Texas Property Tax Bills

Fall in Texas heralds cooler temperatures and the notorious property tax bills.

Starting October 1st, counties in Texas begin to issue their tax bills for the current year.  Remember in Texas we pay our property taxes in arrears, meaning that they become due and payable at the end of the tax year for which they are accrued, although they can be paid at any point after the bill is issued.  Unfortunately, the counties don’t release their bills for all taxing entities (generally, city, school and hospital) on the same day, so what do you do when you have some tax bills out, i.e., due and payable, and some that aren’t?

Bills from taxing entities for your collateral property must be issued in order for you to collect and pay those taxes at closing.

When you encounter a scenario in which some of the tax bills on a property are out and some are not, you cannot pay them all at closing.  As a lender you will escrow for those taxes that will shortly be due and payable, and the title company will then insure that taxes are paid through the previous year.  Until the current year’s taxes are due and payable and paid, the title company will not insure that taxes are paid through the current year.

In this blog post concerning legal and regulatory matters of interest to the mortgage industry, Sandler Law Group (SLG) provides general information and industry observations that are not motivated by or concerned with a particular past occurrence or event, or a specific existing legal problem of which SLG is aware. Nothing published herein is intended to constitute legal advice and the use of the blog post by a reader shall not give rise to an attorney-client relationship with SLG. SLG expressly disclaims any representation of accuracy or reliability as to the content of this blog post, as well as any obligation to maintain such content over time or to ensure it is free from errors. Brad Cope is the attorney responsible for the SLG content of this blog post. Unless otherwise noted, the attorneys of SLG are not certified by the Texas Board of Legal Specialization.