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
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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.
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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
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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
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