81R31780 PMO-F
By: West S.B. No. 2121
Substitute the following for S.B. No. 2121:
By: Elkins C.S.S.B. No. 2121
A BILL TO BE ENTITLED
AN ACT
relating to the persons entitled to redeem property after the
foreclosure of a property owners' association's assessment lien.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 209.010, Property Code, is amended by
amending Subsections (a) and (b) and adding Subsections (b-1) and
(b-2) to read as follows:
(a) A property owners' association that conducts a
foreclosure sale of an owner's lot must send to the lot owner and to
each lienholder of record, not later than the 30th day after the
date of the foreclosure sale, a written notice stating the date and
time the sale occurred and informing the lot owner and each
lienholder of record of the [owner's] right of the lot owner and
lienholder to redeem the property under Section 209.011.
(b) The notice must be sent by certified mail, return
receipt requested, to:
(1) the lot owner's last known mailing address, as
reflected in the records of the property owners' association;
(2) the address of each holder of a lien on the
property subject to foreclosure evidenced by the most recent deed
of trust filed of record in the real property records of the county
in which the property is located; and
(3) the address of each transferee or assignee of a
deed of trust described by Subdivision (2) who has provided notice
to a property owners' association of such assignment or transfer.
Notice provided by a transferee or assignee to a property owners'
association shall be in writing, shall contain the mailing address
of the transferee or assignee, and shall be mailed by certified
mail, return receipt requested, or United States mail with
signature confirmation to the property owners' association
according to the mailing address of the property owners'
association pursuant to the most recent management certificate
filed of record pursuant to Section 209.004.
(b-1) If a recorded instrument does not include an address
for the lienholder, the association does not have a duty to notify
the lienholder as provided by this section.
(b-2) For purposes of this section, the lot owner is deemed
to have given approval for the association to notify the
lienholder.
SECTION 2. Subsections (b), (d), (e), (f), (g), (h), (j),
(k), (m), (n), and (p), Section 209.011, Property Code, are amended
to read as follows:
(b) The owner of property in a residential subdivision or a
lienholder of record may redeem the property from any purchaser at a
sale foreclosing a property owners' association's assessment lien
not later than the 180th day after the date the association mails
written notice of the sale to the owner and the lienholder under
Section 209.010.
(d) To redeem property purchased by the property owners'
association at the foreclosure sale, the lot owner or lienholder
must pay to the association:
(1) all amounts due the association at the time of the
foreclosure sale;
(2) interest from the date of the foreclosure sale to
the date of redemption on all amounts owed the association at the
rate stated in the dedicatory instruments for delinquent
assessments or, if no rate is stated, at an annual interest rate of
10 percent;
(3) costs incurred by the association in foreclosing
the lien and conveying the property to the redeeming lot owner,
including reasonable attorney's fees;
(4) any assessment levied against the property by the
association after the date of the foreclosure sale;
(5) any reasonable cost incurred by the association,
including mortgage payments and costs of repair, maintenance, and
leasing of the property; and
(6) the purchase price paid by the association at the
foreclosure sale less any amounts due the association under
Subdivision (1) that were satisfied out of foreclosure sale
proceeds.
(e) To redeem property purchased at the foreclosure sale by
a person other than the property owners' association, the lot owner
or lienholder:
(1) must pay to the association:
(A) all amounts due the association at the time
of the foreclosure sale less the foreclosure sales price received
by the association from the purchaser;
(B) interest from the date of the foreclosure
sale through the date of redemption on all amounts owed the
association at the rate stated in the dedicatory instruments for
delinquent assessments or, if no rate is stated, at an annual
interest rate of 10 percent;
(C) costs incurred by the association in
foreclosing the lien and conveying the property to the redeeming
lot owner, including reasonable attorney's fees;
(D) any unpaid assessments levied against the
property by the association after the date of the foreclosure sale;
and
(E) taxable costs incurred in a proceeding
brought under Subsection (a); and
(2) must pay to the person who purchased the property
at the foreclosure sale:
(A) any assessments levied against the property
by the association after the date of the foreclosure sale and paid
by the purchaser;
(B) the purchase price paid by the purchaser at
the foreclosure sale;
(C) the amount of the deed recording fee;
(D) the amount paid by the purchaser as ad
valorem taxes, penalties, and interest on the property after the
date of the foreclosure sale; and
(E) taxable costs incurred in a proceeding
brought under Subsection (a).
(f) If a lot owner or lienholder redeems the property under
this section, the purchaser of the property at foreclosure shall
immediately execute and deliver to the redeeming party [owner] a
deed transferring the property to the [redeeming] lot owner. If a
purchaser fails to comply with this section, the lot owner or
lienholder may file an [a cause of] action against the purchaser and
may recover reasonable attorney's fees from the purchaser if the
lot owner or the lienholder is the prevailing party in the action.
(g) If, before the expiration of the redemption period, the
redeeming lot owner or lienholder fails to record the deed from the
foreclosing purchaser or fails to record an affidavit stating that
the lot owner or lienholder has redeemed the property, the lot
owner's or lienholder's right of redemption as against a bona fide
purchaser or lender for value expires after the redemption period.
(h) The purchaser of the property at the foreclosure sale or
a person to whom the person who purchased the property at the
foreclosure sale transferred the property may presume conclusively
that the lot owner or a lienholder did not redeem the property
unless the lot owner or a lienholder files in the real property
records of the county in which the property is located:
(1) a deed from the purchaser of the property at the
foreclosure sale; or
(2) an affidavit that:
(A) states that the property [lot owner] has been
redeemed [the property]; [and]
(B) contains a legal description of the property;
and
(C) includes the name and mailing address of the
person who redeemed the property.
(j) If a person other than the property owners' association
is the purchaser at the foreclosure sale, before executing a deed
transferring the property to the [redeeming] lot owner, the
purchaser shall obtain an affidavit from the association or its
authorized agent stating that all amounts owed the association
under Subsection (e) have been paid. The association shall provide
the purchaser with the affidavit not later than the 10th day after
the date the association receives all amounts owed to the
association under Subsection (e). Failure of a purchaser to comply
with this subsection does not affect the validity of a redemption
[by a redeeming lot owner].
(k) Property that is redeemed remains subject to all liens
and encumbrances on the property before foreclosure. Any lease
entered into by the purchaser of property at a sale foreclosing an
assessment lien of a property owners' association is subject to the
right of redemption provided by this section and the lot owner's
right to reoccupy the property immediately after [the] redemption.
(m) If a lot owner or lienholder sends by certified mail,
return receipt requested, a written request to redeem the property
on or before the last day of the redemption period, the lot owner's
or lienholder's right of redemption is extended until the 10th day
after the date the association and any third party foreclosure
purchaser provides written notice to the redeeming party [lot
owner] of the amounts that must be paid to redeem the property.
(n) After the redemption period and any extended redemption
period provided by Subsection (m) expires without a redemption of
the property, the association or third party foreclosure purchaser
shall record an affidavit in the real property records of the county
in which the property is located stating that the lot owner or a
lienholder did not redeem the property during the redemption period
or any extended redemption period.
(p) The rights of a lot owner and a lienholder under this
section also apply if the sale of the lot owner's property is
conducted by a constable or sheriff as provided by a judgment
obtained by the property owners' association.
SECTION 3. Sections 209.010 and 209.011, Property Code, as
amended by this Act, apply only to a foreclosure sale conducted on
or after the effective date of this Act. A foreclosure sale
conducted before the effective date of this Act is governed by the
law in effect immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2009.