Beyond the Basics: Overlooked Property Tax Certificate Pitfalls in Texas Closings

For Texas title companies, property tax certificates are a critical part of the closing process. They confirm whether taxes are paid and help prevent liens from clouding title. But here’s the catch: even a “clean” certificate can hide risks that derail transactions or create post-closing headaches.

While common issues like exemption confusion and tax roll delays have been widely discussed, there are less obvious pitfalls that deserve attention:

1. Hidden Delinquency from Prior Ownership

Certificates typically reflect the current owner’s tax status, but what about unpaid taxes from prior owners that were never properly assessed? In some counties, these can resurface as supplemental bills months after closing. If your escrow doesn’t account for this, the buyer could face unexpected liability.

Pro Tip: Always confirm with the county whether supplemental assessments or rollback taxes are pending—especially for properties that recently changed use (e.g., agricultural to residential).

2. Special District Assessments

Texas has hundreds of special taxing entities—MUDs, PIDs, and emergency service districts—that don’t always appear on standard certificates. Missing these assessments can lead to disputes and even title claims.

Pro Tip: Cross-check the property’s legal description against county GIS and appraisal district data to identify hidden taxing units.

3. Deferred Tax Agreements on Homesteads

Under Texas law, homeowners over 65 or disabled can defer property taxes. These deferrals often don’t show up on certificates unless specifically requested, leaving buyers exposed to liens that mature after the seller’s death.

Pro Tip: Ask sellers directly about deferrals and verify with the tax office. Don’t assume a zero balance means zero risk.

4. Mid-Year Annexations

Rapid growth in Texas means properties can be annexed into new taxing jurisdictions mid-year. If your certificate was issued before annexation, the prorations may be wrong—and the buyer could owe more than expected.

Pro Tip: Monitor annexation notices and confirm taxing entities as of the closing date, not just the certificate date.

5. Data Lag in Rural Counties

In smaller counties, tax data updates can lag weeks or months behind actual transactions. Certificates pulled too early may omit recent liens or payment plans.

Pro Tip: Use a verification service that checks assessor and treasurer records in real time, not just static certificate data.

Why This Matters

Title companies are trusted to deliver clean closings. Overlooking these issues can lead to escrow disputes, claims against title policies, and unhappy clients. The complexity of Texas property tax law—and its 254 counties—means relying solely on certificates is risky.

Partner with COCRS for Peace of Mind

At COCRS, we go beyond the certificate. Our team specializes in uncovering hidden tax risks, verifying exemption status, and resolving discrepancies before they become closing nightmares.

📞 Ready to protect your transactions from tax surprises? Contact COCRS today to streamline your workflow and ensure your closings are smooth, accurate, and compliant.