Real Estate Law Blog

Prohibiting Conceal Carry and Open Carry at Your Business

The State of Texas now allows licensed handgun owners to openly carry their handgun in a shoulder or belt holster in public. In the absence of notice otherwise (or a specific statutory exclusion), the new law, which went into effect on January 1, 2016, permits a license holder to carry her or his handgun openly or concealed on most private property. The new law has led many business owners to consider whether they will allow open carry on their premises. A gun owner violates the new law if he or she carries a licensed handgun on property after the property owner has provided proper notice that it is forbidden.

 

The following are guidelines on how a property owner may forbid handguns on their property or at their business.

Banning Open Carry Only:

Under Section 30.07 of the Texas Penal Code, an owner of property, or someone with apparent authority to act for the owner, may provide notice that entry on the property by a license holder openly carrying a handgun is forbidden by doing one of the following:

1. Orally communicating that open carry is forbidden.
   
   
2. Providing a card or other document that states, verbatim: “Pursuant to Section 30.07, Penal Code (trespass by license holder with an openly carried handgun), a person licensed under Subchapter H, Chapter 411, Government Code (handgun licensing law), may not enter this property with a handgun that is carried openly.”
   
   
3. Posting a sign on the property that states, verbatim: “Pursuant to Section 30.07, Penal Code (trespass by license holder with an openly carried handgun), a person licensed under Subchapter H, Chapter 411, Government Code (handgun licensing law), may not enter this property with a handgun that is carried openly.” The sign must:
        (a) contain this exact language in both English and Spanish;
        (b) appear in contrasting colors;
        (c) contain block letters at least one inch in height; AND
        (d) be displayed in a conspicuous manner that is clearly visible to the public at EACH entrance to the property.

Banning Concealed Carry Only:

Under Section 30.06 of the Texas Penal Code, the owner of the property, or someone with apparent authority to act for the owner, may provide proper notice that entry on the property by a license holder with a concealed handgun is forbidden by doing one of the following:

1. Orally communicating that concealed carry is forbidden.
    
2. Providing a card or other document that states, verbatim: “Pursuant to Section 30.06, Penal Code (trespass by license holder with a concealed handgun), a person licensed under Subchapter H, Chapter 411, Government Code (handgun licensing law), may not enter this property with a concealed handgun.”
   
   
3. Posting a sign on the property that states, verbatim: “Pursuant to Section 30.06, Penal Code (trespass by license holder with a concealed handgun), a person licensed under Subchapter H, Chapter 411, Government Code (handgun licensing law), may not enter this property with a concealed handgun.” The sign must:
        (a) contain this exact language in both English and Spanish;
        (b) appear in contrasting colors (i.e. black and white);
        (c) contain block letters at least one inch in height; AND
        (d) be displayed in a conspicuous manner that is clearly visible to the public.
   
   Note, the required language for a 30.06 sign has changed slightly from prior requirements. All 30.06 signs must contain language identical to the abovementioned, and old 30.06 signs must be replaced.

Completely Banning Fire Arms:

In order to completely ban the carrying of handguns on private property, the property owner, or someone with apparent authority to act for the owner, must provide either oral notice as to both restrictions, provide a written card or document that complies with the requirements under 30.06 and another card or document that complies with the requirements under 30.07, or display both 30.06 signage and 30.07 signage. The 30.07 signage must be posted at every entrance to the property, no matter how little that entrance is used.

In Summary:

Displaying signage that complies with Section 30.06 and/or Section 30.07 provides the best evidence that a business owner has given notice that concealed carry and/or open carry on their property is forbidden. However, a business owner that is concerned about the signs’ cost, large size, or unsightly appearance may choose to provide notice by card or oral communication. Note, however, some business owners and employees may hesitate to approach someone carrying a handgun to inform that individual they may not carry on the property.

A business owner that chooses to post signs providing notice of the restriction must be especially careful to use signage that complies precisely with the statute’s requirements. Several websites have been created that map out and list businesses whose signs do not meet the statutory requirements, or 30.07 signs that are not placed at each entrance to the premises. The Department of Public Safety does not provide or sell 30.06 or 30.07 signs; rather, a business owner must print their own signs or purchase them from a commercial printing company.

Hotels must take additional steps to inform their guests of their firearm policy. Under Section 2155.103(a) of the Texas Occupations Code, a hotel must include its policy regarding the possession, storage, and transportation of firearms on its reservation website. If a guest makes a reservation over the telephone, the hotel must include information on how the consumer may review applicable guest policies, which must include the hotel’s firearm policy, on the written confirmation provided to the consumer. A hotel owner or keeper’s failure to comply with Section 2155.103 of the Texas Occupations Code is considered a misdemeanor offense, punishable by a fine of not more than $100.

Lauren Crouch & Laura McClellan
K&L Gates LLP
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Landlords Take Note: New Notice to Vacate Requirements

Landlords in Texas must adhere to new requirements when providing tenants notice to vacate prior to filing an eviction suit. The new requirements, which went into effect January 1, 2016, apply only to residential lease agreements entered into on or after January 1, 2016. The primary methods by which a landlord may properly give notice under Section 24.005(f) of the Texas Property Code remain unchanged. A landlord may:

• Provide notice in person by personal delivery to the tenant or any person residing at the premises who is 16 years of age or older;
• Provide notice in person by personal delivery to the premises and affixing the notice to the inside of the main entry door; or
• Provide notice by regular mail, registered mail, or certified mail, return receipt requested, to the premises in question.

A landlord may use an alternative method to provide notice if: (1) the premises has no mailbox and has a keyless bolting device, alarm system, or dangerous animal that prevents the landlord from entering the premises to affix the notice to vacate to the inside of the main door, or (2) the landlord reasonably believes that harm to any person would result from personal delivery to the tenant or a person residing at the premises or from personal delivery to the premises by affixing the notice to the inside of the main entry door.

In such case, the landlord may deliver notice to vacate by securely affixing to the outside of the main entry door a sealed envelope that contains the notice and on which is written the tenant’s name, address, and in all capital letters, the words “IMPORTANT DOCUMENT” or substantially similar language. Additionally, the landlord must deposit a copy of the notice to the tenant in the mail in the same county in which the premises in question is located, by 5 p.m. on the same day the notice is affixed to the tenant’s door. This alternative method for providing notice contains new, additional requirements, meaning a landlord can no longer provide notice by merely affixing the notice to the outside of the main entry door.

The amendment to Section 24.005 also clarifies that notice to vacate under this alternative method is considered delivered on the date the envelope is affixed to the outside of the door and deposited in the mail, regardless of when the notice is received by the tenant.

Laura McClellan & Lauren Crouch
K&L Gates LLP
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Free Webinar - Current Trends in Loan Terms: Large Cap and Middle Market Loans

Join Practical Law and experts from Thompson & Knight LLP and Davis Polk & Wardwell LLP for a free 60-minute webinar. During this session, the presenters will explain the effects of prevailing market forces on the large corporate and middle market segments of the US loan market and discuss arguments commonly raised in loan agreement negotiations.

CLE is pending in multiple states.

March 4, 2015

1:00 – 2:00 pm EST

Register Here: http://info.practicallaw.com/current-trends-in-loan-terms?utm_campaign=US36861%2F003

Laura McClellan
Thompson & Knight LLP
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Changes to Texas Title Rules

In 2013 the Texas Commissioner of Insurance adopted a number of changes to the Texas Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas (the "Texas Title Manual"). Those changes became effective January 3, 2014. A few of the more significant changes are summarized below. For more information, and to subscribe to updates to the Texas Title Manual, visit the Texas Land Title Association's website.

• Procedural Rule P-57 was amended to include "Fairway language" for an optional coverage in the T-26 Additional Insured Endorsement.The amended endorsement now will allow transfer of an interest in a limited liability company without being deemed to create a new entity, thus voiding the title policy's coverage. (The reference is to Fairway Dev. Co. v. Title Ins. Co. of Minn., 621 F. Supp. 120 (N.D. Ohio 1985), in which the court held that the assignment of partnership interests to the remaining partner and a new unrelated purchaser resulted in a termination of the partnership insured by the title policy at issue and the creation of a new partnership that therefore lacked standing to bring a claim under the title policy issued to the original partnership). 
• A new Commercial Environmental Protection Lien endorsement (Form T-36.1) was adopted. Unlike many other jurisdictions, Texas previously allowed this coverage only on residential property. The new endorsement is consistent with the ALTA 8.2-06 endorsement commonly available in other jurisdictions. NOTE: Although approved, this endorsement will not be available until a Rate Rule and a Procedural Rule are proposed and adopted by the Texas Department of Insurance.
• A new Procedural Rule (P-72) and endorsement form (T-54) were adopted to address situations in which an item's status as real or personal property is disputed. The endorsement affects the measure of damages available if certain title defects cause a diminution of value or result in certain specified costs.
• Endorsement Forms T-19 and T-19.1 (Restrictions, Encroachments, Minerals) were amended to more closely conform with ALTA forms 9-06 and 9.1, and to include language insuring against covenant violations.
• Several other endorsements were amended to more closely track the corresponding ALTA forms. Included among these are T-16 (Loan Policy Aggregation), T-14 (Leasehold Owner's Policy), T-4R (Residential Leasehold), T-5 (Leasehold Loan Policy).

Again, a fuller description of the newly effective changes can be found in the update bulletin on TLTA's website. 

Laura McClellan
Thompson & Knight LLP
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Fifth Circuit Ruling on Certain Covenants Running with the Land

"Bankruptcy allows the sale of real property free and clear of certain liens and interests. A covenant running with the land, however, is likely not affected by a sale in bankruptcy. Whether a right is a covenant running with the land is thus a crucial issue, especially when a debtor in bankruptcy seeks to strip the right without the owner’s consent. The Fifth Circuit recently held in Newco Energy v. Energytec, Inc. (In re Energytec, Inc.),[1] that a right to a transportation fee in connection with a pipeline and a right to consent to the assignment of the pipeline were covenants running with the land."

So begins a recent post by my colleagues Mitchell Ayer and Evelyn Breithaupt on Thompson & Knight's Oil and Gas Update blog. In the post, Mitchell and Evelyn summarize and analyze the case and its impact on oil and gas contracts. They conclude with the suggestion that in "agreements such as participation agreements, joint venture agreements and joint operating agreements[, t]o improve the chances that a purchaser’s obligations will survive bankruptcy (i) characterize the obligations as covenants running with the land and (ii) file the agreement of record by referencing the agreement in the assignment (assuming you are in a state like Texas that allows record notice by reference)."

The case, and their suggestions, are relevant to real estate contracts as well. I encourage you to read their post for more information. Click here to read more.

Laura McClellan
Thompson & Knight LLP
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[1] No. 12-41162 (Dec. 31, 2013), available at http://www.ca5.uscourts.gov/opinions/pub/12/12-41162-CV0.pdf

Assistant Professor Position Open for Real Estate Lawyer

I've been asked to share with my readers that the Department of Business Law at California State University, Northridge is accepting applications for an Assistant Professor position to begin in fall 2014. Here is their announcement:

Qualifications: J.D. from an ABA-accredited law school and admission to the bar required. Significant and substantial experience in the practice of law is required. In addition, previous experience in teaching law at the university level, an M.B.A. degree from an accredited college or university, law review membership, experience as a law clerk at the appellate level, a history of scholarly research and publications, and business experience are highly desirable. Candidates must be professionally or academically qualified under AACSB standards and maintain that qualification. Applicants must demonstrate a commitment to working with an ethnically and culturally diverse student population.  CSUN is a Learning Centered University. In addition, the applicant must possess a scholarly interest and professional experience in the practice of real estate law. The successful candidate will be expected to teach courses in real estate law and the business of real estate, as well as other business law classes. The candidate will be expected to join faculty and staff in a commitment to active learning, to the assessment of learning outcomes, and to multiple pathways that enable students to graduate.

The position description can be located from a link on the department's website: www.csun.edu/blaw. We encourage applications, with priority given to those received by August 22, 2013.

Laura McClellan
Thompson & Knight LLP
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New UCC Forms Effective July 1, 2013

In case you were not aware, effective July 1, 2013, all Uniform Commercial Code forms will change. Examples of the new forms are available on the Texas Secretary of State's website.

Laura McClellan
Thompson & Knight LLP
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When Is a Loan Not a Loan?

When is a loan document not evidence of a loan, but rather of an equity investment?

In their article, “9th Circ. Favors Substance Over Form In Fitness Holdings,” Thompson & Knight Partner Ira L. Herman and Associate Evelyn Breithaupt discuss the nuances of the Ninth Circuit decision in In re Fitness Holdings International Inc. (2013 U.S. App. LEXIS 8729). This ruling and similar decisions permit the recharacterization of an obligation labeled as debt, as equity.

This decision is an important reminder that although parties may structure a transaction to look like a loan, courts have the inherent authority to determine what the transaction really is and are not bound by what it is called. The decision warns that payments made on account of a recharacterized loan may constitute a distribution on account of an equity interest, subject to “clawback” as a fraudulent transfer.

The article was published by Law360 on May 6, 2013. You can read the entire article by clicking on the article's title above, or on this link.

Laura McClellan
Thompson & Knight LLP
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Related articles

The Tax Court Rules That Cash Received From Foreign Subsidiary In A "Reinvestment Plan" Was Really A Taxable Dividend

The Tenth Circuit Rules That Bankruptcy Stay Does Not Apply to Appeals From Tax Court

Do You Really Need Local Counsel for Your Texas Deal?

My partner, Alfred M. Meyerson, recently addressed this question in a very informative article in The Metropolitan Corporate Counsel. Besides explaining why you really do need a Texas lawyer working on your Texas real estate deal, Alfie also summarizes some important idiosyncracies of Texas real estate law that you should be aware of if you're doing a deal in the state. I highly recommend this article for your review. Check it out by clicking on this Texas counsel article link. 

Laura McClellan
Thompson & Knight LLP
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Certainty of Title: Upcoming Journal Article

The Arkansas Law Review will be publishing a paper analyzing real property recording systems and the foreclosure crisis. You might find it interesting. You can download Professor Donald J. Kochan's paper, Certainty of Title: Perspectives after the Mortgage Foreclosure Crisis on the Essential Role of Effective Recording Systems, by clicking on the link in the article title in this sentence.

Laura McClellan
Thompson & Knight LLP
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