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A BILL TO BE ENTITLED
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AN ACT
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relating to the persons entitled to redeem property after the |
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foreclosure of a property owners' association's assessment lien. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 209.010, Property Code, is amended by |
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amending Subsections (a) and (b) and adding Subsections (b-1) and |
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(b-2) to read as follows: |
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(a) A property owners' association that conducts a |
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foreclosure sale of an owner's lot must send to the lot owner and to |
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each lienholder of record, not later than the 30th day after the |
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date of the foreclosure sale, a written notice stating the date and |
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time the sale occurred and informing the lot owner and each |
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lienholder of record of the [owner's] right of the lot owner and |
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lienholder to redeem the property under Section 209.011. |
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(b) The notice must be sent by certified mail, return |
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receipt requested, to: |
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(1) the lot owner's last known mailing address, as |
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reflected in the records of the property owners' association; |
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(2) the address of each holder of a lien on the |
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property subject to foreclosure evidenced by the most recent deed |
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of trust filed of record in the real property records of the county |
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in which the property is located; and |
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(3) the address of each transferee or assignee of a |
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deed of trust described by Subdivision (2) who has provided notice |
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to a property owners' association of such assignment or transfer. |
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Notice provided by a transferee or assignee to a property owners' |
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association shall be in writing, shall contain the mailing address |
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of the transferee or assignee, and shall be mailed by certified |
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mail, return receipt requested, or United States mail with |
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signature confirmation to the property owners' association |
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according to the mailing address of the property owners' |
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association pursuant to the most recent management certificate |
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filed of record pursuant to Section 209.004. |
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(b-1) If a recorded instrument does not include an address |
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for the lienholder, the association does not have a duty to notify |
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the lienholder as provided by this section. |
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(b-2) For purposes of this section, the lot owner is deemed |
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to have given approval for the association to notify the |
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lienholder. |
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SECTION 2. Subsections (b), (d), (e), (f), (g), (h), (j), |
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(k), (m), (n), and (p), Section 209.011, Property Code, are amended |
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to read as follows: |
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(b) The owner of property in a residential subdivision or a |
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lienholder of record may redeem the property from any purchaser at a |
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sale foreclosing a property owners' association's assessment lien |
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not later than the 180th day after the date the association mails |
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written notice of the sale to the owner and the lienholder under |
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Section 209.010. |
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(d) To redeem property purchased by the property owners' |
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association at the foreclosure sale, the lot owner or lienholder |
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must pay to the association: |
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(1) all amounts due the association at the time of the |
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foreclosure sale; |
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(2) interest from the date of the foreclosure sale to |
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the date of redemption on all amounts owed the association at the |
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rate stated in the dedicatory instruments for delinquent |
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assessments or, if no rate is stated, at an annual interest rate of |
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10 percent; |
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(3) costs incurred by the association in foreclosing |
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the lien and conveying the property to the redeeming lot owner, |
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including reasonable attorney's fees; |
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(4) any assessment levied against the property by the |
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association after the date of the foreclosure sale; |
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(5) any reasonable cost incurred by the association, |
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including mortgage payments and costs of repair, maintenance, and |
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leasing of the property; and |
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(6) the purchase price paid by the association at the |
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foreclosure sale less any amounts due the association under |
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Subdivision (1) that were satisfied out of foreclosure sale |
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proceeds. |
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(e) To redeem property purchased at the foreclosure sale by |
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a person other than the property owners' association, the lot owner |
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or lienholder: |
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(1) must pay to the association: |
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(A) all amounts due the association at the time |
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of the foreclosure sale less the foreclosure sales price received |
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by the association from the purchaser; |
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(B) interest from the date of the foreclosure |
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sale through the date of redemption on all amounts owed the |
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association at the rate stated in the dedicatory instruments for |
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delinquent assessments or, if no rate is stated, at an annual |
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interest rate of 10 percent; |
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(C) costs incurred by the association in |
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foreclosing the lien and conveying the property to the redeeming |
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lot owner, including reasonable attorney's fees; |
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(D) any unpaid assessments levied against the |
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property by the association after the date of the foreclosure sale; |
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and |
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(E) taxable costs incurred in a proceeding |
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brought under Subsection (a); and |
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(2) must pay to the person who purchased the property |
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at the foreclosure sale: |
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(A) any assessments levied against the property |
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by the association after the date of the foreclosure sale and paid |
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by the purchaser; |
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(B) the purchase price paid by the purchaser at |
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the foreclosure sale; |
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(C) the amount of the deed recording fee; |
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(D) the amount paid by the purchaser as ad |
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valorem taxes, penalties, and interest on the property after the |
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date of the foreclosure sale; and |
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(E) taxable costs incurred in a proceeding |
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brought under Subsection (a). |
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(f) If a lot owner or lienholder redeems the property under |
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this section, the purchaser of the property at foreclosure shall |
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immediately execute and deliver to the redeeming party [owner] a |
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deed transferring the property to the [redeeming] lot owner. If a |
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purchaser fails to comply with this section, the lot owner or |
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lienholder may file an [a cause of] action against the purchaser and |
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may recover reasonable attorney's fees from the purchaser if the |
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lot owner or the lienholder is the prevailing party in the action. |
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(g) If, before the expiration of the redemption period, the |
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redeeming lot owner or lienholder fails to record the deed from the |
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foreclosing purchaser or fails to record an affidavit stating that |
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the lot owner or lienholder has redeemed the property, the lot |
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owner's or lienholder's right of redemption as against a bona fide |
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purchaser or lender for value expires after the redemption period. |
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(h) The purchaser of the property at the foreclosure sale or |
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a person to whom the person who purchased the property at the |
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foreclosure sale transferred the property may presume conclusively |
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that the lot owner or a lienholder did not redeem the property |
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unless the lot owner or a lienholder files in the real property |
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records of the county in which the property is located: |
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(1) a deed from the purchaser of the property at the |
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foreclosure sale; or |
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(2) an affidavit that: |
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(A) states that the property [lot owner] has been |
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redeemed [the property]; [and] |
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(B) contains a legal description of the property; |
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and |
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(C) includes the name and mailing address of the |
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person who redeemed the property. |
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(j) If a person other than the property owners' association |
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is the purchaser at the foreclosure sale, before executing a deed |
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transferring the property to the [redeeming] lot owner, the |
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purchaser shall obtain an affidavit from the association or its |
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authorized agent stating that all amounts owed the association |
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under Subsection (e) have been paid. The association shall provide |
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the purchaser with the affidavit not later than the 10th day after |
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the date the association receives all amounts owed to the |
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association under Subsection (e). Failure of a purchaser to comply |
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with this subsection does not affect the validity of a redemption |
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[by a redeeming lot owner]. |
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(k) Property that is redeemed remains subject to all liens |
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and encumbrances on the property before foreclosure. Any lease |
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entered into by the purchaser of property at a sale foreclosing an |
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assessment lien of a property owners' association is subject to the |
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right of redemption provided by this section and the lot owner's |
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right to reoccupy the property immediately after [the] redemption. |
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(m) If a lot owner or lienholder sends by certified mail, |
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return receipt requested, a written request to redeem the property |
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on or before the last day of the redemption period, the lot owner's |
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or lienholder's right of redemption is extended until the 10th day |
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after the date the association and any third party foreclosure |
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purchaser provides written notice to the redeeming party [lot
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owner] of the amounts that must be paid to redeem the property. |
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(n) After the redemption period and any extended redemption |
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period provided by Subsection (m) expires without a redemption of |
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the property, the association or third party foreclosure purchaser |
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shall record an affidavit in the real property records of the county |
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in which the property is located stating that the lot owner or a |
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lienholder did not redeem the property during the redemption period |
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or any extended redemption period. |
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(p) The rights of a lot owner and a lienholder under this |
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section also apply if the sale of the lot owner's property is |
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conducted by a constable or sheriff as provided by a judgment |
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obtained by the property owners' association. |
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SECTION 3. Sections 209.010 and 209.011, Property Code, as |
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amended by this Act, apply only to a foreclosure sale conducted on |
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or after the effective date of this Act. A foreclosure sale |
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conducted before the effective date of this Act is governed by the |
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law in effect immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2009. |