- November 16, 2010
- All Texas Issuing Offices
- Rollback Taxes
Rule P-20 respecting rollback taxes now reads:
B. ROLLBACK TAXES
1. In connection with the issuance or amendment (after issuance) of any Loan Policy or of any Loan Title Policy Binder on Interim Construction Loan (Interim Binder), and upon payment of the premium required under Rate Rule R-19 , the words: "and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership", as contained in the standard tax exception may be deleted by
(a) Deletion of such words upon the policy or binder form, either by checking the appropriate box on a Form T-2 or T-2R or by lining through the words or by producing an electronic form with the words; or
(b) By attachment to the policy or binder of endorsement form T-30 . The deletion of the above phrase from the standard tax exception is hereafter referred to as "insure or insuring against rollback taxes".
2. A Company may not insure against rollback taxes unless:
a. The Company has satisfactory evidence in its file that the assessed taxes for the current year are not based on an agriculture or open-space valuation; or
b. (i) The rollback taxes have been assessed by all of the taxing authorities;
(ii) The rollback taxes are collected at closing by the Company, and
(iii) The Company will pay the roll back taxes in the ordinary course of business.
We are not authorized to delete the language from the T-1or T-1R Owner' Policy of Title Insurance.
The following are our guidelines for deletion of the rollback tax language on the loan policy or binder:
- You may delete the rollback tax language if the land is not specially valued.
- You may delete the rollback tax language if all rollback taxes, interest, and penalties are paid. Texas law does not allow a lender to require such payment.
- You must add a specific exception or require payment of all rollback taxes, interest, and penalties if the taxes have become due. For example:
" If agricultural land, valued for tax purposes under Article VIII, §1-d and Chapter 23, Subchapter C, Tax Code, is sold, the rollback taxes are triggered and are due. The policy does not insure against such event or the consequences thereof".
We will consider an escrow of funds for the additional tax due if the land is appraised for tax purposes as "qualified open-space land" under Chapter 23, Subchapter D, Tax Code (Article VIII, §1-d-1, Texas Constitution). Please call our underwriting personnel to discuss any escrows.
Please call our underwriting personnel to determine if you are asked to delete the rollback tax language on specially assessed land without an escrow.
If you have any questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
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.