Central Laredo district adopts four-year voluntary moratorium on foreclosures in delinquency policy

The Central Laredo Municipal Management District on March 9 unanimously adopted a delinquency collection and enforcement policy that includes a four-year voluntary moratorium on initiating judicial or nonjudicial foreclosure for delinquent assessments.

Julian Ratnovsky, a board member who presented the draft policy, read the moratorium language during the meeting: “the district hereby adopts a voluntary moratorium on the initiation of any judicial or nonjudicial foreclosure action for the collection of delinquent assessments.” Ratnovsky said the moratorium does not waive the district’s statutory lien and that the board can continue other collection efforts during the pause.

The policy allows the district to continue to levy assessments, accrue interest and penalties, send delinquency notices, record liens, enter payment plans and pursue personal judgments without seeking foreclosure. It also says the district may participate in foreclosure proceedings initiated by other taxing entities to recover outstanding assessments on properties within the district boundary.

Ratnovsky outlined post-moratorium safeguards that would guide any future decision to foreclose: exhaustion of collection efforts (including at least two written delinquency notices and a reasonable repayment plan), a minimum 24-month delinquency requirement before foreclosure consideration, a hardship-review opportunity for owners, written findings by the board that foreclosure is necessary after alternatives have been exhausted, and compliance with applicable Texas law, including chapter 33. "This isn't a simple majority if we ever decide to foreclose," Ratnovsky said; the policy requires a two-thirds board vote to approve foreclosure after the moratorium period.

The board discussed statutory limits on changing interest and penalty rates. Ratnovsky noted the district must follow state-prescribed penalty and interest timing and percentages and cannot unilaterally alter those statutory provisions.

During discussion a board member asked whether the district would need a formal arrangement with an outside law firm to pursue collection remedies; Ratnovsky said the board is in early stages of collections and that the district will likely hire counsel and negotiate fees and scope as needed for liens, judgments or foreclosure work. The district also said it will require monthly collection reports from the entity that processes assessments.

The motion to adopt the policy, including the four-year voluntary moratorium and the post-moratorium safeguards, passed unanimously.

What happens next: the policy will serve as the district’s collection framework; the board may later set a minimum monetary threshold for pursuing foreclosure and will notify the city council at least 30 days before materially altering or terminating the moratorium, per the policy’s notification provision.