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SECTION 1. Title 2, Business
& Commerce Code, is amended by adding Chapter 22 to read as follows:
CHAPTER 22. PUBLIC SALE
OF RESIDENTIAL REAL PROPERTY UNDER POWER OF SALE
Sec. 22.001. DEFINITIONS.
Sec. 22.002.
APPLICABILITY.
Sec. 22.003. AGREEMENTS
CONCERNING SALE. A trustee or substitute trustee conducting a sale to
which this chapter applies may enter
into a written agreement with:
(1) an attorney to advise
the trustee or substitute trustee or to administer or perform any of the
trustee's or substitute trustee's functions or responsibilities under a
security instrument or this chapter; or
(2) an auction company to
arrange, manage, sponsor, or advertise a public sale.
Sec. 22.004. INFORMATION
FROM WINNING BIDDER. (a) A winning bidder at a sale
shall provide the
following information to the trustee or substitute trustee at the time the
trustee or substitute trustee completes the sale:
(1) the name, address,
telephone number, and e-mail address of the bidder and of each individual
tendering or who will tender the sale price for the winning bid;
(2) if the bidder is
acting on behalf of another individual or organization, the name, address,
telephone number, and e-mail address of the individual or organization and
the name of a contact person for the organization;
(3) the name and address
of any person to be identified as the grantee in a trustee's or substitute
trustee's deed;
(4) the purchaser's tax
identification number;
(5) a government-issued
photo identification to confirm the identity of each individual tendering
funds for the winning bid; and
(6) any other information
reasonably needed to complete the trustee's or substitute trustee's duties
and functions concerning the sale.
(b) If a winning bidder
fails or refuses to provide the information described by Subsection (a),
the trustee or substitute trustee may decline to complete the transaction
or deliver a deed.
Sec. 22.005. RECEIPT AND
DEED.
Sec. 22.006. SALE
PROCEEDS. (a) The trustee or substitute trustee shall cause funds received at the sale to be maintained in a separate account
until distributed. The trustee or substitute trustee shall cause to be
maintained a written record of deposits to and disbursements from the
account. The trustee, the substitute
trustee, or an agent acting pursuant to an agreement under Section 22.003
is not considered a fiduciary with respect to the account.
(b) The trustee or
substitute trustee shall make reasonable attempts to identify and locate
the persons entitled to all or any part of the sale proceeds.
(c) In connection with
the sale and related post-sale actions to identify persons with legal
claims to sale proceeds, determine the priority of any claims, and
distribute proceeds to pay claims, a trustee or substitute trustee may
receive:
(1) reasonable actual costs
incurred, including costs for evidence of title;
(2) a reasonable
trustee's or substitute trustee's fee; and
(3) reasonable trustee's
or substitute trustee's attorney's fees.
(d) A fee described by
Subsection (c):
(1) is considered earned
at the time of the sale;
(2) may be paid from sale
proceeds in excess of any first priority
purchase money lien payoff; and
(3) is conclusively
presumed to be reasonable if the fee:
(A) is not more than the
lesser of 2.5 percent of the sale proceeds or $5,000, for a trustee's or
substitute trustee's fee; or
(B) is not more than 1.5
percent of the sale proceeds, for trustee's or substitute trustee's
attorney's fees incurred to identify persons with legal claims to sale
proceeds and determine the priority of the claims.
(e) A trustee or
substitute trustee who prevails in a suit based on a claim that relates to
the sale and that is found by a court to be groundless in fact or in law is
entitled to recover reasonable attorney's fees necessary to defend against
the claim, which may be paid from the excess sale proceeds, if any.
(f) Nothing in this
section precludes the filing of an interpleader action or the depositing of
funds in a court registry.
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SECTION 1. Title 2, Business
& Commerce Code, is amended by adding Chapter 22 to read as follows:
CHAPTER 22. PUBLIC SALE
OF RESIDENTIAL REAL PROPERTY UNDER POWER OF SALE
Sec. 22.001. DEFINITIONS.
Sec. 22.002.
APPLICABILITY.
Sec. 22.003. CONTRACTS
CONCERNING SALE. A trustee or substitute trustee conducting a sale to
which this chapter applies may contract
with:
(1) an attorney to advise
the trustee or substitute trustee or to administer or perform any of the
trustee's or substitute trustee's functions or responsibilities under a
security instrument or this chapter; or
(2) an auction company to
arrange, manage, sponsor, or advertise a public sale.
Sec. 22.004. INFORMATION
FROM WINNING BIDDER. (a) A winning bidder at a sale, other than the foreclosing mortgagee or
mortgage servicer,
shall provide the
following information to the trustee or substitute trustee at the time the
trustee or substitute trustee completes the sale:
(1) the name, address,
telephone number, and e-mail address of the bidder and of each individual
tendering or who will tender the sale price for the winning bid;
(2) if the bidder is
acting on behalf of another individual or organization, the name, address,
telephone number, and e-mail address of the individual or organization and
the name of a contact person for the organization;
(3) the name and address
of any person to be identified as the grantee in a trustee's or substitute
trustee's deed;
(4) the purchaser's tax
identification number;
(5) a government-issued
photo identification to confirm the identity of each individual tendering
funds for the winning bid; and
(6) any other information
reasonably needed to complete the trustee's or substitute trustee's duties
and functions concerning the sale.
(b) If a winning bidder required to provide information under
Subsection (a) fails or refuses to provide the information, the
trustee or substitute trustee may decline to complete the transaction or
deliver a deed.
Sec. 22.005. RECEIPT AND
DEED.
Sec. 22.006. SALE
PROCEEDS. (a) The trustee or substitute trustee shall ensure that funds received at the sale are maintained in a separate account
until distributed. The trustee or substitute trustee shall cause to be
maintained a written record of deposits to and disbursements from the
account.
(b) The trustee or
substitute trustee shall make reasonable attempts to identify and locate
the persons entitled to all or any part of the sale proceeds.
(c) In connection with
the sale and related post-sale actions to identify persons with legal
claims to sale proceeds, determine the priority of any claims, and
distribute proceeds to pay claims, a trustee or substitute trustee may
receive:
(1) reasonable actual
costs incurred, including costs for evidence of title;
(2) a reasonable
trustee's or substitute trustee's fee; and
(3) reasonable trustee's
or substitute trustee's attorney's fees.
(d) A fee described by
Subsection (c):
(1) is considered earned
at the time of the sale;
(2) may be paid from sale
proceeds in excess of the payoff of the
lien being foreclosed; and
(3) is conclusively
presumed to be reasonable if the fee:
(A) is not more than the
lesser of 2.5 percent of the sale proceeds or $5,000, for a trustee's or
substitute trustee's fee; or
(B) is not more than 1.5
percent of the sale proceeds, for trustee's or substitute trustee's
attorney's fees incurred to identify persons with legal claims to sale
proceeds and determine the priority of the claims.
(e) A trustee or
substitute trustee who prevails in a suit based on a claim that relates to
the sale and that is found by a court to be groundless in fact or in law is
entitled to recover reasonable attorney's fees necessary to defend against
the claim, which may be paid from the excess sale proceeds, if any.
(f) Nothing in this
section precludes the filing of an interpleader action or the depositing of
funds in a court registry.
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SECTION 3. Section
1802.002(a), Occupations Code, as amended by Chapters 777 (H.B. 2481) and
1230 (S.B. 1982), Acts of the 84th Legislature, Regular Session, 2015, is
reenacted and amended to read as follows:
(a) This chapter does not
apply to:
(1) a sale conducted by
order of a United States court under Title 11, United States Code;
(2) a sale conducted by an
employee of the United States, this state, or a political subdivision of
this state in the course and scope of employment;
(3) a sale conducted by a
charitable, religious, or civic organization, including an organization
having a tax exempt status under Section 501(c), Internal Revenue Code of
1986, or organized as a nonprofit entity, if the person organizing,
arranging, or conducting the auction receives no compensation;
(4) a foreclosure sale of
real property personally conducted by a trustee or substitute trustee
under a security instrument [under a deed of trust];
(5) a foreclosure sale of
personal property personally conducted by:
(A) a person who holds a
security interest in the property, including a mortgage; or
(B) an employee or agent of
a person described by Paragraph (A) acting in the course and scope of
employment, if:
(i) the employee or agent is
not otherwise engaged in the auction business; and
(ii) all property for sale
in the auction is subject to a security agreement;
(6) a sale conducted by
sealed bid without the option of increasing or decreasing the amount of a
bid;
(7) an auction conducted
only for student training purposes as part of a course of study approved by
the department;
(8) an auction conducted by
a posted stockyard or market agency as defined by the federal Packers and
Stockyards Act (7 U.S.C. Section 181 et seq.), as amended;
(9) an auction of livestock
conducted by a nonprofit livestock trade association chartered in this
state, if the auction involves only the sale of livestock owned by members
of the trade association;
(10) an auction conducted by
a charitable or nonprofit organization chartered in this state, if the
auction:
(A) is part of a fair that
is organized under state, county, or municipal authority; and
(B) involves only the sale
of property owned by the organization's members;
(11) a sale or auction
conducted by an auctioneer while the auctioneer is physically located
outside of this state;
(12) a sale of motor
vehicles at auction by a person licensed under Chapter 2301 or 2302;
(13) a sale of motor
vehicles at auction by a person who holds a wholesale motor vehicle auction
general distinguishing number or an independent motor vehicle general
distinguishing number issued by the Texas Department of Motor Vehicles; or
(14) an auction of property
through the Internet.
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SECTION 3. Section
1802.002(a), Occupations Code, as amended by Chapters 777 (H.B. 2481) and
1230 (S.B. 1982), Acts of the 84th Legislature, Regular Session, 2015, is
reenacted and amended to read as follows:
(a) This chapter does not
apply to:
(1) a sale conducted by
order of a United States court under Title 11, United States Code;
(2) a sale conducted by an
employee of the United States, this state, or a political subdivision of
this state in the course and scope of employment;
(3) a sale conducted by a
charitable, religious, or civic organization, including an organization
having a tax exempt status under Section 501(c), Internal Revenue Code of
1986, or organized as a nonprofit entity, if the person organizing,
arranging, or conducting the auction receives no compensation;
(4) a foreclosure auction involving the sale of real
property personally conducted by a trustee or substitute trustee under a
security instrument [under a deed of trust];
(5) a foreclosure sale of
personal property personally conducted by:
(A) a person who holds a
security interest in the property, including a mortgage; or
(B) an employee or agent of
a person described by Paragraph (A) acting in the course and scope of
employment, if:
(i) the employee or agent is
not otherwise engaged in the auction business; and
(ii) all property for sale
in the auction is subject to a security agreement;
(6) a sale conducted by
sealed bid without the option of increasing or decreasing the amount of a
bid;
(7) an auction conducted
only for student training purposes as part of a course of study approved by
the department;
(8) an auction conducted by
a posted stockyard or market agency as defined by the federal Packers and
Stockyards Act (7 U.S.C. Section 181 et seq.), as amended;
(9) an auction of livestock
conducted by a nonprofit livestock trade association chartered in this
state, if the auction involves only the sale of livestock owned by members
of the trade association;
(10) an auction conducted by
a charitable or nonprofit organization chartered in this state, if the
auction:
(A) is part of a fair that
is organized under state, county, or municipal authority; and
(B) involves only the sale
of property owned by the organization's members;
(11) a sale or auction
conducted by an auctioneer while the auctioneer is physically located
outside of this state;
(12) a sale of motor
vehicles at auction by a person licensed under Chapter 2301 or 2302;
(13) a sale of motor
vehicles at auction by a person who holds a wholesale motor vehicle auction
general distinguishing number or an independent motor vehicle general
distinguishing number issued by the Texas Department of Motor Vehicles; or
(14) an auction of property
through the Internet.
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