Beyond the Certificate: Uncovering Hidden Property Tax Risks in Texas Closings

In Texas real estate, property tax certificates are essential for verifying a property's tax status before closing. But for title companies, relying solely on these certificates can be risky. While they confirm whether taxes are paid, they often fail to reveal deeper issues that can derail transactions or create post-closing liabilities.

1. Exemption Confusion: The Over-65 Trap

Texas offers generous exemptions for seniors, but these don’t automatically transfer to new owners. Title companies often struggle with prorating taxes when the seller has an exemption that the buyer won’t qualify for. If not handled correctly, the buyer may receive a surprise tax bill months after closing—especially if the county retroactively removes the exemption.

Tip: Always verify exemption status with the county and clarify proration terms in the contract.

2. Timing Gaps and Tax Roll Delays

Texas counties release tax rolls at different times—some as late as December. If a closing occurs before the current year’s tax bill is available, title companies must estimate taxes based on prior year data or CAD appraisals. This can lead to inaccurate prorations and disputes between buyers and sellers.

Tip: Use conservative estimates and document assumptions clearly in escrow files.

3. Unrecorded Liens and Payment Plans

Some Texas property owners enter into installment agreements or defer taxes due to hardship. These arrangements may not appear on the certificate unless specifically requested. If overlooked, buyers may inherit unexpected obligations. 

Tip: Ask sellers directly about any payment plans or deferrals and verify with the county.

4. Newly Subdivided or Improved Properties

Brand-new homes, condos, or subdivided lots often lack finalized tax assessments. Without accurate data, title companies must manually calculate prorations, increasing the risk of error.

Tip: Partner with a service that can provide estimated assessments based on CAD trends and builder disclosures.

5. Data Discrepancies Across Counties

Texas has 254 counties, each with its own tax systems and quirks. Some counties may not update their records promptly, leading to mismatches in parcel numbers, legal descriptions, or taxing entities.

Tip: Cross-reference certificates with assessor and treasurer records, especially in rural or fast-growing counties.

Let COCRS Help You Stay Ahead

At COCRS, we understand that a clean tax certificate doesn’t always mean a clean title. Our team specializes in uncovering hidden tax risks, verifying exemption status, and resolving discrepancies before they become closing issues.

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