Tex. Local Government Code § 214.003 — TX Code / Code lg / Chapter 214 / Section 214.003
§ 214.003. RECEIVER.
Status: in_force

(a) A home-rule municipality may bring an action in district court against an owner of property that is not in substantial compliance with:

(1) the municipal ordinances regarding:

(A) fire protection;

(B) structural integrity;

(C) zoning; or

(D) disposal of refuse; or

(2) a municipal ordinance described by Section 54.012(1), (2), (5), (6), (7), or (9).

(b) Except as provided by Subsections (b-1) and (c), the court may appoint as a receiver for the property a nonprofit organization or an individual with a demonstrated record of rehabilitating properties if the court finds that:

(1) the structures on the property are in violation of the standards set forth in Section 214.001(b) and an ordinance described by Subsection (a);

(2) notice of violation was given to the record owner of the property; and

(3) a public hearing as required by Section 214.001(b) has been conducted.

(b-1) This subsection applies only to a municipality wholly or partly located in a county that is located along the international border and contains a municipality with a population of 500,000 or more. The court may appoint as a receiver under Subsection (b) an individual without a demonstrated record of rehabilitating properties if the municipality demonstrates that:

(1) no individual with a demonstrated record of rehabilitating properties is available; and

(2) the individual being appointed is competent and able to fulfill the duties of a receiver.

(c) A receiver appointed under Subsection (b) may act as a receiver for any property, including historic property subject to Section 214.00111.

(d) For the purposes of this section, if the record owner does not appear at the hearing required by Section 214.001(b), the hearing shall be conducted as if the owner had personally appeared.

(e) In the action, the record owners and any lienholders of record of the property shall be served with personal notice of the proceedings or, if not available after due diligence, may be served by publication. Actual service or service by publication on the record owners or lienholders constitutes notice to all unrecorded owners or lienholders.

(f) The court may issue, on a showing of imminent risk of injury to any person occupying the property or a person in the community, any mandatory or prohibitory temporary restraining orders and temporary injunctions necessary to protect the public health and safety.

(g) A receiver appointed by the court may:

(1) take control of the property;

(2) collect rents due on the property;

(3) make or have made any repairs necessary to bring the property into compliance with:

(A) minimum standards in local ordinances; or

(B) guidelines for rehabilitating historic properties established by the secretary of the interior under 16 U.S.C.A. Section 470 et seq. or the municipal historic preservation board, if the property is considered historic property under Section 214.00111;

(4) make payments necessary for the maintenance or restoration of utilities to the properties;

(5) purchase materials necessary to accomplish repairs;

(6) renew existing rental contracts and leases;

(7) enter into new rental contracts and leases;

(8) affirm, renew, or enter into a new contract providing for insurance coverage on the property; and

(9) exercise all other authority that an owner of the property would have except for the authority to sell the property.

(h) On the completion of the restoration of the property to the minimum code standards of the municipality or guidelines for rehabilitating historic property, or before petitioning a court for termination of the receivership under Subsection (l):

(1) the receiver shall file with the court a full accounting of all costs and expenses incurred in the repairs, including reasonable costs for labor and supervision, all income received from the property, and, at the receiver's discretion, a receivership fee of 10 percent of those costs and expenses;

(2) if the income exceeds the total of the cost and expense of rehabilitation and any receivership fee, the rehabilitated property shall be restored to the owners and any net income shall be returned to the owners; and

(3) if the total of the costs and expenses and any receivership fee exceeds the income received during the receivership, the receiver may maintain control of the property until the time all rehabilitation and maintenance costs and any receivership fee are recovered, or until the receivership is terminated.

(h-1) A receiver shall have a lien on the property under receivership for all of the receiver's unreimbursed costs and expenses and any receivership fee.

(i) Any record lienholder may, after initiation of an action by a municipality:

(1) intervene in the action; and

(2) request appointment as a receiver:

(A) under the same conditions as the nonprofit organization or individual; and

(B) on a demonstration to the court of an ability and willingness to rehabilitate the property.

(j) For the purposes of this section, the interests and rights of an unrecorded lienholder or unrecorded property owner are, in all respects, inferior to the rights of a duly appointed receiver.

(k) The court may not appoint a receiver for any property that is an owner-occupied, single-family residence.

(l) A receiver appointed by a district court under this section, or the home-rule municipality that filed the action under which the receiver was appointed, may petition the court to terminate the receivership and order the sale of the property after the receiver has been in control of the property for more than one year, if an owner has been served with notice but has failed to assume control or repay all rehabilitation and maintenance costs and any receivership fee of the receiver.

(m) In the action, the record owners and any lienholders of record of the property shall be served with personal notice of the proceedings or, if not found after due diligence, may be served by publication. Actual service or service by publication on all record owners and lienholders of record constitutes notice to all unrecorded owners and lienholders.

(n) The court may order the sale of the property if the court finds that:

(1) notice was given to each record owner of the property and each lienholder of record;

(2) the receiver has been in control of the property for more than one year and an owner has failed to repay all rehabilitation and maintenance costs and any receivership fee of the receiver; and

(3) no lienholder of record has intervened in the action and offered to repay the costs and any receivership fee of the receiver and assume control of the property.

(o) The court shall order the sale to be conducted by the petitioner in the same manner that a sale is conducted under Chapter 51, Property Code. If the record owners and lienholders are identified, notice of the date and time of the sale must be sent in the same manner as provided by Chapter 51, Property Code. If the owner cannot be located after due diligence, the owner may be served notice by publication. The receiver may bid on the property at the sale and may use a lien granted under Subsection (h-1) as credit toward the purchase. The petitioner shall make a report of the sale to the court.

(p) The court shall confirm the sale and order a distribution of the proceeds of the sale in the following order:

(1) court costs;

(2) costs and expenses of the receiver, and any lien held by the receiver; and

(3) other valid liens.

(q) Any remaining sums must be paid to the owner. If the owner is not identified or cannot be located, the court shall order the remaining sums to be deposited in an interest-bearing account with the district clerk's office in the district in which the action is pending, and the clerk shall hold the funds as provided by other law.

(r) After the proceeds are distributed, the court shall award fee title to the purchaser subject to any recorded bona fide liens that were not paid by the proceeds of the sale.