THE CHIEF"S APPRAISAL: Several different directions possible for foreclosed property

Ever wonder what happens when people don’t pay their taxes? The Texas Constitution and the Property Tax Code both provide that an automatic tax lien attaches to property every January 1st for that tax year. The lien is in favor of all taxing entities that have the legal authority to tax the property.  When taxes don’t get paid, taxing entities can, and do, file lawsuits to foreclose on these tax liens. After a judgment is taken, the property may be auctioned by the sheriff’s department on the courthouse steps.

Notice is given to the public of these tax foreclosure sales by publication in the local newspaper three times before the sale. These sales may only be held on the first Tuesday of any given month. Here in Ector County, such sales are usually held four times a year.
At these sales, the bidding begins at a minimum amount. That amount is equal to the amount that was due on the property along with certain costs, or the value of the property as determined by the court at the time the judgment was taken, whichever is less. If a bid is made of at least that minimum threshold amount, then the officer conducting the sale will continue to hear competing bids until a final, highest bid is heard. Then the property is sold to that person.

If there are no bids equal to the minimum bid on the property, it is sold to, or “struck off” to one taxing entity. That entity or “trustee” will take legal ownership of the property on behalf of all the entities for the purpose of reselling it to collect the taxes.

When property is sold at a tax foreclosure sale, the property is conveyed to the highest bidder subject to a “right of redemption” held by the previous owner. This right of redemption allows the previous owner to recover their ownership of the property by paying to the tax foreclosure sale purchaser the amount the purchaser bid for the property, plus certain other incidental fees, amounts and premiums.

While the taxing entities own the property it is not taxable so the entities list the property for sale and routinely sell the property to collect taxes and to get the property back on the tax roll.

This “resale” of the properties provides a second chance for interested people to purchase properties that did not sell at the tax foreclosure sale. An interested person may make an offer to purchase any such property. To promote the resale of properties, these properties are listed through a realtor who handles the sale of property that has been struck off to the entities. 

To purchase one of these resale properties, an offer may be made to purchase the property. Upon receiving an offer, the offer will be classified as a “minimum bid” or an “underbid” based on whether the offer is at least equal to or under the minimum bid for the property that was used at the original tax foreclosure sale. For an underbid, the governing bodies of all the taxing entities will consider the offer and decide whether to accept the offer. For a minimum bid, only the governing body of the trustee entity is required to approve the resale of the property. For this reason, minimum bids are more frequently approved than underbids.

But, even after the resale of a property, the previous owner may still have a right of redemption.

For information on these properties, you may contact our office at 1301 E. Eighth street. We can provide a list of the properties for free. We can also provide a list of the properties with maps and appraisal records attached for a nominal copying fee, usually from $5 to $10. You can also go to our website at www.ectorcad.org to get detail information on these properties. From the home page, select Owner Name and type in ECISD TRUSTEE or ECTOR COUNTY TRUSTEE.