85R1573 PMO-F
By: Walle H.B. No. 3699
A BILL TO BE ENTITLED
AN ACT
relating to notice to and rights of certain residential tenants of
premises purchased at a foreclosure sale.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 24.005, Property Code, is amended by
amending Subsection (b) and adding Subsections (b-1), (b-2), (b-3),
(b-4), and (b-5) to read as follows:
(b) Except as provided by Subsection (b-1), if [If] the
occupant is a tenant at will or by sufferance, the landlord must
give the tenant at least three days' written notice to vacate before
the landlord files a forcible detainer suit unless the parties have
contracted for a shorter or longer notice period in a written lease
or agreement.
(b-1) If a premises [building] is purchased at a judicial or
nonjudicial [tax] foreclosure sale [or a trustee's foreclosure
sale] under a lien superior to a [the] tenant's lease and the tenant
is a bona fide residential tenant at will or by sufferance on the
date of the [timely pays rent and is not otherwise in default under
the tenant's lease after] foreclosure, the purchaser must give the
[a residential] tenant [of the building] at least 90 [30] days'
written notice to vacate before filing a forcible detainer suit [if
the purchaser chooses not to continue the lease. The tenant is
considered to timely pay the rent under this subsection if, during
the month of the foreclosure sale, the tenant pays the rent for that
month to the landlord before receiving any notice that a
foreclosure sale is scheduled during the month or pays the rent for
that month to the foreclosing lienholder or the purchaser at
foreclosure not later than the fifth day after the date of receipt
of a written notice of the name and address of the purchaser that
requests payment].
(b-2) For purposes of this section, a residential tenant is
bona fide only if:
(1) the lease was the result of an arms-length
transaction;
(2) the lease requires receipt of rent that is not
substantially less than fair market rent for the premises; and
(3) the tenant is not the mortgagor of the purchaser at
the foreclosure sale or the child, spouse, or parent of the
mortgagor.
(b-3) A bona fide residential tenant of a premises purchased
at a judicial or nonjudicial foreclosure sale may occupy the
premises until the later of:
(1) the date provided by the notice to vacate under
Subsection (b-1); or
(2) the end of the remaining lease term.
(b-4) For purposes of Subsection (b-3), a bona fide
residential tenant may occupy the premises as described by
Subsection (b-3) only if the tenant:
(1) owes no delinquent or unpaid rent or other sums
owed to the landlord on the date of the foreclosure sale; and
(2) is a party to a lease agreement that is effective
on the date of the foreclosure sale.
(b-5) Before a foreclosure sale, a foreclosing lienholder
may give [written notice] to a tenant, including a residential
tenant at will or by sufferance or under a written lease or oral
rental agreement, written notice stating that a foreclosure notice
has been given to the landlord or owner of the property and
specifying the date of the foreclosure.
SECTION 2. The changes in law made by Section 24.005,
Property Code, as amended by this Act, apply only to the purchase of
property at a foreclosure sale on or after the effective date of
this Act. The purchase of property at a foreclosure sale before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 3. This Act takes effect January 1, 2018.