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A BILL TO BE ENTITLED
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AN ACT
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relating to the foreclosure of certain property associations' |
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assessment liens. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 82.113, Property Code, is amended by |
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adding Subsections (c-1), (d-1), and (d-2) and amending Subsections |
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(d), (e), (g), and (j) to read as follows: |
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(c-1) A lien, lien affidavit, or other instrument |
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evidencing the nonpayment of assessments or other charges owed to |
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an association and filed in the official public records of a county |
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is a legal instrument affecting title to real property. |
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(d) By acquiring a unit, a unit owner grants to the |
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association a power of sale in connection with the association's |
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lien. By written resolution, a board may appoint, from time to |
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time, an officer, agent, trustee, or attorney of the association to |
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exercise the power of sale on behalf of the association. Except as |
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provided by Subsection (d-2), an association may not foreclose the |
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association's assessment lien unless the association first obtains |
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a court order in an application for foreclosure under the rules |
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adopted by the supreme court under Subsection (d-1). An |
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association may obtain a court order described by this subsection |
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to foreclose any other lien under the association's dedicatory |
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instrument [the declaration, an association shall exercise its
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power of sale pursuant to Section 51.002]. |
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(d-1) The supreme court, as an exercise of the court's |
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authority under Section 74.024, Government Code, shall adopt rules |
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establishing foreclosure proceedings for use by an association in |
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foreclosing a lien of the association. The rules adopted under this |
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subsection must be substantially similar to the rules adopted by |
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the supreme court under Section 50(r), Article XVI, Texas |
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Constitution. |
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(d-2) A court order described by Subsection (d) is not |
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required under this section if the owner of the property that is |
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subject to foreclosure agrees in writing at the time the |
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foreclosure is sought to waive that requirement. A waiver under |
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this subsection may not be required as a condition of the transfer |
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of title to real property. If the owner executes a waiver under |
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this subsection, the association must exercise the association's |
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power of sale under Section 51.002. |
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(e) The association [has the right to foreclose its lien
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judicially or by nonjudicial foreclosure pursuant to the power of
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sale created by this chapter or the declaration, except that the
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association] may not foreclose a lien for assessments consisting |
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solely of fines. Costs of foreclosure may be added to the amount |
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owed by the unit owner to the association. A unit owner may not |
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petition a court to set aside a sale solely because the purchase |
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price at the foreclosure sale was insufficient to fully satisfy the |
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owner's debt. |
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(g) The owner of a unit [used for residential purposes and] |
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purchased [by an association] at a foreclosure sale of the |
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association's lien for assessments may redeem the unit not later |
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than the 90th day after the date of the foreclosure sale. If the |
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association is the purchaser [To redeem the unit], the owner must |
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pay to the association to redeem the unit all amounts due the |
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association at the time of the foreclosure sale, interest from the |
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date of foreclosure sale to the date of redemption at the rate |
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provided by the declaration for delinquent assessments, reasonable |
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attorney's fees, all [and] costs incurred by the association in |
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foreclosing the lien and in connection with the redemption process, |
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any assessment levied against the unit by the association after the |
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foreclosure sale, and any reasonable cost incurred by the |
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association as owner of the unit, including costs of maintenance, |
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[and] leasing, mortgage payments, taxes, and insurance. If a party |
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other than the association is the purchaser of the unit at the |
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foreclosure sale, the redeeming owner must pay to the purchaser an |
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amount equal to the amount bid at the sale, interest on the bid |
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amount computed from the date of the foreclosure sale to the date of |
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redemption at the rate of six percent, any assessment paid by the |
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purchaser after the date of foreclosure, and any reasonable costs |
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incurred by the purchaser as the owner of the unit, including costs |
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of maintenance, leasing, mortgage payments, taxes, and insurance. |
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The redeeming owner must also pay to the association all |
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assessments that are due as of the date of the redemption, |
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reasonable attorney's fees, and all costs incurred by the |
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association in foreclosing the lien. On redemption, the purchaser |
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of the unit at the foreclosure sale [association] shall execute a |
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deed to the redeeming unit owner. The exercise of the right of |
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redemption is not effective against a subsequent purchaser or |
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lender for value without notice of the redemption after the |
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redemption period expires unless the redeeming unit owner records |
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the deed from the purchaser of the unit at the foreclosure sale |
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[association] or an affidavit stating that the owner has exercised |
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the right of redemption. A unit that has been redeemed remains |
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subject to all liens and encumbrances on the unit before |
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foreclosure. All rents and other income collected from the unit by |
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the purchaser of the unit at the foreclosure sale [association] |
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from the date of foreclosure sale to the date of redemption belong |
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to the purchaser of the unit at the foreclosure sale [association], |
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but the rents and income shall be credited against the redemption |
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amount. The purchaser of [An association purchasing] a unit at a |
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sale foreclosing an association's assessment [its] lien may not |
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transfer ownership of the unit during the redemption period to a |
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person other than a redeeming owner. |
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(j) At any time before a [nonjudicial] foreclosure sale, a |
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unit owner may avoid foreclosure by paying all amounts due the |
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association. |
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SECTION 2. Subchapter C, Chapter 82, Property Code, is |
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amended by adding Section 82.1131 to read as follows: |
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Sec. 82.1131. NOTICE REQUIRED FOR MILITARY SERVICEMEMBER. |
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(a) In this section, "military servicemember" has the meaning |
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assigned by Section 51.015. |
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(b) Before a foreclosure under Section 82.113 is initiated |
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on property owned by a military servicemember, the association must |
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send the notice described by this subsection to the last known |
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address of the owner of the property according to the association's |
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records. The notice must state the name and address of the sender of |
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the notice and contain a statement that is conspicuous, printed in |
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boldface or underlined type, and substantially similar to the |
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following: |
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"ASSERT AND PROTECT YOUR RIGHTS AS A MEMBER OF THE ARMED |
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FORCES: If you are or your spouse is serving on active military |
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duty, including active military duty as a member of the Texas |
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National Guard, the National Guard of another state, or a reserve |
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component of the armed forces of the United States, you may be |
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entitled to special rights or relief under federal or state law |
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relating to the foreclosure of a lien on your property. Please send |
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written notice of active duty military service status to the sender |
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of this notice immediately." |
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(c) An owner who is a military servicemember entitled to the |
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protections under federal law, including the Servicemembers Civil |
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Relief Act (50 U.S.C. App. Section 501 et seq.), or state law, |
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including Section 51.015, or the owner's agent, representative, or |
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family member, must provide written notice of the owner's active |
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duty military status to an association that sends a notice under |
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Subsection (b) not later than the 30th day after the date the |
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notice from the association is received. |
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SECTION 3. Chapter 209, Property Code, is amended by adding |
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Sections 209.0091, 209.0092, and 209.0093 to read as follows: |
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Sec. 209.0091. JUDICIAL FORECLOSURE REQUIRED. (a) Except |
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as provided by Subsection (c), a property owners' association may |
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not foreclose a property owners' association's assessment lien |
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unless the association first obtains a court order in an |
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application for foreclosure under the rules adopted by the supreme |
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court under Subsection (b). An association may obtain a court order |
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described by this subsection to foreclose any other lien under the |
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association's dedicatory instrument. |
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(b) The supreme court, as an exercise of the court's |
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authority under Section 74.024, Government Code, shall adopt rules |
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establishing foreclosure proceedings for use by a property owners' |
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association in foreclosing a lien of the association. The rules |
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adopted under this subsection must be substantially similar to the |
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rules adopted by the supreme court under Section 50(r), Article |
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XVI, Texas Constitution. |
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(c) A court order described by Subsection (a) is not |
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required under this section if the owner of the property that is |
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subject to foreclosure agrees in writing at the time the |
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foreclosure is sought to waive that requirement. A waiver under |
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this subsection may not be required as a condition of the transfer |
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of title to real property. If the owner executes a waiver under |
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this subsection, the association must exercise the association's |
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power of sale under Section 51.002. |
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Sec. 209.0092. ASSESSMENT LIEN FILING. A lien, lien |
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affidavit, or other instrument evidencing the nonpayment of |
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assessments or other charges owed to an association and filed in the |
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official public records of a county is a legal instrument affecting |
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title to real property. |
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Sec. 209.0093. NOTICE REQUIRED FOR MILITARY SERVICEMEMBER. |
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(a) In this section, "military servicemember" has the meaning |
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assigned by Section 51.015. |
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(b) Before a foreclosure under Section 209.0091 is |
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initiated on property owned by a military servicemember, the |
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association must send the notice described by this subsection to |
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the last known address of the owner of the property according to the |
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association's records. The notice must state the name and address |
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of the sender of the notice and contain a statement that is |
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conspicuous, printed in boldface or underlined type, and |
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substantially similar to the following: |
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"ASSERT AND PROTECT YOUR RIGHTS AS A MEMBER OF THE ARMED |
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FORCES: If you are or your spouse is serving on active military |
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duty, including active military duty as a member of the Texas |
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National Guard, the National Guard of another state, or a reserve |
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component of the armed forces of the United States, you may be |
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entitled to special rights or relief under federal or state law |
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relating to the foreclosure of a lien on your property. Please send |
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written notice of active duty military service status to the sender |
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of this notice immediately." |
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(c) An owner who is a military servicemember entitled to the |
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protections under federal law, including the Servicemembers Civil |
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Relief Act (50 U.S.C. App. Section 501 et seq.), or state law, |
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including Section 51.015, or the owner's agent, representative, or |
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family member, must provide written notice of the owner's active |
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duty military status to an association that sends a notice under |
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Subsection (b) not later than the 30th day after the date the notice |
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from the association is received. |
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SECTION 4. (a) Sections 82.113(d), (e), and (j), Property |
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Code, as amended by this Act, and Sections 82.113(d-1) and (d-2), |
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82.1131, 209.0091, and 209.0093, Property Code, as added by this |
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Act, apply only to an assessment or other debt that becomes |
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delinquent on or after January 1, 2012. An assessment or other debt |
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that becomes delinquent before January 1, 2012, is governed by the |
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law in effect on the date the assessment or debt became delinquent, |
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and that law is continued in effect for that purpose. |
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(b) Section 82.113(g), Property Code, as amended by this |
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Act, applies only to a condominium unit sold at a foreclosure sale |
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on or after January 1, 2012. A unit sold at a foreclosure sale |
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before January 1, 2012, is governed by the law in effect immediately |
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before January 1, 2012, and that law is continued in effect for that |
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purpose. |
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(c) Sections 82.113(c-1) and 209.0092, Property Code, as |
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added by this Act, apply only to an instrument filed on or after |
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January 1, 2012. An instrument filed before January 1, 2012, is |
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governed by the law in effect on the date the instrument was filed, |
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and that law is continued in effect for that purpose. |
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SECTION 5. Not later than January 1, 2012, the Supreme Court |
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of Texas shall adopt rules of civil procedure under Sections |
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82.113(d-1) and 209.0091, Property Code, as added by this Act. |
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SECTION 6. (a) Except as provided by Subsection (b) of this |
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section, this Act takes effect January 1, 2012. |
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(b) Section 5 of this Act takes effect September 1, 2011. |