When I want to get a hold of my daughter or son, I send a text or message them because they will respond almost immediately. If I call or email them, I get nothing back for days or weeks. In today’s ever changing world of technology, texting and the use of social media (i.e. instagram, snapchat, facebook, etc.) has replaced older methods of communication. So what happens when a buyer purchases property and then subsequently the seller learns and confirms via text that the buyer has sold the property used as the buyer’s last known address? What happens when the property is being foreclosed upon and notice needs to be sent out? Can you use the address in the deed of trust or note or is the seller on notice that the address on the documents is no longer valid because of the text messages? Fortunately, the Houston Court of Appeals in Bauder v. Alegria, 480 S.W.3d 92 (Tex. App. – Houston [14th Dist.] 2015, n.w.h.) provides some guidance on this tricky issue.
In Bauder, Sara Alegria and her brother (“Alegria”) purchased property on Roosevelt Street from the Bauders and signed a promissory note secured by a deed of trust. The deed of trust was silent with respect to whether and how Alegria should provide notice of a change of address should it become necessary.
After purchasing the property, Alegria made payments from various addresses including the address of the purchased property on Roosevelt Street. Alegria defaulted on the note and Baulder’s attorney sent notice to cure the default to the Roosevelt Street address and stated that failure to cure would result in acceleration. However, just days before the notice to cure was sent by Baulder’s attorney, Bauder had sent text messages to Sara Alegria stating that he understood that she had sold the house on Roosevelt Street (i.e. the address on the note and deed of trust) and as a result, he assumed that an alternative address from which payments had been made was Alegria’s primary residence. Alegria did not cure the default and the Roosevelt Street property was foreclosed on and Alegria filed suit to set aside the foreclosure sale because, among other reasons, the foreclosure was not proper because she did not receive proper notice.
In ruling for Alegria that the foreclosure was not proper because the notice to cure and foreclosure notice were sent to the wrong last known address, the court looked at Texas Property Code Section 51.002 and the requirements for notice. Under Texas law, a foreclosure cannot take place unless the mortgage servicer provides notice of sale to the debtor’s residence and service of notice by certified mail is only complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor’s last known address. See Tex. Prop. Code Section 51.002(e). Under Section 51.002, a debtor’s last known address is defined as the debtor’s residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed the notices required by Section 51.002. In this case, and based on all the other facts plus the text messages, it is clear that the seller had reasonable notice of Alegria’s change of address before the notice was sent and because the notice was sent to the wrong address, the trial court’s finding and ruling setting aside the foreclosure sale because of improper notice was upheld. Bauder v. Alegria, 480 S.W.3d 92, 98 (Tex. App. – Houston [14th Dist.] 2015, n.w.h.).
Ignoring the issues of whether you have consent to communicate via text, email or social media, the Alegria case demonstrates the danger of text communications to and from customers. While everyone has jumped on texting and social media to market products and services to try and distinguish themselves from their competitors and increase visibility, it increases the danger that a company will be deemed to have notice of the information communicated from its customers via text and social media. Safeguards should be put in place that govern how this information is used and disclaimers concerning what effect the receipt of this information will have concerning notice. Even better, make sure the loan documents state how and where notices must be sent. The opinions in this blog are solely the author’s and any comments, suggestions and replies can be sent to email@example.com.