Legislative Amendments Address Squatters and Fraudulent Documents

By Aaron J. Demuth, Esq. | Codilis and Associates, PC | USFN Member (IL, IN, MI, MO, TX, WI)

For years, servicers and property management companies in Texas facing unauthorized occupants or forged real estate records found themselves trapped in a slow, expensive legal labyrinth. Unauthorized occupants could manipulate procedural loopholes in the Texas Property Code to remain in homes for months, while scammers and foreclosed owners filed fraudulent deeds and liens that clouded property titles.

Recognizing these vulnerabilities, the Texas Legislature passed a sweeping package of property rights reforms. Enacted in 2025, with effective dates ranging from September 1, 2025, to January 1, 2026, these new laws fundamentally reshape how the state penalizes real estate fraud and handles the eviction of squatters.

Historically, a property owner discovering a squatter had to file a traditional forcible entry and detainer lawsuit, wait weeks for a hearing, and hope the unauthorized occupant did not drag the process out through appeals.

Texas Senate Bill 1333, effective September 1, 2025, amends the Texas Property Code to provide owners with an expedited remedy in clear-cut cases of squatting. Under the law, a property owner or the owner’s designated agent may submit a sworn complaint directly with a local sheriff or constable. Law enforcement may then immediately remove the unauthorized occupant if:

• The property was not open to the general public at the time the person entered.
• No active, legitimate civil litigation is pending regarding ownership.
• The owner or the owner’s agent has directed the person to leave the property, and the person has not done so.
• The occupant is not a current or former tenant, or an immediate family member of the owner.

In qualifying cases, this process converts what was once a court-filed forcible entry and detainer proceeding into an expedited order of possession. If the criteria are met, officers can issue immediate notices to vacate, arrest violators for criminal trespass, and move unauthorized personal belongings to the property line.

Complementing SB 1333 is Texas Senate Bill 38, effective January 1, 2026, which targets cases where a full eviction proceeding is still legally required. Modeled after fast-tracked eviction processes in states such as Florida, SB 38 requires Texas justice courts to hold trial no earlier than the 10th day and no later than the 21st day after an eviction petition is filed. This eliminates county-to-county discrepancies and prolonged delays that previously stalled servicers and property management companies.

Squatters and foreclosed property owners sometimes exploit county records by filing falsified leases, forged deeds, or fraudulent liens to fabricate a “legal right” to a property. Undoing these filings previously required a costly suit to quiet title.

Texas Senate Bill 1734, also effective September 1, 2025, provides an accessible legal shield for victimized property owners. Owners can now record a formal “owner’s affidavit” detailing exactly why a recorded deed or lien is fraudulent. Once notice is mailed and the certificate of mailing is recorded, the beneficiary of the suspect document has a strict 120-day window to record a controverting affidavit. If the beneficiary fails to respond or cannot prove legitimacy, the owner can file a streamlined petition asking a judge to invalidate the fraudulent document. The petition is a summary proceeding allowing for an ex parte order to remove the suspect document from title.  

To stop fraud before it enters public records, Texas Senate Bill 16 passed during the Legislature’s second called special session, adds strict operational guardrails at the county clerk level. Anyone recording a document related to the conveyance of real property must now present a valid government-issued photo ID, which the county clerk is legally required to copy and record. If a clerk suspects a document is fraudulent, the clerk must refer the recorded identification information to local law enforcement.

Texas has paired these amendments with severe criminal consequences to deter fraudulent conduct. Under the new statutory framework, the act of squatting is no longer treated merely as a civil matter.

Presenting a fake lease or fraudulent deed to law enforcement or a county clerk to claim rights to a property is now a Class A misdemeanor. Furthermore, SB 16 formally creates the criminal offenses of Real Property Theft and Real Property Fraud. Selling, leasing, or advertising a residential property without legal title or express authorization has been elevated to a felony of the second degree—rising to a first-degree felony if the property value or financial benefit exceeds $300,000. To ensure that these offenses can be prosecuted long after a scam occurs, each now carries a 10-year statute of limitations.

The landscape for owners of real estate owned (REO) property has shifted significantly in favor of legitimate property owners. However, invoking these remedies requires proactive management. Because immediate police removal requires proof of legal ownership, servicers and property management companies must keep detailed records of property condition and inspections, record deeds in a timely manner, and act quickly if an unauthorized individual attempts to occupy the property. Through these aggressive amendments, Texas has given servicers and property management companies effective legal remedies to deal with squatters and fraudulent recorded documents that create a cloud on title.  

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USFNews - Aug. 5, 2026