Courtesy of Mary Blanck, Independence Title – Please note that within the next 2-4 weeks, the local taxing authorities typically begin sending out the 2011 property tax bills.

If you have an upcoming closing that involves a loan in Texas, the Lender who is making the new loan will require all property taxes to be collected and paid at the time of closing.

Typically, these taxes can be paid one of two ways:

1)    Property taxes can be withheld from the owner’s funds at the time of closing,
OR
(2)     Funds can be disbursed from the existing owner’s escrow account currently set up to service the property.

Occasionally, there may be a delay from the time the existing Lender disburses the funds from the existing escrow account to the point at which taxes can be verified as “paid” by the taxing authority.  If the title company unable to obtain a tax certificate from the tax service confirming that taxes are paid in full at the time of closing, then they will be required to collect these taxes from you, the current owner, at closing.  Unfortunately, paid receipts from the property tax office, escrow account disbursement statements or letters from your Lender confirming the disbursement of taxes from your escrow account will not be adequate proof of payment.  The Title Company must have a Tax Certificate which indicates that taxes have been “Paid” prior to closing.

This can be a very confusing issue, so please feel free to contact us with any questions you may have with regard to property taxes or any other title matter.