This section preserves an owner’s right to enter a tax-payment contract, sets disclosure and foreclosure-related rules for certain tax-lien contracts, and limits or voids some arrangements.
Sec. 32.065. CONTRACT FOR FORECLOSURE OF TAX LIEN. (a) Section 32.06 does not abridge the right of an owner of real property to enter into a contract for the payment of taxes. (b) Notwithstanding any agreement to the contrary, a contract entered into under Subsection (a) between a transferee and the property owner under Section 32.06 that is secured by a priority lien on the property shall provide for foreclosure in the manner provided by Section 32.06(c) and: (1) an event of default; (2) notice of acceleration; and (3) recording of the deed of trust or other instrument securing the contract entered into under Subsection (a) in each county in which the property is located. (b-1) On an event of default and notice of acceleration, the mortgage servicer of a recorded lien encumbering real property may obtain a release of a transferred tax lien on the property by paying the transferee of the tax lien or the holder of the tax lien the amount owed by the property owner to that transferee or holder. (c) Notwithstanding any other provision of this code, a transferee of a tax lien or the transferee's assignee is subrogated to and is entitled to exercise any right or remedy possessed by the transferring taxing unit, including or related to foreclosure or judicial sale, but is prohibited from exercising a remedy of foreclosure or judicial sale where the transferring taxing unit would be prohibited from foreclosure or judicial sale. (d) Chapters 342 and 346, Finance Code, and the provisions of Chapter 343, Finance Code, other than Sections 343.203 and 343.205, do not apply to a transaction covered by this section. (e) If in a contract under this section a person contracts for, charges, or receives a rate or amount of interest that exceeds the rate or amount allowed by this section, the amount of the penalty for which the person is obligated is determined in the manner provided by Chapter 349, Finance Code. (f) Before accepting an application fee or executing a contract, the transferee shall disclose to the transferee's prospective borrower each type and the amount of possible additional charges or fees that may be incurred by the borrower in connection with the loan or contract under this section. (g) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1329, Sec. 3, eff. September 1, 2007. (h) An affidavit of the transferee executed after foreclosure of a tax lien that recites compliance with the terms of Section 32.06 and this section and is recorded in each county in which the property is located: (1) is prima facie evidence of compliance with Section 32.06 and this section; and (2) may be relied on conclusively by a bona fide purchaser for value without notice of any failure to comply. (i) An agreement under this section that attempts to create a lien for the payment of taxes that are not delinquent or due at the time the property owner executes the sworn document under Section 32.06(a-1) is void. Acts 1979, 66th Leg., p. 2288, ch. 841, Sec. 1, eff. Jan. 1, 1982. Redesignated from Tax Code Sec. 32.06(j) and amended by Acts 1995, 74th Leg., ch. 131, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1396, Sec. 39, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 7.91, eff. Sept. 1, 1999. Amended by: Acts 2005, 79th Leg., Ch. 406 (S.B. 1587), Sec. 2, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 1126 (H.B. 2491), Sec. 14, eff. September 1, 2005. Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 17.001(66), eff. September 1, 2007. Acts 2007, 80th Leg., R.S., Ch. 1220 (H.B. 2138), Sec. 4, eff. September 1, 2007. Acts 2007, 80th Leg., R.S., Ch. 1329 (S.B. 1520), Sec. 2, eff. September 1, 2007. Acts 2007, 80th Leg., R.S., Ch. 1329 (S.B. 1520), Sec. 3, eff. September 1, 2007. Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 22.007, eff. September 1, 2009. Acts 2013, 83rd Leg., R.S., Ch. 206 (S.B. 247), Sec. 9, eff. May 29, 2013.