Tag Archive for: Texas property code

Colony Ridge Foreclosure Notices Appear to Routinely Ignore Texas Law

The controversial Colony Ridge development in Liberty county, which targets Hispanics and which has been labeled a “foreclosure mill” by Texas Attorney General Ken Paxton, appears to routinely ignore Texas law when sending out foreclosure notices.

Section 51.0075 (e) of the Texas Property Code requires that “the name and a street address for a trustee or substitute trustees shall be disclosed on the notice required by Section 51.002 (b).” But all sampled Colony Ridge foreclosure notices do not include the trustee’s street address.

Nor do they include the location of foreclosure sales, which state law also requires.

These and other irregularities may explain why Paxton found the foreclosure rate in Colony Ridge is 50 times the national average.

They also could theoretically invalidate thousands of foreclosures, according to sources consulted for this post.

Colony Ridge is now 50 percent bigger than Manhattan
The massive Colony Ridge development in Liberty County primarily sells owner-financed land on which buyers put their own homes. Shown above, one small portion of the development now 50% larger than Manhattan.

Colony Ridge Foreclosure Notices Contain No Street Address for Trustee

A random sampling of foreclosure notices for Liberty County properties outside of Colony Ridge shows that all trustees have complied with the street address provision.

However, a second sampling of foreclosure notices on properties inside Colony Ridge shows that none of the 58 notices contains a street address for the trustee. Instead, they include only a Post Office Box number.

In Texas, a “street address” includes the name and number of a building, along with the street or road it’s located on. It’s needed for driver’s licenses and other official documents, such as foreclosure notices.

According to ChatGPT, in Texas, foreclosure notices must include the street address of the trustee or substitute trustee to ensure transparency and accessibility for borrowers and interested parties. This requirement serves several key purposes. It:

  1. Prevents Fraud and Confusion – Clearly identifying the trustee’s location reduces the risk of fraudulent or misleading foreclosure practices by ensuring that the foreclosure is managed by a verifiable, accessible entity.
  2. Facilitates Communication – The trustee is responsible for conducting the foreclosure sale, so providing a physical address allows borrowers, lienholders, and other interested parties to contact them for inquiries, legal matters, or foreclosure-related issues.
  3. Ensures Proper Notice – Texas law mandates that foreclosure procedures follow due process, which includes proper notice to homeowners. Listing the trustee’s address helps ensure that homeowners know where to send requests for information, reinstatement payments, or legal disputes.
  4. Complies with Texas Property Code – Texas law, including Section 51.0075 (e) of the Texas Property Code, sets strict requirements for foreclosure notices. The inclusion of a trustee’s street address aligns with these legal requirements, helping to protect both lenders and borrowers.

Location of Foreclosure Sale Also Omitted

Texas law also requires that foreclosure notices include the location of the foreclosure sale itself.

Properties outside of Colony Ridge list this information. However, all 58 of these Colony Ridge foreclosure notices only say, “At a place designated by the Commissioner’s Court of Liberty County, Texas.”

People from south of the border may not know the customary location of such sales – at county courthouses. That makes it difficult for non-English speakers to figure out where to go if they want to bid on their property. It also increases the likelihood that foreclosures will sale through uncontested.

Finally, it helps explain why investigative journalist Wayne Dolcefino found that Colony Ridge successfully repurchased all properties in a foreclosure sale around Thanksgiving, 2020. In the first 11 months that year, the developer foreclosed on approximately 2,900 properties out of 22,956 that reportedly existed in the development at that time – 13% in less than a year.

Today, the development is at least 50% larger than Manhattan. So, the number of foreclosures each year since 2020 has likely increased.

Contested Foreclosures Possible And Other Implications

Failure to disclose such information could potentially invalidate a foreclosure sale if challenged in court. Texas foreclosure law is strict about proper notice requirements, and any defect in the notice could give borrowers grounds to contest the foreclosure. Here’s why:

1. Strict Compliance Required
  • Texas courts have ruled that failure to strictly follow foreclosure notice requirements can be grounds to invalidate a sale.
  • If the foreclosure has already occurred, a borrower could challenge it and request that the court void the sale due to non-compliance.
2. Violation of Texas Property Code
  • Under Texas Property Code § 51.002(b), a foreclosure notice must include key information, including the date, time, location of the sale, and the name and street address of the trustee.
  • If this information is missing or incorrect, the notice might not meet statutory requirements, making the foreclosure legally defective.
3. Borrower’s Right to Challenge the Foreclosure
  • If a borrower can show that the missing trustee address caused harm or confusion, they may file a lawsuit to halt or reverse the foreclosure.
  • A court could issue a temporary restraining order (TRO) or injunction, delaying the foreclosure until the notice is corrected.
4. Lender May Have to Restart the Process
  • If a court finds that the notice was defective, the lender may have to start the foreclosure process over, sending a corrected notice and waiting the required 21-day period before conducting a new sale.
5. Trustee and Lender Liability
  • A defective notice could also expose the trustee and lender to legal claims, including wrongful foreclosure or violations of Texas consumer protection laws.

Bottom Line

According to one lawyer consulted for this post, missing addresses for the trustee and/or sale location represent serious defects that could invalidate a Texas foreclosure if properly challenged. If you or someone you know face foreclosure and notices are an issue, consulting a real estate attorney to explore your legal options may help.

Posted by Bob Rehak on 2/12/2025

2724 Days since Hurricane Harvey

The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.

Texas Now Has Flood Disclosure For Renters

Several years ago, a new Texas law mandated flood disclosure for home buyers. Effective January 1, 2022, we now have a similar law for renters. The last legislature added a new section to the Texas Property Code: § 92.0135. But read the fine print. The law has some huge “qualifiers.”

Jennifer Parks Rental townhome
Many of the Marina Drive Townhomes destroyed by Harvey were rented out. Even though the ground level flooded frequently, landlords in such situations would not have been required to disclose past flooding...until this year.

Floodplain Disclosure Requirement

The new law requires landlords to provide tenants with special notice if their structure is located in the 100-year floodplain designated by FEMA. The notice must also inform tenants that:

  • “Even if the dwelling is not in a 100-year floodplain, the dwelling may still be susceptible to flooding.”
  • “Most tenant insurance policies do not cover damages or loss incurred in a flood.”
  • “You should seek insurance coverage that would cover losses caused by a flood.”

Exception for Elevated Structures

However, the landlord is not required to tell tenants that the property is in the floodplain if the building has been elevated above it. Hmmmm. What about that vehicle in the parking lot?

Flood Disclosure Required…But Only If in Past 5 Years

Regardless of the floodplain status, if a building has flooded in the last five years, the landlord must disclose that to a prospective tenant. This five-year limitation, is one of the biggest flaws in the law, in my opinion. The landlord would currently not have to disclose flooding in the 1994, Allison, Ike, the May 25-27 floods in 2015, or the Tax Day and Memorial Day Floods in 2016. And come September, the landlord would not have to disclose flooding during Hurricane Harvey either.

A lady in the apartment complex pictured above flooded eight times in five years!

Written Communication, Separate From Lease Required

However, if the landlord must provide notice, he/she must do it in separate written communication at/or before the signing of the lease.

“Substantial Loss” May Trigger Termination of Lease

If the landlord fails to provide the required notice AND if the tenant suffers a “substantial loss,” the tenant may terminate the lease within 30 days after flood damage occurred. The law defines substantial as 50% or more of the value of repairs to or replacement of the renter’s personal property – on the day the damage occurred.

Lease Termination Only Allowed For 30 Days

Another “but”: termination of the lease becomes effective when the tenant moves out, not at the time of damage.

Within another 30 days after the termination of the lease, the landlord must refund “all rent or other amounts paid in advance under the lease for any period after the effective date of the termination of the lease.”

Flooding No Excuse for Unpaid Rent

The new law does not affect “a tenant’s liability for delinquent, unpaid rent or other sums owed to the landlord before the date the lease was terminated.” So, in other words, if it takes you a full month to move your flood damaged possessions out after the flood, you would owe the landlord for that month.

I am not a lawyer and do not provide legal advice, but that’s how I read the law. Regardless of whether you are a landlord or a tenant, you should read it yourself and discuss it with your lawyer if you have questions.

Posted by Bob Rehak on 4/16/22 based on a tip from a reader

1691 Days since Hurricane Harvey