| 1 | 1 | | 86R10167 NC-D |
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| 2 | 2 | | By: Zaffirini S.B. No. 1440 |
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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 the effect of a foreclosure on a preexisting |
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| 8 | 8 | | residential tenancy. |
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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 | | and (b-4) to read as follows: |
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| 13 | 13 | | (b) If the occupant is a tenant at will or by sufferance, the |
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| 14 | 14 | | landlord must give the tenant at least three days' written notice to |
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| 15 | 15 | | vacate before the landlord files a forcible detainer suit unless |
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| 16 | 16 | | the parties have contracted for a shorter or longer notice period in |
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| 17 | 17 | | a written lease or agreement. |
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| 18 | 18 | | (b-1) If a building is purchased at a tax foreclosure sale |
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| 19 | 19 | | or a trustee's foreclosure sale and is occupied by a residential |
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| 20 | 20 | | tenant [under a lien superior to the tenant's lease] and the tenant |
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| 21 | 21 | | timely pays rent and is not otherwise in default under the tenant's |
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| 22 | 22 | | lease or tenancy after foreclosure, the tenant: |
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| 23 | 23 | | (1) may occupy the tenant's unit until the end of the |
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| 24 | 24 | | remaining term of the lease if the lease is bona fide and was |
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| 25 | 25 | | entered into before the date the title to the building is |
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| 26 | 26 | | transferred to a successor in interest pursuant to the foreclosure, |
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| 27 | 27 | | except that the successor in interest may terminate the lease |
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| 28 | 28 | | effective on the date of sale of the unit to a purchaser who will |
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| 29 | 29 | | occupy the unit as a primary residence, if the successor in interest |
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| 30 | 30 | | gives the [purchaser must give a residential] tenant [of the |
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| 31 | 31 | | building] at least 90 [30] days' written notice to vacate; or |
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| 32 | 32 | | (2) must vacate the tenant's unit if the tenancy is a |
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| 33 | 33 | | bona fide tenancy without a lease or the tenant has a bona fide |
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| 34 | 34 | | lease that is terminable at will if the successor in interest gives |
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| 35 | 35 | | the tenant at least 90 days' written notice to vacate [if the |
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| 36 | 36 | | purchaser chooses not to continue the lease]. |
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| 37 | 37 | | (b-2) The tenant is considered to timely pay the rent under |
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| 38 | 38 | | Subsection (b-1) [this subsection] if, during the month of the |
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| 39 | 39 | | foreclosure sale, the tenant pays the rent for that month to the |
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| 40 | 40 | | landlord before receiving any notice that a foreclosure sale is |
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| 41 | 41 | | scheduled during the month or pays the rent for that month to the |
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| 42 | 42 | | foreclosing lienholder or the purchaser at foreclosure not later |
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| 43 | 43 | | than the fifth day after the date of receipt of a written notice of |
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| 44 | 44 | | the name and address of the purchaser that requests payment. Before |
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| 45 | 45 | | a foreclosure sale, a foreclosing lienholder may give written |
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| 46 | 46 | | notice to a tenant stating that a foreclosure notice has been given |
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| 47 | 47 | | to the landlord or owner of the property and specifying the date of |
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| 48 | 48 | | the foreclosure. |
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| 49 | 49 | | (b-3) A lease or tenancy is considered to be bona fide for |
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| 50 | 50 | | purposes of Subsection (b-1) only if: |
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| 51 | 51 | | (1) the mortgagor or the child, spouse, or parent of |
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| 52 | 52 | | the mortgagor is not the tenant; |
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| 53 | 53 | | (2) the lease or tenancy was the result of an |
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| 54 | 54 | | arm's-length transaction; and |
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| 55 | 55 | | (3) the lease or tenancy requires the receipt of rent |
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| 56 | 56 | | that is not substantially less than fair market rent for the |
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| 57 | 57 | | property or the unit's rent is reduced or subsidized due to a |
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| 58 | 58 | | federal, state, or local subsidy. |
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| 59 | 59 | | (b-4) Subsection (b-1) does not affect the requirements for |
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| 60 | 60 | | termination of a government subsidized tenancy. |
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| 61 | 61 | | SECTION 2. Section 33.51(b), Tax Code, is amended to read as |
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| 62 | 62 | | follows: |
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| 63 | 63 | | (b) The officer charged with executing the writ shall place |
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| 64 | 64 | | the purchaser or the purchaser's assigns in possession of the |
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| 65 | 65 | | property described in the purchaser's deed without further order |
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| 66 | 66 | | from any court and in the manner provided by the writ, subject to |
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| 67 | 67 | | any notice to vacate that may be required to be given to a tenant |
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| 68 | 68 | | under Section 24.005(b-1) [24.005(b)], Property Code. |
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| 69 | 69 | | SECTION 3. This Act takes effect September 1, 2019. |
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