In such a rapidly evolving technological world, information is never more than a few clicks or keystrokes away. Social networks and public records are more easily accessed than ever before, and for reasons not always altruistic. For this, and several other reasons, many states including Texas provide clear instruction in the tax code on how to better protect those who serve the public or are vulnerable to abuse, via Confidential Account Status on property parcels. These protections are rightly offered to a deserved few, but without proper planning, can potentially derail a real estate transaction.
Texas state offers property ownership confidentiality to 31 protected groups, ranging from U.S. Attorneys and Federal Judges, to Police Officers and victims of abuse. Section 25.025 of the Tax Code lays out these groups in detail and applies confidentiality of all information that may identify the owner of the property. In order to remove identifying information from the county rolls, you must be a member of a protected group, and file an application with supporting documentation to your local county office. This protection is then applied and will not ever be removed without written instruction from the protected party. This is where things can create problems.
The protection afforded by the confidentiality program is so strong, that nobody other than the protected homeowner may request or obtain any identifying information about the parcel from the county. When it comes time to sell the home, this information is unavailable to the title company and any vendors that may need to obtain this data to verify taxes, ownership, and exemptions. The confidentiality creates a break between the property and the owner. So, what can you do?
There are two ways to protect against this roadblock:
One is having your seller provide written notice to drop the confidentiality or providing the title company with the most recent tax statement. It may not always be possible, or the best option available, to have your seller drop confidentiality. Sometimes, they may even be moving for reasons directly tied to their confidential status.
The only remaining option is to provide the tax statement. Giving this document to the title and tax vendors bridges the gap created by confidentiality and allows for certification of parcel information.
The best way forward is always to keep open communication with your seller and help them make the decision that best suits their situation. Whatever that decision may be, the most important thing is to remain proactive and understand the needs of closing a confidential account. Taking decisive action at the beginning of the transaction will prevent unnecessary delays and instill confidence in your client. Get to know your client and their realtor to remain prepared for the unexpected. Owners of confidential accounts deserve the extra help they need, so get out there and give it to them!