Foreclosures are on the rise in recent years. Even commercial property isn’t safe from foreclosures in Texas. If you receive a foreclosure notice, it is important to take action right away if you want to halt the procedure.
With Texas having a shorter foreclosure timeline than many states, it’s crucial to know what to expect to help prevent a foreclosure sale on your commercial property.
Commercial property foreclosure process
The Lone Star State has both judicial and nonjudicial foreclosure processes. However, many foreclosures follow the nonjudicial procedure as it’s faster and less expensive.
In general, the foreclosure process involves three steps:
- Notice of default: The lender must send you a notice of default or a demand letter. You should receive this no later than 20 days to give you time to “cure” or resolve the default.
- Notice of sale: After at least 21 days, the lender must file a real property record regarding the foreclosure sale date. Lenders should also send you a notice of sale through certified mail, have it posted at the courthouse door and file it at the local county clerk’s office.
- Foreclosure sale: If your lender completes both notice requirements, they can move forward with the foreclosure sale. Texas holds foreclosure sales every first Tuesday of the month, serving as the standard foreclosure date. Auctions take place at the county courthouse, where anyone may bid on the foreclosed properties.
Right of redemption rules in Texas
Not all foreclosed properties in Texas get a statutory redemption period. The right of redemption rules only apply to specific types of foreclosures:
- Foreclosures involving property owners’ association assessment liens
- Foreclosures involving condominium owners’ association assessment liens
- Foreclosures involving certain tax liens
Generally, the rules mean you can only buy back your property if the foreclosure was because you failed to pay the homeowner’s association fee or the sale involved a government entity or tax lender.
Explore your options to prevent foreclosure
You need to act quickly and strategically as soon as you receive a notice of foreclosure. Use the cure period to review the notice thoroughly and to negotiate with your lender.
Moreover, it is prudent to consult a seasoned commercial real estate to help you understand your options to halt the sale. They can help you explore which solutions are the best for your situation.