Tax lien issues in Texas

7 Replies

I'm wondering if anyone has come across the issue where the a property was purchased at the Sherriff's tax sale in texas and there was a first lien on the property in which the lien holder was not notified by the firm that handles the tax foreclosures for the county.  Are there any remedies to this problem or does the purchaser own that lien now? 

Was the sale handled by a law firm? How do you know the lienholder was not notified? Have you reviewed the case yourself? Was there not a notification by publication?

If all the information in your post is correct, the purchaser will indeed be in a tough position. If this is a large investment, it is probably time to seek legal council. A good real estate attorney will be worth their weight in gold here.

Yes, the county does contract to a law firm which manages their foreclosures and they also appoint a different attorney for the owner, if they can not contact them.  Some research was done before the purchase but everything was done online through the county website.  I've found that it maybe better to go to the records building to do the research as the information is more complete. 

I spoke with a person at the firm that handles the foreclosures and I was told that I should have done better research.  She is correct but I didn't expect that response.  I called back and spoke with a manager in the foreclosure department and they told me that they will do more research and if it turns out that a lien holder was not notified, they will void the sale.

I noticed that there was a lien on the property while doing my research but I assumed that they had been contacted...never assume.  When I checked the documentation that was sent by the firm, it was only addressed to the owner and not the lien holders.  They publish the information as well.  I'm not sure how I missed this but I did.  Hopefully, there is a release out there that just didn't show up online.  The manager did seem to be concerned and is working to rectify the problem.  Thanks for the response, I think I've learned a valuable lesson and I hope the lesson doesn't cost me too much.     

You should have hired someone to do a complete title search before you bought.

Joe Gore

This is a grey area in the property tax code. Under the hierarchy of home liens in Texas, property tax liens are only superseded by certain properly filed federal and state liens.  As long as the lien holder was notified and failed to secure their lien, you should have nothing to fear. 

It's when there isn't notification to a lien holder that attorneys like to get involved and cause this to become grey.  Section 32 of the Texas Property Tax Code defines lien priorities. See link below:

http://www.window.state.tx.us/taxinfo/proptax/96-2...

(Page 207).

You can actually argue under section 33.94, that they failed to secure their interest. Thus they now have a civil matter with the previous owner.

33.95 gives you free and clear title.

Updated almost 4 years ago

The code does reference a civil procedure that does allow a person to file a suit to have the sale vacated, as long as they file within 1 year from date of sale. Mortgage companies try and use this to scare you in to settling for even money. When in fac

Updated almost 4 years ago

The code does reference a civil procedure that does allow a person to file a suit to have the sale vacated, as long as they file within 1 year from date of sale. Mortgage companies try and use this to scare you in to settling for even money. When in fac

Thank you for the valuable information.  I believe I may have dodged a bullet.  The release was found by the foreclosure company.   

Hi,

I live in Travis County (Austin).  I'm wondering, is there a DIY approach to finding all the liens on a property that's up for foreclosure?  I've searched under the address and owner's name the Tax Assessor and County Clerk website and have found no liens on this property.

However, I want to be certain that I'm not missing something. The house does have an HOA and I would think that if someone's not paying their mortgage, they're probably not paying the HOA!

In addition to the Tax Assessor website (https://tax-office.traviscountytx.gov/) and the public records at the county clerk website (http://traviscountyclerk.org/eclerk/Content.do?cod...), 

Should I be checking somewhere else?
How can I make sure the IRS has been notified?

Many thanks!

Ken

It looks like you have covered most of the bases but I've found that I'm able to locate more information by going down to the county records building and doing the research as opposed to doing it online. I'm sure the HOA has some type of Lien or balance on the property, if they haven't been paid. If they have a lien, it should have been filed in the courts so it should show up. The HOA will probably bid on the property as well, if they are owed anything. Some may say to use a service to do the research but nobody can pay for a title search for every house that peaks there interest. The IRS would only be notified if they have a lien on the property. There are others with a lot more experience than me so maybe they have additional ideas.

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