Court Opinion

ID: 4133406
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:37:38.713323+00
Date Added: 2024-06-11T14:35:04.334584
License: Public Domain

Honorable Tom Hanna                        Opinion   No.   M-1263
Crlmlnal Dlstrlct Attorney
Jefferson      County                      Re:   Whether State buying
Beaumont, Texas                                  in real property at
                                                 delinquent tax sale
                                                 may sell same before
                                                 expiration  of two year
                                                 redemption period, or
                                                 may rent Same and
                                                 apply rent to taxes or
                                                 general revenue fund,
Dear Mr.      Hanna:                             and related questlons.
       We have received your request for an Opinion        from this
office   on the following numbered questions:
      “1.      After  the State has bought In property at
               a delinquent tax sale, may It then sell such
               property before the two year redemption period
               Is up?
      “2.      May the State and County collect rent from
               a tenant who Is living on the property after
               the State and County has taken in such property
               at a tax sale?

       “3.     If your answer to questlon number 2 was yes,
               please advise as to whether or not the rent
               money must be applied to taxes or whether or not’
               it may be put Into the general fund like any other
               County revenues ?
       “4 .    If the rent Is applied to the taxes, what must
               the State and County do with the property after
               the taxes are paid In full?

       “5.     If rent money Is collectible   after the State
               has bought in said property,   must the State and
               County prorate each rent payment an;:.?g the other
               taxing unita that were Tialntlffs    ln tne origins3
               tax case?”
.   .

        Honorable   Tom Hanna,   Page 2    (M-1263)

             Article  7345b, Section 9, Vernon’s Civil Statutes,       provii
        among other things, that If property be sold to any taxing
        unit which Is a party to the kdament in said suit.         the title
        to said property‘shail   be bid-in-and   held by sald taxi
        for the use and benefit of Itself     and all other tax-i--=%2
                                                                   ng un
        which arnartleme           sum        which kve been ad.ludaed fo

        vldes tMte       taxing unlt may sill    and convey the property
        so purchased by it at any tlms In any manner determined to be
        most advantageous to said taxkg      unfts either at public or
        private sale, subject to any then exlstlng right of redemptior
        It may be polnted out here th t thi       Section was enacted i
        1947 (Acts 50th Leg., Reg. Se&         ps 1061) and amended then
        earlier statutes   on this subjeci’which    are Articles 7288 and
        7289.
              Articles  7288 and 7289, Vernon’s Civil Statutes,     pro-
        vide In substance,     that upon failure   of sale of any real
        estate at tax sale Sor want of a purchaser, it shall be bid
        off’ to the State   for the taxes and penalties    due, and all
        costs accruing thereon, conveyed to the State and held by it
        until the same shall have been redeemed by the owner within
        two years from the date of the deed to the State or Is sold
        by the State.     Article   7328, Vernon’s Civil Statut.es, insofar
        as pertinent to this Inquiry, provides -for the public sale
        OS the land so conveyed to the State and not redeemed within
        the tlms prescribed      by law, and that the proceeds of such
        sale, after deducting and paying the amount of the county tax
        to the County Treasurer, shall be sent to the State Treasurer
               The next Soregoing mentioned articles    were Involved in
        Attorney General Opinion No. O-3405 lgkl),       which held in
        substance that where property was or I ginally bid off jointly
        to county, city and state following     a delinquent tax judgment
        the State’s    portion of rents accruing from the property after
        the period of redemption expired and prior to final fore-
        closure sale should be handled by the State Treasurer       in the
        same manner as If it were the proceeds of the original       tax
        foreclosure   . The effect .ol this opinion 1s that the taxing
        authorities    were deemed to have had the authority to collect
        rents for the use of such property during the period of time
        they held the title    to same. Our Texas Suoreme Court in
        Spak v. City of Dallas, 111 Tex. 350, 355; 235 S .W. 513, (19
        nela tat,
                        property .Sn a thing consists not merely In
              Its   &ershlp    and possession, but In the unrestricted
                                        -6197-
Honorable   Tom Hanna, page 3         (M-1263)

     right of use,, enjoyment and disposal.  Anything which
     destroys any of these elements of property,  to that
     extent destroys the property itself.   The substantial
     value of the property lies In Its use.”

Hence, It Is apparent that the benefits         and profits    from the
use of property belong to the holder of the ownership and
posseeslon     of such property.      Your query Involves rents
accrued during the time the State and County held the title
and possession      of the real property In question.       Thus, the
State and County are entitled         to the rents the same as rents
and profits     accruing on any other property owned by them,
58 Tex. Jur.2d, 470 Vendor and Purchaser, Sec. 250.              This
being so, It necessarily       follows that the rental money so
collected     should be retained by the State and County and
placed to their credit in their respective          funds.   It Is .not
proceeds from the original        salt of the property as 1s rt-
qulrtd to be applied toward the payment of the delinquent
taxes owed by the former owner of the Droptrty as might be
Inferred from certain language in said Opinion No. o-3405.
Such a mlsappllcatlon      of the rent money to the credit of
one no longer holding title         to the property would be a
rtstrlctlon     of the legal owner’s rlght of use,      enjoyment and
disposal     of the property,   over and above the mtre right of
redemption allowed for-the        two year statutory   period.     We
believe     that In ‘this regard Opinion No. O-3405 should be
interpreted      to merely designate the State Treasurer as the
proper recipient      of the rent money belonging to the State as
general revenue.

     In view of the foregoing,   your numbered questions art
answer by the following  correspondingly numbered paragraphs:
      1.    The State may sell real property purchased at
            tax salt, before expiration  of the two years
            redemption period.
      2.    The State and County are authorized to collect rent
            from a tenant of real property purchased at a tax sale.

      3.    The rent money accruing from renl’property    after its
            purchase by the State at a tax sale anti held for the
            benefit of Itself   and the County, belongs to the
            State and County in proportion    to the amounts secured
            by their respective   liens, and should be deposited
            Into the respective   funds of said bodies like any
            other revenues collected.

                                    -6198-
                                i
Honorable    Tom Hanna, page 4        (M-IL63)

     4.     The  rent accruing :fttr the foreclosure sale
            belongs to the State and County and is not appllc-
            able as credit on tht delinquent taxes of the
            former owner of the property.

     5.     Any rent money accrued and collected  on real
            property after pUrChaSt of same by the State and
            County at tax salt and before final sale thereon,
            should be prorated among the taxing units adjudged
            to have tax litnt against said property.

                            SUMMARY
            The following  holdings art made relative   to real
      property purchased at delinquent ad valorem tax salt:
      (1) The State may sell the property before expiration
      o? the two year redemption period.     (2) The State and
      County art authorized to rent the property.     Rent money
      accruing from the property after Its purchase belongs
    . pro rata to the taxing units and should be deposited
      Sor their use In their respective    funds like any other
      revenues collected.     Rent money on such property accruing
      after foreclosure   salt and before final salt should be
      prorated among taxing units having liens on property.

Prepared by Robert    Lattlmort
Assistant Attorney    General

                                  -6199-
Honorable    Tom Hanna, page 5      (M-1263)

APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chalrman
W.E. Allen, Co-Chalrmtn
Slg Aronson
Lang Baker
Llnward Shivers
Roland Allen

SAMUELD. m: DANIEL
Staff Legal Assistant

ALFREDWALKER
Executive Assistant

NOLAWHITE
First Assistant

                                 -6200-