Sec. 200.405. APPROVAL OF SALE OF ALL OR SUBSTANTIALLY ALL OF ASSETS. (a) Except as provided by the certificate of formation of a domestic real estate investment trust, a sale, lease, pledge, mortgage, assignment, transfer, or other conveyance of an interest in real property or other assets of the real estate investment trust does not require the approval or consent of the shareholders of the real estate investment trust unless the transaction constitutes a sale of all or substantially all of the assets of the real estate investment trust.

(b) A real estate investment trust must approve the sale of all or substantially all of its assets by complying with this section.

(c) The trust managers of the real estate investment trust shall adopt a resolution that approves the sale of all or substantially all of the assets of the real estate investment trust and:

(1) recommends that the sale of all or substantially all of the assets of the real estate investment trust be approved by the shareholders of the real estate investment trust; or

(2) directs that the sale of all or substantially all of the assets of the real estate investment trust be submitted to the shareholders for approval without recommendation if the trust managers determine for any reason not to recommend approval of the sale.

(d) The sale of all or substantially all of the assets of the real estate investment trust shall be submitted to the shareholders of the real estate investment trust for approval as provided by this subchapter. The trust managers may place conditions on the submission of the proposed sale to the shareholders.

(e) If the trust managers approve the sale of all or substantially all of the assets of the real estate investment trust but do not adopt a resolution recommending that the proposed sale be approved by the shareholders of the real estate investment trust, the trust managers shall communicate to the shareholders the reason for the trust managers' determination to submit the proposed sale to shareholders without a recommendation.

(f) The shareholders of the real estate investment trust shall approve the sale of all or substantially all of the assets of the real estate investment trust as provided by this subchapter.

(g) After the approval of the sale by the shareholders, the trust managers may abandon the sale of all or substantially all of the assets of the real estate investment trust, subject to the rights of a third party under a contract relating to the assets, without further action or approval by the shareholders.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.