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There are two types of protests normally available to a homestead exempted property owner: (1) determination of the appraised value of the property; and (2) unequaTexas Property TAZl appraisal of the owner’s property. The first protest type is what is says it is, that the property owner simply disagrees with the value of the property provided in the notice of appraised value. The second type deals with taking a reasonable number of comparable properties within the taxing district, appropriately adjusted based on the factors above, and showing that the appraised value of the subject property in the notice of appraised value is above the median of those property values. Disparities in the timing of the reappraisal of properties within the district may lend certain properties to be at lower values. Due to advancements in technology and the growing need for governmental funding, larger taxing districts have significantly cut down on this time lag.

The property owner will be notified of the hearing time, date, and place at least 15 days prior to the date of the hearing. The chief appraiser is required to provide notice of the rights of the taxpayer, notice of the right to inspect and copy the district’s evidence, and a copy of the hearing procedures. The property owner may appear at the hearing in person, through an agent, or by affidavit. If the property owner fails to appear in some form, they will be precluded from appealing the appraisal review board’s decision. The hearing procedures are very informal. All parties are allowed to offer evidence, examine and cross examine witnesses, and present argument to the board. The property owner is permitted to testify to the value of their property, and may offer an opinion of market value or the inequality of the appraisal by the district.

So long as all of the administrative procedures have been followed to completion, a property owner may further appeal the appraisal review board’s decision to a district court or may elect to engage in non-binding arbitration. Under either avenue, the property owner is required to pay the taxes determined to be due before their delinquency as a precondition of further review. The taxpayer’s petition for review must be filed with the district court within 60 days of the receipt of the appraisal review board’s notice of determination of protest. The review by the district court or arbitrator will be “de novo” or new, so neither the taxing authority nor the property owner is bound by the prior rendition of value. Thus, it is possible for the appraisal district to seek a higher value than it sought in the protest hearing or that set by the appraiser.
A taxpayer may pursue non-binding arbitration by moving the district court to refer the case. However, if the taxpayer wants to engage in non-binding arbitration, the appraisal district must give its consent.

A taxpayer who prevails in a judicial review proceeding may be awarded reasonable attorney’s fees. Those fees may not exceed the greater of $15,000.00 or 20% of the total amount by which the property owner’s tax liability is reduced by the appeal. Further, the fees may not exceed $100,000.00 or the total amount by which the property owner’s tax liability is reduced by the appeal, whichever is less. These fee caps prevent property owners from receiving reimbursement for attorney’s fees where the reduction being sought is only a relatively small amount. The award of fees is, however, mandatory when the taxpayer prevails on a judicial review.

R. Scott Alagood is board certified in residential and commercial real estate law by the Texas Board of Specialization and can be reached at alagood@dentonlaw.com or http://www.dentonlaw.com.

commercial-leaseThe terms of the commercial lease will govern the financial relationship between the business and the landlord. The lease will determine the tenant’s occupancy rights. The lease will establish how the parties deal with default and termination. The lease will supply the base upon which the business operates for years to come. It is important that the tenant understand the terms contained within the lease and how the lease will impact its business.

Tenant’s Construction

Tenants typically construct improvements to the leased premises to make it suitable for their specific purpose. Unless limited by the terms of the lease, such improvements may be performed without the landlord’s consent. Any improvements to the leased premises which cannot be removed without damaging the property must remain with the premises at the conclusion of the lease. Tenants must consider the length of time it will take to improve and fixture the leased premises, when the landlord will turn over possession of the leased premises, and when rent starts to accrue during the lease negotiations.

Repairs and Maintenance

In a commercial setting, the parties may allocate the repair and maintenance responsibilities for the leased premises. Typically, the landlord will retain the responsibility over the structural portions of the leased premises, while the tenant will accept the duty for the remainder of the structure and its systems. It should be noted that the landlord’s failure to repair or maintain does not relieve the tenant of paying rent unless otherwise allowed by statute, the lease, or otherwise arises to the level of a constructive eviction.

Default, Remedies, and Mitigation

A lease typically defines specific acts and omissions which will constitute “defaults” thereunder. Clearly the failure to pay rent is a default. Tenants may want to require the landlord to provide some type of notice to the tenant and allow an opportunity to cure before being held in default. Once a default occurs, the landlord has several options available. The landlord may terminate the lease and demand that the tenant vacate the leased premises. Alternatively, the landlord may retake possession of the leased premises without accepting surrender of the lease, and relet to another tenant. The landlord may allow the lease to continue and sue for rents as they become due. If the landlord chooses to accelerate the rentals under the lease, it must reduce the future rentals by the fair market rental value of the leased premises and discount the remainder of the rentals due under the lease to present value. If the landlord relets the leased premises at a rental rate which is less than the rental rate in the defaulting lease, then the landlord may also sue the defaulting tenant for the difference. In most default situations, the landlord should also attempt to mitigate its damages upon a tenant’s default where it can do so. A landlord may also recover its reasonable and necessary attorney’s fees in a suit against a defaulting tenant where allowed by the terms of the lease or otherwise by statute.

Implied Covenants

Unless the lease expressly provides otherwise, a commercial lease typically contains certain promises which are implied. These include the landlord’s promise that the tenant will enjoy the premises without interference, the tenant’s promise not to cause waste, and the landlords “warranty” that the premises is suitable for the tenant’s intended use. The implied covenant that the tenant continuously operate its business on the leased premises exists where the lease provides that the rental is paid only as a percentage of the tenant’s gross sales.

Waiver of Jury Trial

It is very common for a commercial lease to contain a waiver of jury trial provision. Such a provision is valid under Texas law. If a tenant wishes to retain the right to a trial by jury, then such will have to be negotiated prior to the execution of the lease.

Non-waiver

Most commercial leases also contain “non-waiver” provisions. A non-waiver provision allows a landlord not to be bound by a prior failure to enforce a lease right or to declare a later occurring default which the landlord may have delayed enforcing or outright waived its rights in a prior default situation. Non-waiver provisions are generally considered valid and enforceable.

Restrictions on Assignment

Unless otherwise allowed by the terms of the lease or the landlord’s consent, Texas law does not allow a tenant to assign or sublet its leasehold interest. Any attempt to assign or sublet by a tenant without lease authorization or the landlord’s consent is void.

Condemnation

Unless otherwise contracted between the parties to the lease, a tenant is entitled to share in any condemnation award where any portion of the leased premises is lost through the eminent domain process. However, most commercial landlords typically want to alter this situation so that they remain in control of the condemnation process and the proceeds.

Casualty

Damage to the leased premises caused by fire, earthquake, flood, or other casualty which renders the property unsuitable for continued occupancy terminates the leasehold estate. Any prepaid rental on the date of casualty is not refundable unless allowed by the lease. Typically, the parties will negotiate the specific events which will render the leased premises so untenable that the lease will terminate. In the event of a casualty which only affects a portion of the leased premises, the parties will also normally negotiate how the tenancy will continue and how rent may be abated.

R. Scott Alagood is board certified in Commercial and Residential Real Estate Law and can be reached at alagood@dentonlaw.com and http://www.dentonlaw.com.

VeronaNJ_CourtsIn response to legislation adopted in 2011, the Supreme Court of Texas has issued new rules governing civil cases filed in justice courts.  These new rules go into effect on August 31, 2012, and will govern the filing, pre-trial procedures, trial, and appeal of all civil cases filed in a justice court.

Historically, cases in justice courts were divided into small claims and justice court cases.  Small claim cases typically involved civil disputes of $10,000.00 or less. However, these same cases could also be heard as a justice court case.  The Texas Rules of Evidence applied to justice court cases, but not to small claims cases.  Certain types of civil disputes can only be initiated in justice courts, such as evictions, tenant lockouts, and the disconnection of residential tenant’s utilities by a landlord.

To some extent, the new rules simplify practice in justice courts.  Under the current rules, multiple and seemingly conflicting statutes could apply, while certain procedural topics are loosely addressed.  Texas Rules of Civil Procedure 523-591 set forth the general rules 737-755 deal with particular cases such as evictions and enforcing a landlord’s duty to repair or remedy residential rental property.  Starting August 31st, these rules will be repealed and replaced with new rules 500-510 of the Texas Rules of Civil Procedure.

The new rules will divide justice court civil cases into four distinct categories (1) small claims cases (rules 500-507); (2) debt claim cases (rules 500-507 and 508); (3) repair and remedy cases (rules 500-507 and 509); and (4) eviction cases (rules 500-507 and 510).

The general rules governing all cases will be found in rules 500-507.  These rules will apply to all small claims cases, and any other case not covered by rules 508, 509, and 510 which may be filed in a justice court.  Small claims cases will continue to apply to any disputes over monetary sums of $10,000.00 or less.  In computing  the $10,000.00 amount, attorney’s fees incurred will continue to be included, while statutory interest and court costs will not.  To the extent the general rules are not in conflict with rules 508, 509, and 510, they will apply to debt claims, repair and remedy claims, and eviction claims.   To the extent that rules 508, 509, or 510 conflict with the general rules, the specific rules shall control.

Debt claims will be primarily governed by rule 508, and will apply to any lawsuits brought to recover a debt by an assignee of a claim, a debt collector or collection agency, a financial institution, or a person primarily engaged in the business of lending money at interest.  These cases will typically involve unpaid credit card claims involving not more than $10,000.00 (as calculated in small claims cases).

Repair and remedy cases will be primarily governed by rule 509, and will apply to lawsuits filed by a residential tenant under Subchapter b of Chapter 92 of the Texas Property Code to enforce a landlord’s duty to repair or emery a condition which materially affects the physical health and safety of an ordinary tenant.  An associated monetary claim will not be allowed to exceed $10,000.00 (as calculated in small claims cases).

Eviction cases will be primarily governed by rule 510, and will apply to any lawsuits brought to recover possession of real property under Chapter 24 of the Texas Property Code.  If not more than $10,000.00 in unpaid rentals (as calculated in small claims cases) is sought, then a rent claim may be joined in the eviction suit.

All other rules of civil procedure and rules of evidence not included in rules 500-510 will typically not apply in justice courts.  The  judge will continue to be able to develop the facts of the case, including questioning witnesses or parties and summoning witnesses to appear.  pretrial discovery may be allowed so long as the judge considers it reasonable and necessary, and only after written court approval is obtained.

For all cases filed in justice court on or after August 31, 2013, the new rules will apply.  For cases which were filed prior to August 31, 2013, and not concluded by that date, the Supreme Court has authorized the justice courts to continue using the old rules where the use of the new rules would not be feasible or would work injustice.  Hopefully, the transaction will be smooth, and practice in the justice courts will continue to be affordable and efficient way to resolve smaller disputes.

Scott Alagood is Board Certified by the Texas Board of Legal Specialization in both Commercial and Residential Real Estate Law and may be reached at alagood@dentonlaw.com and www.dentonlaw.com.

 

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May 2013 Newsletter Page 1

To establish a claim by adverse possession, a claimant must enter the land with a claim of right inconsistent and hostile with that of another person.  Tex. Civ. Prac. & Rem. Code Section 16.021(1).  A “claim of right” is defined as the claimant’s intention to appropriate or claim the land as his or her own.  Such claim of right may be established by a public declaration of the claim or by visible and apparent acts.  The verbal assertion of a claim is not necessary.

The claimant need not understand or maintain that the claim of right he or she is relying upon is actually adverse to that of the record title holder.  However, a mistake as to whom actually holds record title is not sufficient to establish adverse possession where the land is shared.

If the appropriation and possession of the land was done through permission or with the consent of the record title holder, then such will not suffice to establish adverse possession.

Adverse possession cannot be established where the claimant recognizes that another person holds title to the land or has offered to purchase the land from the title holder in such a way that would show that the claimant admitted that the title holder is the real owner.

In certain instances (as will be discussed in Part III), visible appropriation may be taken as evidence of a claim of right when the claim of right is not otherwise expressed.

As you can see the law of adverse possession is founded on notice.  Existing rights in land should not be lost without giving the owner an opportunity to take preventative action by taking prompt action to dispute the claim.

R. Scott Alagood is a board certified attorney in both Commercial and Residential Real Estate Law by the Texas Board of Legal Specialization.
 

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To establish a claim by adverse possession, a claimant must enter the land with a claim of right inconsistent and hostile with that of another person.  Tex. Civ. Prac. & Rem. Code Section 16.021(1).  A “claim of right” is defined as the claimant’s intention to appropriate or claim the land as his or her own.  Such claim of right may be established by a public declaration of the claim or by visible and apparent acts.  The verbal assertion of a claim is not necessary.

The claimant need not understand or maintain that the claim of right he or she is relying upon is actually adverse to that of the record title holder.  However, a mistake as to whom actually holds record title is not sufficient to establish adverse possession where the land is shared.

If the appropriation  and possession of the land was done through permission or with the consent of the record title holder, then such will not suffice to establish adverse possession.

Adverse possession cannot be established where the claimant recognizes that another person holds title to the land or has offered to purchase the land from the title holder in such a way that would show that the claimant is admitted that the title holder is the real owner.

In certain instances (as will be discussed in Part III), visible appropriation may be taken as evidence of a claim of right when the claim of right is not otherwise expressed.

As you can see, the law of adverse possession is founded on notice.  Existing rights in land should not be lost without giving the owner an opportunity to take preventative action by taking prompt action to dispute the claim.

R. Scott Alagood is a licensed Texas attorney and Board Certified by the Texas Board of Legal Specialization in both Residential and Commercial Real Estate Law and may be contacted by email at Alagood@dentonlaw.com or www.dentonlaw.com.

The elements of an adverse possession claim or “title by limitations” claim depend on which particular statute of the Texas Civil Practice & Remedies Code applies.  The remainder of this series shall discuss each separate statute in more detail.  For now, start with the proposition that there are statutes which contain limitations periods of 3, 5, and 10 years, an also three (3) statutes which have 25 year limitations periods.  Each statute has certain elements which are common with the other statutes and its own particular set of elements which must be proven to establish title by “limitations” or “adverse possession”.

The common elements which must be proven in order to establish such a claim are as follows:  (1) visible appropriation and possession of the land, sufficient to give notice to the record title holder, that it (2) peaceable, (3) under claim of right hostile to the title holder’s claim, and (4) that continues for the duration specified in the applicable statute.*

Each particular statute will require additional elements beyond those described herein.  Those elements will be discussed in the future parts of this series.  However, neither knowledge of the rights of the record holder nor any intent to dispossess the record owner of the real property is a required element of an adverse possession claim.  An adverse possession claim must be established by the strength of the claimant’s title (veracity and accuracy of the proof of each element of the applicable limitations statute) and not on the weakness of the record owner’s title (or lack of evidence thereof).  There are no presumptions favoring an adverse possession claimant’s claim.  The burden of proof solely rests on the adverse possession claimant.  An adverse possession claim is typically a question of fact not law.

*Each of these elements als have sub-parts or sub-factors which need to be considered, and which will also comprise a future Part in the remainder of this series.

Please contact R. Scott Alagood at Alagood@dentonlaw.com or www.dentonlaw.com.
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A Quitclaim Deed in Texas is a somewhat of an oxymoron.  Believe it or not, a Quitclaim Deed is really not a Deed.  To understand the reasons why, you must know a little background about the type of deeds typically used in Texas to transfer real property.

There are three basic types of Deeds in Texas which are used to convey real property*:  (1) General Warranty Deed, (2) Special Warranty Deed, and (3) Deed Without Warranty.  Each of these Deeds  primarily accomplishes the same thing.  That is, they actually convey the interests owned by the Grantor in the real property being conveyed.  The granting clause contained in each of these deeds affirmatively grants “all right, title, and interest” that the Grantor holds in the particular real property being conveyed.  The typical words of grant used in a Deed to show intent to convey are “grant, sold, and conveyed”.  However, other words, such as “transfer” or “alienate” may suffice.  Words such as “release”, “wish”, or “dedicate” have either caused confusion as to the Grantor’s intent or have been held ineffective as words of conveyance.  The use of the propert words of grant will imply that certain warranties exist by law.

There are differences between the three basic types of Deeds.  Each Deed “warrants” the grant in differing manners.  A warranty is effectively a contractual promise by the Grantor that the interest being conveyed in the Deed is the full and complete interest described.  A General Warranty Deed “warrants” the conveyed interest against any prior conveyance of an interest, not just a conveyance by the Grantor.  A Special Warranty Deed limits the warranty against any conveyance of an interest, but only if it occurs, “by, through, or under” the Grantor.  That is, the Grantor is only warranting against matters that he or she may have conveyed to others, but not mattes that someone else may have conveyed to others.  A Deed Without Warranty is just what it says it is.  There is no warranty, and thus no contractual promise by the Grantor that he or she will stand behind the promised conveyance.  However, since the Deed Without Warranty uses the “words of grant”, it is a Deed regardless of its lack of warranty and transfers the interest described therein.

To the contrary, a Quitclaim Deed under Texas law does NOT constitute a conveyance of real property.  A quitclaim conveys only the Grantor’s rights in the described property, if any.  A Quitclaim on its face conveys doubts about the Grantor’s interests in the property and a Buyer or Grantee is automatically put on notice about these doubts.  As such, a Quitclaim is not a Deed and cannot be used to establish title to a particular parcel of real estate, whether by the Grantee of the Quitclaim or anyone else claiming under him.

Also, a Quitclaim Deed does not contain any warranty of title.  As such, the Buyer or Grantee receives nothing more than a chance at title.  There are several disadvantages through the use of the Quitclaim that are not present when using a true Deed:

1.  No express warranty of title nor implied warranties of title;

2.  A person claiming under a Quitclaim cannot rely on the 5 year statute of limitations to establish title;

3.  A Buyer or Grantee claiming under a Quitclaim cannot avail themselves of the benefits of the Texas recording statutes that protects innocent purchasers against prior unrecorded Deeds; and

4.  The after-acquired title doctrine cannot be invoked by a Quitclaim Grantee to claim an interest in real property obtained by the Quitclaim Grantor after the date of the Quitclaim.

Effectively, a Quitclaim Deed only acts as an “estoppel” or defense agains the Quitclaim Grantor who is claiming an interest in the real property quitclaimed to the Quitclaim Grantee.  Therefore, the use of a Quitclaim Deed should typically be limited to situations where a Buyer or Grantee can otherwise stand on his or her own title, but needs to make sure that any other potential claimant will not have a valid claim to defeat such Grantee’s claim in the same real property.  In those instances, a Quitclaim may be used essentially as an estoppel document, rather than a tool to obtain title to or an interest in real estate.

If you are ever presented with a situation in which you are being advised to use a Quitclaim or believe a Quitclaim is adequate, you should seek legal advice from an attorney specialized in real estate transactions to make sure you are fully aware of the consequences of such actions, as well as obtaining other possible options, such as using a Deed Without Warranty.  Otherwise, you may find yourself or your heirs or assigns litigating an unintended title dispute at some point in the future.

*There are other types of deeds which deal with mineral estates in Texas real property such as mineral deed or a royalty deed.  It should be noted that unless otherwise reserved to the Grantor or through a prior transfer, the deed of a fee interest in real estate in Texas will include the mineral estate along with the surface estate.  However, the discussion of transferring an interest in only the mineral estate is beyond the scope of this discussion.

Please contact R. Scott Alagood at http://www.dentonlaw.com or alagood@dentonlaw.com.
 

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