83R4413 CLG-F
By: Raymond H.B. No. 2795
A BILL TO BE ENTITLED
AN ACT
relating to enforcement of a lien against certain decedents'
interests in real property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 2, Estates Code, as effective
January 1, 2014, is amended by adding Chapter 125 to read as
follows:
CHAPTER 125. ENFORCEMENT OF LIEN AGAINST CERTAIN DECEDENTS'
INTERESTS IN REAL PROPERTY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 125.001. DEFINITIONS. In this chapter, "mortgage
servicer," "mortgagee," "mortgagor," and "security instrument"
have the meanings assigned by Section 51.0001, Property Code.
Sec. 125.002. APPLICABILITY OF CHAPTER; CONFLICT WITH OTHER
LAW. (a) This chapter applies only to foreclosure of a lien on real
property of a decedent's estate if the decedent is the mortgagor of
the security instrument creating the lien.
(b) To the extent of a conflict between this chapter and
another provision of this subtitle, Rule 736, Texas Rules of Civil
Procedure, or Chapter 51, Property Code, this chapter controls.
(c) Notwithstanding Section 22.004, Government Code, the
supreme court may not amend or adopt a rule in conflict with this
chapter.
SUBCHAPTER B. PROCEDURES PRIOR TO FORECLOSURE OF LIEN
Sec. 125.051. PROCEDURE IF NO WILL OR LETTERS TESTAMENTARY
OR OF ADMINISTRATION. (a) If a debt that is secured by a decedent's
interest in real property under a security instrument is in default
and the personal representative of the decedent's estate has not
received valid letters testamentary or of administration, the
mortgagee or mortgage servicer may proceed with foreclosure of the
lien on the property in accordance with this section.
(b) Foreclosure may not be initiated under this section
earlier than the 180th day after the earlier of the date of the
decedent's death or the date an independent administration of the
estate is filed and may be initiated only if the mortgagee agrees in
writing that the mortgagee has only a preferred debt and lien claim
against the decedent's interest in the real property.
(c) If a will has not been filed in the probate court in the
county in which the real property is located, the mortgagee or
mortgage servicer, concurrently with obtaining a judgment
declaring heirship under Chapter 202 from a probate court in the
county where the real property is located, must:
(1) obtain a court order under Rule 736, Texas Rules of
Civil Procedure, allowing the mortgagee or mortgage servicer to
proceed with foreclosure of the lien under Chapter 51, Property
Code, and the terms of the security instrument; and
(2) give notice in accordance with Subchapter C.
(d) After a foreclosure sale following the procedure in
Subsection (c), the foreclosure deed divests all persons receiving
notice under Subchapter C of their right, title, and interest in the
decedent's interest in the real property.
(e) If a will has been filed in the probate court in the
county in which the decedent's real property is located but no
letters testamentary have been issued to a personal representative
of the decedent's estate, the mortgagee or mortgage servicer must:
(1) obtain a court order under Rule 736, Texas Rules of
Civil Procedure, allowing the mortgagee or mortgage servicer to
proceed with foreclosure of the lien under Chapter 51, Property
Code, and the terms of the security instrument; and
(2) give notice in accordance with Subchapter C.
(f) After a foreclosure sale following the procedure in
Subsection (e), the foreclosure deed divests all persons receiving
notice under Subchapter C of their right, title, and interest in the
decedent's interest in the real property.
Sec. 125.052. PROCEDURE IF LETTERS TESTAMENTARY OR OF
ADMINISTRATION ISSUED. (a) If a debt that is secured by a
decedent's interest in real property under a security instrument is
in default and the personal representative of the decedent's estate
has received valid letters testamentary or of administration, the
mortgagee or mortgage servicer may proceed with foreclosure of the
lien on the property in accordance with this section.
(b) Not earlier than the 180th day after the date the
personal representative of the decedent's estate receives valid
letters testamentary or of administration, the mortgagee or
mortgage servicer may proceed with foreclosure of the lien under
Chapter 51, Property Code, and the terms of the security instrument
if the mortgagee or mortgage servicer gives notice to the personal
representative.
Sec. 125.053. PROCEDURE IF WILL PROBATED AS MUNIMENT OF
TITLE. If a debt that is secured by a decedent's interest in real
property under a security instrument is in default and the
decedent's will has been admitted to probate as a muniment of title
in accordance with Chapter 257, the mortgagee or mortgage servicer
may proceed with foreclosure of the lien under Chapter 51, Property
Code, and the terms of the security instrument if the mortgagee or
mortgage servicer gives notice to the devisees who acquired the
decedent's interest in the real property under the terms of the
will.
SUBCHAPTER C. NOTICE AND OTHER REQUIREMENTS
Sec. 125.101. NOTICE. (a) For purposes of Section
51.002(b), Property Code, a mortgagee or mortgage servicer
foreclosing a lien under this chapter must send notice of sale to:
(1) each surviving obligor of the debt secured by the
real property or surviving mortgagor of the security instrument
encumbering the real property to the street address of the property
sought to be foreclosed;
(2) the decedent, with the notation "Decedent," to the
street address of the property sought to be foreclosed;
(3) for foreclosure initiated under Section
125.051(c), each heir of the decedent named in the judgment
obtained under Section 202.201, at the heir's last known address;
(4) for foreclosure initiated under Section
125.051(e), the persons the probate court determines acquire the
decedent's interest in the property under the terms of the
decedent's will, at the persons' last known addresses;
(5) the "Occupant" at the street address of the
property sought to be foreclosed; and
(6) if an heir is a minor child or otherwise under a
legal disability, the person who is the parent, natural guardian,
next friend, or person with a power of attorney for the heir or if a
guardianship has been opened for the heir, the name and last known
address of the guardian of the heir's estate.
(b) In addition to mailing the notice by certified mail as
required by Section 51.002(b), Property Code, the mortgagee or
mortgage servicer shall mail the notice by regular mail to the
person's last known address or to the person's probate attorney of
record, if known.
(c) If the name, last known address, or whereabouts of the
surviving spouse or an heir of a decedent or other person is
unknown, the mortgagee or mortgage servicer by affidavit shall
describe to the court the due diligence exercised by the person to
find or locate the whereabouts of the spouse or heir for purposes of
providing notice under this section and the court shall determine
whether citation by publication is necessary.
Sec. 125.102. CONTENTS OF APPLICATION FOR RULE 736 ORDER;
SERVICE OF CITATION. (a) If a court order under Rule 736, Texas
Rules of Civil Procedure, is required under this chapter, the
application for the order must:
(1) substantially comply with the requirements of Rule
736.1; and
(2) contain an estimate of the "fair market value" of
the property prepared not earlier than the 120th day before the date
the application is filed and supported by documentation from two of
the following:
(A) a current appraisal;
(B) a broker's price opinion (BPO);
(C) a valuation from an official taxing
authority; or
(D) an automated valuation model appraisal
(AVM).
(b) A respondent in a proceeding under Rule 736, Texas Rules
of Civil Procedure, and this chapter must be served with citation in
accordance with Section 5, Part II, Texas Rules of Civil Procedure.
Sec. 125.103. CONTENTS OF ORDER. An order allowing the
mortgagee or mortgage servicer to proceed with the foreclosure of a
lien under this chapter must:
(1) describe the material facts establishing the basis
for foreclosure;
(2) describe the real property to be foreclosed by the
property's commonly known mailing address and legal description;
(3) contain the name and last known address of each
person who is to receive the notice under this subchapter; and
(4) contain the recording or indexing information of
the security instrument to be foreclosed.
SECTION 2. Chapter 125, Estates Code, as added by this Act,
applies only to the estate of a decedent who dies on or after the
effective date of this Act. The estate of a decedent who dies
before the effective date of this Act is governed by the law in
effect on the date of the decedent's death, and the former law is
continued in effect for that purpose.
SECTION 3. This Act takes effect January 1, 2014.