Could the Texas Veterans Land Board charge a later paid-in-full deed fee on an older land contract or on a contract assigned to a new purchaser?

Texas AG Opinion JM-897: Which Paid-in-Full Deed Fee Applied to Veterans Land Contracts?

Plain-English summary

Veterans Land Board Chairman Garry Mauro asked about paid-in-full deed fees on veterans land contracts. One question involved contracts made before the fee was first authorized in 1961 but later assigned to new purchasers. The other asked whether the board could charge fees adopted after a post-1961 contract was made.

JM-897 followed Attorney General Opinion JM-774 (1987), which had concluded that adding a fee to a pre-1961 contract would unconstitutionally impair the contract. The general rule was that the contract's terms and the statutes and rules in effect at formation fixed the parties' obligations, unless the documents clearly agreed otherwise.

A reference to a statute or rule "as amended" did not, by itself, accept every future amendment. The opinion read that standard phrase as referring to the law as amended up to the time the contract was made. Ambiguity also ran against the Veterans Land Board because it drafted the documents.

Assignments required document-specific analysis. The original contract, the assignment, and the statutes and rules had to be read together. The question was whether the assignment created a new contract on the deed-fee issue or waived a right under the original agreement. An assignment using clear forward-looking language, such as an agreement to comply with governing statutes and rules "as they may be, from time to time," could obligate the assignee to pay the fee in effect when the deed was eventually obtained.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could the Veterans Land Board add a deed fee to a contract made before 1961?

No, under JM-774's analysis. A fee not provided by the contract, statute, or rule when the contract was made would unconstitutionally impair the agreement.

Did the words 'as amended' make a purchaser subject to future fee increases?

Not by themselves. The opinion read that phrase as covering amendments already in effect when the contract was made.

Which fee applied to a post-1961 original contract?

Absent clear agreement to future changes, only the fee authorized by the statute or rule in effect when the contract was made.

Which fee applied after a purchaser assumed an older contract?

The opinion did not supply one automatic answer. The original contract, assignment, statutes, and rules determined whether the assignment created a new deed-fee obligation or waived a preexisting right.

Could an assignment expressly accept future deed fees?

Yes. Clear language agreeing to follow statutes and rules as they changed over time could bind the assignee to the fee in effect when the paid-in-full deed was obtained.

Background and statutory framework

The Veterans Land Board's sample documents referred to the statute governing the program, then chapter 161 of the Natural Resources Code, and to board rules. Some said the statute "as amended" bound the parties. JM-897 treated the law at formation as part of the contract and rejected a reading that silently incorporated later fee statutes or rules.

The opinion identified two constitutional restrictions: article I, section 10, of the United States Constitution and article I, section 16, of the Texas Constitution. JM-774 had applied those contract-impairment provisions to deed fees added after formation.

For assignments, the Attorney General declined to reduce the analysis to the original-contract date or assignment date alone. The full transaction controlled. The assignment could be a new contract for the fee obligation or could waive a right carried forward from the original contract. Newman v. Supreme Lodge, Knights of Pythias, 70 So. 241 (Miss. 1915), supported enforcing a clear agreement to future governing provisions.

Citations

Constitutional and statutory authority:

• U.S. Constitution article I, section 10
• Texas Constitution article I, section 16
• Natural Resources Code chapter 161

Case:

• Newman v. Supreme Lodge, Knights of Pythias, 70 So. 241 (Miss. 1915)

Prior Attorney General material referenced: JM-774 (1987).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-897
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0897.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Obvious character-level OCR errors have been corrected, but minor errors may remain; the linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

                 May 6, 1988

Honorable Garry Mauro Opinion No. JM-897
Chairman
Veterans Land Board Re: Additional questions
1700 N. Congress relevant to Attorney General
Austin, Texas 78701 Opinion JM-774 (1987) on paid-
in-full deed fee on contracts
subject to Veterans Land Act
(RQ-1275)

Dear Mr. Mauro:

 You ask:

      1. May the Veterans Land Board impose a
   paid-in-full deed fee on [veterans' land]
   contracts   entered into before   1961  but
   assumed by a new purchaser after 1961?  All
   contract assignments  since 1961 are made
   subject to the Veterans     Land Act,   'as
   amended.'

                   Veterans Land          impose
   the"&r%t""%SO     paid-in-full izzi" fee on
   contracts  or   assignments   of   contracts
   entered into after 1961 or is the board
   limited to the fee authorized by statute at
   the time the contract is entered into?

As you indicated in your request, these questions relate
to the question dealt with in Attorney General Opinion
JM-774 (1987). There, we ruled that imposition of a
paid-in-full deed fee, which was not adopted by statute or
rule until 1961, would constitute an unconstitutional
impairment of contracts if applied to contracts made
before 1961 when no such fee was provided for by statute
or by rule. U.S. Const. art. I, §10. See also Tex.
Const. art. I, §16.

 In our opinion, the issues you now present are for

the most part resolved by reference to JM-774 (1987) and
the authorities cited there. Absent clear agreement to

                      p. 4413

Honorable Garry Mauro - Page 2 (JM-897)

the contrary, parties to a contract are bound by the terms
of the contract entered into and by the laws relating to
its subject matter that are in effect at the time of its
?
making.

 Attorney General Opinion JM-774 held that as the

pre-1961 contracts themselves and the statutes and rules
then in effect were silent as to the purchasers'
obligations to pay a paid-in-full deed fee, imposition of
paid-in-full deed fees set by later statutes or rules
would unconstitutionally impair the contracts. Regarding
post-1961 contracts as well, the contract's own terms
taken together with the statutes and rules in effect at
the time of its making govern the obligations under the
contract absent clear agreement to the contrary.

 We note that the relevant provisions contained in the

sample original contracts we have seen consist of:

      1. statements that the contract is made
   pursuant to a statute (currently chapter 161
   of the Natural Resources Code) and rules
   adopted by the Veterans Land Board;

      2. statements that the parties are bound
   by the provisions   of such statutes    and
   rules; and

      3. statements   that the statute,      'as
   amended,' shall be binding on the parties.

 It is our opinion that where there are no provisions

regarding controlling statutes, or where there is a cita-
tion of a statute, or of a statute "as amended," the
controlling law can only be that in effect, and "as
amended," at the time the contract was made.1 In such

  1. "As amended" could arguably be deemed to refer

to the statute and rules as they will be amended in the
future. But in light of the rule that ambiguous contract
language is construed against the drafter thereof (the
board here), and given that "as amended" is standard
language appended to references to an act or rule to 1
indicate as amended to the present, we consider that a
contract statement that the purchaser or assignee is
subject to an act or rule "as amended" can, in itself,
(Footnote Continued)
?

                     p. 4414


Honorable Garry Mauro - Page 3     (JM-897)




cases, to apply to the contract a fee        statute or rule
enacted or promulgated  after the making     of the contract
would unconstitutionally impair it.

     None of the exceptions to the impairment rule set out
in JM-774, e.g., in the cases where legislative enactments
are in the "public interest," or where the exceptions turn
on the distinction    between  impairment  of rights and
impairment of remedies, are any more apposite here than
they were held to be in the context of the very similar
issues presented in Attorney General Opinion JM-774.

     Thus, it is our opinion that original      contracts,
making references  to the controlling    statutes  in the
manner indicated above, and executed     after 1961, are
subject only to the fee which was provided     for by the
statute or rule at the time the contract was made.

     You also ask what paid-in-full deed fees, if any,
assignees of such contracts   could be made liable    for.
From the foregoing discussion,      it follows that     an
assignment contract referencing the controlling    statute
and rules as they were referenced in the original contract

C
provisions discussed above does not subject the assignee
to fees or fee increases enacted or promulgated after the
assignment was made.

     The issue, then, is whether the assignee is subject
to the law in force at the time of the assignment or to
that in force at the time the original contract was made,
with respect to the deed fee, where the assignment
contract made reference to controlling statutes or rules
in the manner discussed above with respect to the original
contracts. We feel that determination of this issue may
be made only with reference to particular contracts    and
pertinent rules: what paid-in-full   deed fee, if any, an
assignee may be made liable for depends on whether     the
particular  assignment  and underlying   contract,   taken
together with the pertinent statutes and rules, show that
the assignment constituted a new contract with respect to
the obligation of the assignee to pay a deed fee, or show
a waiver by the assignee of the right under the original



(Footnote Continued)
only bind the purchaser  or assignee to the provisions of
such act or rules as amended up to the time of the making
of the contract.




                         p. 4415

Honorable Garry Mauro - Page 4 JM-897)

contract to obtain the deed without paying a fee or
increased fee, etc.
?
We note, however, that, in examining the various
sample contracts and assignments supplied by the board to
us per our request, we have found some sample assignment
contracts which provide that the assignee "agrees to
comply with the statutes, rules and regulations governing
the Veterans Land Board, as they may be, from time to time" (emphasis added). We think that by assenting to
such provisions in the assignment contract, an assignee
could be deemed to obligate himself to pay whatever deed
fee is in effect under rule or statute at the time he
obtains his paid-in-full deed. Again, though, the overall
effect of an assignment transaction can only be determined
by reference to the assignment contract as a whole, the
underlying original contract, and pertinent statutes and
rules in effect at all relevant times. It is in any case
our opinion that an assignee (or original purchaser for
that matter, although we have seen no original contracts
referring to future controlling statutes and rules as do
the sample assignment contracts mentioned above) could
obligate himself to pay the fee in effect at the time he
obtains his deed in the future where the contract clearly ?
indicates such. See, e.a Newman v. Supreme Lodge, Knights of Pythias, 70 So. 241 (Miss. 1915).

                    SUMMARY

      The extent of     the obligation    of
   purchaser or assignee under a veterans land
   contract to pay a paid-in-full deed fee is
   determined by the pertinent    statutes    and
   rules in effect at the time of the making of
   the contract, unless the contract  documents
   clearly show the parties'   agreement to be
   subject to paid-in-full deed fees as they
   are in effect subsequently.

      Whether an assignee, under an assignment
   contract not clearly indicating the parties
   agreement to be bound by deed fees as they
   will be in effect      in the future,     is
   obligated to pay the deed fee in effect at
   the time of the original contract or to pay
   that in effect at the time of the assignment
   depends on whether all pertinent   documents
   and rules taken together indicate that the
   assignment contract  is a new contract    at                ?
   least with respect to the deed fee, that the



                        p. 4416

Honorable Garry Mauro - Page 5 JM-897)

   assignee has waived a right under        the
   original contract to obtain the deed without
   paying a fee or increased fee, etc.

      Where a contract so provides, a purchaser
   or assignee may obligate himself to pay a
   deed fee enacted or promulgated   at a time
   subsequent to the making of the contract.




                               JIM     MATTOX
                               Attorney General of Texas

MARY KELLER
First Assistant Attorney General

                     p. 4417

Honorable Garry Mauro - Page 6 (JM-897)

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by William Walker
Assistant Attorney General

                     p. 4418