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Signed Into Law
Signed May 19, 2025Effective 2025-09-01
SB372

Regular Session

Relating to the persons authorized or appointed to exercise the power of sale under the terms of a contract lien on real property.

Government Affairs & Regulatory Compliance Analysis

SB372: Government Affairs Overview

SB 372 amends the Texas Property Code to authorize legal entities (corporations, LLCs, partnerships) and governmental subdivisions to serve as trustees or substitute trustees for contract liens. This legislation removes the administrative burden of appointing specific natural persons to conduct foreclosures, significantly streamlining operations for mortgage servicers and law firms by eliminating the need to re-appoint trustees when individual attorneys leave a firm.

Sen. Donna Campbell·Senate Bill·Regular Session

Low
Low Cost
Effective:2025-09-01
Business Impact

Who SB372 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: low

Standard regulatory changes (effective 2025-09-01). Review during normal business planning.

🏢

Real Estate

Affected business types:

  • Property developers
  • Commercial landlords
  • Property managers
  • Real estate investors
View all real estate legislation
🏦

Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation

Key Operational Considerations

  • 1Master Service Agreements (MSAs): Update agreements with foreclosure vendors to reflect that the vendor entity, rather than individual attorneys, will be the appointed trustee.
  • 2Foreclosure Departments: Train staff to input entity names (e.g., "Smith & Associates, PLLC") rather than individual names into the *Appointment of Substitute Trustee* fields.
  • 3Signatory Authority: Establish clear internal protocols regarding which officers or agents are authorized to sign the *Trustee’s Deed* on behalf of the corporate trustee.

Estimated Cost Impact

lowMinimal cost impact anticipated.

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SB372
Low
Relating to the persons authorized or appointed to exercise the power of sale under the terms of a contract lien on real property.
Low Compliance Urgency
Requires routine attention
Cost Impact
Low
Effective
2025-09-01
Primary Author: Sen. Donna Campbell
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025 (Systems must be updated by this date to utilize entity appointments).
  • Agency Rulemaking: None. This is a self-executing statutory change to the Texas Property Code; however, individual County Clerks may adjust their recording requirements for corporate signatures.

Immediate Action Plan

  • Audit Forms: Immediately instruct outside counsel or document vendors to redraft foreclosure templates to accommodate corporate appointees.
  • Review Insurance: Verify that your foreclosure vendor’s Errors & Omissions (E&O) policy covers the *entity* acting as trustee, not just the individual attorneys.
  • Update MSAs: Amend vendor contracts to require the vendor to maintain corporate authority to act as a trustee in Texas.
  • Test Filings: Schedule a pilot test of the new document templates by July 1, 2025, to ensure readiness for the September 1 effective date.

Operational Changes Required

Contracts

  • Deeds of Trust: Review proprietary security instruments to ensure they do not explicitly restrict the definition of "Trustee" to a natural person. Standard Fannie/Freddie forms are generally compatible.
  • Master Service Agreements (MSAs): Update agreements with foreclosure vendors to reflect that the vendor entity, rather than individual attorneys, will be the appointed trustee.

Hiring/Training

  • Foreclosure Departments: Train staff to input entity names (e.g., "Smith & Associates, PLLC") rather than individual names into the *Appointment of Substitute Trustee* fields.
  • Signatory Authority: Establish clear internal protocols regarding which officers or agents are authorized to sign the *Trustee’s Deed* on behalf of the corporate trustee.

Reporting & Record-Keeping

  • Document Templates: You must revise the *Appointment of Substitute Trustee*, *Notice of Sale*, and *Trustee’s Deed* templates.
  • Change: Replace individual name fields with entity name fields.
  • Change: Update signature blocks on the *Trustee's Deed* to reflect a corporate execution (e.g., "ABC Trustee Services, LLC, by [Name], Authorized Agent").

Fees & Costs

  • No New State Fees: Filing fees remain unchanged.
  • Cost Savings: Operational savings are expected due to reduced document preparation when personnel changes occur within vendor firms.

Strategic Ambiguities & Considerations

  • County Clerk Acceptance: While the law permits entity trustees, county clerks may initially reject *Trustee’s Deeds* if the authority of the human signer is not explicitly clear.
  • Risk: A clerk may question whether the person signing for "ABC Trustee Services, LLC" actually has the authority to convey the property.
  • Mitigation: Be prepared to record a corporate resolution or Power of Attorney alongside the deed in strict counties during the initial rollout.
  • "Governmental Subdivision": The law allows government agencies to act as trustees. Private lenders should avoid inadvertently appointing a government entity unless participating in specific public loan programs that require it.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Nov 15, 2024
Passed Senate
Mar 24, 2025
Passed House
May 6, 2025
Signed
May 19, 2025
Effective
Sep 1, 2025
TopicsFinancialFinancial--generalProperty InterestsProperty Interests--mortgages & LiensProperty Interests--real PropertyProperty Interests--trusts
03

Senate Authors

Sen. Donna CampbellRepublican · Primary Author

House Sponsor

Rep. Matthew ShaheenRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Donna Campbell

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about SB372

Q

What does Texas SB372 do?

SB 372 amends the Texas Property Code to authorize legal entities (corporations, LLCs, partnerships) and governmental subdivisions to serve as trustees or substitute trustees for contract liens. This legislation removes the administrative burden of appointing specific natural persons to conduct foreclosures, significantly streamlining operations for mortgage servicers and law firms by eliminating the need to re-appoint trustees when individual attorneys leave a firm.

Q

Who authored SB372?

SB372 was authored by Texas Senator Donna Campbell during the Regular Session.

Q

When was SB372 signed into law?

SB372 was signed into law by Governor Greg Abbott on May 19, 2025.

Q

How significant are the changes in SB372?

The regulatory priority for SB372 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB372?

The cost impact of SB372 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB372 address?

SB372 addresses topics including financial, financial--general, property interests, property interests--mortgages & liens and property interests--real property.

Q

What are the key dates for SB372?

Key dates for SB372: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB372?

SB372 primarily affects property owners and real estate professionals. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026