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Attorney general has ruled; appraisal districts must comply

By Marlene J. Bohr mbohr@etcnonline.com
June 6, 2012 at 3:19 a.m.

In an opinion handed down by Greg Abbott, attorney general for the state of Texas, he has upheld the decision that appraisal districts must include neighboring foreclosed property when assessing the value of nearby property. This very matter was discussed by Morris County residents last week.

In the opinion sent May 30 to Sen. Kevin Eltife, the attorney general's summary reads: "Pursuant to Tax Code section 23.01(C), a chief appraiser, in appraising a residence homestead, may not exclude from consideration the value of neighboring properties simply because they were subject to a foreclosure sale."

In the notice to Sen. Eltife, the attorney general said, "Your request letter explains that appraisers have historically refused to consider neighboring foreclosed properties when appraising a residence homestead because foreclosure sales do not represent the 'willful and arm's length transaction requirement in Section1.04(7)(C), Tax Code'. By enacting subsection 23.01(c), however, the Legislature plainly mandated that, notwithstanding section 1.04 (7)(C) chief appraisers must consider 'the value of other residential property that is in the same neighborhood as the residence homestead being appraised and that was sold at a foreclosure sale,' as long as the other statutory appraisal requirements are met. Thus when appraising a property, a chief appraiser may not exclude from consideration the value of neighboring properties simply because they were subject to a foreclosure sale."

J.D. Davis, a Lone Star resident, brought this matter to the attention of Sen. Eltife, who then contacted the attorney general for an opinion.

"I believe first that this opinion gives every homeowner in Texas what we have asked for and that is fair and equitable appraisals," Mr. Davis said. "It gives us everything that we asked, but more importantly, my hat's off to Sen. Eltife, Sen. Dan Patrick, and Rep. Ken Paxton for having the courage to first pass this law and then second, to follow through and see that the law is being enforced. What has occurred is that when a law passed that someone in power, the appraisal district in this case, disagreed with, they chose to ignore it. In this particular case the appraisal district will no longer be able to ignore existing law and in fact, should they continue to ignore it as they have in the past, they will be subjecting themselves to official oppression and official conduct charges both civilly and criminally. This has been reaffirmed by the Attorney General's office."

Mr. Davis pointed to certain neighborhoods where appraisals were not following this ruling.

"We have neighborhoods throughout Daingerfield," he said. "On E.G. McMillan, there has been one market sale and three foreclosures in the last few years. The same with Mountain View; there were three foreclosures and one market sale. This was the exact reason this law was passed to give those homeowners, in those areas exactly like that, relief. Again, one other neighborhood I am familiar with in Daingerfield with exact set of circumstances is Wildwood. It had three foreclosures and one at market sale, and all anyone was asking was that the law be applied fairly.

"This again reaffirms and forces the appraisal district to apply the law fairly in those neighborhoods that have been ravished by foreclosures. We have many areas in Daingerfield and also in Lone Star. Again, everyone in Texas wins because this changes the way that appraisal standards apply. There is new set of rules dealing with appraisal standards and it changes the definition of market value. In the past, market value and appraisal standards both eliminated any foreclosure sales. Now they must include those. This is a landmark case. This is going to affect the way that appraisals are done in Texas for many, many years to come, not only in Morris County but every county in Texas."

Sen. Eltife said he was pleased with the attorney general's opinion.

"This opinion affirms that the intent of the Legislature was clear when passing legislation mandating that chief appraisers not exclude from consideration any foreclosed property," he said. "Any appraisal district not doing so needs to immediately change its practices."



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