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  H.B. No. 1470
 
 
 
 
AN ACT
  relating to the public sale of real property under a power of sale
  in a security instrument.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 2, Business & Commerce Code, is amended by
  adding Chapter 22 to read as follows:
  CHAPTER 22. PUBLIC SALE OF RESIDENTIAL REAL PROPERTY UNDER POWER OF
  SALE
         Sec. 22.001.  DEFINITIONS. In this chapter:
               (1)  "Auction company" has the meaning assigned by
  Section 1802.001, Occupations Code.
               (2)  "Residential real property" means:
                     (A)  a single-family house;
                     (B)  a duplex, triplex, or quadraplex; or
                     (C)  a unit in a multiunit residential structure
  in which title to an individual unit is transferred to the owner of
  the unit under a condominium or cooperative system.
               (3)  "Security instrument," "substitute trustee," and
  "trustee" have the meanings assigned by Section 51.0001, Property
  Code.
         Sec. 22.002.  APPLICABILITY. This chapter applies only to a
  public sale of residential real property conducted under a power of
  sale in a security instrument.
         Sec. 22.003.  CONTRACTS CONCERNING SALE. A trustee or
  substitute trustee conducting a sale to which this chapter applies
  may contract with:
               (1)  an attorney to advise the trustee or substitute
  trustee or to administer or perform any of the trustee's or
  substitute trustee's functions or responsibilities under a
  security instrument or this chapter; or
               (2)  an auction company to arrange, manage, sponsor, or
  advertise a public sale.
         Sec. 22.004.  INFORMATION FROM WINNING BIDDER. (a) A
  winning bidder at a sale, other than the foreclosing mortgagee or
  mortgage servicer, shall provide the following information to the
  trustee or substitute trustee at the time the trustee or substitute
  trustee completes the sale:
               (1)  the name, address, telephone number, and e-mail
  address of the bidder and of each individual tendering or who will
  tender the sale price for the winning bid;
               (2)  if the bidder is acting on behalf of another
  individual or organization, the name, address, telephone number,
  and e-mail address of the individual or organization and the name of
  a contact person for the organization;
               (3)  the name and address of any person to be identified
  as the grantee in a trustee's or substitute trustee's deed;
               (4)  the purchaser's tax identification number;
               (5)  a government-issued photo identification to
  confirm the identity of each individual tendering funds for the
  winning bid; and
               (6)  any other information reasonably needed to
  complete the trustee's or substitute trustee's duties and functions
  concerning the sale.
         (b)  If a winning bidder required to provide information
  under Subsection (a) fails or refuses to provide the information,
  the trustee or substitute trustee may decline to complete the
  transaction or deliver a deed.
         Sec. 22.005.  RECEIPT AND DEED. The trustee or substitute
  trustee shall:
               (1)  provide the winning bidder with a receipt for the
  sale proceeds tendered; and
               (2)  except when prohibited by law, within a reasonable
  time:
                     (A)  deliver the deed to the winning bidder; or
                     (B)  file the deed for recording.
         Sec. 22.006.  SALE PROCEEDS. (a) The trustee or substitute
  trustee shall ensure that funds received at the sale are maintained
  in a separate account until distributed. The trustee or substitute
  trustee shall cause to be maintained a written record of deposits to
  and disbursements from the account.
         (b)  The trustee or substitute trustee shall make reasonable
  attempts to identify and locate the persons entitled to all or any
  part of the sale proceeds.
         (c)  In connection with the sale and related post-sale
  actions to identify persons with legal claims to sale proceeds,
  determine the priority of any claims, and distribute proceeds to
  pay claims, a trustee or substitute trustee may receive:
               (1)  reasonable actual costs incurred, including costs
  for evidence of title;
               (2)  a reasonable trustee's or substitute trustee's
  fee; and
               (3)  reasonable trustee's or substitute trustee's
  attorney's fees.
         (d)  A fee described by Subsection (c):
               (1)  is considered earned at the time of the sale;
               (2)  may be paid from sale proceeds in excess of the
  payoff of the lien being foreclosed; and
               (3)  is conclusively presumed to be reasonable if the
  fee:
                     (A)  is not more than the lesser of 2.5 percent of
  the sale proceeds or $5,000, for a trustee's or substitute trustee's
  fee; or
                     (B)  is not more than 1.5 percent of the sale
  proceeds, for trustee's or substitute trustee's attorney's fees
  incurred to identify persons with legal claims to sale proceeds and
  determine the priority of the claims.
         (e)  A trustee or substitute trustee who prevails in a suit
  based on a claim that relates to the sale and that is found by a
  court to be groundless in fact or in law is entitled to recover
  reasonable attorney's fees necessary to defend against the claim,
  which may be paid from the excess sale proceeds, if any.
         (f)  Nothing in this section precludes the filing of an
  interpleader action or the depositing of funds in a court registry.
         SECTION 2.  Section 1802.001, Occupations Code, is amended
  by adding Subdivision (14) to read as follows:
               (14)  "Security instrument," "substitute trustee," and
  "trustee" have the meanings assigned by Section 51.0001, Property
  Code.
         SECTION 3.  Section 1802.002(a), Occupations Code, as
  amended by Chapters 777 (H.B. 2481) and 1230 (S.B. 1982), Acts of
  the 84th Legislature, Regular Session, 2015, is reenacted and
  amended to read as follows:
         (a)  This chapter does not apply to:
               (1)  a sale conducted by order of a United States court
  under Title 11, United States Code;
               (2)  a sale conducted by an employee of the United
  States, this state, or a political subdivision of this state in the
  course and scope of employment;
               (3)  a sale conducted by a charitable, religious, or
  civic organization, including an organization having a tax exempt
  status under Section 501(c), Internal Revenue Code of 1986, or
  organized as a nonprofit entity, if the person organizing,
  arranging, or conducting the auction receives no compensation;
               (4)  a foreclosure auction involving the sale of real
  property personally conducted by a trustee or substitute trustee
  under a security instrument [under a deed of trust];
               (5)  a foreclosure sale of personal property personally
  conducted by:
                     (A)  a person who holds a security interest in the
  property, including a mortgage; or
                     (B)  an employee or agent of a person described by
  Paragraph (A) acting in the course and scope of employment, if:
                           (i)  the employee or agent is not otherwise
  engaged in the auction business; and
                           (ii)  all property for sale in the auction is
  subject to a security agreement;
               (6)  a sale conducted by sealed bid without the option
  of increasing or decreasing the amount of a bid;
               (7)  an auction conducted only for student training
  purposes as part of a course of study approved by the department;
               (8)  an auction conducted by a posted stockyard or
  market agency as defined by the federal Packers and Stockyards Act
  (7 U.S.C. Section 181 et seq.), as amended;
               (9)  an auction of livestock conducted by a nonprofit
  livestock trade association chartered in this state, if the auction
  involves only the sale of livestock owned by members of the trade
  association;
               (10)  an auction conducted by a charitable or nonprofit
  organization chartered in this state, if the auction:
                     (A)  is part of a fair that is organized under
  state, county, or municipal authority; and
                     (B)  involves only the sale of property owned by
  the organization's members;
               (11)  a sale or auction conducted by an auctioneer
  while the auctioneer is physically located outside of this state;
               (12)  a sale of motor vehicles at auction by a person
  licensed under Chapter 2301 or 2302;
               (13)  a sale of motor vehicles at auction by a person
  who holds a wholesale motor vehicle auction general distinguishing
  number or an independent motor vehicle general distinguishing
  number issued by the Texas Department of Motor Vehicles; or
               (14)  an auction of property through the Internet.
         SECTION 4.  The changes in law made by this Act apply only to
  a sale for which the notice of sale is given under Section 51.002,
  Property Code, on or after the effective date of this Act. A sale
  for which the notice of sale is given before the effective date of
  this Act is governed by the law applicable to the foreclosure sale
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 5.  To the extent of any conflict, this Act prevails
  over another Act of the 85th Legislature, Regular Session, 2017,
  relating to nonsubstantive additions to and corrections in enacted
  codes.
         SECTION 6.  This Act takes effect September 1, 2017.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1470 was passed by the House on April
  13, 2017, by the following vote:  Yeas 137, Nays 1, 3 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 1470 was passed by the Senate on May
  24, 2017, by the following vote:  Yeas 30, Nays 1.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor