Texas 2017 - 85th Regular

Texas House Bill HB1470 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Villalba, Oliveira (Senate Sponsor - Creighton) H.B. No. 1470
2		-	(In the Senate - Received from the House April 18, 2017;
3		-	May 9, 2017, read first time and referred to Committee on Business &
4		-	Commerce; May 21, 2017, reported favorably by the following vote:
5		-	Yeas 8, Nays 0; May 21, 2017, sent to printer.)
6		-	Click here to see the committee vote
	1	+	H.B. No. 1470
7	2
8	3
9		-	A BILL TO BE ENTITLED
10	4		AN ACT
11	5		relating to the public sale of real property under a power of sale
12	6		in a security instrument.
13	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	8		SECTION 1. Title 2, Business & Commerce Code, is amended by
15	9		adding Chapter 22 to read as follows:
16	10		CHAPTER 22. PUBLIC SALE OF RESIDENTIAL REAL PROPERTY UNDER POWER OF
17	11		SALE
18	12		Sec. 22.001. DEFINITIONS. In this chapter:
19	13		(1) "Auction company" has the meaning assigned by
20	14		Section 1802.001, Occupations Code.
21	15		(2) "Residential real property" means:
22	16		(A) a single-family house;
23	17		(B) a duplex, triplex, or quadraplex; or
24	18		(C) a unit in a multiunit residential structure
25	19		in which title to an individual unit is transferred to the owner of
26	20		the unit under a condominium or cooperative system.
27	21		(3) "Security instrument," "substitute trustee," and
28	22		"trustee" have the meanings assigned by Section 51.0001, Property
29	23		Code.
30	24		Sec. 22.002. APPLICABILITY. This chapter applies only to a
31	25		public sale of residential real property conducted under a power of
32	26		sale in a security instrument.
33	27		Sec. 22.003. CONTRACTS CONCERNING SALE. A trustee or
34	28		substitute trustee conducting a sale to which this chapter applies
35	29		may contract with:
36	30		(1) an attorney to advise the trustee or substitute
37	31		trustee or to administer or perform any of the trustee's or
38	32		substitute trustee's functions or responsibilities under a
39	33		security instrument or this chapter; or
40	34		(2) an auction company to arrange, manage, sponsor, or
41	35		advertise a public sale.
42	36		Sec. 22.004. INFORMATION FROM WINNING BIDDER. (a) A
43	37		winning bidder at a sale, other than the foreclosing mortgagee or
44	38		mortgage servicer, shall provide the following information to the
45	39		trustee or substitute trustee at the time the trustee or substitute
46	40		trustee completes the sale:
47	41		(1) the name, address, telephone number, and e-mail
48	42		address of the bidder and of each individual tendering or who will
49	43		tender the sale price for the winning bid;
50	44		(2) if the bidder is acting on behalf of another
51	45		individual or organization, the name, address, telephone number,
52	46		and e-mail address of the individual or organization and the name of
53	47		a contact person for the organization;
54	48		(3) the name and address of any person to be identified
55	49		as the grantee in a trustee's or substitute trustee's deed;
56	50		(4) the purchaser's tax identification number;
57	51		(5) a government-issued photo identification to
58	52		confirm the identity of each individual tendering funds for the
59	53		winning bid; and
60	54		(6) any other information reasonably needed to
61	55		complete the trustee's or substitute trustee's duties and functions
62	56		concerning the sale.
63	57		(b) If a winning bidder required to provide information
64	58		under Subsection (a) fails or refuses to provide the information,
65	59		the trustee or substitute trustee may decline to complete the
66	60		transaction or deliver a deed.
67	61		Sec. 22.005. RECEIPT AND DEED. The trustee or substitute
68	62		trustee shall:
69	63		(1) provide the winning bidder with a receipt for the
70	64		sale proceeds tendered; and
71	65		(2) except when prohibited by law, within a reasonable
72	66		time:
73	67		(A) deliver the deed to the winning bidder; or
74	68		(B) file the deed for recording.
75	69		Sec. 22.006. SALE PROCEEDS. (a) The trustee or substitute
76	70		trustee shall ensure that funds received at the sale are maintained
77	71		in a separate account until distributed. The trustee or substitute
78	72		trustee shall cause to be maintained a written record of deposits to
79	73		and disbursements from the account.
80	74		(b) The trustee or substitute trustee shall make reasonable
81	75		attempts to identify and locate the persons entitled to all or any
82	76		part of the sale proceeds.
83	77		(c) In connection with the sale and related post-sale
84	78		actions to identify persons with legal claims to sale proceeds,
85	79		determine the priority of any claims, and distribute proceeds to
86	80		pay claims, a trustee or substitute trustee may receive:
87	81		(1) reasonable actual costs incurred, including costs
88	82		for evidence of title;
89	83		(2) a reasonable trustee's or substitute trustee's
90	84		fee; and
91	85		(3) reasonable trustee's or substitute trustee's
92	86		attorney's fees.
93	87		(d) A fee described by Subsection (c):
94	88		(1) is considered earned at the time of the sale;
95	89		(2) may be paid from sale proceeds in excess of the
96	90		payoff of the lien being foreclosed; and
97	91		(3) is conclusively presumed to be reasonable if the
98	92		fee:
99	93		(A) is not more than the lesser of 2.5 percent of
100	94		the sale proceeds or $5,000, for a trustee's or substitute trustee's
101	95		fee; or
102	96		(B) is not more than 1.5 percent of the sale
103	97		proceeds, for trustee's or substitute trustee's attorney's fees
104	98		incurred to identify persons with legal claims to sale proceeds and
105	99		determine the priority of the claims.
106	100		(e) A trustee or substitute trustee who prevails in a suit
107	101		based on a claim that relates to the sale and that is found by a
108	102		court to be groundless in fact or in law is entitled to recover
109	103		reasonable attorney's fees necessary to defend against the claim,
110	104		which may be paid from the excess sale proceeds, if any.
111	105		(f) Nothing in this section precludes the filing of an
112	106		interpleader action or the depositing of funds in a court registry.
113	107		SECTION 2. Section 1802.001, Occupations Code, is amended
114	108		by adding Subdivision (14) to read as follows:
115	109		(14) "Security instrument," "substitute trustee," and
116	110		"trustee" have the meanings assigned by Section 51.0001, Property
117	111		Code.
118	112		SECTION 3. Section 1802.002(a), Occupations Code, as
119	113		amended by Chapters 777 (H.B. 2481) and 1230 (S.B. 1982), Acts of
120	114		the 84th Legislature, Regular Session, 2015, is reenacted and
121	115		amended to read as follows:
122	116		(a) This chapter does not apply to:
123	117		(1) a sale conducted by order of a United States court
124	118		under Title 11, United States Code;
125	119		(2) a sale conducted by an employee of the United
126	120		States, this state, or a political subdivision of this state in the
127	121		course and scope of employment;
128	122		(3) a sale conducted by a charitable, religious, or
129	123		civic organization, including an organization having a tax exempt
130	124		status under Section 501(c), Internal Revenue Code of 1986, or
131	125		organized as a nonprofit entity, if the person organizing,
132	126		arranging, or conducting the auction receives no compensation;
133	127		(4) a foreclosure auction involving the sale of real
134	128		property personally conducted by a trustee or substitute trustee
135	129		under a security instrument [under a deed of trust];
136	130		(5) a foreclosure sale of personal property personally
137	131		conducted by:
138	132		(A) a person who holds a security interest in the
139	133		property, including a mortgage; or
140	134		(B) an employee or agent of a person described by
141	135		Paragraph (A) acting in the course and scope of employment, if:
142	136		(i) the employee or agent is not otherwise
143	137		engaged in the auction business; and
144	138		(ii) all property for sale in the auction is
145	139		subject to a security agreement;
146	140		(6) a sale conducted by sealed bid without the option
147	141		of increasing or decreasing the amount of a bid;
148	142		(7) an auction conducted only for student training
149	143		purposes as part of a course of study approved by the department;
150	144		(8) an auction conducted by a posted stockyard or
151	145		market agency as defined by the federal Packers and Stockyards Act
152	146		(7 U.S.C. Section 181 et seq.), as amended;
153	147		(9) an auction of livestock conducted by a nonprofit
154	148		livestock trade association chartered in this state, if the auction
155	149		involves only the sale of livestock owned by members of the trade
156	150		association;
157	151		(10) an auction conducted by a charitable or nonprofit
158	152		organization chartered in this state, if the auction:
159	153		(A) is part of a fair that is organized under
160	154		state, county, or municipal authority; and
161	155		(B) involves only the sale of property owned by
162	156		the organization's members;
163	157		(11) a sale or auction conducted by an auctioneer
164	158		while the auctioneer is physically located outside of this state;
165	159		(12) a sale of motor vehicles at auction by a person
166	160		licensed under Chapter 2301 or 2302;
167	161		(13) a sale of motor vehicles at auction by a person
168	162		who holds a wholesale motor vehicle auction general distinguishing
169	163		number or an independent motor vehicle general distinguishing
170	164		number issued by the Texas Department of Motor Vehicles; or
171	165		(14) an auction of property through the Internet.
172	166		SECTION 4. The changes in law made by this Act apply only to
173	167		a sale for which the notice of sale is given under Section 51.002,
174	168		Property Code, on or after the effective date of this Act. A sale
175	169		for which the notice of sale is given before the effective date of
176	170		this Act is governed by the law applicable to the foreclosure sale
177	171		immediately before the effective date of this Act, and that law is
178	172		continued in effect for that purpose.
179	173		SECTION 5. To the extent of any conflict, this Act prevails
180	174		over another Act of the 85th Legislature, Regular Session, 2017,
181	175		relating to nonsubstantive additions to and corrections in enacted
182	176		codes.
183	177		SECTION 6. This Act takes effect September 1, 2017.
184		-	* * * * *
	178	+	______________________________ ______________________________
	179	+	President of the Senate Speaker of the House
	180	+	I certify that H.B. No. 1470 was passed by the House on April
	181	+	13, 2017, by the following vote: Yeas 137, Nays 1, 3 present, not
	182	+	voting.
	183	+	______________________________
	184	+	Chief Clerk of the House
	185	+	I certify that H.B. No. 1470 was passed by the Senate on May
	186	+	24, 2017, by the following vote: Yeas 30, Nays 1.
	187	+	______________________________
	188	+	Secretary of the Senate
	189	+	APPROVED: _____________________
	190	+	Date
	191	+	_____________________
	192	+	Governor