Sec. 26.3514. LIMITS ON LIABILITY OF LENDER. (a) This section applies:
(1) to a lender that has a security or lienhold interest in an underground or aboveground storage tank, in real property on which an underground or aboveground storage tank is located, or in any other personal property attached to or located on property on which an underground or aboveground storage tank is located, as security for a loan to finance the acquisition or development of the property, to finance the removal, repair, replacement, or upgrading of the tank, or to finance the performance of corrective action in response to a release of a regulated substance from the tank; or
(2) to situations in which the real or personal property constitutes collateral for a commercial loan.
(b) A lender is not liable as an owner or operator under this subchapter solely because the lender holds indicia of ownership to protect a security or lienhold interest in property as described by Subsection (a) of this section.
(c) A lender that exercises control over a property before foreclosure to preserve the collateral or to retain revenues from the property for the payment of debt, or that otherwise exercises the control of a mortgagee in possession, is not liable as an owner or operator under this subchapter unless that control leads to action that the commission finds is causing or exacerbating contamination associated with the release of a regulated substance from a tank located on the property.
(d) A lender that has a bona fide security or lienhold interest in any real or personal property as described by Subsection (a) of this section and that forecloses on or receives an assignment or deed in lieu of foreclosure and becomes the owner of that real or personal property is not liable as an owner or operator under this subchapter if the lender removes from service any underground or aboveground storage tanks on the property in accordance with commission rules and takes and with due diligence completes corrective action in response to any release from those tanks in accordance with commission rules. A lender shall begin removal or corrective action as prescribed by the commission within a reasonable time, as set by the commission, after the date on which the lender becomes the owner of the property, but not to exceed 90 days after that date.
(e) If a lender removes a tank from service or takes corrective action at any time before or after foreclosure, the lender shall perform corrective action in accordance with requirements adopted by the commission under this subchapter.
(f) A lender described by Subsection (a) is not liable as an owner or operator under this subchapter because the lender sells, re-leases, liquidates, or winds up operations and takes measures to preserve, protect, or prepare the secured aboveground or underground storage tank before sale or other disposition of the storage tank or the property if the lender:
(1) did not participate in the management of an aboveground or underground storage tank or real or personal property described by Subsection (a) before foreclosure or its equivalent on the storage tank or the property; and
(2) establishes, as provided by Subsection (g), that the ownership indicia maintained after foreclosure continue to be held primarily to protect a security interest.
(g) A lender may establish that the ownership indicia maintained after foreclosure continue to be held primarily to protect a security interest if, within 12 months after foreclosure, the lender:
(1) lists the aboveground or underground storage tank, or the facility or property on which the tank is located, with a broker, dealer, or agent who deals in that type of property; or
(2) advertises the aboveground or underground storage tank for sale or other disposition, at least monthly, in:
(A) a real estate publication;
(B) a trade or other publication appropriate for the aboveground or underground storage tank being advertised; or
(C) a newspaper of general circulation in the area in which the aboveground or underground storage tank is located.
(h) For purposes of Subsection (g), the 12-month period begins:
(1) when the lender acquires marketable title, if the lender, after the expiration of any redemption period or other waiting period required by law, was acting diligently to acquire marketable title; or
(2) on the date of foreclosure or its equivalent, if the lender does not act diligently to acquire marketable title.
(i) If a lender outbids, rejects, or does not act on an offer of fair consideration for the aboveground or underground storage tank or the facility or property on which the storage tank is located, it is presumed that the lender is not holding the ownership indicia primarily to protect the security interest unless the lender is required, in order to avoid liability under federal or state law, to make the higher bid, obtain the higher offer, or seek or obtain an offer in a different manner.
Added by Acts 1991, 72nd Leg., ch. 905, Sec. 3, eff. June 16, 1991. Amended by Acts 1995, 74th Leg., ch. 315, Sec. 7, eff. Sept. 1, 1995.
Section: Previous 26.348 26.349 26.350 26.351 26.3511 26.3512 26.3513 26.3514 26.3515 26.3516 26.352 26.354 26.355 26.356 26.357 NextLast modified: September 28, 2016