2023 Texas Statutes › Tax Code › Title 1 - Property Tax Code › Subtitle E - Collections and Delinquency › Chapter 34 - Tax Sales and Redemption › Subchapter A. Tax Sales › Section 34.07. Subrogation of Purchaser at Void Sale

Sec. 34.07.  SUBROGATION OF PURCHASER AT VOID SALE.  (a)  The purchaser at a void or defective tax sale or tax resale is subrogated to the rights of the taxing unit in whose behalf the property was sold or resold to the same extent a purchaser at a void or defective sale conducted in behalf of a judgment creditor is subrogated to the rights of the judgment creditor.
(b)  Except as provided by Subsection (c), the purchaser at a void or defective tax sale or tax resale is subrogated to the tax lien of the taxing unit in whose behalf the property was sold or resold to the same extent a purchaser at a void or defective mortgage or other lien foreclosure sale is subrogated to the lien of the lienholder, and the purchaser is entitled to a reforeclosure of the lien to which the purchaser is subrogated.
(c)  If the purchaser at a void or defective tax sale or tax resale paid less than the total amount of the judgment against the property, the purchaser is subrogated to the tax lien only in the amount the purchaser paid at the sale or resale.
(d)  In lieu of pursuing the subrogation rights provided by this section to which a purchaser is subrogated, a purchaser at a void tax sale or tax resale may elect to file an action against the taxing units to which proceeds of the sale were distributed to recover an amount from each taxing unit equal to the distribution of taxes, penalties, interest, and attorney's fees the taxing unit received.  In a suit filed under this subsection, the purchaser may include a claim for, and is entitled to recover, any excess proceeds of the sale that remain on deposit in the registry of the court or, in the alternative, is entitled to have judgment against any party to whom the excess proceeds have been distributed.  A purchaser who files a suit authorized by this subsection waives all rights of subrogation otherwise provided by this section.  This subsection applies only to an original purchaser at a tax sale or resale and only if that purchaser has not subsequently sold the property to another person.
(e)  If the purchaser prevails in a suit filed under Subsection (d), the court shall expressly provide in its final judgment that:
(1)  the tax sale is vacated and set aside;  and
(2)  any lien on the property extinguished by the tax sale is reinstated on the property effective as of the date on which the lien originally attached to the property.
(f)  A suit filed against the taxing units under Subsection (d) may not be maintained unless the action is instituted before the first anniversary of the date of sale or resale. In this subsection:
(1)  "Date of sale" means the date on which the sheriff or constable conducted the sale of the property under Section 34.01.
(2)  "Date of resale" means the date on which the grantor's acknowledgment was taken or, in the case of multiple grantors, the latest date of acknowledgment by the grantors as shown in the deed.
Acts 1979, 66th Leg., p. 2299, ch. 841, Sec. 1, eff. Jan. 1, 1982.  Amended by Acts 1999, 76th Leg., ch. 1481, Sec. 31, eff. Sept. 1, 1999;  Acts 2001, 77th Leg., ch. 1430, Sec. 30, eff. Sept. 1, 2001.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 133 (H.B. 1128), Sec. 5, eff. September 1, 2017.