Amend CSSB 507 as follows:
(1) In SECTION 1 of the bill, in added Chapter 209, Property
Code, add a new Section 209.010 to read as follows and renumber
existing sections and cross-references in the chapter
appropriately:
Sec. 209.010. REIMBURSEMENT FOLLOWING FORECLOSURE OF LIEN
FOR NONPAYMENT OF ASSESSMENTS. (a) This section applies to a
property owners' association that forecloses a lien on a lot to
secure payment of assessments owed to the association by the owner.
(b) If a property owners' association authorizes a
foreclosure sale of a lot, the association shall establish a
minimum bid price and may not sell the property for less than the
minimum bid price. The minimum bid price shall be the greater of:
(1) 80 percent of the value of the property according
to the most recent appraisal by the appraisal district established
for the county in which the property is located, minus:
(A) the amount owing on any liens of record
against the property; and
(B) the amount of any taxes owing on the
property, whether or not the taxes are delinquent; or
(2) the amount owed on the debt for which the sale is
authorized plus any expenses expected to be attributed to the sale.
(c) In establishing the minimum bid price under Subsection
(b), the property owners' association may use any amount applicable
under Subsection (b) on or after the 20th day before the date the
association mails notice of sale to the owner.
(d) The property owners' association shall mail a
preforeclosure notice to the owner not later than the 60th day
before the date the notice of sale under Subsection (c) is mailed
to the owner. The preforeclosure notice must:
(1) inform the owner that the property owners'
association:
(A) intends to foreclose the association's lien
on the property; and
(B) will establish a minimum bid price for the
foreclosure sale;
(2) request the owner to provide documentary evidence
to the association regarding the existence and amount of any lien
on the property;
(3) state that if the requested documentary evidence
is provided on or before the 40th day after the date the notice is
mailed, the minimum bid price will be the greater of:
(A) 80 percent of the value of the property
according to the most recent appraisal by the appraisal district
established for the county in which the property is located, minus:
(i) the amount owing on any liens of
record against the property; and
(ii) the amount of any taxes owing on the
property, whether or not the taxes are delinquent; or
(B) the amount owed on the debt for which the
sale is authorized plus any expenses expected to be attributed to
the sale;
(4) state that if the owner does not provide the
requested documentary evidence on or before the 40th day after the
date the notice is mailed or provides incomplete information and
there are any liens of record against the property, the association
may establish a minimum bid price that is the amount owed for the
debt for which the sale is authorized plus any expenses expected to
be attributed to the sale;
(5) provide the name and address of the person to whom
the requested documentary evidence may be provided; and
(6) state the amount the association claims is owed on
the debt for which the foreclosure sale will be authorized and the
amount the association will add for expenses.
(e) The owner has the burden of ensuring that any
documentary evidence reaches the person designated in the
preforeclosure notice within the period prescribed by Subsection
(d).
(f) The property owners' association has the burden of:
(1) checking the real property records of the county
in which all or part of the property is located to determine
whether a lien of record has been filed on the property; and
(2) obtaining a statement of the appraised value of
the property from the appraisal district established for the county
in which the property is located.
(g) If the real property to be sold under this section is
the principal residence of the owner, not later than the 20th day
after the date the preforeclosure notice is mailed, the property
owners' association shall make a reasonable attempt to contact the
owner in person to advise the owner regarding the information
required to be in the preforeclosure notice. An attempt to contact
the owner must be made by a member of the governing body of the
association. If no contact is made, the association must make at
least three attempts to contact the owner by telephone and three
attempts to contact the owner in person at the owner's residence.
If the attempts to contact the owner by telephone and in person are
not successful, a member of the governing body of the association
shall leave an additional copy of the preforeclosure notice affixed
to the front door of the residence.
(h) If the property owners' association finds no liens of
record filed on the property to be sold, the minimum bid price is
80 percent of the appraised value of the property according to the
most recent appraisal by the appraisal district established for the
county in which the property is located. If the association finds
a lien of record filed on the property and provides a
preforeclosure notice as prescribed by this section, and the owner
fails to respond to the notice in the period prescribed by
Subsection (d):
(1) it is conclusively presumed that the amount owed
on the lien equals or exceeds the difference between 80 percent of
the appraised value of the property and the amount owed on the debt
for which the sale is authorized plus any expenses expected to be
attributed to the sale; and
(2) the minimum bid price may be established as the
amount owed on the debt for which the sale is authorized plus any
expenses expected to be attributed to the sale.
(i) A person does not have a cause of action against a
property owners' association for the association's failure to
establish a lower minimum bid price.
(j) The owner has a cause of action against the property
owners' association for damages caused by the association's failure
to set a greater minimum bid price as prescribed by this section.
Damages under this subsection are limited to the difference between
the greater minimum bid price that the association should have
established under this section and the amount owed on the debt for
which the sale is authorized plus the expenses of the sale. The
owner is also entitled to recover reasonable attorney's fees.
(k) If no other bidder bids the minimum bid price, the
property owners' association may hold the property and must resell
the property for a price that equals or exceeds the minimum bid
price. If the property is held by the association as provided by
this subsection and the property was the principal residence of the
owner at the time the preforeclosure notice was mailed, the owner
may continue to reside on the property until the closing on the
resale of the property if all mortgage or other lien payments are
current and no taxes owed on the property are delinquent.
(l) If the owner continues to reside on the property after
the foreclosure sale, the property owners' association may charge a
reasonable rent to be deducted from the amount owed the owner at
the time of the resale. If the owner does not pay all mortgage and
other lien payments and taxes when due, the association may evict
the owner.
(m) When the property is sold to a buyer other than the
property owners' association, the proceeds shall be applied in the
following priority:
(1) expenses of the sale;
(2) the amount owed on the debt for which the sale was
authorized;
(3) any assessments that accrued against the property
after the sale was authorized;
(4) the remainder, if any, to be paid to the owner.
(n) Assessments continue to accrue against the property
after a foreclosure sale, regardless of who owns the property.
(o) If the owner continues to live on the property after a
foreclosure sale as provided by Subsection (k), the owner is
responsible for reasonable maintenance of the property. The
property owners' association is entitled to make an inspection of
the property at a reasonable time on or before the 10th day after
the date of the foreclosure sale and once every 60 days thereafter.
If the owner does not reasonably maintain the property in a
condition as good as or better than the condition of the property
on the date of the foreclosure sale, the association may make the
needed repairs or maintenance and deduct the reasonable cost of the
repairs or maintenance from the amount due the owner at the time of
resale.
(p) If the property is held by the property owners'
association as provided by Subsection (k) and the property is the
principal residence of the owner at the time the preforeclosure
notice is mailed and the owner is evicted from the property, on or
before the first anniversary of the date the owner moved from the
property, the association shall pay the owner:
(1) the full amount due the owner from a resale; or
(2) if the property is not resold, the full amount
that would have been due the owner if a resale had been made for
the minimum bid price.
(2) Add the following appropriately numbered SECTION and
renumber existing SECTIONS of the bill appropriately:
SECTION __. Section 209.010, Property Code, as added by this
Act, applies to a foreclosure sale conducted on or after January 1,
2001.