BILL ANALYSIS

H.B. 1228

By: Dutton

Business & Industry

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Currently, a property owners' association may foreclose on real property for the property owner's failure to pay association assessments. In many instances, the foreclosed property is encumbered with a first lien that is not disposed of when the foreclosure sale occurs because there is no requirement to notify the lienholder of the foreclosure or the sale. H.B. 1228 sets out provisions relating to notice and providing the lienholder with an opportunity to cure a delinquency before a foreclosure sale.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 1228 amends the Property Code to prohibit a property owners' association from foreclosing an association assessment lien on real property by giving notice of sale under provisions of law relating to the sale of real property under a contract lien or by commencing a judicial foreclosure action unless the association has provided written notice of the total amount of the delinquency giving rise to the foreclosure to any other holder of a lien of record on the property whose lien is first in priority or, if the assessment lien is first in priority, is next in priority to the assessment lien and unless the association has provided the recipient of the notice an opportunity to cure the delinquency before the 61st day after the date the recipient receives the notice. The bill requires such notice to be sent by certified mail, return receipt requested, to the address for the lienholder shown in the deed records relating to the property that is subject to the assessment lien.

EFFECTIVE DATE

September 1, 2011.