas Constitution. The evidence showed that the county never intended to cause flood damage to the homeowner’s properties, but that the county knoew that flooding could result.

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The Texas Supreme Court recently decided an important eminent domain case in In Re Lazy W District No. 1, Relator. Specifically, the Court decided that the trial court must consider whether the court has jurisdiction over a proceeding as quickly as possible in a case, and need not wait on the outcome of a special commissioners proceeding before hearing the jurisdictional issues.

The Mechanics of Eminent Domain

When a government entity such as a city, municipality or water district is interested in exercising its power of eminent domain over a parcel of land, the Texas eminent domain statutes require they follow several steps:

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Most Texas landlords realize that when they rent to a tenant with a criminal history, the landlord may be held liable for criminal acts committed by that tenant. Texas Property Code Section 92.025 provides that a tenant cannot sue a landlord solely for leasing to a tenant convicted of, arrested for or placed on deferred adjudication for an offense. However, this law goes on to say that it does not preclude a suit for negligence against the landlord if: 1) the landlord leases to a tenant who has been convicted of murder, capital murder, indecency with a child, aggravated sexual assault and certain other listed offenses; and 2) the landlord knew or should have known of the conviction.

That’s pretty clear. However, now the federal government steps in. Even though a criminal record is not a protected status (like race, gender, religion, etc.) under the U.S. Department of Housing and Urban Development’s (HUD) Fair Housing Act, that has not prevented the Office of General Counsel for HUD from issuing “Guidance” on the application of the Fair Housing Act to prospective tenants with criminal records. The Guidance (what a misnomer) indicates that a landlord who conducts a background check of a prospective tenant and refuses to lease to that tenant on the basis of the prospective tenant’s criminal record may leave that landlord open to complaints of discrimination by prospective tenants with criminal records. Remember, HUD can institute enforcement proceedings on these complaints as well.

HUD’s position is a catch-22 for Texas landlords. On the one hand, if the landlord refuses to rent based on a prospective tenant’s criminal record, the landlord is open to complaints and possible enforcement proceedings by HUD. On the other hand, if the landlord rents to a tenant with a criminal record, the landlord can be liable to other tenants for the actions of the tenant with the criminal history. HUD recommends that landlords evaluate prospective tenants, including any criminal records, on a case-by-case basis. Now, what was a simple leasing decision, becomes a legal issue that should probably be reviewed by the landlord’s attorney. This increases the landlord’s costs, which will probably result in higher rents. Higher rents will push some of the poorest renters out of the price range for certain apartments.

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There has been a new development in Texas law regarding notary seals and this development affects any document in Texas that has to be notarized. This includes deeds, wills, trusts, oil and gas leases and many other kinds of documents. In fact, any document that must be filed in the deed records is required to be notarized.

Earlier this year, Texas House Bill 1683 went into effect and required the Texas Secretary of State to assign a notary identification number for all notaries and required notaries’ seals to include that number. Unfortunately, the statute was unclear on whether the law only applied to notaries who were commissioned or recommissioned after January 1, 2016 or to all notaries. The Secretary of State took the position that the law only applied to notaries who were commissioned or recommissioned on or after January 1, 2016, and that existing notaries did not have to get new seals under the new rules but would have to obtain a new seal that is compliance with the new rules once their current commission expires. This meant that under the law some notaries would have seals that include their notary identification number while others would not until their commission expired and they request renewal of their commission.

There is case law in Texas that suggests that a notary seal that is not in compliance with the notary seal rules is not a valid seal, and that an invalid seal when contested or challenged is considered to be no seal at all. This could raise serious legal issues concerning wills, trusts, oil and gas leases and any real estate document where the notary used a seal without their identification number on it.

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Occasionally, a Texas landowner will own a piece of property that lacks access, or sufficient access, to a public road. Usually, the first thing the landowner should do is to negotiate with an adjoining landowner to see if the adjoining landowner will agree to an easement of some kind. However, on some occasions, the landowner finds themselves at the mercy of difficult or recalcitrant adjoining landowners or is simply unable to reach an agreement with adjoining landowners and is unable to obtain any kind of access easement. In that situation, one of the only options is to file suit and request that a court declare an “easement by necessity”.

In the case of the Staley Family Partnership Ltd. v. Stiles, the Texas Supreme Court reiterated an important requirement for this kind of easement.

This case involved three tracts of land that were originally part of a single land grant in Collin County, Texas from the State of Texas to Thompson Helms in 1853. In 1866, the land was separated into three portions by a Texas probate court:

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The National Society of Professional Surveyors (NSPS) and the American Land Title Association (ALTA) recently issued new minimum standards for surveys that you can access here. The NSPS and ALTA each officially adopted these new standards in 2015, and they become effective on February 23, 2016.

Some notable changes include:

● The American Congress on Surveying and Mapping (ACSM) is now to be known as the National Society of Professional Surveyors.

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The Foreign Investment in Real Property Tax Act was amended recently, with changes going into effect on February 17, 2016. Previously, when a foreign person or entity sold real property in the United States, the buyer was required to withhold 10% of the gross sales price. Beginning February 17, 2016, the amount required to be withheld increases to 15%. Under 26 CFR 1.1461 and 26 CFR 1.1445-6, if a buyer is required to withhold the tax from the seller and fails to do so, the buyer becomes responsible for the tax and any interest that accrues between the time the tax was due and when the buyer actually pays the tax. However, if the buyer obtains a withholding certificate from the Internal Revenue Service (IRS) that eliminates the withholding requirement and the seller fails to pay the tax, the buyer is not responsible for the tax. Either the buyer or the seller can apply for a withholding certificate.

Under the new requirements (that can be accessed here):

● If the sales price of the real property is less than $300,000 and the buyer intends to use the property as a residence, then no withholding is required.

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Earlier this week, the Texas Senate State Affairs Committee approved the draft of a new statute entitled the Texas Real Property Transfer on Death Act (Senate Bill 462). You can review a draft of the bill here. This bill would create a procedure for a non-testamentary transfer of real property. In this case, non-testamentary means that it passes outside of someone’s will and avoids the entire probate process.

We don’t yet know if the bill will end up as a statute. If it does, it will go into effect on September 1, 2015. The potential statute contains a number of traps for the unwary. For example, the specialized deed authorized by the bill applies only to a person who owns real property as a joint tenant with right of survivorship. As currently written, the bill does not apply to an owner who is a tenant in common or an owner of community property with or without a right of survivorship. As currently written, Section 114.055 of the bill has some very specific requirements that must be complied with if this specialized deed is to be effective. It will also be important to be aware of the conditions that will revoke the deed, described in Section 114.057 of the bill. Interestingly, a contrary provision in a will does not revoke or supersede a transfer on death deed.

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The United States Supreme Court recently issued an opinion that effects many Texas property and mineral owners. Specifically, the Court decided the case of Marvin M. Brandt Revocable Trust v. United States in an 8 to 1 decision. The Court determined that certain rights-of-way for railroads revert to private property owners following the railroad’s abandonment of the right-of-way easement. The ownership of the easement may carry with it ownership of the mineral estate. Where it does, and when the easement covers many acres, the mineral interests could be very valuable.

This case is significant for Texans because there are many railroads and railroad rights-of-way throughout Texas. The decision, written by Chief Justice John Roberts, addressed this central question: what happens to the ownership of the right-of-way easement when a railroad abandons its right-of way. In this case, the right-of-way was granted to the railroad under the General Railroad Right-of-Way Act of 1875. This Act gives railroads the right-of-way through public lands in the United States. The land at issue in this case was a ten-mile strip in Wyoming, upon which the right-of-way was created in 1908. Subsequently, in 1976, the federal government conveyed the land to Marvin and Lulu Brandt. The railroad later abandoned the right-of-way, and by 2004 all the track had been removed. In 2006, the U.S. government requested a judicial declaration of their title. The Brandts’ deed (which was a land patent) didn’t specify what would happen if the railroad gave up the right-of-way. Mr. Brandt argued that the right-of-way had been an easement, and that once it was abandoned, it was terminated and the easement area belonged to him. The U.S. government argued that after abandonment, title to the right-of-way land reverts back to the government. The U.S. District Court awarded title to the U.S. government and the Tenth Circuit Court of Appeals affirmed.

train-tracks-1336056-m.jpg Chief Justice Roberts reversed the lower courts’ rulings. The Supreme Court’s majority opinion found that the right-of-way was terminated at the time of the abandonment, and that the Brandts owned the property. The Court found that the language, legislative history, and subsequent administrative interpretation of the 1875 Act supported this decision. The Court cited Great Northern Railway Co. v. United States, decided in 1942, in support of its decision. In that case, also decided that under the 1875 Act, the U.S. government granted the railroad only an easement, not fee simple title in the easement property, and therefore, the easement disappeared once it was abandoned. The Court found that in the Brandts’ case that the railroad abandoned the easement in 2004 and the government did not have any interest in the land after. Title to the easement property reverted to the Brandt Revocable Trust as the current owners of the land.