Delinquent Property Taxes under Mortgage or Probate

This column first appeared in the San Antonio Express News and other Hearst Newspapers on April 8, 2019.


person holding black pen

Dear Mr. Premack: I know you have written suggesting property tax deferral is not a wise long-term planning tool, but I have a question about using it in a different way. As someone over 65, for the past few years I have deferred taxes during the early part of the year and paid them out over a longer period, always going into the new year with a zero-balance owed. It’s a great way to manage cash flow and not have to come up with larger payments and still not accrue penalties and interest over years. Everything has been fine up until this year when I received a notice from the lender that my taxes were delinquent, and I need to pay the entire amount in 30 days. My question: I have both the four-payment split and the complete deferral recognized on my home. I am not listed on the delinquent tax roll for my county and I have never received a notice of delinquency from the appraisal district as the state code requires. How can I be delinquent — which means not paying when owed — when the state does not recognize my situation as being a delinquency? – R

The answer depends entirely on the contract which you signed with your lender. In exchange for lending you the funds to buy your home, you made a number of contractual promises. You must make your monthly mortgage principal and interest payment on time. You must not allow any lien to be placed on the property that would jeopardize the priority of your lender’s security interest. You must pay your real property taxes.

The Texas Tax Code generally allows qualified homeowners to a) defer their taxes (but during deferral they are classified as delinquent, and the taxes must eventually be paid with interest), or to b) pay the tax bill in four equal quarterly installments. The Code also says that taxes become delinquent if not paid by the initial due date (usually February 1 each year). If you opt to make payments quarterly, you are still delinquent. The statute waives penalties and interest, but still classifies you as delinquent when you are on the quarterly payment plan.

Because you are classified as delinquent under the statute, you are in violation of the terms of your contract with the mortgage lender. If your house was free of any liens the you would not have the contractual obligation and could take full advantage of the options available under the Tax Code. But you do have a mortgage lien, and must abide by the restrictive terms of the contract.

Dear Mr. Premack: My sister and I are the only surviving siblings in our family. Our older sister passed on and left no Will for her house. She was unmarried, had no children, and our parents have passed on. My understanding is we are heirs of her house. We have not yet gone to court or done anything to get our names on the deed to the house. Oldest sister owed back property taxes on the house. Now I have been sued due to the delinquency, but my younger sister is omitted from the suit. My question: is it legal to sue me and not my younger sister though our names are not on the deed? LR

Your older sister died owing property taxes. The house is subject to a claim by the taxing agencies for payment, and could be foreclosed upon to pay the back taxes if an arrangement is not reached. Since you and your younger sister have taken no legal action to claim title to the house, there is no official record that you and she are the owners. But in fact, when a person dies (your older sister), title to their property vests immediately in the heirs. Even if no one is sure of the identity of the proper heirs, they still own the property (subject to establishing their claims). It is fully legal for the taxing authority to sue any owner of a property for delinquent taxes, and you are an owner. Since neither you nor your younger sister have taken legal action to establish ownership rights, the tax collector may not be aware of her. If you hire an attorney, go through probate, are awarded ownership (both of you) then the suit should be amended to include your younger sister as a defendant. Probate will also give you authority to negotiate with the tax collector, and either save the house or gain time to sell it


Paul Premack is a Certified Elder Law Attorney with offices in San Antonio and Seattle, handling Wills and Trusts, Probate, and Business Entity issues. View past legal columns or submit free questions on legal issues via www.TexasEstateandProbate.com or www.Premack.com.

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