82R6641 PMO-D
By: Dutton H.B. No. 1196
A BILL TO BE ENTITLED
AN ACT
relating to foreclosure of a property owners' association's
assessment lien.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 209, Property Code, is amended by adding
Sections 209.0091 and 209.0092 to read as follows:
Sec. 209.0091. APPRAISAL AND MINIMUM SALE PRICE REQUIRED.
(a) Before a property owners' association files suit to foreclose
an assessment lien or initiates foreclosure of the lien under
Section 51.002, the association must:
(1) obtain and pay for an independent appraisal of the
fair market value of the property owner's property; and
(2) provide a copy of the appraisal to the property
owner by certified mail, return receipt requested, or by delivery
by the United States Postal Service with signature confirmation.
(b) Regardless of the amount of the lien, a property owners'
association may not conclude a judicial or nonjudicial foreclosure
sale of a property for which the property owners' association
obtained an appraisal under Subsection (a) unless the final sale
price at the foreclosure sale is at least 80 percent of the fair
market value as shown in the appraisal.
Sec. 209.0092. PRIORITY OF PAYMENTS AFTER FORECLOSURE. (a)
Proceeds received by a property owners' association at the
conclusion of a foreclosure sale of a property subject to an
assessment lien shall be applied in the following order of
priority:
(1) any delinquent assessment;
(2) any current assessment;
(3) any attorney's fees incurred by the association
associated solely with assessments or any other charge that could
provide the basis for foreclosure;
(4) any fines assessed by the association;
(5) any attorney's fees incurred by the association
that are not subject to Subdivision (3); and
(6) any other amount owed to the association.
(b) All proceeds from the foreclosure sale remaining after
the application of money in accordance with Subsection (a) shall be
paid to the property owner not later than the 60th day after the
date of the foreclosure sale.
SECTION 2. The change in law made by this Act applies only
to a foreclosure of a property owners' association assessment lien
for unpaid assessments all of which first become delinquent on or
after the effective date of this Act. Foreclosure of a property
owners' association assessment lien for assessments all or part of
which first became delinquent 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 3. This Act takes effect September 1, 2011.