Archives for posts with tag: real estate

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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With a hopefully improving economy, our State and local community should see an increase in new housing development.  If our past history is a good indicator of the future, then the increase in new construction will necessarily increase the number of construction defect claims between the Buyers of these new homes and the Contractors who constructed them.  This article will briefly discuss the history of residential construction claims in Texas and set forth the current legal framework for home owners and builders who may soon find themselves on one side or the other of a residential construction defect claim.

History

Prior to 1999, residential construction disputes in Texas were primarily dealt with through general contract principles and consumer protection statutes.  As a result of a real or perceived increase in the number of claims brought by owners against builders and the large damage claims potentially available under certain State consumer protection statutes, the Texas legislature enacted the Texas Residential Construction Liability Act in Chapter 27 of the Texas Property Code (“RCLA”).  RCLA framed construction defect claims into specific procedural and damage limitation considerations.  However, it seemingly did little to reduce the number of suits and arbitrations or to reduce the large damage claims sought by home owners against builders.  In response to a very powerful Texas builders’ lobby (with input from a somewhat less influential consumers’ lobby), the Texas legislature enacted the Texas Residential Construction Commission Act (“TRCCA”) in 2003.  The general purpose of TRCCA was to 1) provide a builder registration program, 2) provide a mandatory administrative state-sponsored inspection and dispute resolution process for construction defects, and 3) set forth minimum building standards and warranties for residential construction.  Without getting into the details of TRCCA, it should be noted that an owner’s failure to follow the mandatory state-sponsored inspection and dispute resolution process could result in the owner losing the ability to prosecute a claim in court or through arbitration.

The mandatory and harsh effects of TRCCA when combined with the economic downturn effectively resulted in litigated and arbitrated construction defect claims virtually ceasing to exist between 2003 and 2009 in Texas.  However, TRCCA was subject to the sunset laws governing administrative agencies, and as part of the sunset process TRCCA was repealed in 2009.  Now that TRCCA has been repealed, owners and builders face going “back to the future” when dealing with construction defect claims under traditional contract principles, consumer protection statutes, and the Residential Construction Liability Act.

Implied Warranties

When TRCCA was dissolved in 2009, one of the consequences was the removal of the minimum building standards and warranties for residential construction.  With TRCCA out of the way, the common law of Texas which existed at the time of TRCCA reappeared.  Through several former Texas Supreme Court decisions, two common law implied warranties once again set the standard for residential construction defects in Texas.

The first implied warranty is the” warranty of good and workmanlike manner”.  This warranty requires a Contractor to construct a residence in the same manner as would a generally proficient Contractor engaged in similar work and performing under similar circumstances.  Any express warranty must equal or exceed the performance required by the implied warranty of good and workmanlike manner, and it cannot completely disclaim the implied warranty by providing performance standards which do not meet or exceed those required by the residential construction industry.

The second implied warranty is the warranty that the home is suitable for human habitation and only extends to defects that render the home unsuitable for its intended use as a home.  This warranty is only applicable to latent defects, that is, those defects that are not disclosed or clearly known to the Buyer of the home.  This warranty may not be generally disclaimed.  If fully disclosed by a builder to a Buyer, those defects which are knowingly and voluntarily accepted will not be subject to the implied warranty of habitability.

Deceptive Trade Practices: the Home Owner’s Sword

The Deceptive Trade Practices – Consumer Protection Act (Section 17.41 et. seq. of the Texas Business and Commerce Code, herein “DTPA”) applies to the sale of homes.  The DTPA expressly allows a consumer to maintain an action where the breach of an express or implied warranty produces economic damages or damages for mental anguish.  Where a builder has not built the home in “a good and workmanlike manner” or to be “habitable”, such builder has breached either or both of the two warranties implied by law on a new residence, thus making such “breach” actionable under the DTPA.

The benefits that the DTPA provides over general contract principles are primarily two-fold.  First, the claimant only has to show that its damages were “produced”, rather than “proximately caused”, by the builder’s breach of the implied warranty.  This means that the claimant need not prove that any resulting damages were reasonably foreseeable.  Any damages, no matter how remote, may be proven by the claimant, so long as they result from the builder’s breach of the implied warranty.  Secondly where the claimant can prove that the builder intentionally or knowingly “breached” the implied warranty, the claimant may also be awarded mental anguish damages and up to three times the claimant’s actual or economic damages.

Residential Construction Liability Act: the Builder’s Shield

Since the expiration of TRCCA, RCLA continues to provide builders with a statutory filter through which construction defect claims must navigate.  While RCLA does not in and of itself provide the home owner with a separate cause of action against a builder, failure to comply with the Act has consequences for both the home owner and the builder.

First, RCLA makes it clear that to the extent of any conflict between RCLA and the DTPA, the provisions of RCLA will control.  Second, RCLA limits the liability of a Contractor for defects caused by several statutory acts which are deemed to be outside of the Contractor’s control.  Third, RCLA requires that the home owner give the Contractor at least sixty (60) days prior written notice by certified mail of the specific construction defects that are the subject of the complaint prior to filing suit or invoking arbitration proceedings.  Fourth, RCLA allows the Contractor during the first thirty-five (35) days following receipt of the home owner’s RCLA notice to inspect the home and construction defects by supplying the home owner with a written request for inspection.

Second, RCLA allows the Contractor to provide a written offer of settlement to the home owner by certified mail that may include an agreement by the Contractor to repair or have repaired  any of the applicable construction defects and may describe the kind of repairs to be made.  Additionally, under certain specific circumstances, the Contractor may also make an offer to repurchase the home.  Any offered repairs must be made not later than forty-five (45) days after the Contractor’s receipt of the home owner’s written acceptance of the Contractor’s offer, unless delayed by the home owner or by other events beyond the Contractor’s control.

Third, if the home owner believes that the Contractor’s initial offer of settlement is not reasonable, then the home owner must advise the Contractor in writing of such fact and provide details why within twenty-five (25) days of receipt of the Contractor’s initial offer.  In such instance, the Contractor has an additional ten (10) days from receipt of such notice from the home owner to make a supplemental written offer of settlement to the home owner.

Fourth, if the home owner rejects a reasonable offer from the Contractor or fails to permit the Contractor to perform under such offer after acceptance, the home owner’s damages are limited to the greater of the value of the Contractor’s repair offer, or monetary settlement offer; and the home owner’s reasonable and necessary attorney’s fees incurred before the offer was rejected.  Where a Contractor fails to make a timely reasonable offer, the immediately preceding damage limitations do not apply.  Regardless, the current version of RCLA seems to prohibit a home owner from recovering any damages other than the following reasonable and necessary damages which are proximately caused (must be “foreseeable”) by a construction defect: cost of repairs; cost for the replacement or repair of goods damaged in the residence; engineering and consulting fees; expenses for temporary housing; reduction in fair market value related to any structural failure; and attorney’s fees.  Note that the heightened causation standard of “proximate cause” is reintroduced, and the limitations on damages supplied by RCLA appear to completely remove the statutory mental anguish and multiplication of damages which would otherwise be allowed by the DTPA.

Finally, under RCLA, either the home owner or the Contractor may force the construction defect disputes to be mediated.

Conclusion

As you can see, construction defect claims can be extremely complicated for both the home owner and the builder.  Failure to follow the statutory requirements of RCLA may have serious consequences for either or both parties.  Therefore, if you find yourself in such a situation, it is always advisable to seek the advice of a competent attorney who regularly deals with construction defect cases.

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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