# TheAttorney General ofTexas

August 19, 1982
MARK WHITE Attorney General

Supreme Court Building P.0. BOY 12546 Austin. TX. 76711. 2546 5121475.2501 Telex 9101674-1367 Telecopier 5121475-0266

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AnEqualOpportunityl Affirmative Action Employer Mr. L.AlvisVandygriff Comissioner Opinion No. ~~-503

Texas Savings andLoan Department P. 0.Box 1089 Austin, Texas 78767 Re: Whether savings and loan company isanauthorized agent to receive tax bill under section 31.01 of the Texas Property Tax Code
DearMr.Vandygriff:

You have asked the following question:
Is a savings and loan association or other mortgage lender that isengaged in thepractice of collecting an escrow account as described herein the 'authorized agent' toreceive the original tax notice or taxbill under standard mortgage lending arrangements **in** Texas?
You indicate that representatives of a "taxing unit," as defined in section 1.04(12) of the Texas Property Tax Code, have raised the question as towhether the original taxnotice orbill should be sent to theperson inwhose name theproperty is listed on the taxbill or to the lending institution that has the responsibility to pay such taxes on behalf of that person pursuant to its contractual agreement made with the borrower. Section 31.01(a) of the Texas Property Tax Codeprovides inpart:

the assessor for each taxing unit shall prepare and mail a tax bill to each person inwhose name the property is listed on the taxbill or to his authorized agent....
Pursuant toauthority conferred by sections 5.07 and 31.Ol(c)(lO) of the Property Tax Code the State Property Tax Board has adopted a rule further defining this provision: Rule 237.03.00.038 provides in part:
Current tax bills shall be issued to each person

in whose name the property is listed or to his authorized agent by October 1 or as soon

p. 1812Mr. L.Alvis Vandygriff -Page 2 (MW-503)

thereafter aspracticable in thecase ofmortgaged property where taxes are paid from an escrow account controlled by the mortgagee (mortgage holder), the notice requirements shall be satisfied by sending the tax bill to the mortgagee. Written authorization by the property owner isnot required in order todeliver the tax bill to the mortgage company when the mortgage company acknowledges that it has authority for payment of taxes on theproperty.
36T.A.C. 9155.38 (1982). You indicate that in thepast, taxing units provided a copy of the tax notice or bill to both the lender and property owner. The Property Tax Codemakes noprovision fora feeor charge for such notices. You now indicate that one taxing unit has indicated that itwill no longer provide two notices without charge, but itwill provide only one notice in the future. Accordingly, you are concerned whether the lender, in your case, a state chartered savings and loan association, is entitled to receive the original tax bill or notice without charge as the "authorized agent" of the property owner. Themortgagee would have authority toreceive the tax bill under the quoted administrative rule. This result is consistent with the common lawofagency. The question of whether the lending institution is the "authorized agent" depends on the lender's relationship with the borrower. In the situation that you present, the state chartered savings and loans association would qualify as the authorized agent under the deed of trust. The deed of trust instrument between the borrower and the lender contains the following provision which is taken from the standard FNMA/FHLMC Uniform Instrument which provides:

Borrower shall pay to lender on the day monthly installments ofprincipal and interest arepayable under theNote, until theNote ispaid in full, a sum (herein 'Funds') equal to one-twelfth (l/12) of the yearly taxes and assessments which may attain priority over this Deed of Trust, and ground rents on the Property, if any, plus one-twelfth (l/12) of yearly premium installments of hazard insurance, plus one-twelfth (l/12) of yearly premium installments for mortgage insurance, if any, all as reasonably estimated initially and from time to time by Lender on the basis of assessments and bills and reasonable estimates thereof.... Lender shall apply theFunds topay said taxes, assessments, insurance premiums andgrounds rents....

p. 1813. .
Mr. L.AlvisVandygriff -Page 3 (MW-503)

We are aware thatother deeds of trust forms inuse inthis state contain similar versions of this language. In essence, under such provisions, theborrower and lender have agreed that theborrower pay in advance into an escrow account held by the lender and the lender will assume the obligation and responsibility to pay taxes and other enumerated obligations on theproperty. This isnothing more than the application of the law of agency. Agency isa legal relation whereby one party is authorized to act for the other. 3Tex. Jur. 3d Agency 51. See also,Valley View Cattle Company v. IowaBeef Processors, 548 F.2d 1219 (5th Cir. 1977); Sorenson V. Shupe Brothers Company, 517 S.W.2d 861, 864 (Tex. Civ. App. - Amarillo 1974, no writ); Roper v. Compania De Perforaciones y Servicio, S.A., 315 S.W.Zd 30, 33 (Tex. Civ. App. -Austin 1958, writ ref'd n.r.e.). An agency relationship is created bv an exoress or imnlied contract. orbv oneration of law. 3 Tex. Jur..3d Agency s13. See also Valley I
. View Cattle Company v. Iowa Beef Processors, supra; Green v. Hannon, 369 S.W.2d 853, 856 (Tex.Civ.App. -Texarkana 1963,writ ref'dn.r.e.).
The central element of an agency relationship is delegated authority. The situation which you present involves such authority created by an express contractual relationship set forth in the deed of trust. The borrower has contractually agreed topay the lender an amount to cover the taxes and the lender has agreed touse such funds to pay the taxes on the borrower's behalf. We believe that a state chartered savings and loan association or othermortgage lender isthe authorized agent entitled to receive the original tax bill or notice from the taxing unitwhere thedeed of trustplaces theresponsibility forpaying the taxes on the lender.
SUMMARY

A state chartered savings and loan association or other mortgage lender is the authorized agent entitled toreceive theoriginal tax bill from the taxing unit where the deed of trust places the responsibility for paying taxes on the mortgage lender. 

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WHITE Attorney General ofTexas
JOHNW. FAINTER, JR. FirstAssistant Attorney General

p. 1814Mr. L.Alvis Vandygriff -Page 4 (Mw-503)

RICHARD E.GRAY III Executive Assistant Attorney General Prepared byThomas M. Pollan Assistant Attorney General
APPROVED: OPINION COMMITTEE
Susan L.Garrison, Chairman JonBible Rick Gilpin Patricia Hinojosa JimMoellinger Thomas M. Pollan

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