Court Opinion

ID: 4131558
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:17:04.985393+00
Date Added: 2024-06-11T14:32:34.854479
License: Public Domain

The Attorney          General of Texas
                                                          August 19, 1982

MARK WHITE
Attorney General

                                         Mr. L. Alvis Vandygriff                 Opinion No. ~~-503
Supreme      Court Building              Comissioner
P. 0. BOY 12546
Austin. TX. 76711. 2546
                                         Texas Savings and Loan Department       Re: Whether savings and loan
5121475.2501                             P. 0. Box 1089                          company is an authorized agent
Telex    9101674-1367                    Austin, Texas   78767                   to receive    tax bill   under
Telecopier     5121475-0266                                                      section 31.01 of the Texas
                                                                                 Property Tax Code
1607 Main St.. Suite 14W
Dallas.   TX. 75201-4709                 Dear Mr. Vandygriff:
2141742.6944
                                              You have asked the following question:
4624 Alberta       Ave., Suite     160
El Paso, TX.       79905-2793
                                                   Is a savings     and  loan association   or other
9151533.3464                                       mortgage lender that is engaged in the practice of
                                                   collecting an escrow account as described herein
                                                   the 'authorized agent' to receive the original tax
1220 0alle.s Ave., Suite          202
                                                   notice or tax bill under standard mortgage lending
Houston,    TX. 77002.6966
7131650.0666
                                                   arrangements in Texas?

                                              You indicate that representatives of a "taxing unit," as defined
606 Broadway,         Suite 312          in section 1.04(12) of the Texas Property Tax Code, have raised the
Lubbock,     TX.    79401.3479
                                         question as to whether the original tax notice or bill should be sent
6061747-5236
                                         to the person in whose name the property is listed on the tax bill or
                                         to the lending institution that has the responsibility to pay such
4309 N. Tenth, Suite B                   taxes on behalf of that person pursuant to its contractual agreement
McAkn,       TX. 76501.1685              made with the borrower.   Section 31.01(a) of the Texas Property Tax
5121662-4547
                                         Code provides in part:

200 Main Plaza. Suite 400                          the assessor for each taxing unit shall prepare
San Antonio,  TX. 76205-2797                       and mail a tax bill to each person in whose name
5121225-4191                                       the property is listed on the tax bill or to his
                                                   authorized agent....
An Equal Opportunityl
 Affirmative   Action     Employer             Pursuant to authority 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. 1812
Mr. L. Alvis Vandygriff - Page 2   (MW-503)

          thereafter as practicable in the case of mortgaged
          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 is not required in order to deliver the tax
          bill to the mortgage company when the mortgage
          company acknowledges that it has authority for
          payment of taxes on the property.

36 T.A.C. 9155.38 (1982). You indicate that in the past, taxing units
provided a copy of the tax notice or bill to both the lender and
property owner. The Property Tax Code makes no provision for a fee or
charge for such notices.   You now indicate that one taxing unit has
indicated that it will no longer provide two notices without charge,
but it will 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. The mortgagee would have authority to receive the tax
bill under the quoted administrative rule. This result is consistent
with the common law of agency.

     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 of principal and interest are payable
          under the Note, until the Note is paid 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 the Funds
          to pay said taxes, assessments, insurance premiums
          and grounds rents....

                                p. 1813
.   .

        Mr. L. Alvis Vandygriff - Page 3     (MW-503)

             We are aware that other deeds of trust forms in use in this state
        contain similar versions of this language.     In essence, under such
        provisions, the borrower and lender have agreed that the borrower 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 the property.  This is nothing more than the
        application of the law of agency. Agency is a legal relation whereby
        one party is authorized to act for the other.    3 Tex. Jur. 3d Agency
        51. See also, Valley View Cattle Company v. Iowa Beef 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. or bv oneration of law.
        3 Tex. Jur..3d Agency s13.    See also Valley View I Cattle
                                                               .    Company v.
        Iowa Beef Processors, supra; Green v. Hannon, 369 S.W.2d 853, 856
        (Tex. Civ. App. - Texarkana 1963, writ ref'd n.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 to pay the lender an
        amount to cover the taxes and the lender has agreed to use such funds
        to pay the taxes on the borrower's behalf.    We believe that a state
        chartered savings and loan association or other mortgage lender is the
        authorized agent entitled to receive the original tax bill or notice
        from the taxing unit where the deed of trust places the responsibility
        for paying the taxes on the lender.

                                     SUMMARY

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

                                                *m
                                                               WHITE
                                                     Attorney General of Texas

        JOHN W. FAINTER, JR.
        First Assistant Attorney General

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

RICHARD E. GRAY III
Executive Assistant Attorney General

Prepared by Thomas M. Pollan
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Hinojosa
Jim Moellinger
Thomas M. Pollan

                               p. 1815