LIABILITY IN TEXAS FOR FILING A FRAUDULENT COURT RECORD OR FRAUDULENT LIEN AGAINST REAL OR PERSONAL PROPERTY

Lien.jpgIn order to prevent persons from asserting false liens or claims against real or personal property, the Texas Legislature enacted Chapter 12 of the Texas Civil Practices and Remedies Code.

Under Chapter 12, a person may not make, present, or use a document or other record with:

  • knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property;
  • intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01 of the Texas Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and
  • intent to cause another person to suffer: physical injury; financial injury; mental anguish or emotional distress.

A person who violates Subsection Chapter 12 is liable to each injured person for the greater of $10,000 or the actual damages caused by the violation together with court costs; reasonable attorney’s fees and exemplary damages in an amount determined by the court.

However, a person claiming a lien under Chapter 53 of the Texas Property Code, is not liable under this section for the making, presentation, or use of a document or other record in connection with the assertion of the claim unless the person acts with intent to defraud.

An action to enjoin violation of Chapter 12 or to recover damages under Chapter 12 may be brought by the Attorney General of Texas; a District attorney; a County attorney or a Municipal attorney. However, in the case of a fraudulent judgment lien, the action may be brought by the person against whom the judgment is rendered or, in the case of a fraudulent lien or claim against real or personal property, the obligor or debtor, or a person who owns an interest in the real or personal property.

Notwithstanding any other law, a person licensed or regulated by Title 11 of the Texas Insurance Code (the Texas Title Insurance Act), does not have a duty to disclose a fraudulent court record, document, or instrument purporting to create a lien or purporting to assert a claim on real property or an interest in real property discovered in connection with a sale, conveyance, mortgage, or other transfer of the real property or interest in real property.

Furthermore, a purported judgment lien or document establishing or purporting to establish a judgment lien against property in Texas, that is issued or purportedly issued by a court or a purported court other than a court established under the laws of the state of Texas or the United States, is void and has no effect in the determination of any title or right to the property.

An action under Chapter 12 may be brought in any district court in the county in which the recorded document is recorded or in which the real property is located. The fee for filing an action under this chapter is $15. The plaintiff must pay the fee to the clerk of the court in which the action is filed. The plaintiff may not be assessed any other fee, cost, charge, or expense by the clerk of the court or other public official in connection with the action.

The fee for service of notice of an action under Chapter 12 charged to the plaintiff may not exceed $20 if the notice is delivered in person or the cost of postage if the service is by registered or certified mail. A plaintiff who is unable to pay the filing fee and fee for service of notice may file with the court an affidavit of inability to pay under the Texas Rules of Civil Procedure. If the $15 filing fee imposed is less than the filing fee the court imposes for filing other similar actions and the plaintiff prevails in the action, the court may order a defendant to pay to the court the difference between the fee paid by the plaintiff and the filing fee the court imposes for filing other similar actions.

The court shall award the plaintiff the costs of bringing the action if the plaintiff prevails and the court finds that the defendant, at the time the defendant caused the recorded document to be recorded or filed, knew or should have known that the recorded document is fraudulent. A document or instrument is presumed to be fraudulent if the document:

(1) Is a purported judgment or other document purporting to memorialize or evidence an act, an order, a directive, or process of a purported court or a purported judicial entity not expressly created or established under the constitution or the laws of this state or of the United States; or a purported judicial officer of a purported court or purported judicial entity.
(2) Purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and is not a document or instrument provided for by the constitution or laws of this state or of the United States; or is not created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the laws of this state, or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person;
(3) Is not an equitable, constructive, or other lien imposed by a court with jurisdiction created or established under the constitution or laws of this state or of the United States; or
(4) Purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and the document or instrument is filed by an inmate or on behalf of an inmate.

For purposes of Chapter 12, the costs of bringing the action include all court costs, attorney’s fees, and related expenses of bringing the action, including investigative expenses.

At the Law Office of Stephen O’Rear, P.C. we assist people in removing fraudulent liens or claims against real or personal property.