Insights · Tax foreclosure · Texas
How a property tax foreclosure unfolds in Texas, step by step
Here is how it plays out in Texas.
When property taxes go unpaid for long enough, the county will eventually take the home and sell it. It does not happen overnight, and it does not happen without warning. But each step is easy to miss when the owner has passed away and the mail goes to an empty house.
1. The county files a lawsuit
Unpaid taxes become a court case. The county, or a law firm working for it, sues the owner of record for the back taxes plus interest, penalties and legal fees. That total grows every month.
2. The county looks for the owner, or the heirs
If the owner has died, the county has to figure out who inherited the home so those people can be served with the lawsuit. This is where the family tree from our earlier posts comes back. When heirs cannot be found, they are served by a notice posted at the courthouse or printed in a newspaper, which means many never learn a case exists.
3. The case goes to trial
If the taxes remain unpaid, the case goes before a judge. The judge confirms the amount owed and signs an order allowing the home to be sold.
4. The home goes to auction
A short time after the judgment, the property is sold at a public auction to the highest bidder. In Texas these sales happen on the first Tuesday of the month, usually on the courthouse steps. Whatever the home sells for above the tax debt is owed to the heirs, but they have to know to claim it, and the sale price is often far below what the home is worth.
5. A last chance after the sale
Texas gives the former owner a window to buy the home back after the auction, but at a premium on top of the sale price. For a family home that window is two years; for other property it is six months. It is a real option, but an expensive one. The details are in Texas Tax Code, Chapter 34.
Everything up to the auction is reversible.
It can be stopped, even late
Paying the balance, or reaching an agreement about the property, ends the case. Heirship Title works with families in exactly this position all the time, and we can stop a foreclosure auction up to four days before the sale date.
If you have received a notice about a home in your family, or if you suspect one is behind on taxes, the earlier we talk the more options there are. Call or text us at (754) 247-1854.