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Senate Bill 889 |
Senate Author: Carona |
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Effective: 6-17-11 |
House Sponsor: Davis, Sarah |
Senate Bill 889 amends the Property Code to establish that a lien creates an assignment of rents arising from real property securing an obligation under the lien, except under certain conditions, and that an assignment of rents creates a presently effective security interest in all accrued and unaccrued rents arising from the real property described in the document creating the assignment, regardless of the form of the document. The bill establishes that the security interest in rents is separate and distinct from any security interest held by the assignee in the real property from which the rents arise and that an assignment of rents does not reduce the secured obligation except to a specified extent. The bill sets out provisions relating to the recording and perfecting of security interests in rents and the priority of such interests, the means by which an assignee may enforce a security interest in rents and the effect of such enforcement, and the application of proceeds obtained by an assignee from the collection of rents or collection on a judgment in an action under the bill's provisions. It also provides for notification of applicable parties regarding the assignment of rents; claims and defenses of a tenant; the turnover of rents and the liability of an assignor; and the attachment, perfection, and priority of an assignee's security interest in any proceeds.