In the summaries and Q&A discussion below, we have tried to anticipate some of the practical questions that homeowners, tenants, and business owners might ask concerning real and personal property issues.
NOTE: This section does not address the mechanics of making insurance claims or the legal issues related to insurance claims.
A. Disaster Remediation Contracts
Sections 58.002 and 58.003 of the Texas Business and Commerce Code regulate the actions of disaster remediation contractors who do not maintain offices within a county or adjacent county where a natural disaster occurred. Unless a disaster remediation contractor has an established office in the county or adjacent county where a property is located for at least one year prior to the contract, a disaster remediation contractor cannot require full or partial payment before beginning work and may not require a partial payment in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered. A contract subject to this chapter must be in writing.
B. Continuation of Homestead Exemption While Replacement Structure is Constructed
Tex. Tax Code § 11.135 allows a homeowner to continue to receive a homestead exemption for the structure and the land and improvements used in the residential occupancy of the structure rendered uninhabitable or unusable by a casualty while the homeowner constructs a replacement if: (1) the homeowner does not establish a different principal residence for which the homeowner receives an exemption and (2) the homeowner intends to return and occupy the structure as the homeowner’s principal residence. To continue the exemption, the homeowner must begin active construction of the replacement qualified residential structure or other physical preparation of the construction site on or before the first anniversary (or, if the property is located in an area declared to be a disaster area by the governor and the structure is rendered uninhabitable or unusable by the disaster, the fifth anniversary) of the date the homeowner ceases to occupy the former qualified residential structure as its principal residence. The site of a replacement qualified residential structure is under physical preparation if the owner has engaged in architectural or engineering work, soil testing, land clearing activities, or site improvement work necessary for the construction of the structure or has conducted an environmental or land use study relating to the construction of the structure. The exemption, under these conditions, can be maintained for up to five years if the property is located in an area declared to be a disaster area by the governor and the structure is rendered uninhabitable or unusable by the disaster, and two years in all other cases. It also preserves homestead protections for homeowners displaced by wind or water damage. If the homeowner sells the property before construction of the residential structure is completed, an additional tax is imposed on the property equal to the difference between the taxes imposed on the property for each of the years in which the owner received the exemption and the tax that would have been imposed had the owner not received the exemption in each of those years, plus interest at an annual rate of 7 percent calculated from the dates on which the differences would have become due. A tax lien attaches to the property on the date the sale is completed. The lien exists in favor of all taxing units for which the additional tax is imposed.
C. Increases in Tax Appraisal Value
Tex. Tax Code § 23.01(e)prohibits increases in the appraisal value of a property the year after the property’s appraised value was lowered based on a protest or appeal, unless a chief appraiser can support an increase with clear and convincing evidence from the record. The chief appraiser may satisfy this requirement by presenting evidence showing that the inequality in the appraisal of property has been corrected with regard to the properties that were considered in determining the value of the subject property. The burden of proof is on the chief appraiser to support an increase in the appraised value of property under the circumstances described by this subsection.
D. Installment Payments of Taxes on Property in Disaster Area
If a residential homestead property—or a residential property that has less than five living units, or property owned or leased by a business entity with less than $5 million in gross receipts in the entity’s most recent federal tax year or state franchise tax annual period (in 2009 dollars—adjust annually for inflation by using the index that the comptroller considers to most accurately report changes in the purchasing power of the dollar for consumers in Texas)—is in a disaster area and has been damaged by or as a direct result of the disaster or an emergency, the owner may elect to pay the taxes in four equal installments, each of which are to be due two months apart from one another. To take advantage of this provision, the first installment must be paid before the date the taxes are delinquent, and such payment must be accompanied by a notice to the taxing unit that the person will pay the remaining taxes in three equal installments. The three subsequent installments must be made by the first day of the second, fourth, and sixth months after the delinquency date, respectively. For example, if the delinquency date is February 1, the first installment must be paid before February 1, the second installment must be paid before April 1, the third installment must be paid before June 1, and the fourth installment must be paid before August 1. A person or business entity may pay more than the amount due for each installment, and the amount in excess of the amount due shall be credited to the next installment. If the person or business entity fails to make a payment before the installment payment deadline, the unpaid installment is delinquent and incurs a penalty of 6 percent and interest equal to 1 percent for each month the payment is unpaid. See Tex. Tax Code § 31.032.
E. Waiver of Certain Tax Penalties
The chief appraiser or collector may waive a late penalty for an otherwise compliant taxpayer if the taxpayer seeking the waiver files a written application for the waiver with the chief appraiser or collector no later than the 30th day after the date the declaration or statement, as applicable, was required to be filed. The chief appraiser or collector may also waive a late penalty if the taxpayer’s failure to file or failure to timely file the declaration or statement was the result of a disaster that made it effectively impossible for the taxpayer to comply with tax filing requirements, or if an event beyond the taxpayer’s control destroyed the taxpayer’s property or records. See Tex. Tax Code § 23.129.
F. Manufactured Homes - Regulation
The Texas Department of Housing and Community Affairs, through its Manufactured Housing Division, regulates the manufactured housing industry in Texas. In addition to other duties, the Division is responsible for maintaining records of ownership of manufactured homes and records determining whether the manufactured home is considered real property or personal property under Texas law. The Division is also responsible for issuing and monitoring licenses to persons in the manufactured housing industry, as well as investigating and resolving consumer complaints. To contact the Division, visit their website.
G. Manufactured Homes – Statement of Ownership
Title to a manufactured home is evidenced by a “Statement of Ownership.” Statements of Ownership are issued by the Manufactured Housing Division headquarters in Austin. You must apply to the Division for your Statement of Ownership within 60 days after you buy or relocate your home. Applying for a Statement of Ownership is very important because ownership of a manufactured home does not pass or vest at a sale or transfer of the home until a completed Application for Statement of Ownership is filed with the Division. If you purchase your home from a licensed retailer, they may assist you in completing the necessary forms, and they must provide all necessary information, supporting documents, and fees and documents to the Division. If you acquire a home from someone other than a retailer, you may obtain the necessary forms from the Division’s website or by calling 1-800-500-7074. To determine what you will need to submit with your Statement of Ownership application, please read Applying for a Statement of Ownership (PDF).
H. Buying Flood Damaged Manufactured Homes
Manufactured homes which have sustained flood or wind damage must be properly repaired and inspected before they can be sold or conveyed. A salvaged manufactured home cannot be sold or conveyed to anyone except a licensed retailer, and only a licensed retailer is authorized to rebuild a salvaged manufactured home. In addition, federal law requires that new homes sustaining damage must be rebuilt in accordance with the manufacturer’s specifications and must pass inspection by the Manufacturer’s Design Approval Primary Inspection Agency. These restored homes are sold as new homes and come with a one-year manufacturer’s warranty. If the manufacturer will not honor the one-year warranty due to the extent of damage, then the restored home must be sold as a used home, at a reduced cost. Used homes sold at a reduced price only have a 60-day warranty of habitability. For more information on the purchasing of flood damaged homes, please read Buying Flood Damaged Manufactured Homes.