A new statute will provide new rights to co-tenant heirs and a new option for the Texas real estate attorneys assisting them. The Texas legislature recently passed and Governor Abbott signed Section 16.0265 of the Texas Civil Practice and Remedies Code that provides assistance to heirs who have collectively inherited real estate from a common ancestor. In particular, it gives some additional rights to the heir or heirs who live on, use and pay taxes on the land to the exclusion of the other heirs. You can read the full text of the new law here.
This new statute applies to cotenant heirs, which the statute defines as one of two or more people who simultaneously acquire identical and undivided ownership interests in real property through intestate succession. Intestate succession means the passage of title to property according to the Texas Estates Code, which applies when someone dies without leaving a will or if someone has left will, but the will was not probated. This is a common situation, and is sometimes difficult to remedy short of filing a lawsuit.
Specifically, the new statute says that one or more cotenant heirs may acquire interests of the other heirs by adverse possession if, for a continuous and uninterrupted ten year period:
(1) the possessing cotenant heir or heirs:
(A) hold the property in peaceable and exclusive possession;
(B) cultivate, use, or enjoy the property; and
(C) pay all property taxes on the property not later than two years after the date the taxes become due; and
(2) no other cotenant heir has:
(A) contributed to the property’s taxes or maintenance;
(B) challenged a possessing cotenant heir’s exclusive possession of the property;
(C) asserted any other claim against a possessing cotenant heir in connection with the property, such as the right to rental payments from a possessing cotenant heir;
(D) acted to preserve the cotenant heir’s interest in the property by filing notice of the cotenant heir’s claimed interest in the deed records of the county in which the property is located; or
(E) entered into a written agreement with the possessing cotenant heir under which the possessing cotenant heir is allowed to possess the property but the other cotenant heir does not forfeit that heir’s ownership interest.
To take advantage of the statute, the possessory cotenant heir must file an affidavit of heirship in the form required by the Texas Estates Code as well as an affidavit of adverse possession. The new statute describes what the affidavit of adverse possession must contain. The possessory cotenant must also publish notice of their claim in a newspaper for four weeks following the filing of the affidavits and must provide written notice by certified mail, return receipt requested to the last known addresses of other cotenant heirs.
If no controverting affidavit or lawsuit is filed within five years from the date that the possessory cotenant heir’s affidavits are filed, and no notice by a contesting cotenant heir has been filed in the deed records, then title to the property vests in the possessory cotenant heir.
Most importantly, once this procedure is been accomplished, the statute allows the lender to extend a loan with the property as collateral.
The precise language of the new statute is important and anyone who wants to take advantage of this new law should seek the assistance of an attorney in determining the application of the new law their particular situation. At the least, the statute provides a somewhat more streamlined and lower cost procedure for heirs to obtain clear title to inherited property.