New Constitutional Amendment Provides for Uniform Assessment of Property Texas Throughout Texas

Last Tuesday, November 3, 2009, Texas voters passed 11 constituional amendments, many of which serve to preserve private property rights, and to equalize the manner in which ad valorem taxes are assessed against real estate in Texas.

Of particular importance to Texans paying property taxes was proposition 3, whose purposes was to remove the constitutional requirement that administrative and judicial enforcement of uniform standards and procedures for property appraisal originate in the county where the tax is imposed. Instead, the amendment sought to remove the requirement of local procedures for tax appraisals, and to give the Texas Legislature full discretion to prescribe the manner of the enforcement of uniform appraisal standards and procedures throughout the State.

The exact language of the proposed amendment was somewhat benign:

Amendment No. 3 (H.J.R. 36, Article 3) The constitutional amendment providing for uniform standards and procedures for the appraisal of property for ad valorem tax purposes.

Prior to adoption of this Amendment,Section 23(b), Article VIII, Texas Constitution, required that administrative and judicial enforcement of uniform standards and procedures for the appraisal of property for property tax purposes, as prescribed by general law, originate in the county where the tax is imposed. This provision has been interpreted to mean that the state has little meaningful supervisory or administrative power over the standards and methods that local appraisal districts use to value property.

While the Texas property tax system has always been administered on the local level, it is undeniable that the state retains an interest in property tax appraisal professionalism and competence. The state also has an interest in the consistent determination of property tax appraised values from one locality to the next, through the application of uniform appraisal practices, because the state allocates funding to public schools based on the per-student aggregate taxable property value in each school district.

As do most things legal, property tax appraisal practices and procedures vary widely across Texas. A property located in one county is sometimes appraised much differently than a similar property located elsewhere in the state -- even in an adjoining County.

Prior to adoption of proposition 3, there was no legal basis for direct oversight of appraisal districts by the state. Thus, inequities in assessing and collecting taxes were local functions, and the state was powerless to directly require an appraisal district to follow state law or apply a standard appraisal method. This resulted in a hodge-podge of practices and non-standard procedures, which failed to ensure appropriate and accurate appraisals that determine the value of property for taxation purposes.

As a Texas attorney actively engaged in a real estate practice, I fervently believe that some degree of statewide uniformity and equity of appraisal processes is necessary. In my opinion, real property located in one Texas county should be appraised in the same manner and according to the same rules as similar property located in another Texas county. This is not to say that a "one size fits all" approach is best, but certainly amending the Texas Constitution to allow direct state enforcement authority and oversight of local appraisals was a positive step. With the recent passage of proposition 3, the state is allowed to oversee the appraisal system directly and take the necessary action to address inequities and inconsistencies in property appraisal.

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Real Estate Commission Agreements MUST be in Writing to be Enforceable

Real Estate commissions paid to brokers and realtors are often the subject of legal disputes in Texas. Participants in real estate sales and purchases often squabble over who, if anybody, is entitled to a commission arising from that sale.

Disagreements frequently arise between brokers over who was the "procuring cause" of a certain sale. Likewise, sellers sometimes dispute that their listing agent or salesperson has adequately represented his or her interests. Real estate professionals, on the other hand, must be wary of clients who benefit from their services, but do not wish to compensate them.

No broker or agent should be required to freely provide services, advice or expertise. But -- at the same time -- brokers must disclose to their customers the method and amount of compensation they intend to realize from a given transaction.

This dilemna has a simple solution -- PUT IT IN WRITING!

The Texas Real Estate Commission, and local Boards of Realtors, frequently publish materials encouraging that commission and representation agreements be in writing so as to avoid disputes over commissions.

Texas law does NOT require that agreements for the engagement of Realtors as either "Listing Agents" (Seller's Representatives)or "Buyer's Representatives" be in writing. However, a broker/agent MAY NOT file a suit to enforce any commission claim, unless theagreement to pay a commission is in writing and signed by the customer.

Section 1101.806(c) of the Texas Occupations Code (the Texas Real Estate License Act) expressly provides as follows:

A person may not maintain an action in this state to recover a commission for the sale or purchase of real estate unless the promise or agreement on which the action is based, or a memorandum, is in writing and signed by the party against whom the action is brought or by a person authorized by that party to sign the document.

A prudent broker, seller and/or buyer will not enter into a real estate transaction without a written agreement concerning payment of commissions. This arrangement protects all participants in real estate purchases and sales.

Further, Buyers or Sellers from whom a broker/agent/salesperson seeks a commission, based upon anything other than a written agreement might be spared the expense of paying that commission.

Shedding the Homestead Designation and Family Transfers

Texas Homesteads -- Bars to Keep Strangers Out, or to Keep Owners In?

Many times, family members desire to sell properties to one-another. The reasons for these transfers are innumerable -- advance pre-death gifts, planning for the aging process, and maintaining the integrity of family properties are just a few. A common scenario is when a mother desires to sell her home to her son, but to remain living in the home until her death. This transaction -- simplistic as it seems -- could encounter difficulties and even be rejected by a title company because of the tremendous power of Texas homestead laws.

The homestead laws are contained in the Texas Constitution and in Chapter 41 of the Texas Property Code. Our courts have liberally construed the homestead protections, indulging every opportunity to exempt real property from forced sale by general creditors.

In Texas, exercising homestead rights in property does not require any formalized legal process, or the filing of a specific document. The general criteria for creating a homestead are (i) overt acts of usage, and (ii) an intent to claim the land as a permanent residence.

Every Texan family and every single adult person is entitled to a homestead exempt from seizure for claims of creditors Homestead exemptions in Texas were enacted to protect Texans' homes from creditors. However, once a homestead is designated, removing that designation will often require physical abandonment of the property. This can present problems under the scenario described above, since mom (the seller) will be required to abandon the homestead exemption before she can sell the property to her son (the buyer). This very likely could mean that mom won't be permitted to reside in the home for some period of time after the transfer.

Courts have been fairly consistent on this issue: Where a homestead claimant moves from property that has been previously impressed with homestead character, the question of whether such property continues as a homestead is dependent primarily upon the intention of the claimant. West v. Austin Nat’l Bank, 427 S.W.2d 906, 911-12 (Tex. Civ. App.–San Antonio 1968, writ ref’d n.r.e.) (citing McMillan v. Warner, 38 Tex. 410, 411 (1873)). “One does not necessarily abandon a homestead merely by changing residence.” Chesson, 149 S.W.3d at 808 (citing Rancho Oil Co. v. Powell, 142 Tex. 63, [69,] 175 S.W.2d 960, 963 (1943)). “To be an abandonment that would subject such property to seizure and sale, there must be a voluntary leaving or quitting of the residence with a then present intent to occupy it no more as a home . . . .” King v. Harter, 70 Tex. 579, 581, 8 S.W. 308, 309 (1888). “[O]ur courts have held that ‘it must be undeniably clear and beyond almost the shadow, at least [of] all reasonable ground of dispute, that there has been a total abandonment with an intention not to return and claim the exemption.’” Burkhardt v. Lieberman, 138 Tex. 409, 416, 159 S.W.2d 847, 852 (1942) (quoting Gouhenant v. Cockrell, 20 Tex. 96, 98 (1857))."

As with most legal problems, there are solutions to problems presented by the homestead exemption. Family transfers can be accomplished without changing mom's place of residence. One should seek experienced legal counsel when presnted with problems selling real estate that arise from the homestead exemption.

RLWPC Retained by Knollcreek HOA in Dispute with City

Knollcreek HOA, Inc. has hired RLWPC Law Firm to represent its intersts in a dispute with the City of San Antonio over what the City alleges is blockage of a drainage easement. According to City officials, a parking lot owned by the homeowners association encroaches on an existing easement, and improperly results in drainage to a particular lot within the community. The City has demanded that the HOA remove the lot. However, the lot pre-existed the Citry's annexation of the subdivision.

Trey Wilson is poised to engage in immediate negotiations with the City and, if necessary, to protect the Association's rights in court. The Knollcreek subdivision is located inside of 1604 on the City's northeast side.

Trey Wilson Completes Arbitration Against Regency Park HOA

Our firm recently completed an evidentiary arbitration proceeding wherein we defended residents of San Antonio's Regency Park subdivision against claims made by that community's Homeowners Association. The dispute began in 2006 when our clients first request permission from the RPHOA's Architectural Committee to construct a swimming pool. The RPHOA and its ACC failed to respond for several months, but later engaged in a course of majing absurd demands of our clients.

By October 2007, the HOA still had not made a final decision, despite our clients submitting multiple applications, hiring a landscape designer and a professional enginerr-- all at the HOA's request. When the HOA failed to respond to our clients' final submission, they obtained "presumed approval" according to the terms of the applicable restrictions. Thereafter, our clients commenced construction of their pool. The HOA then filed suit and obtained a TRO preventing further construction.

Shortly after the TRO was issued, the HOA approved the swimming pool design, and construction was completed. The Association, however, sought to collect its attorneys fees associated with the TRO. The homeowners hired RLWPC on the eve opf trial over the attorneys' fees issues, and successfully had the lawsuit abataed and referred to arbitration as provided in the restrictive covenants.

A lengthy arbitration session was conducted by the Honorable Juan Gallardo -- a former district judge. Judge Gallardo's arbitration award is expected in the very near future.

Cop Watch: Dallas County Constable's Computers Taken Over, What About Our Privacy Rights?

First, there were rumors that employees of a Dallas County Constable were forced to work for free on the job as well as on the constable's re-election campaigns. Then, some of these employees told their stories to FBI agent Danny Defenbaugh and that's when You-Know-What hit the fan.

Right now, Dallas County Constable Jaime Cortes has his lawyers filing arguments with the court that the Dallas County Commissioners don't have the legal right to investigate Cortes or his fellow law enforcer, Constable Derick Evans. (There are rumors that Craig Watkins is behind the scenes with his own investigation, but the District Attorney's Office isn't confirming that they're doing anything here.)

Right before Thanksgiving, a retired district judge is going to have a hearing and sort out this mess -- but there's already a lot of mud that's been slung and probably lots more will get thrown before that November 23rd court date.

Why should we care?

Well, regardless of all this employment hooplah, the bottom line is that the computers used by the constables were taken by the investigators, and presumably they've been through all those stored files. In fact, we've got no idea who all has been combing through those computer files.

Plus, we don't know what all those law enforcement files contained on the Constable's databases, but any Average Joe citizen out there probably had a right to privacy expectation that their personal information wouldn't be tossed around like this.

Today, the Dallas County Constables do lots of police-type work -- long gone are the olden days, where their primary job was serving subpoenas and the like. Now, Cortes and his brethren are involved in things like (1) finding dads who aren't paying their child support and forcing the deadbeat dads to pay up; (2) searching out and closing down crack houses and other drug sales shops in their area; (3) watching schools for dealers trying to sell drugs like heroin to the kids there; (4) impounding cars and other vehicles for various law violations, etc.

There's nothing to shield totally innocent folk from the stigma of being revealed as someone once considered as a druggie, etc. by the free for all use of the Constable's computer files here.

Let's hope the Judge on the November 23rd hearing puts a stop to this -- although, it's probably like shutting the barn door after the horse is gone by now ... right? How many copies of those hard drives have been made? Who got sent what as email attachments?