AI-assisted research summary: A real estate investment trust’s lack of capacity cannot be used as a claim or defense, and certain ultra vires acts or transfers are not invalid. The section also allows specified proceedings to challenge unauthorized acts and lets a court enjoin performance and award limited compensation.
Sec. 200.004. ULTRA VIRES ACTS. (a) Lack of capacity of a real estate investment trust may not be the basis of any claim or defense at law or in equity. (b) An act of a real estate investment trust or a transfer of property by or to a real estate investment trust is not invalid because the act or transfer was: (1) beyond the scope of the purpose or purposes of the real estate investment trust as expressed in the real estate investment trust's certificate of formation; or (2) inconsistent with a limitation on the authority of an officer or trust manager to exercise a statutory power of the real estate investment trust, as that limitation is expressed in the real estate investment trust's certificate of formation. (c) The fact that an act or transfer is beyond the scope of the expressed purpose or purposes of the real estate investment trust or is inconsistent with an expressed limitation on the authority of an officer or trust manager may be asserted in a proceeding: (1) by a shareholder against the real estate investment trust to enjoin the performance of an act or the transfer of property by or to the real estate investment trust; or (2) by the real estate investment trust, acting directly or through a receiver, trustee, or other legal representative, or through shareholders in a representative suit, against an officer or trust manager or former officer or trust manager of the real estate investment trust for exceeding that person's authority. (d) If the unauthorized act or transfer sought to be enjoined under Subsection (c)(1) is being or is to be performed or made under a contract to which the real estate investment trust is a party and if each party to the contract is a party to the proceeding, the court may set aside and enjoin the performance of the contract. The court may award to the real estate investment trust or to another party to the contract, as appropriate, compensation for loss or damage resulting from the action of the court in setting aside and enjoining the performance of the contract, excluding loss of anticipated profits. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.