ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

August 25,2004 

The Honorable Eugene D. Taylor 

Williamson County Attorney 

Williamson County Courthouse Annex 

Second Floor 

405 Martin Luther Ring, Box 7 

Georgetown, Texas 78626 

Opinion No. GA-0237 

Re: Whether liens for public improvement district 

assessments levied against property that was not a 

homestead at the time ofassessment maybe enforced 

by foreclosure even though the property has become 

a homestead between the date of assessment and the 

date of the enforcement action (RQ-0187-GA) 

Dear Mr. Taylor: 

You ask whether liens assessed by a public improvement district against property that was 

not a homestead at the time of assessment may be enforced by foreclosure even though the property 

has become a homestead between the date of assessment and the date of the enforcement action.’ 

I. Legal Backwound 

A. Statutory Lien Created by Chapter 372 of the Local Government Code 

Chapter 372 of the Local Government Code, the Public Improvement District 

Assessment Act, authorizes counties and municipalities to establish public improvement districts 

(“districts” or “PIDs”) to undertake public improvements upon receiving a petition requesting that 

a district be established. See TEX. Lot. GOV’T CODE ANN. $5 372.001 (Vernon 1999) (short title), 

372.002 (Vernon Supp. 2004) (municipal and county powers), 372.005 (Vernon Supp. 2004) 

(requisites for petition). If the governing body of a municipality or county finds that a proposed 

improvement project would promote the interests ofthe municipality or county, “the governing body 

may undertake an improvement project that confers a special benefit on a definable part of the 

municipality or county or the municipality’s extraterritorial jurisdiction.” Id. 5 372.003(a) (Vernon 

Supp. 2004). A public improvement project may include such items as landscaping, roadways, 

pedestrian malls, libraries, parking facilities, mass transportation facilities, water, wastewater, or 

drainage facilities or improvements, or parks. See id. 5 372.003(b). A PlD may be established and 

improvements financed only after the governing body provides notice and holds a public hearing on 

‘Letter from Honorable Eugene D. Taylor, Williamson County Attorney, to Honorable Greg Abbott, Texas 

Attorney General (Feb. 19, 2004) (on file with Opinion Committee, also available at http://www.oag.state.tx.us) 

[hereinafter Request Letter]. 
The Honorable Eugene D. Taylor - Page 2 (GA-0237) 

the improvement’s advisability and a majority of the body votes to approve the distict. See id. $5 

372.009(a)-(b) (hearing), (c) (notice), 372.010 (majority vote on improvement order). 

After a PID has been established, “[tlhe governing body of the municipality or county shall 

apportion the cost of an improvement to be assessed against property in an improvement district. 

The apportionment shall be made on the basis of special benefits accruing to the property because 

of the improvement.” Id. 4 372.015(a). After holding a hearing on a proposed assessment, the 

governing body “by ordinance or order shall levy the assessment as a special assessment on the 

property.” Id. § 372.017(b); see also id. $5 372.016 (requiring assessment roll, notice, and hearing), 

372.017(a) (requiring governing body to hear objections to proposed assessments). In addition, after 

notice and a hearing, a governing body may make a supplemental assessment to correct omissions 

or mistakes in the assessment relating to the total cost of the improvement. See id. 3 372.019 

(“Notice must be given and the hearing held under this section in the same manner as required by 

Sections 372.016 and 372.017.“). And a governing body may make a reassessment or new 

assessment of a parcel of land if(i) a court of competent jurisdiction sets aside an assessment against 

the parcel; (ii) the governing body determines that the original assessment is excessive; or (iii) on 

the written advice of counsel, the governing body determines that the original assessment is invalid. 

See id. § 372.020. 

Significantly, section 372.018(b) oftheLoca1 Government Code provides that an assessment 

is a lien against the property assessed: 

An assessment or reassessment, with interest, the expense of 

collection, and reasonable attorney’s fees, if incurred, is afirst and 

prior lien against theproperty assessed, superior to all other liens and 

claims except liens or claims for state, county, school district, or 

municipality ad valorem taxes, and is a personal liability of and 

charge against the owners of the property regardless of whether the 

owners are named. The lien is effective from the date of the 

ordinance or order levying the assessment until the assessment is paid 

and may be enforced by the governing body in the same manner that 

an ad valorem tax lien against real property may be enforced by the 

governing body. Delinquent installments of the assessment shall 

incur interest, penalties, and attorney’s fees in the same manner as 

delinquent ad valorem taxes. The owner of assessed property may 

pay at any time the entire assessment, with interest that has accrued 

on the assessment, on any lot or parcel. 

Id. 5 372.018(b) (emphasis added).* 

‘Section 5 1.008 of the Property Code generally requires that a statutory lien in favor of a govemmental entity 

must be recorded in county real property records. See TEX. PROP. CODE ANN. § 51.008(a) (Vernon Supp. 2004). 

However, section 5 1.008 does not apply if “( 1) the lien is imposed as a result of failure to pay: (A) ad valorem taxes; 

or(B) a penalty 01 interest owed in connection with those taxes; OI (2) the law establishing the lien expressly states that 

(continued...) 
The Honorable Eugene D. Taylor - Page 3 (GA-0237) 

B. Article XVI, section 50 of the Texas Constitution and Attorney General Opinion 

JC-0386 

Article XVI, section 50 ofthe Texas Constitution protects a homestead from forced 

sale for the payment of debts, with certain exceptions. It provides in pertinent part: 

(a) The homestead of a family, or of a single adult person, 

shall be, and is hereby protected from forced sale, for the payment of 

all debts except for: 

(1) the purchase money thereof, or a part of 

such purchase money; [or] 

(2) the taxes due thereon . . 

TEX. CONST. art. XVI, 5 50. In Attorney General Opinion JC-0386 this office concluded that a 

homestead may not be subject to forced sale for the nonpayment ofPlD assessments under the “taxes 

due thereon” clause of article XVI, section 50, because PID assessments are not taxes for purposes 

of that provision. See Tex. Att’y Gen. Op. No. JC-0386 (2001). As the opinion noted, 

The words “tax, ” “taxes,” and “taxation” in the Texas Constitution, 

used without a qualifying word, mean ad valorem tax, taxes, or 

taxation. See [Taylorv. Boyd, 63 Tex. 533,541(1885).] Ad valorem 

taxes are annually collected for the ordinary purposes of municipal 

government and are based on an estimation of the value of the entire 

taxable property in a city, from which an estimate is made of the 

percent of taxation of this value that will raise the sum necessary to 

meet the “current annual want.” Id. at 540. In contrast, assessments 

are charges imposed for purposes that do not require that they be 

imposed annually, or with reference to time. See id. They are not 

usually based upon a percentage of the value of the taxable property 

of a city, but upon the real or supposed benefit resulting from the 

improvement of the property on which the specific charge is laid. 

Id. at 4. Relying on Supreme Court of Texas cases holding that a special assessment is not a “tax” 

within article XVI, section 50 of the Texas Constitution, City of Wichita Fulls v. Williams, 26 

S.W.2d 910, 915 (Tex. 1930), and Higgins v. Bordages, 31 SW. 52, 55 (Tex. 1895) the opinion 

concluded: 

‘(...continued) 

recording the lien is not required.” Id. 5 51 .OOS(a)( I)-(2). In addition, it does not apply to “(I) a lien created under 

Section 89.083, Natural Resources Code; (2) a state tax lien under Chapter 113, Tax Code; OI (3) a lien established under 

Chapter 61 or 213, Labor Code.” Id. 5 51.008(c). You have not asked OI briefed whether a stahltory lien created by 

section 372.018(b) of the Local Government Code is subject to section 51.008 of the Property Code’s recording 

requirement, and we do not address the issue here. 
The Honorable Eugene D. Taylor - Page 4 (GA-0237) 

A homestead is not subject to forced sale to collect the assessments 

against it. A homestead may not be subjected to forced sale for 

nonpayment of a public improvement district assessment under the 

“taxes due thereon” clause of article XVI, section 50 of the Texas 

Constitution. 

Tex. Att’y Gen. Op. No. JC-0386 (2001) at 4 (citations omitted). 

II. Analvsis 

As background to your request, you note that the legislature in 2001 amended chapter 372 

of the Local Government Code to authorize counties to establish PIDs. See Request Letter, supra 

note 1, at 1. In researching chapter 372 for your county, you reviewed Attorney General Opinion 

JC-0386. You note that while that opinion concluded that a homestead may not be subject to forced 

sale for the nonpayment of PlD assessments under the “taxes due thereon” clause of article XVI, 

section 50, the opinion does not address “the enforceability of a PlD assessment lien ordered before 

a homestead exemption is established, as distinct from [a PID lien on] property that is already a 

homestead at the time of assessment.” Id. 

As you point out, in some cases a district will be created and assessments levied before 

property is developed as a subdivision and sold as multiple lots owned as homesteads: “The district 

and the developer who owns the unimproved land are already contractually obligated to pay the 

lenders the full amount ofthe assessment before any homesteads are created in the district. That debt 

is secured by the statutory assessment lien against all the property in the district.” Id. at 2. You posit 

a situation in which, “[a]t the time the homeowners establish their homestead, the liens guaranteeing 

repayment are already in place and the owners expressly acquire title subject to the liens.” Id. at 2. 

Given this possible scenario, you ask us to address the following question: 

Are liens assessed by a public improvement district against 

property that was not subject to the constitutional and statutory 

homestead exemption at the time of the assessment enforceable by 

forced sale, even though the property may have become a homestead 

between the date of the assessment and the date of the enforcement 

action? 

Id. at 1. 

InInwoodNorth Homeowners ‘Association, Inc. v. Harris, 736 S.W.2d 632 (Tex. 1987), the 

Supreme Court of Texas addressed whether the homestead laws of Texas protect the homeowners 

against foreclosure for their failure to pay neighborhood assessments imposed by the developer. 

Several homeowners had purchased lots in a subdivision subject to a declaration providing that all 

lots within the subdivision “were impressed with certain covenants and restrictions” that would “run 

with the land and be binding upon all parties acquiring rights to anyofthe property.” Id. at 633. The 

declaration included the covenant that lot owners agreed to pay annual assessments. Id. 
The Honorable Eugene D. Taylor - Page 5 (GA-0237) 

After concluding that the covenants created contractual liens, the court then considered the 

extent to which constitutional homestead protection applied. Id. at 634. The court noted that as a 

general rule, article XVI, section 50 protects homesteads against all debts except those specifically 

listed. Id. Importantly, however, the court also observed that homestead rights 

may not be construed so as to avoid or destroy pre-existing rights. 

Minnehoma Financial Co. Y. Ditto, 566 S.W.2d 354,357 (Tex. Civ. 

App.-Fort Worth 1978, writ ref d n.r.e.). It has long been held that 

an encumbrance existing against property cannot be affected by the 

subsequent impression of the homestead exception on the land. 

Farmer v. Simpson, 6 Tex. 303, 310 (1851). As said by this court 

many years ago, “[A] previously acquired lien, whether general or 

special, voluntary or involuntary, cannot be subsequently defeated by 

the voluntary act of a debtor in attempting to make property his 

homestead.” Gage v. Neblett, 57 Tex. 374, 378 (1882). 

Id. at 635. The court “reaftinn[ed] that when the property has not become a homestead at the 

execution of the mortgage, deed of trust or other lien, the homestead protections have no application 

even if the property later becomes a homestead.” Id. For this reason, the homeowners’ rights 

depended on when the lien attached to the property: 

If it occurred simultaneously to or after the homeowners took title, 

there is authority which would deem the homestead right superior. 

See Freiberg Y. Walzem, 85 Tex. 264,20 S.W. 60,61(1892). On the 

other hand, if the lien attached prior to the claimed homestead right 

and the lien is an obligation that would run with the land, there would 

be a right to foreclose. 

Id. The court noted that in Texas, “a covenant runs with the land when it touches and concerns the 

land; relates to a thing in existence or specifically binds the parties and their assigns; is intended by 

the original parties to run with the land; and when the successor to the burden has notice.” Id. 

(citations omitted). 

The court found that the covenants to pay assessments satisfied each of these criteria, and the 

homeowners’ deeds made specific reference to the assessments. Id. “Because the restrictions were 

placed on the land before it became the homestead of the parties, and because the restrictions contain 

valid contractual liens which run with the land,” the court concluded that “the homeowners were 

subject to the liens in question and an order of foreclosure would have been proper.” Id. at 635-36. 

Importantly, the Znwood court also held that a second theory supported its holding-the idea 

that “[a] homestead right in real property cannot rise any higher than the right, title or interest 

acquired by the homestead claimant.” Id. at 636. The court articulated the rule that although a 

homestead may attach to an interest less than an unqualified fee simple title, the homestead “will not 

operate to circumvent an inherent characteristic of the property acquired.” Id. 
The Honorable Eugene D. Taylor - Page 6 (GA-0237) 

Finally, we note that the court recently held that foreclosure is not an appropriate remedy to 

enforce homeowners’ association late fees that were not included in the deed restrictions. See 

Brooksv. Northglen Ass’n, 47Tex. Sup. Ct. J. 719,2004WL 1439643, *ll (June25,2004) (“[T]he 

restrictions did not provide any notice that a late fee would be imposed in addition to the interest 

charge. As a result, the property owners did not have notice of the late charge. Therefore, in light 

of Inwood’s notice requirement, foreclosure is not an appropriate remedy for a failure to pay the late 

charge.“) (citing Tex. Att’y Gen. LO-97-019 with approval). Thus, when enforcing a lien that 

predates a homestead, foreclosure is available only for amounts that are within the lien’s scope. See 

id.; see also Tex. Att’y Gen. LO-97-019, at 4 (‘Whether a property owners’ association may 

foreclose on a homestead to collect the costs will depend upon whether the lien for those costs 

(i) attached to the property prior to the homestead right and (ii) is the result of a restriction that runs 

with the land. . [T]he determination whether a lien for costs incurred by a property owners’ 

association relating to violations of the subdivision’s restrictions or the property owners’ 

association’s bylaws and rules preexisted a homestead right will depend upon the terms of the 

applicable restrictions and whether the assessment of these costs is contemplated by an existing lien 

under the restrictions or creates a new lien.“). 

Your question involves a statutory lien created by section 372.018 of the Local Government 

Code as opposed to a developer’s contractual lien. Section 372.018 provides that “[a]n assessment 

or reassessment, with interest, the expense of collection, and reasonable attorney’s fees, if incurred, 

is afirst andprior lien against the property assessed, superior to all other liens and claims except 

liens or claims for state, county, school district, or municipality ad valorem taxes.” TEX. LDC. GOV’T 

CODE ANN. $j 372.018(b) (Vernon Supp. 2004) (emphasis added). The lien “maybe enforced by the 

governing body in the same manner that an ad valorem tax lien against real property may be enforced 

by the governing body.” Id. 

Your specific question is whether “liens assessed by a public improvement district against 

property that was not [a] homestead at the time of the assessment [may be enforced by 

foreclosure even though the property has become a homestead] between the date of the assessment 

and the date of the enforcement action.” Request Letter, supra note 1, at 1. A municipality or 

county may enforce a section 372.018 lien against a homestead by foreclosure if the lien attached 

to the property before it became a homestead and was therefore “an inherent characteristic of the 

property acquired.” Inwood, 736 S.W.2d at 636. Because a lien created by section 372.018 “is 

effective from thedate of the ordinance or order levying the assessment,” TEX. Lot. GOV’T CODE 

ANN. 8 372.018(b) (Vernon Supp. 2004), the date of the ordinance or order must predate the 

homestead’s creation. The amounts to be collected must fall within the lien’s scope. See Brooks, 

2004 WL 1439643, *1 1; Tex. Att’y Gen. LO-97-019, at 4. Whether an assessment on a particular 

homestead may be enforced by foreclosure will ultimately depend upon the facts of the particular 

case and would be beyond the purview of an attorney general opinion. See Tex. Att’y Gen. LO-97- 

019, at 4 (determinations whether “a lien for those costs (i) attached to the property prior to the 

homestead right and (ii) is the result of a restriction that runs with the land . will ultimately 

depend upon the facts of the particular case and are beyond the purview of an attorney general 

opinion”); see also Tex. Att’y Gen. Op. Nos. GA-0128 (2003) at 5 (question requiring resolution of 
The Honorable Eugene D. Taylor - Page 7 (GA-0237) 

particular facts is “not one in which this office ordinarily engages in the opinion process”); GA-0106 

(2003) at 7 (“This oftice cannot find facts or resolve fact questions in an attorney general opinion.“). 

Attorney General Opinion JC-0386 did not address foreclosure of a homestead to enforce a 

contractual or statutory lien for assessments predating a homestead and is not inconsistent with this 

opinion. Moreover, nothing in this opinion affects the conclusion in Attorney General Opinion 

JC-0386 that chapter 372 assessments are not taxes for purposes of article XVI, section 50(a)(2) of 

the Texas Constitution. 
The Honorable Eugene D. Taylor - Page 8 (GA-0237) 

SUMMARY 

A public improvement district assessment may be enforced by 

foreclosure of a homestead provided that the statutory lien created by 

section 372.018(b) of the Local Government Code predates the date 

the propertybecame a homestead and the amounts to be collected fall 

within the lien’s scope. 

BARRY R. MCBEE 

First Assistant Attorney General 

DON R. WILLETT 

Deputy Attorney General for Legal Counsel 

NANCY S. FULLER 

Chair, Opinion Committee 

Mary R. Crouter 

Assistant Attorney General, Opinion Committee