When multiple people inherit an interest in real property, each is responsible for their share of the ad valorem taxes of the property. What happens if one party fails to meet its tax obligations? What recourse is available to a party that pays more than its share of the tax obligations? In Texas, a co-owner may force the sale of an owner’s interest in real property as reimbursement for property taxes paid on the owner’s behalf.
The forced sale remedy is governed by Chapter 29 of the Texas Property Code. The forced sale remedy is limited to cases of real property that is not otherwise exempt from forced sale under the Texas constitution or other state laws and is received by inheritance, under a will, by joint tenancy with a right of survivorship, or by any other survivorship agreement. The remedy is also available when the real property is owned in part by a certain tax exempt nonprofit organizations with a corporate purpose of developing low-income housing.
A person may file a petition for forced sale in the district court of the county where the real property is located if:
- the petitioner has paid the other owner’s share of ad valorem taxes imposed on the property for any three (3) years in a five (5) year period (or two (2) years in a three (3) year period in the case of a nonprofit organization);
- the other owner has not reimbursed the petitioner for more than half of the total amount paid by the petitioner for the taxes on the owner’s behalf; and
- the petitioner made a demand that the other owner reimburse the petitioner for the amount paid by the petitioner for the taxes on the owner’s behalf.
Upon completion of the hearing on the forced sale petition, if the court is satisfied that the petitioner has met each of the above requirements by clear and convincing evidence, the court will enter an order that divests the defendant’s interest in the subject real property and orders the petitioner to pay to the defendant an amount equal to the fair market value of the defendant’s interest in the property, as determined by a court appointed independent appraiser, less the amount of defendant’s share of ad valorem taxes paid by the petitioner. The court order should also direct the defendant to executed and deliver a deed conveying the defendant’s interest in the property to the petitioner.