Foreclosure Buyers and Real Estate Flippers - You Need to Watch 99 Homes!

This movie is overly-dramatic, but a fair depiction of the potential for a dirty underbelly of the home-flipping industry. Good acting and definitely worth a watch!

Trey Wilson San Antonio Texas Real Estate Attorney, Trey Wilson Real Estate Lawyer in San Antonio wrote:

Are You a Landlord or Property Manager in Need of a Real Estate Lawyer in San Antonio, Texas?

Trey Wilson San Antonio Texas Real Estate Attorney, Trey Wilson Real Estate Lawyer in San Antonio wrote:

Check out my new video short for Landlord-Tenant law. Call me if you are a Landlord who needs legal assistance the San Antonio, Texas area.

Have You Been the Victim of Real Estate Fraud?

San Antonio Real Estate Lawyer Trey Wilson wrote:  Check out my new video short on real estate fraud. I prosecute and defend lawsuits alleging fraud in a real estate transaction, fraudulent concealment and fraud by non-disclosure.

New Form for Seller's Disclosures Required as of 1/1/2016

Trey Wilson San Antonio Texas Real Estate Attorney, Trey Wilson Real Estate Lawyer in San Antonio wrote:  

I frequently write and speak about the importance of the proper and accurate completion of Seller's Disclosure Notices.  Such notices are required by Section 5.008 of the Texas Property Code, which requires that the Disclosures be:

• signed by the Seller;
• delivered to a Buyer at or prior to the time that a purchase contract is entered; and 
• accurate as of the date that they are signed.  

Texas courts have held that a Seller has an ongoing obligation to supplement or update the representations contained in the Seller's Disclosure Notice if facts change materially.  

If s Seller affirmatively misrepresents, or fraudulently conceals (fails to disclose a known property condition when a duty to disclose exists), that Seller can be liable for real estate fraud and possibly a violation of the Texas Deceptive Trade Practices Act.  The Texas Real Estate License Act even provides that a real estate salesperson and her broker can even be held liable if they are aware of a Seller's misrepresentation of a property's condition.

To assist Sellers in complying with the legal obligation to disclose a property's condition as required by Section 5.008, the Texas Real Estate Commission has promulgated a standardized form that is used in most real estate transactions. This form -- TREC form No. OP-H -- was revised in August 2015.  Here is a link to the newly revised form.

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property.  These forms are drafted and recommended for adoption by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and one public member appointed by the governor.

Beginning January 1, 2016, all real estate transactions involving TREC licensed brokers will require use of the newly revised Seller's Disclosure Form.

Contracts for Deed & Executory Contracts -- New Texas Law Gives Real Teeth to Recording Requirement - HB 311

Trey Wilson San Antonio Texas Real Estate Attorney, Trey Wilson Real Estate Lawyer in San Antonio wrote:

Over the course of several years and multiple legislative sessions, Texas lawmakers have tinkered with Chapter 5, Subchapter D of the Texas Property Code related to "executory contracts" a/k/a "contracts for deed." In prior posts on this blog, I have outlined some of the issues, problems and requirements related to this category of transactions for selling real estate to buyers who cannot obtain conventional financing (mortgage loans). I have also pontificated on my experiences with these instruments, as a lawyer who routinely handles real estate transactions and real estate litigation. It's no secret that I have very mixed emotions about the need for and potential for abuse of Contracts for Deed.

Obviously, the Texas Legislature feels the same way, as they, again, "beefed-up" the requirements, and told us how serious they are about the requirement that contracts-for-deed be required. Enter HB 311...

This new law, which becomes effective on September 1, 2015, amends numerous statutes contained in Chapter 5 of the Property Code. According to the legislation's author/sponsor, the intent of the new law is pretty clear. He introduced the law as follows:

Executory contracts for the sale of residential property (sometimes referred to as “contracts for deed”) have long been disfavored because they encumber title without transferring title, cannot be sold in the real estate market, cannot be used to borrow money to make improvements, and are potentially abusive transactions under which legal title to homestead property may be withheld until many years after the buyer has built a home and made other expensive improvements. While the Texas Legislature has made changes to discourage the use of these instruments, serious problems persist from their use. Parties also contend that there remain significant misunderstandings among sellers, buyers, and even judges and attorneys about the nature of executory contracts and about the rights and obligations of the various parties to such instruments. H.B. 311 continues the progression to modernize residential real estate transactions, improve transparency, and improve the process of conversion of these relics of real estate. 

As eventually passed, HB 311 also enacts a new civil penalty for violations of state law related to executory contracts.  

Stay tuned, in a future post on this blog, I will cover the numerous changes to Chapter 5, on a section-by-section basis, and give a personal commentary on HB 311. 

Check out My New Website: www.SanAntonioRealEstateLawyer.com

Trey Wilson San Antonio Texas Real Estate Attorney, Trey Wilson Real Estate Lawyer in San Antonio wrote:

Please check out my new website: www.sanantoniorealestatelawyer.com

Texas "Transfer on Death Deed" Inches Closer to Becoming a Reality

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

The proposed "Texas Real Property Transfer on Death Act" was passed by the Texas Senate on April 9, 2015, and appears poised to be passed by the Texas House (if time doesn't run out before the end of the 84th Legislative Session).  

This legislation, sponsored primarily by Rep. Jessica Farrar (Houston's 148th District) seeks to establish a Transfer of Death deed instrument in Texas. According to the bill analysis, the proposal is a response to the common scenario where a Texas real estate owner passes away intestate (without a will), and their property passes by intestate succession to certain categories of heirs defined by statute. 

This can lead to a cloud on the title due to multiple family members co-owning the property.  Sometimes these heirs are not on good terms, are not in contact, or are otherwise incapable of having common ownership of the inherited property.  This seems to be a particularly frequent problem for low-income homeowners in Texas who cannot afford a lawyer to prepare a will, or whose heirs cannot afford to probate a will after the death.  In such instances, consolidating ownership can be so costly and complicated that families abandon or otherwise lose their property. 

The legislation suggests that the newly-conceived transfer on death (TOD) deed instrument would allow heirs to efficiently obtain clear title to property, and serve as an alternative to probate for real property insofar as a TOD deed would be considered as a "will substitute" for real property (thereby 

allowing a property owner to transfer real property to a named beneficiary upon the owner's death without the need for the beneficiary to go through probate).

If successful, the "Texas Real Property Transfer on Death Act" would be added as a new Chapter 114 of the Texas Estates Code, effective September 1, 2015.

Check Out my New Magazine Articles

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

My article on the rise of water rate litigation and my news brief on a proposed ban of taxation on real estate transactions both appear in this month's issue of Elite Attorney SA. Be sure to check them out in this high-quality magazine that highlight's San Antonio's legal community.

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

All Texas Deeds Contain Implied Covenants/Warranties Unless Expressly Disclaimed

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

In previous posts on this blog, I have explained the difference among the most common types of deeds used in Texas. 

While some instruments (typically General Warranty Deeds) expressly provide certain warranties about the marketability of the Grantor's title, ALL deeds and other conveyance instruments that contain the words "grant" or "convey" are also deemed by Section 5.023, Texas Property Code, to contain  implied covenants by the grantor to the grantee.

By law, it is implied by he Grantor that: (i) the grantor has not conveyed any interest in the property to any other person (other than the grantee); and (ii) that, at the time of execution of the conveyance instrument, the property is free from encumbrances (i.e. taxes, liens, assessments, etc.). 

Most importantly, these implied covenants, by law,  may "be the basis for a lawsuit as if [such covenant] had been expressed in the conveyance."  That's right!  These implied covenants -- even if never expressly made or stated by the grantor -- give rise to liability on the Grantor's part if they turn out to be untrue. See Tex.Prop. Code Section 5.023(b).

Fourth Court of Appeals: Mother's Transfer of Land to Sons Included Mineral Interests, Even if Never Discussed

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

In an opinion issued in mid-February 2015, San Antonio's Fourth Court of Appeals rejected an elderly mother's claims against her sons related to deeds she executed 12 years earlier. The deeds -- executed in 2000 -- granted to the sons, respectively, parcels of rural property, but made no mention of mineral interests. That is there was neither an express grant nor reservation of the minerals contained in the deeds. 

By the time she filed suit in 2012 (12 years after the deeds were executed), mom decided that she did not intend to convey the minerals -- or at least that she regretted doing so. Notably, the properties are located in the booming Eagle Ford shale play of south Texas by the time of suit, but no mineral activity had occurred on the property at the time that the deeds were granted.

Although the case largely turned on the timeliness of mom's suit for breach of fiduciary duty (i.e. whether the claim was barred by limitations), the Court correctly noted that the deeds' silence as to minerals resulted in all of the surface estates and the mineral interests owned by mom transferred to the sons under Texas real estate law. See Cockrell v. Tex. Gulf Sulphur Co., 157 Tex. 10,  299 S.W.2d 672, 675(1956) (“[I]t is fundamental that a warranty deed will pass all of the estate owned by the grantor at the time of the conveyance unless there are reservations or exceptions which reduce the estate conveyed.”). Thus, even though mom and her sons never discussed or considered the mineral interests at the time of the conveyance, they were conveyed under the deed because it did not expressly reserve mineral rights. 

The complete opinion, rendered in Mary Moczygemba v. Thomas and Harry Moczygemba, can be found here. 

New York Penthouse Sells for $100,500,000.00 - Most Expensive Home Sale Ever??

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

According to an article in Forbes Life  Magazine, a New York City penthouse has broken residential purchase price records by selling for $100.5 m. The article identifies the property as "the duplex penthouse of the 89th and 90th floor of One57," and lists the buyer as P 89-90, LLC.

One57 is a 2014 skyscraper located in midtown Manhattan that was completed in 2014. It is one of the two tallest residential buildings in the U.S. One57 has already developed a legacy for secrecy as a "Billionaire's Club."

The building was designed by French architect Christian de Portzamparc.

I predict that this price record won't stand for long...  It also won't be eclipsed in San Antonio, Texas anytime soon!

Why the Texas Deceptive Trade Practices Act Usually Doesn't Apply to Claims Against Brokers

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

One of the favored and most-powerful weapons in the arsenal of Plaintiff's lawyers is the Texas Deceptive Trade Practices Act ("DTPA"). This statute is modeled on similar ones adopted by other states, and provides valuable protections to consumers against all manner of false, misleading and/or deceptive practices and acts.

In addition to serving as an independent cause of action, the DTPA also implicates categories of damages that can result in significant damages awards against defendants who are found to have acted "knowingly" or "intentionally." Specifically, Section 17.50(b) of the DTPA provides:

(b) In a suit filed under this section, each consumer who prevails may obtain:

(1) the amount of economic damages found by the trier of fact. If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for mental anguish, as found by the trier of fact, and the trier of fact may award not more than three times the amount of economic damages; or if the trier of fact finds the conduct was committed intentionally, the consumer may recover damages for mental anguish, as found by the trier of fact, and the trier of fact may award not more than three times the amount of damages for mental anguish and economic damages;

Obviously, given the types of damages provided in Section 17.50(b), plenty of demand letters and Petitions contain allegations that the DTPA has been violated. In fact, it seems like many lawyers use the same "boilerplate" language to implicate the statute's Draconian damages provisions or otherwise make a standard tort or contract case "fit" within the scope of the DTPA.

In our San Antonio real estate law practice, we frequently defend and prosecute real estate professionals who have allegedly violated ethical or legal standards. In those instances where our client is a real estate broker or salesperson in a suit or claim advanced against them, we limit the scope of a Plaintiff's claim by forcing that Plaintiff to demonstrate that he or she is entitled (based on the law and/or facts) to pursue each of the causes of action brought against our client. Where the DTPA is concerned, a Plaintiff is usually limited by Section 17.49(i), of the DTPA, which provides:

(i) Nothing in this subchapter shall apply to a claim against a person licensed as a broker or salesperson under Chapter 1101, Occupations Code, arising from an act or omission by the person while acting as a broker or salesperson. This exemption does not apply to:

(1) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion;

(2) a failure to disclose information in violation of Section 17.46(b)(24); or

(3) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.

This section serves to exempt from the DTPA virtually all activities of a real estate professional who renders advice, exercises judgment, or offers and opinion the course and scope of his or her activities as a broker or salesperson. Notably, this exemption does not apply where the real estate professional engages in intentional or other unconscionable behaviors or actual fraud. Likewise, a real estate professional who acts as a principal may not be exempted.

Fraudulent Deeds...Can they be Set-Aside by Courts?

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Recently, I completed the successful defense of a client whose elderly parent had sued them to set-aside a years old deed to real estate in San Antonio on grounds of fraud.  

The fraud allegations in that case were unique, in that the parent was alleging fraud in the inducement, as opposed to fraud in securing the deed, or outright forgery. The parent alleged in the lawsuit that, even though the parent had knowingly and intentionally signed the deed in favor of the child, this conveyance was in consideration for a promise by the child (which was allegedly false at the time it was made) that such child would care for the parent for life.  

When the parent determined that the child wasn't doing a good enough job as a caretaker, suit was filed in an effort to have the Court determine that the deed was void, and should be set-aside.  Although the case was resolved quickly, in our client's favor, our research revealed some important points of law that are worth re-producing here.

First, deeds procured by fraud are voidable only, not void, at the election of the grantor.  

Second, it is well-settled law in Texas that a properly executed, notarized and recorded deed  (if if such deed is alleged to be fraudulent) is valid and represents prima facie evidence of title until there has been a successful suit to set it aside. See Meiners v. Texas Osage Cooperative Royalty Pool, 309 S.W.2d 898 (Tex. Civ.App. — El Paso 1958, writ ref'd n. r. e.); Whalen v. Richardson, 353 S.W.2d 941 (Tex. Civ.App. — Amarillo 1962, n. w. h.). To the same effect is Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025 (1923), wherein the court stated that: A deed obtained by fraud is not void but voidable only. As between the original parties [Defendant's] title is prima facie good, and it could only be avoided by a suit and a decree annulling and canceling the deed.

Third, it is a fundamental rule of law that only the person whose primary legal right has been breached may seek redress for an injury. As such, a suit to set aside a deed obtained by fraud can only be maintained by the defrauded party. Smith v. Carter, 45 S.W.2d 398 (Tex.Civ.App. — Texarkana 1932, writ dism'd); Meiners v. Texas Osage Cooperative Royalty Pool, supra. A party who was not defrauded by the conveyance has not suffered an invasion of a legal right and therefore does not have standing to bring suit based on that fraud.

Fourth, at least one Texas Court of Appeals has allowed to stand a Judgment issued by a Texas District Judge setting aside a deed based upon an alleged false promise by the grantee to care for the grantor "for the rest of his life." Williams v. Kaufman, 275 SW 3d 637 (Tex.App. --Beaumont) 2009

While it appears that setting aside a deed based upon fraud in the inducement may be tough, and somewhat uncommon, deeds secured by forgery and other fraudulent artifices are more common. An individual involved in a dispute over a fraudulent deed should consult with an experienced real estate attorney to explain the law and discuss possible outcomes.

Changes in Life Circumstances May Require Deed Changes

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Each week we receive several calls from folks whose life circumstances have changed, and, as a result, they desire to change the name on a deed.  The typical requests relate to marriage and/or divorce, and consist of adding or removing another individual's name to the title of residential real estate. In other cases, property owners wish to grant property to loved ones.

While the process of creating a deed or other legal instrument to convey or change title is somewhat simple for an experienced Texas real estate lawyer, the implications and legality of such an instrument may be more complex. Here are some important considerations associated with adding or removing names from existing deeds:

1.  Removal of a person's name from title to property does not alleviate that person from mortgage or other indebtedness. Stated simply, if you are a borrower (or co-borrower) on a loan for the purchase of real estate, conveying your interest in title to another person (including your co-borrower) does not in any manner absolve you of your indebtedness under a mortgage note.  The note is a contract between you and the lender, and unless such lender agrees to allow a co-borrower to assume the full indebtedness, you are still "on the hook" for the loan, even if you do not reside in or desire to own the collateralized property.

2.  Likewise, addition of a new spouse's or other person's name to title to property encumbered by a mortgage lien (or deed of trust evidencing such an encumbrance), does not mitigate the existing borrower's obligations under mortgage note indebtedness, or work as an assumption by the added-person of the mortgage note balance.

3.  Conveying an interest in the property could violate the terms of an existing mortgage lien (deed of trust), and result in acceleration of the entire mortgage balance. Most deeds of trust contain a "due on sale" clause. This clause should be reviewed before changing title to real property that is not owned free and clear of any indebtedness.

4.  Adding a spouse's name to real property might change the character of that property from separate property to community property. This is all well and good until a divorce is looming or inheritance of the property is considered.

If you have considered these factors, and still desire to move forward with making deed changes, you should be sure that a real estate lawyer who is knowledgeable about deed drafting and real estate transactions handles the process for you.

Introduction to WHY WE CHARGE A “CONSULTATION FEE” WHEN OTHER LAWYERS MAY NOT

San Antonio Texas Real Estate Attorney Trey Wilson wrote:

Some prospective clients are surprised to hear that we charge a $350.00  “consultation fee” for a 1 hour in-person or telephonic discussion of whether we can and should undertake to represent them.  We know that many attorneys in San Antonio offer “free consultations.”  We do not – and for what we believe are very good reasons.

For the first several years of our firm's existence, we did not charge for consultations.  Resultantly, we gave away thousands of hours, and expended substantial resources visiting with hundreds of prospective clients who were “lawyer shopping,” “kicking tires,” or simply looking for free advice. 

We are blessed with dozens of potential new client calls each week, so consulting (for free) quickly became a full-time job. That business model was plainly unsustainable when we reached the point where we had to have non-lawyers conduct most of our initial consultations. I was never comfortable with this, especially since many of our real estate cases are highly complicated, involve challenging  factual scenarios, and have tremendous implications for the involved parties.

Just like any other business enterprise, a law firm’s clients are its lifeblood, and fresh blood is an essential component for sustaining. Nevertheless, we came to dread consulting with prospective clients because...well... there were just too many requests for our time.  We were so busy conducting free consultations that we fell behind in the work required to service our existing clients’ legal matters.  Even worse, it became obvious that lots of prospective clients had visited with us solely  to obtain free free advice, with no intention of ever retaining ANY lawyer's services.

So, in the year 2010, I decided to start charging a nominal consultation fee, and simultaneously enhanced the initial consultation/meeting with prospective clients into a valuable “strategy session,” as opposed to a generic interview.  This was a great business decision  – for us and for the people who  genuinely interested in obtaining the services of a serious, and hard-working real estate lawyer in San Antonio. 

There are 5 key reasons why we charge a $350.00 “consultation fee.”   In the coming days, we will list those reasons one-by-one.

San Antonio Lawyers Name the "Best" of their Peers

S.A. Scene Magazine has issued its annual list of the Best Lawyers in San Antonio, as named and voted on by their Colleagues.  I was proud to find out that I had been named as the top vote recipient in 3 categories:

• Real Estate Transactions

• Environmental & Land Use; and 

• Environmental Litigation

In past years, I have been recognized as one of the best lawyers in Real Estate Litigation, and was a little surprised (disappointed) to have not earned that distinction this year.  But, I'll take that as a challenge for next year!

I am especially proud of being named in this list because it is not influenced by advertising dollars spent in the magazine (I don;t have any), and being named is based upon polling of other practicing lawyers in and around San Antonio. It is humbling to be recognized by your peers as being good at what you do!  I appreciate the recognition by my colleagues, and congratulate the other lawyers whose names appear on the list.