By Ellis S.B. No. 317
76R3657 MLS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to real property that has been foreclosed on by a property
1-3 owners' association.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 51, Property Code, is amended by adding
1-6 Section 51.007 to read as follows:
1-7 Sec. 51.007. NOTICE OF SALE OF REAL PROPERTY UNDER PROPERTY
1-8 OWNERS' ASSOCIATION'S LIEN; REDEMPTION. (a) In addition to the
1-9 requirements of Section 51.002(b), a notice of sale of real
1-10 property under a power of sale conferred by a property owners'
1-11 association's lien must be published in a newspaper of general
1-12 circulation in each county in which the property is located at
1-13 least once each week for three consecutive weeks before the date of
1-14 the sale, with the first publication appearing at least 21 days
1-15 before the date of the sale, designating the place of the sale and
1-16 providing a brief description of the property sufficient to
1-17 identify the location of the property.
1-18 (b) The owner of real property in a residential real estate
1-19 subdivision whose property has been sold at a foreclosure sale
1-20 because of a property owners' association's lien for assessments
1-21 may redeem that property not later than the 90th day after the
1-22 property owners' association purchases the property at the
1-23 foreclosure sale.
1-24 (c) If the association purchases real property at a sale
2-1 foreclosing its assessment lien, the association may not transfer
2-2 ownership of the real property to a person other than a redeeming
2-3 owner during the redemption period.
2-4 (d) To redeem the real property, the property owner must pay
2-5 to the property owners' association:
2-6 (1) all amounts due to the association at the time of
2-7 the foreclosure sale;
2-8 (2) interest from the date of foreclosure sale to the
2-9 date of redemption at the rate provided by dedicatory instrument
2-10 for a delinquent assessment;
2-11 (3) costs incurred by the association in foreclosing
2-12 the lien, including reasonable attorney's fees;
2-13 (4) any assessment levied against the property by the
2-14 association after the foreclosure sale; and
2-15 (5) any reasonable cost incurred by the association as
2-16 owner of the property, including costs of maintenance and leasing.
2-17 (e) If the property owner redeems the real property as
2-18 provided by this section, the property owners' association shall
2-19 execute a deed transferring the property to the redeeming property
2-20 owner.
2-21 (f) The exercise of the right of redemption is not effective
2-22 after the redemption period against a subsequent purchaser or
2-23 lender for value without notice of the redemption unless the
2-24 redeeming property owner records the deed from the property owners'
2-25 association or an affidavit stating that the owner has exercised
2-26 the right of redemption.
2-27 (g) Real property that has been redeemed remains subject to
3-1 all liens and encumbrances on the real property before foreclosure.
3-2 All rents and other income collected by the property owners'
3-3 association from the date of foreclosure sale to the date of
3-4 redemption belong to the association, but the association shall
3-5 credit the rent and income against the redemption amount.
3-6 SECTION 2. (a) This Act takes effect September 1, 1999.
3-7 (b) The change in law made by this Act applies only to a
3-8 notice of sale that must be provided under Section 51.007, Property
3-9 Code, as added by this Act, for a sale of real property under a
3-10 power of sale conferred by a property owners' association lien that
3-11 occurs on or after October 1, 1999.
3-12 (c) A notice of sale that must be provided for a sale of
3-13 real property under a power of sale conferred by a property owners'
3-14 association lien that occurs before October 1, 1999, is governed by
3-15 the law in effect immediately preceding the effective date of this
3-16 Act, and the former law is continued in effect for that purpose.
3-17 (d) The changes in law made by Section 51.007, Property
3-18 Code, as added by this Act, apply only to real property sold at a
3-19 foreclosure sale that occurs on or after the effective date of this
3-20 Act. Real property sold at a foreclosure sale before the effective
3-21 date of this Act is covered by the law in effect on the date of the
3-22 sale, and the former law is continued in effect for that purpose.
3-23 SECTION 3. The importance of this legislation and the
3-24 crowded condition of the calendars in both houses create an
3-25 emergency and an imperative public necessity that the
3-26 constitutional rule requiring bills to be read on three several
3-27 days in each house be suspended, and this rule is hereby suspended.