TAX SALE PURCHASERS
H.B. 335
Amends/Enacts: § 34.015 Tax Code and § 34.0445 Civil Practice and
Remedies Code
Effective date: September 1, 2003 (applies to a public sale occurring
after October 1, 2003)
This bill is intended to prevent
people who owe delinquent taxes to a county or to a school district or city
with territory in that county from buying property at tax-foreclosure sales in
that county. The bill places certain
restrictions and requirements on the sheriff or officer conducting the
sheriff’s sale, the county tax assessor-collector and the prospective
purchaser.
The Sheriff or officer conducting
a sale:
1. May not execute
or deliver a deed to a purchaser unless the purchaser exhibits to
the sheriff an “Unexpired Written Statement” that indicates the purchaser does
not owe any delinquent taxes to the county where the property is located or to
any city or school district located in the county.
2. May not execute
a deed in the name of or deliver a deed to any person other than
the successful bidder at the sale.
3. Must name
in the deed and deliver the deed to the person who bid on the property.
The deed that the sheriff or
officer executes must state that the sheriff or officer complied with these
requirements. It is a Class B Misdemeanor if the sheriff or officer violates
these rules.
A prospective purchaser:
3. A person requesting a statement from a county’s tax assessor-collector must submit a sworn, written request that identifies each taxable property that he owns or formerly owned in the county or in any city or school district with territory in that county.
County Tax
Assessor-Collector
The county tax assessor-collector:
1. Upon receiving a sworn request will determine whether the requestor owes any delinquent taxes to the county or any city or school district whose taxes are collected by the county.
2. The county tax assessor-collector will contact the tax assessor-collectors for the cities and school districts to determine whether the requestor owes delinquent taxes to any of those cities or school districts.
3. The county assessor-collector will issue a statement reflecting any delinquent taxes that the requestor owes or stating that he does not owe any reported delinquent taxes. If delinquent taxes are not reported by a city or school district, those taxes will not be included in the county assessor-collector’s statement and will not prevent the requestor from buying property at a tax-foreclosure sale.
4. The assessor-collector may charge up to $10 for issuing a statement. The statement will be valid for 90 days.
In order to buy real property at a
tax-foreclosure sale, a person must be the one who actually bids on the property
at the sale. The statute prohibits a person purchasing property for another
person (including a person’s wife or other relative). The purchaser must
exhibit to the officer conducting the sale an “Unexpired Written Statement”
showing that he does not owe any delinquent taxes. In order to obtain a valid
“Unexpired Written Statement” the purchaser must submit a sworn request to the
county tax assessor-collector. The request must list all properties that the
purchaser has owned and currently owns.
Upon receipt of a sworn request,
the tax assessor-collector must not only check the status of the county’s taxes
and any other taxes that the county is responsible to collect, but also whether
the requestor owes delinquent taxes to any other city or school district that
taxes property in the county. The county tax assessor-collector must therefore
send a copy of the request to all tax assessor-collectors of any cities or
schools that tax property located in the county. The other tax
assessor-collectors must inform the county tax assessor-collector whether or
not the requestor owes any delinquent taxes, and, if so, the amount of
delinquent taxes owed. Unfortunately the statute does not specify a time limit
in which the other tax assessor-collectors must respond, it leaves that up to
the county tax assessor collector.
The tax assessor-collectors are
responsible for determining whether the requestor owes any delinquent taxes.
The tax assessor-collector will list any delinquent taxes that are currently
assessed in the name of the requestor. A person is liable for payment of
delinquent taxes assessed against property they own on January 1 of the year of
the delinquent tax despite the fact they no longer own the property. Contrast
that situation where a requestor acquires property that has delinquent taxes
assessed against it. A person is not liable if he did not own the property on
January 1 of the year of the delinquent taxes.
If a requestor did business under
a trade name and that business has outstanding delinquent taxes owed by it, the
requestor may or may not owe those taxes. If the requestor is an individual and
did business under the trade name, he is personally liable for those taxes. If
however the requestor operated as a corporation or limited partnership or
limited liability company, he is not individually liable for those taxes.
The sheriff or officer may not
execute or deliver a deed to anyone other than the successful bidder. The
statute also requires that the sheriff or officer may only deliver the deed to
the purchaser after that person has exhibited an “Unexpired Written Statement”
issued by the county tax assessor-collector stating no delinquent taxes are
owed. The statute however does not specify the time frame in which a purchaser
must obtain the “Unexpired Written Statement” to exhibit to the sheriff or
officer that conducted the sale. A deed from a sheriff or officer conducting a
tax-foreclosure sale must name the successful bidder as the grantee. The deed must recite that the buyer had a
valid statement and showed it to the sheriff or officer. The deed, when recorded, will conclusively
prove that the law was followed. A
person who knowingly violates this law is guilty of a misdemeanor.
The same requirements will apply
to a sale of property under a writ of execution. A delinquent taxpayer will not be able to buy property at such a
sale.
A.
No, the
statute does not prohibit a person from bidding on property at a tax sale
without an “Unexpired Written Statement”. It only prohibits a sheriff or
officer from executing a deed or delivering a deed to the person without that
person exhibiting an “Unexpired Written Statement” listing no taxes due.
A.
The
requestor makes their request to the County Tax Assessor-Collector of the
county where the property is located. The County Tax Assessor-Collector must
check whether there are any taxes due the county and any school district or city
that has taxable property located in the county. This includes “overlapping”
jurisdictions, i.e. cities and schools that overlap from other counties into
the subject county. In those instances the County Tax Assessor-Collector must
send the Request to those tax assessor-collectors.
Q.
What if the
requestor states on the Request that the only property he owns is in a city and
school that is located completely within the county. Must the Tax
Assessor-Collector send the Request to all the other tax assessor-collectors?
A.
Yes, upon
receipt of a Request the County Tax Assessor-Collector must inquire of all tax
assessor-collectors for any city or school that has taxable property located in
the county as to whether the Requestor owes delinquent taxes.
Q.
Should the Tax
Assessor-Collector list on the Written Statement delinquent taxes owed by a
Requestor to a water district, hospital district or taxing authorities other
than schools or cities?
A.
No, the
statute only requires the Tax Assessor-Collector to list delinquent taxes owed
to the county where the property that is being sold is located and any city or
school district that also has taxable property in the county. The Requestor is
not required to pay delinquent taxes to other taxing authorities in order to
purchase property at a sheriff’s sale.
Q. If
Requestor only lists one property on the Request may the tax assessor-collector
list delinquent taxes due on other properties?
A. Yes, the Requestor is required to list all
property that he previously owned and currently owned to facilitate the search
by the tax assessor-collection, but it does not limit the search. The tax
assessor-collector should include all delinquent taxes owed by the Requestor
regardless of whether the property(s) is listed on the Request.
Q.
Can the
County Tax Assessor-Collector set the amount of time that another tax
assessor-collector has to respond to a Request?
A.
Yes, the
statute authorizes the County Tax Assessor-Collector to specify the date that
another tax assessor-collector is to respond to a Request sent by the County
Tax Assessor-Collector.
Q.
Can the
County Tax Assessor-Collector set the amount of time needed to process a
Request from a Requestor?
A.
The statute
does not specify the time in which the County Tax Assessor-Collector must act;
therefore any reasonable amount of time would be appropriate. The statute does
indicate that the legislature intended the County Tax Assessor-Collector to
mail the complete Written Statement to the Requestor.
Q.
Should the
Tax Assessor-Collector list on the Written Statement delinquent taxes due on
property that Requestor previously owned?
A.
Depends, the
Tax Assessor-Collector should list any delinquent taxes that the Requestor
owes.
a. A person only owes taxes if they own
the property on January 1 of the year of the tax. If the Requestor did not own
the property on January 1 of the year of the delinquent tax they do not owe
that tax and it should not be listed on the Written Statement.
b. The Requestor owes the delinquent tax
if on January 1 of the year of the delinquent tax he owned the property. In
this instance the delinquent tax should be listed on the Written Statement.
Q.
Should the Tax Assessor-Collector list on the Written Statement delinquent
taxes due on property that the Requestor currently owns?
A. Same answer as above, if the Requestor owned
the property on January 1 of the year of the delinquent tax, list it on the
Written Statement, if the Requestor did not own the property on January 1 of
the tax year do not list the tax.
Q.
Should the Tax Assessor-Collector list on the Written Statement delinquent
taxes assessed against a business the Requestor owns or owned?
A. Depends on the status of the business.
If the Requestor operated the
business as a sole proprietorship or general partnership he is personally liable
for the delinquent taxes and those taxes should be included on the Written
Statement.
If the Requestor’s business
was organized as a corporation or limited partnership or limited liability
company the Requestor is not personally liable for the delinquent taxes and
those taxes should not be included on the Written Statement.