Bulletin: TX000077

Dear Associates;

The legislature has adopted HB 2491 (effective 9/1/05) which governs assignments and refinance of ad valorem tax liens.

Amended §32.06, Tax Code, authorizes transfer of the ad valorem tax lien.  A person may authorizeanother person to pay delinquent taxes on the person's land by filing with the collector a sworn document stating the authorization, the name and street address of the transferee authorized to pay the taxes, and a description of the land by street address, if applicable, and legal description. 

The collector shall issue a tax receipt to the transferee, shall (directly or through a person designated) certify on the sworn document that payment of taxes, penalties, interest and collection costs have been made by the transferee on behalf of the owner, and shall state that the taxing unit's tax lien is transferred to the transferee.  The collector shall attach to the sworn document the collector's seal of office or sign the document before a notary public and deliver the sworn document, a tax receipt, and the affidavit attesting to the transfer of tax lien within 30 days.   The collector shall conspicuously identify in the taxpayer's account the date of the transfer. 

The tax lien transferred must be recorded in the deed records with the sworn statement and affidavit attesting to the tax lien transfer in order to be enforceable.  

After six months after recordation of the tax lien (transfer) and before foreclosure, the transferee of the tax lien may require the property owner to provide written authorization and pay a reasonable fee before providing the current payoff.  A mortgage servicer who pays the transferred tax lien is subrogated to all rights of the lien.   

A foreclosure of the transferred tax lien may not be instituted within one year after the date on which the lien is recorded, unless the contract between the owner and the transferee provides otherwise.  After one year from the date the tax lien is transferred, the transferee may foreclose unless the contract provides otherwise.   

Beginning on the date the foreclosure deed is recorded, the landowner or mortgage servicer of a prior recorded lien may redeem the land from the purchaser at the foreclosure by paying the buyer or successor 125% of the purchaser price in the first year and 150% of the purchase price in the second year of the redemption period.  The redemption may be exercised on or before two years after the purchaser's foreclosure deed is filed of record if the land is the residence homestead of the owner, or was designated for agricultural use, or was a mineral interest.  Other land may be redeemed no later than 180 days after the date the foreclosure deed is filed of record.   

The contract (Deed of Trust) must require the transferee to serve foreclosure notices on the landowner at the landowner's last known address in the manner required by §51.002, Property Code or by a commercially reasonable delivery service that maintains verifiable records of deliveries for at least five years from the date of delivery.  The contract (Deed of Trust) also must require the transferee to serve a copy of the notice in the same manner on the mortgage servicer or holder of each recorded lien encumbering the land, that must include on the first page, in 14-point boldfaced print or 14-point uppercase typewritten letters, substantially as follows: 

 "PURSUANT TO TEXAS TAX CODE SECTION 32.06, THE FORECLOSURE SALE

REFERRED TO IN THIS DOCUMENT IS A SUPERIOR TRANSFER TAX LIEN SUBJECT

TO RIGHT OF REDEMPTION UNDER CERTAIN CONDITIONS.  THE FORECLOSURE IS

SCHEDULED TO OCCUR ON THE (DATE)."