| 1 | 1 | | 85R1573 PMO-F |
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| 2 | 2 | | By: Walle H.B. No. 3699 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to notice to and rights of certain residential tenants of |
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| 8 | 8 | | premises purchased at a foreclosure sale. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 24.005, Property Code, is amended by |
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| 11 | 11 | | amending Subsection (b) and adding Subsections (b-1), (b-2), (b-3), |
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| 12 | 12 | | (b-4), and (b-5) to read as follows: |
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| 13 | 13 | | (b) Except as provided by Subsection (b-1), if [If] the |
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| 14 | 14 | | occupant is a tenant at will or by sufferance, the landlord must |
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| 15 | 15 | | give the tenant at least three days' written notice to vacate before |
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| 16 | 16 | | the landlord files a forcible detainer suit unless the parties have |
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| 17 | 17 | | contracted for a shorter or longer notice period in a written lease |
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| 18 | 18 | | or agreement. |
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| 19 | 19 | | (b-1) If a premises [building] is purchased at a judicial or |
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| 20 | 20 | | nonjudicial [tax] foreclosure sale [or a trustee's foreclosure |
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| 21 | 21 | | sale] under a lien superior to a [the] tenant's lease and the tenant |
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| 22 | 22 | | is a bona fide residential tenant at will or by sufferance on the |
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| 23 | 23 | | date of the [timely pays rent and is not otherwise in default under |
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| 24 | 24 | | the tenant's lease after] foreclosure, the purchaser must give the |
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| 25 | 25 | | [a residential] tenant [of the building] at least 90 [30] days' |
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| 26 | 26 | | written notice to vacate before filing a forcible detainer suit [if |
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| 27 | 27 | | the purchaser chooses not to continue the lease. The tenant is |
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| 28 | 28 | | considered to timely pay the rent under this subsection if, during |
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| 29 | 29 | | the month of the foreclosure sale, the tenant pays the rent for that |
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| 30 | 30 | | month to the landlord before receiving any notice that a |
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| 31 | 31 | | foreclosure sale is scheduled during the month or pays the rent for |
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| 32 | 32 | | that month to the foreclosing lienholder or the purchaser at |
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| 33 | 33 | | foreclosure not later than the fifth day after the date of receipt |
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| 34 | 34 | | of a written notice of the name and address of the purchaser that |
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| 35 | 35 | | requests payment]. |
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| 36 | 36 | | (b-2) For purposes of this section, a residential tenant is |
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| 37 | 37 | | bona fide only if: |
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| 38 | 38 | | (1) the lease was the result of an arms-length |
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| 39 | 39 | | transaction; |
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| 40 | 40 | | (2) the lease requires receipt of rent that is not |
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| 41 | 41 | | substantially less than fair market rent for the premises; and |
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| 42 | 42 | | (3) the tenant is not the mortgagor of the purchaser at |
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| 43 | 43 | | the foreclosure sale or the child, spouse, or parent of the |
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| 44 | 44 | | mortgagor. |
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| 45 | 45 | | (b-3) A bona fide residential tenant of a premises purchased |
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| 46 | 46 | | at a judicial or nonjudicial foreclosure sale may occupy the |
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| 47 | 47 | | premises until the later of: |
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| 48 | 48 | | (1) the date provided by the notice to vacate under |
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| 49 | 49 | | Subsection (b-1); or |
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| 50 | 50 | | (2) the end of the remaining lease term. |
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| 51 | 51 | | (b-4) For purposes of Subsection (b-3), a bona fide |
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| 52 | 52 | | residential tenant may occupy the premises as described by |
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| 53 | 53 | | Subsection (b-3) only if the tenant: |
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| 54 | 54 | | (1) owes no delinquent or unpaid rent or other sums |
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| 55 | 55 | | owed to the landlord on the date of the foreclosure sale; and |
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| 56 | 56 | | (2) is a party to a lease agreement that is effective |
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| 57 | 57 | | on the date of the foreclosure sale. |
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| 58 | 58 | | (b-5) Before a foreclosure sale, a foreclosing lienholder |
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| 59 | 59 | | may give [written notice] to a tenant, including a residential |
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| 60 | 60 | | tenant at will or by sufferance or under a written lease or oral |
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| 61 | 61 | | rental agreement, written notice stating that a foreclosure notice |
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| 62 | 62 | | has been given to the landlord or owner of the property and |
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| 63 | 63 | | specifying the date of the foreclosure. |
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| 64 | 64 | | SECTION 2. The changes in law made by Section 24.005, |
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| 65 | 65 | | Property Code, as amended by this Act, apply only to the purchase of |
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| 66 | 66 | | property at a foreclosure sale on or after the effective date of |
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| 67 | 67 | | this Act. The purchase of property at a foreclosure sale before the |
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| 68 | 68 | | effective date of this Act is governed by the law as it existed |
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| 69 | 69 | | immediately before the effective date of this Act, and that law is |
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| 70 | 70 | | continued in effect for that purpose. |
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| 71 | 71 | | SECTION 3. This Act takes effect January 1, 2018. |
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