86R10167 NC-D
By: Zaffirini S.B. No. 1440
A BILL TO BE ENTITLED
AN ACT
relating to the effect of a foreclosure on a preexisting
residential tenancy.
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),
and (b-4) to read as follows:
(b) 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 building is purchased at a tax foreclosure sale
or a trustee's foreclosure sale and is occupied by a residential
tenant [under a lien superior to the tenant's lease] and the tenant
timely pays rent and is not otherwise in default under the tenant's
lease or tenancy after foreclosure, the tenant:
(1) may occupy the tenant's unit until the end of the
remaining term of the lease if the lease is bona fide and was
entered into before the date the title to the building is
transferred to a successor in interest pursuant to the foreclosure,
except that the successor in interest may terminate the lease
effective on the date of sale of the unit to a purchaser who will
occupy the unit as a primary residence, if the successor in interest
gives the [purchaser must give a residential] tenant [of the
building] at least 90 [30] days' written notice to vacate; or
(2) must vacate the tenant's unit if the tenancy is a
bona fide tenancy without a lease or the tenant has a bona fide
lease that is terminable at will if the successor in interest gives
the tenant at least 90 days' written notice to vacate [if the
purchaser chooses not to continue the lease].
(b-2) The tenant is considered to timely pay the rent under
Subsection (b-1) [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. Before
a foreclosure sale, a foreclosing lienholder may give written
notice to a tenant stating that a foreclosure notice has been given
to the landlord or owner of the property and specifying the date of
the foreclosure.
(b-3) A lease or tenancy is considered to be bona fide for
purposes of Subsection (b-1) only if:
(1) the mortgagor or the child, spouse, or parent of
the mortgagor is not the tenant;
(2) the lease or tenancy was the result of an
arm's-length transaction; and
(3) the lease or tenancy requires the receipt of rent
that is not substantially less than fair market rent for the
property or the unit's rent is reduced or subsidized due to a
federal, state, or local subsidy.
(b-4) Subsection (b-1) does not affect the requirements for
termination of a government subsidized tenancy.
SECTION 2. Section 33.51(b), Tax Code, is amended to read as
follows:
(b) The officer charged with executing the writ shall place
the purchaser or the purchaser's assigns in possession of the
property described in the purchaser's deed without further order
from any court and in the manner provided by the writ, subject to
any notice to vacate that may be required to be given to a tenant
under Section 24.005(b-1) [24.005(b)], Property Code.
SECTION 3. This Act takes effect September 1, 2019.