Bulletin: TX000073

Date:
October 08, 2004
To:
All Issuing Offices in Texas
RE:
Tax Foreclosure Checklist

Dear Associates:

Texas law on tax foreclosures had become very complex over the past several years.  We have created a checklist to aid you in insuring these transactions.  A copy of the checklist is attached to this bulletin. It will be posted to Virtual Underwriter and stewarttexas.com.

If you have any questions, please contact a Texas underwriter.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

STEWART TITLE GUARANTY COMPANY
Author: Richard L. Black, SeniorTexas Underwriting Counsel
5900 Shepherd Mt. Cove, Bldg. 2, Suite 200
Austin, TX  78730
(512) 342-7062
FAX (512) 342-7061
WATS (800) 252-9229 (TX only)

                                                                                                                                               

(September, 2004)

EXAMINER'S CHECKLIST:  TAX SALES

1.  Has the Tax Sale Deed been recorded for more four years?           Yes                No

***If the answer is " No", proceed to No. 2 below. 

***If the answer is "Yes", you are not required to examine the underlying tax suit, and no exceptions/requirements are necessary concerning the tax sale/deed, regardless of the type of property involved or the manner of service of citation made on owners and lienholders. 

2.      If the Tax Sale Deed was filed less than four years ago, has it been recorded for more than two years          Yes              No

***If the answer is " No", proceed to No. 3 below. 

***If the answer is "Yes", you must examine the underlying tax suit to confirm that all foreclosed owners and lienholders were personally served with citation.  (Serving the Texas Secretary of State qualifies as personal service with respect to out-of-state corporations.)  If all defendants were personally served in the tax suit, no exceptions are necessary concerning the tax sale/deed.  If an owner or lienholder was served by posted/published citation and the Tax Sale Deed has been recorded for more than two years (but less than four years), place the Invalidity Exception (see Exceptions on the next page) in Schedule "B "of the Commitment and Policies issued, unless you obtain a waiver of the exception from underwriting counsel.

3.      If the Tax Sale Deed was filedless than two years ago, you must examine the underlying tax suit and obtain the answers to the following questions:

a) Was the land receiving ahomesteadtax exemption when the tax suit was filed?        _____  Yes      _____  No

b) Was the land receivinganagriculturaltax exemption when the tax suit was filed?     _____  Yes     _____  No

c)      Does your title examination indicate that the land sold at the tax sale consisted of both surface andmineralownership?  _____ Yes     _____   No

d)      Was the Tax Sale Deed recorded less than six monthsago? 

   ______  Yes  _______  No                      

***If the answer to EACH of the preceding four questions is "No" AND each owner and lienholder was personally served with citation, then no further requirements or exceptions are necessary concerning the tax sale/deed. 

***If the answer to ANY of the preceding four questions is "Yes", you must place theRedemption Exceptionand theInvalidity Exception(see Exceptions on the next page) in Schedule "B" of the Commitment and any Policy issued, unless you obtain a waiver of the exceptions from underwriting counsel.

4.      If property sold at the tax sale does not fall into any of the three categories set out under No. 3(a), (b), and (c) above and the Tax Deed was recorded less than one year ago, has the Deed been recorded for more than six months           Yes             No

***If the answer is " Yes" and all owners and lienholders were personally served with citation in the tax suit, no Schedule "B "exception concerning the tax sale/deed is necessary in the Commitment and Policies. 

***If the answer is " Yes", but an owner or lienholder was served by published/posted citation, you may omit the Redemption Exception, but you must place the Invalidity Exception (see Exceptions below) in Schedule "B "of each Commitment and Policy issued, unless you obtain a waiver of the exception from underwriting counsel. 

***If the answer is " No", refer back to No. 3(d) above.    

NOTE:  Under all circumstances, unless you have obtained approval from underwriting counsel first, do not issue an Owner Policy to the party who was the purchaser at the tax sale.

EXCEPTIONS

[REDEMPTION EXCEPTION (Schedule "B"):]  Any rights of redemption in connectionwith the tax foreclosure and sale reflected by Sheriff's/Constable's Deed filed [date of filing], and recorded in/under [recording data], __________  Records of  ________  County, Texas.

INVALIDITY EXCEPTION (Schedule "B"):]  Any claim of invalidity of the foreclosure and tax sale pursuant to judgment entered in Cause No. _________ , District Court of   ________        County, Texas, and as reflected by Sheriff's/Constable's Tax Deed filed [date of filing], and recorded in/under [recording data], _________   Records of ________ County, Texas

References

Bulletins Replaced:
None
Related Bulletins:
TX000032 1995 Texas Legislation
Underwriting Manual:
TX 19.00 Tax Titles
Exceptions Manual:
TX Minerals
 
TX Mobile Homes
 
AL Taxes, Real Property
Forms:
None