Closing With Non Durable Power of Attorney

Question: I have a listing where the Mrs. is the power of attorney for the Mr., as he is currently residing in our local jail. I have a Limited Non Durable Power of Attorney, notarized form. Is this all I will need to close?

Answer: A spouse may grant this authority with a valid, properly drafted power of attorney. In this instance the power must be specific, unequivocal and should accurately describe the subject property. The power being non durable is a disadvantage since it could be revoked by the subsequent incapacity of the principal, an event occurring outside the document requiring further investigation. The best way to determine if the power is acceptable is to present it to the title company for ultimate approval. Let me caution that instruments executed in a jail or prison are suspect, and title companies are often reluctant to insure their validity. If the spouse is in a local jail, your seller may well be required to have the incarcerated spouse execute the deed and furnish the usual photo ID.

Disclosure of a Fatality

Question: The question present has to do with disclosure. In the State of Texas is the Seller of a multi-family property (50 units) required to disclose to the Buyer, that there has been a fatality on the property or in one of the units? What document should the information be presented on?

Answer: Bob's question involves a fatality that occurred in a multi-family project, in one of the units or elsewhere on the property, and whether the seller has a duty to disclose it to the buyer. Section 5.008(c) of the Property Code addresses this issue, but first note that it applies to property "comprising not more than one residential dwelling unit located in this state."
Would the same code provision give like protection to a seller of multi-family property? Most probably it would.

Section 5.008(c), Texas Property Code:

"A seller or seller's agent shall have no duty to make a disclosure or release information related to whether a death by natural causes, suicide or accident unrelated to the condition of the property occurred on the property or whether a previous occupant had, may have had, has or may have AIDS, HIV related illnesses or HIV infection."

If the death is related to the property condition, then it must be disclosed. What might be "related" can be specific or general. A dangerous condition on the property may involve a fire or explosion, perhaps a toxic environmental hazard, or more commonly a loose step, rail or banister on an upper floor causing a fatal accident. If the property is located in a dangerous area and subject to external threats, then the death should be disclosed unless clearly unrelated to such conditions.

Not only need AIDS, HIV related illnesses or HIV infection not be disclosed, but such conditions cannot be disclosed even upon inquiry. This condition is deemed immaterial since one cannot contract such a disease from the property itself. Also, those infected with such diseases are considered persons with disabilities and are protected against discrimination under the Fair Housing Act of 1988. Real estate agents who decline to make such disclosure or release information are protected by Section 1101.802 of the Texas Real Estate License Act.

The less common, but more serious areas of concern, are those properties that are "psychologically impacted" or "stigmatized" due to an actual or suspected dramatic event or occurrence. Examples are the mass shooting deaths at Luby's in Killeen (property drastically remodeled); O. J. Simpson's Rockingham Estate (bulldozed and scraped) and Jeffrey Dahmer's apartment building in Milwaukee (structure razed and the lot fenced in). In most cases, the stigma attaches to the site as well as the improvements and represents substantial lost value to the property. Needless to say, in such instances full disclosure should be made whether or not the event is sensational or notorious.

If Bob decides he needs to reveal the fatality, he can use any written document that clearly discloses the death and its cause, including a statutory form.

Judgment Against Prior Owners

Question: I am in process of selling my home. New title search discovered that 2 or 3 owners ago had a judgment lien from a phone company against property. We discovered that when we bought the property the title company that searched for us knew about this but neglected to tell me or fix the problem. I did not purchase owner's policy. The closing agent for the title company said I really did not need it. That there was no problems. We are now told that the prior owner is not the same person who the lien is against. Now what do I do? The new buyer's bank wants this cleared up.

Answer: There are a few available remedies for your problem. First, review my discussion on "Judgments and Liens" posted in February, 2008 for an overview of this subject. If the judgment in question has been recorded over ten (10) years and not renewed, then it is barred by the statute of limitations. Since the judgment occurred two or three owners ago, a considerable time may have passed. If the abstract of judgment was recorded against the prior owner for a period of four (4) years before the prior owner conveyed the title, the judgment is barred. If the judgment was recorded against the prior owner after he conveyed title, your property is not affected. This determination depends upon the facts.
You mention that the buyer's bank wants the judgment question cleared up. I assume a title company has issued a commitment scheduling this judgment to the bank as a lender, and the bank wants it removed.
Since the property is a homestead, you can follow the procedure outlined in Section 52,0012 of the Property Code and have the judgment removed by an affidavit. But before that, if you confirm that the prior owner is not the party against the person against whom the judgment is taken, you might have the prior owner (if he can be found), give a credible affidavit to that effect. You might also offer the judgment creditor clear and convincing evidence that your prior owner and his judgment debtor are not one and the same, and demand that the creditor execute a release of your property from the lien. Or perhaps the title company can be convinced that the judgment debtor and your prior owner are not one and the same and declare the judgment as not affecting your property.
This is a prime example of why an owner's title policy is a good investment, especially when questionable items appear of record.

Deed vs. Will

Question: My husband passed away 2 years ago on August 15th, 2005. Fred died intestate. We purchased our home on April 15, 1992. What do I need do to transfer our Deed of Trust into my name at Dallas County Records?

Answer: A deed is the means of transferring title by living persons, and a will or (other testamentary process such as joint tenancy agreements, etc.) is the means of transferring title by those deceased. If the decedent made no lifetime transfer by deed, or left no will at death, then there is no written transfer instrument available for the decedent's interest. The result is the passage of title by intestate death as set forth in the Probate Code and the process by which title is evidenced and established of record. Please review my answer to "Deceased Without a Will" in the September, 2007 archive, which discusses the affidavit of heirship and the judicial determination of heirship. I further recommend that you consult an attorney familiar with this situation for assistance.

Affidavit/Release of Lien

Question: Will Land America American Title accept filing of a homestead affidavit to release an abstract of judgment to facilitate the closing of a home sale in Texas based upon Section 52.001 amended Sept 2007?

Answer: You have probably reviewed my answer in the September, 2007 archive "Title Insurance Company Affidavit as Release of Lien." You will note from my discussion and the wording of the Property Code that there are strict notice requirements and time periods before such a release (more accurately, an affidavit that functions as a release) becomes effective. Similar requirements are found in Section 52.0012 effective June 15, 2007 for homesteads. While I am not underwriting counsel for any title company and cannot declare what a company will or will not accept, I see no reason why such a procedure, if properly followed, would not be accepted. This is brand new law, but it is nonetheless statutory and clear as to its intention. If this procedure is your only practical remedy, try it and find out what happens. That is what I would recommend to place a client in the most favorable position.

Contract With Dower Rights

Question: Closing date was supposed to be on 4/30/08. This was contingent on spouse signing off of dower rights. Spouse refused to sign off on dower rights. Is this a breach of contract for buyer if this was written in purchase agreement that offer contingent on spouse signing off dower rights?

Answer: I may not completely understand your question, but I believe you ask if there is a purchase agreement, i.e., a contract that is subject to a party signing off on dower rights, is there is a breach of contract if the party refuses to sign and the transaction does not close. No, there is no breach, but who would accept a contract with this type of contingency?

Small Claims Judgement

Question: I was able to obtain a small claims judgement against my Auto Manufacturer 'BMW' in Harris County, TX. BMW has refused to pay, and 30 days have passed since the judgement date. I was trying to see where I can locate BMW's specific property (their vehicles) and seek an Abstract of Judgment.

Answer: You apparently reviewed my post on abstracts of judgment and similar remedies for judgment creditors. Your judgment in small claims court is probably $5,000.00 or less and you are most likely pro se, that is, not represented by counsel.

I cannot imagine BMW losing a case in small claims court and refusing to pay the judgment, unless they have perfected an appeal. In whatever case, if they do not pay, you should order an abstract of judgment and record it in Harris County, then obtain a writ of execution and send the sheriff or constable to a known business address of BMW.
What you need even more is legal counsel to guide you in collecting the judgment, or at least some business or agency in the business of making such collections.

Our blog is primarily concerned with real estate issues, but if BMW owns real property in its name in Harris County, your abstract of judgment will certain impose a lien on it.