Best Practices

Mayor Barbara K. Crews

Resale of Tax Foreclosed Properties

In 1991, the Galveston City Council, faced with many unused properties off the tax rolls, developed a policy for resale of tax foreclosed properties.

The goals of the policy include:

The speedy, economical return of unused, tax foreclosed properties to the tax rolls as productive properties.

  • A low-cost method of resale complying with Section 34.05 of the Texas State Tax Code to ensure:

    1. maximum income and benefits to taxing units and taxpayers,
    2. a procedure for sales that is fair to all parties concerned.
The City of Galveston owns at least 100 unused tax foreclosed properties located in the city. These properties are deteriorating at the same time the city is having to spend large sums of money for grass cutting and property upkeep costs. Only by selling these properties will the city be spared spiraling upkeep costs and the properties returned to productive use on the tax rolls.

The city and other taxing units became owners of property interests in these properties when they were not sold at tax foreclosure sales.

Section 34.05 gives procedural and pricing guidelines for the resale of properties by government entities. The result of a tax suit is a judgment of foreclosure which stipulates two important values relevant to tax resale: One is the value of the judgment, that is, the sum of taxes, penalties, interest and court costs; the other is the market value of the property as of the time of the tax foreclosure judgment. Under Section 34.05 the city may resell tax foreclosed properties without the consent of the other taxing entities having interests in the properties if the sale price is more than the lower of the two values started in the Tax Foreclosure Judgment. The city may sell tax foreclosed properties for less that the lower of the two amounts stated in the Tax Foreclosure Judgment if all other taxing entities give their consent to the sale at the lower price.

The city seeks to establish even more stringent resale procedures for tax foreclosed properties than those required by the tax law by adopting a policy for resale with the following characteristics:

  • All taxing units with an interest in tax foreclosed properties will have input in the pricing and method of resale.
  • A resale committee composed of one representative from each taxing entity will decide methods of sale, pricing, and other relevant issues. Representatives of taxing units may be the legal counsel for that entity, a member of the City Council, County Commissioners, Court, School Board, College Board of Trustees or Navigation District Commission, or a designee.
  • The resale committee will determine:
    1. the scheduling of sales,
    2. the method of presale publicity and advertising,
    3. the method of sales to be employed,
    4. the distribution of sales proceeds among the taxing units, in accordance with state law and the provisions of this policy,
    5. the procedure for conveying property sold to purchasers,
    6. other relevant aspects of an ongoing sales program.
The first sale occurred in September 1992 and the most recent sale was in February 1995 -- a total of 10 separate sales. As a result of this new policy, 103 properties have been put back on the tax rolls at the approximate value of $1.5 million.

Contact: Office of the Mayor, (409) 766-2103

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