Notice of Claim

Purpose
TSSA’s Notice of Claim form, which is an official form that may be purchased from TSSA, is used during the Chapter 59 foreclosure process. The purpose of this form is to comply with the requirements of section 59.043 of the Property Code. This section requires that, as part of the process of foreclosure on a delinquent tenant, a notice of claim must be mailed to the tenant via certified mail. After mailing the Notice of Claim form to the tenant via certified mail, you must wait at least 15 days (for a regular foreclosure sale not involving vehicles, etc.) to perform your newspaper publication, and complete the rest of the foreclosure process. Chapter 59.043 of the Property Code (see the “Self-Storage Lien” tab of the TSSA Goldbook©) contains a detailed list of exactly what information must be included in the Notice of Claim to comply with the statute.

The TSSA form contains the required statutory notice, and contains many other important items. For example, the TSSA Notice of Claim puts tenants on notice that personal checks will not be accepted for redemption, only credit cards, cash, money order, certified check, or cashier’s check. This will prevent a tenant from showing up the day of the sale, writing you a hot check, running away with his goods, and leaving you high and dry with no collateral.

When to Use
You may use this form when a tenant is delinquent, you desire to institute the Chapter 59 foreclosure process, your lease contains the “magic language” required by the statute to allow foreclosure rights, and your lease is signed by the tenant. If you are using the TSSA lease, you can be assured that your lease contains the language required by the statute to give you foreclosure rights. Otherwise, you will need to contact your attorney to see if your lease is adequate.

If you are not using a TSSA lease but you use a TSSA Notice of Claim, you should be aware that your lease may not give you the right to require payment by credit card or certified funds. The TSSA lease Paragraph 5 gives you a contractual right to require payment by credit card or certified funds at your discretion, without any notice to the tenant.

Tips for Use
This form must be sent certified mail to the tenant’s last known address as stated in the rental agreement or in a written notice furnished by the tenant after execution of the rental agreement. The statute does not require the notice to be sent certified mail, with return receipt requested (it only requires certified mail), but you would be well served to request a return receipt or proof of delivery so that you can prove the tenant received the mail.

You do not have to wait until you receive the certified mail receipt or the unclaimed certified mail letter back in order to proceed with the foreclosure process. The statute states that the notice of claim is considered delivered when the notice, properly addressed and with proper postage, is deposited with the postal service. In some instances, for whatever reason, you may never get the return receipt or the unclaimed original letter back. For this reason, you should always keep a copy of any Notice of Claim that you send out and ideally a copy of the envelope. On the copy, it might be a good idea to jot a note or put a letter in the file, along with the receipt from the post office, stating the approximate time, or at least the date and place, that the certified notice was mailed. This is so that, in the event that you ever get into a “swearing match” where a tenant says he never got the Notice of Claim, you will have as much proof as possible that you sent the letter, even if the notice or return receipt does not come back.

The Notice of Claim was revised in 2006 in response to a new interpretation of an old statute by TXDOT/TXDMV. Please make sure that you are using the most recent version of the Notice of Claim (it is only imperative for “special foreclosure” procedures – vehicle, boat, trailer or outboard motor, but it is always a good idea to use the most recent version of TSSA forms).

The Notice of Claim also contains language stating that “partial payment will not stop sale but will reduce the amount due.” However, if the tenant does send in partial payment, I recommend, though it is not legally required, that you send a reply letter (certified or regular mail) saying in essence, “Thank you for you recent payment of $X. It will be applied to your account but will not stop any foreclosure sale or other collection proceeding.” This letter can be sent as a safeguard – to prevent the tenant from saying that “the manager told me on the phone that if I sent in partial payment he’d stop the sale for a month. You went ahead and sold my unit and now I’m suing.”