Is it legal for you to help other people protest their property-tax appraisals?

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04/28/2016 | Author: TAR Legal Staff

You’re walking the dog and start chatting with a neighbor. She’s very upset about her property-tax appraisal and wants to fight it. She knows that you’re a REALTOR® and asks you to help her. Can you?

You’re special

The Texas Department of Licensing and Regulation licenses property-tax professionals and requires such a license if you’re representing a person at a protest hearing, negotiating with the appraisal district on behalf of another person, or advising another person about a matter that can be protested.

However, because you’re licensed by the Texas Real Estate Commission, you are exempt from this additional licensing requirement as long as you’re providing property tax services relating to single-family residences or ranches.

But TREC is still watching

If, for example, your neighbor pays you to perform a comparative market analysis, advise her as to which properties help her case, or represent her at the hearing, the Texas Real Estate Commission oversees those activities. That means that she can file a complaint with TREC about your property-tax protest services just as she would file a complaint if you sold her a house.

Keep in mind that TREC’s oversight of all your services is triggered when you charge a fee. Therefore, if you protest someone’s property taxes without charging a fee, you don’t need a license, and TREC has no jurisdiction over your activities. 

Categories: Legal
Tags: property taxes, trec, legal


Eleyana on 07/14/2016

All in all it is the good clarification. nice sound.

Angola oula on 07/12/2016

I read the post twice, did i miss something? coz this article hold such a great points which is always surfing by peoples to get favorable answers.

Tracy Stanley on 04/29/2016

TAR has opened a discussion and it appears TAR may be a bit light on this issue. TAR says we may be special, but if you are going to represent property owners at ARB hearing, you must have an Appointment of Agent like Randy McKechnie said.

Representing a taxpayer requires a working knowledge of the Property Tax Code, the local Rules and Policies of the ARB and particularly what is taught to ARB members. Property tax has become a very specialized profession not available in an MCE class.

The definition of Market Value for Valuation is NOT the same as Realtors were taught. Market value is not always Appraised Value in the property tax arena. Exemptions like homestead and elderly help reduce market value to taxable value.

A CMA might not be good enough for ARB.  Ask yourself, did you follow the Code for adjustments for size, location, closing date, age and a laundry list of required adjustments for a proper CMA to the ARB?

The Code requires CADs to appraise ALL property at 100% of market value using 3 approaches before determining market value; cost, income and comparable sales. The last approach is usually the best for residential property and one that Realtors have basic knowledge. We can be members of MLS and have access to recent sales that are not required to be published for the public. In fact, some appraisal district have been refused access to our MLS comps like Harris County and Ft Bend and Travis. As Realtors we MUST PROTECT OUR COMPS from being public knowledge because it’s more that just the sale price that helps define market value. As Realtors who are skilled in CMAs, we may be able to adjust the sales to the subject; understand the Code, know local ARB policy, YES, maybe even help taxpayers reduce value.  But there is little monetary reward and much time in a proper presentation to the ARB.

The amount of property tax is based on the formula: Value x Rate = Tax Amount. We can argue value, but Rate is decided by the taxing entities. If values increase and rates stay the same, then that is a tax increase. This is the MAJOR problem with property tax in Texas! Rate never seems to decrease. Taxing entities are flush with excess revenue.

What happens when, not if, you get a bad ARB panel decision! Read again Al Cannistra’s remarks about arbitration. And if you dig finding CMAs and market value, check out becoming an arbitrator. Realtors as arbitrators are usually good listeners and knowledgeable in the residential market place.

We are in a hot market and the success fee is very rewarding. I am a 40 year Realtor, recently pinned as Emeritus; a licensed property tax agent since 1985 and listed on the Comptroller’s registry as an arbitrator.  Listing and selling property is much more rewarding than arguing with a trained appraisal district appraiser before an ARB panel.

Erline Sullivan on 04/28/2016

For taxing purposes a property does not have to be appraised at Market Value.

Market Value is what a Buyer is willing to pay. CAD has no way of knowing why the buyer would pay.  The tax office should not let the sale price dictate the neighborhood value - only the age and size should be considered to set a taxing value.

Possibly, using the lowest “price per square foot” in the vicinity might be a fair and easier way to go. If that doesn’t generate enough money, raise the tax rate.  That should make for fewer protest and less work for the taxing body.

Think about it…......Realtors® check comps daily and pretty much know why a buyer would pay big bucks for one house on the street and much less for another.  CAD does not know this.

Pamela C Mehl on 04/28/2016

Joe Aubin knows his stuff, as usual. Great comment.

I used to own a title company in another state and post closing tax adjustments innocuously called “supplementals” had us drinking Maalox at our desks.  Make sure your closer always estimates high enough if tax bills aren’t out.

Wilco assessments are pretty spot on: If your assessment is high, and you are thinking of selling, leave it alone. It will help your Zestimate which apparently the uninformed public thinks is the ultimate source for valuation instead of their Realtor.

Al Cannistra on 04/28/2016

I am a graduate of the first Arbitrators training class in Texas and have been a Texas Property Tax Arbitrator since the procedure was first allowed . I am also the founder and organizer of a closed LinkedIn group which all Texas Arbitrators are invited to join.

As a public service I maintain a website with information about the Arbitration procedure with featured links to the State Comptroller’s site so that the information is always current and a link to Texas A&M for more information.

Everyone is invited to share or link to the site at will.

There you will find who can and who cannot represent property holders and other information including a list of current Arbitrators. I am NOT looking to represent property holders nor speak to them….  if I chat with anyone about the procedures, I recuse if the case is assigned to me so that there is no possible conflict of interest.

The site is intended to be simple to use yet comprehensive. If anyone has suggestions on what may be added please let me know.  Al

NOTE: Be sure to watch the Comptroller’s slide presentations!

Joseph Aubin on 04/28/2016

Please remember that value is based on January 01 of the taxing year. Only provide comps from the last quarter of the previous year through the first quarter of the taxing year. Giving too much info on active and solds to CADs just fuels their information pipeline for the following year.

Johnn C. Osenbaugh, Sr. on 04/28/2016

1.  Limit your evidence & testimony to “market price” rather than “market value” when appearing before an ARB & don’t address “Uniform & Equal” Appraisal without having a property tax license (TX Occupation Code 1152)    [also see TALCB Rule 155.2]
2.  Many CAD staff refer to themselves as “appraisers” (TOC 1151)
yet they’re not remotely the same as TOC 1103 ((fee appraisers). This often needs clarification when rebutting the CAD case before the ARB because there’s a common misconception of some “higher standing” than your license.
3.  MLS Evidence submitted before an ARB is commonplace & essential.
    Many CAD’s have it already through various channels.

Barbara Polk, GRI,CRS,LTG,CRB,ePRO on 04/28/2016

Soo, this means ANYBODY can protest your property value.  After IKE, I protested the value of my condo in Galveston.  I do not belong to that MLS so I anticipated the ‘tribunal’ would give me the comparables.  I was informed that they do not used them, they just drive into the subdivision/complex and ‘pronounce’ what the square footage price for those properties would be.  I asked if a three bedroom, on an interior lot without a pool would be taxed at the same rate as a four bedroom, three bath with a pool on a corner lot.  I was told ‘yes’, that is how they do it down there.
Well, I wrote to Susan Combs and somebody wrote some guidelines for the appraisal district to use across the state.  Well, apparently, this is not being used or somebody is being undercharged/overcharged.  Sounds like some lazy people working on a most important aspect for our property tax payers.  No wonder I am getting so many calls for CMA’s from clients and/or their children.  I thought this had been settled so we could know the same process was being used in all of Texas.
Next thing will be that my insurance agent can be able or set the value of my property or, if he doesn’t charge a fee to do my illegitimate will, she/he isn’t responsible or is this what is the ultimate goal?
Please send these comments to TREC.  Thank you.

Randy McKechnie on 04/28/2016

A property owner can not be represented by anyone without first presenting an Appointment of Agent form required by the state Comptroller, so the taxpayer is the client of the real estate licensee.

Judy McKee on 04/28/2016

Your comments are interesting. Saying a license holder can provide a consumer non client relationship can provide sold information. in a CMA.
If the license holder is going to use MLS solds the information is confidential.
To give a non member, non -client confidential information to me is a violation.

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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

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