Texas Senate Bill SB889

Texas 2011 - 82nd Regular

• Introduced: 2/23/11
• Out of Senate Committee: 3/9/11
• Voted on by Senate: 3/24/11
• Refer: 3/1/11
• Out of House Committee: 4/26/11
• Report Pass: 3/9/11
• Voted on by House: 5/23/11
• Engrossed: 3/24/11
• Governor Action: 6/17/11
• Refer: 4/11/11
• Report Pass: 4/20/11
• Enrolled: 5/23/11
• Passed: 6/17/11

Caption

Relating to assignment of rents to holders of certain security interests in real property.

Impact

The proposed changes under SB889 are significant for both creditors and property owners, as they establish clearer protocols for the assignment of rents. This clarity will benefit lenders looking to secure their interests in real estate by allowing for a more straightforward approach to enforceable security instruments. Moreover, property owners and landlords will need to be aware of how these changes can impact existing leases and tenant relationships, particularly concerning how and when rents can be collected.

Summary

SB889 aims to clarify and modify the laws surrounding assignments of rents in relation to security interests in real property in Texas. The bill introduces Chapter 64 to the Property Code, detailing definitions associated with assignments of rents, the role of assignees and assignors, and the procedures for enforcement. Significant measures include stipulations on how these assignments affect tenant payments and lender interests, thereby influencing how real estate transactions and investments are managed in the state.

Contention

While SB889 seeks to streamline the process of assigning rents as part of real property security interests, it may raise concerns from tenant advocacy groups regarding the rights of tenants. Specifically, the bill stipulates that tenants are to pay rents to assignees after receiving proper notice, potentially complicating former agreements with landlords. Critics may argue that these new provisions could favor lenders disproportionately, leading to increased vulnerabilities for tenants in rental agreements.