Property Tax Litigation & Arbitration

Provided you went before the ARB and/or received a “Top-Line” offer, you may qualify for either Binding Arbitration or Litigation. 

Binding Arbitration: 

Tax Code Chapter 41A gives property owners meeting certain criteria the option of requesting binding arbitration as an alternative to filing an appeal of an appraisal review board (ARB) decision to state district court. Much more cost effective and much faster than litigation. Quite often these cases can be settled prior to year-end or January 31st if filed timely. The advantage of this is you can remit a “Conditional Tax Tender Letter” with your payment which forces the tax jurisdiction to accept and post the payment for less than the original tax statement amount. By doing so, you avoid the lengthly refund process which generally takes between 60-90 days. The following is a list of qualifications: 

1. Must have an ARB Order Determining Protest 
2. Must have a homestead exemption; or have a commercial or residential property valued below $5 million to qualify for an arbitration. 
3. Delinquent Taxes must not exist 
4. Must file within 60 days of receiving the ARB Order of Determination 

Cost to File:

Residential Homestead	Market Value per ARB Order	Deposit Amount
Residence Homestead	$500,000 or less	$450
Residence Homestead	More than $500,000	$500
Not Residence Homestead	$1 million or less	$500
Not Residence Homestead	More than $1 million but not more than $2 million	$800
Not Residence Homestead	More than $2 million but not more than $3 million	$1,050
Not Residence Homestead	More than $3 million but not more than $5 million	$1,550

How it works: 

Property owner or agent submits Request for Binding Arbitration, Form AP-219-3 along with Appointment of Agent for Binding Arbitration Form 50-791 along with cashiers check for proper amount to the local appraisal district. The appraisal district verifies it was filed timely, no delinquent taxes exist, then assigns a arbitration number on the form and forwards to the state comptrollers office. 

The state comptrollers office receives it and logs it in then sends a letter to both the local appraisal district and the property owner/agent. The letter states both parties have 45 days to work together before a 3rd party arbitrator is assigned. Approximately 90% of the time the case is settled at this point and 100% of the fee is returned less a $50 non-refundable state mandated administrative fee. 

If the case is not resolved within this 45 day window, then it goes before a 3rd party arbitrator. The arbitrator will send a letter of introduction/instruction and will specify when, where and how the hearing will be heard. Generally, both sides will provide written evidence to all parties, at least 10 days before the hearing. Generally the owner/agent presents first, then the local appraisal district, then each side may rebut the other side. The arbitrator usually allows a final comment then closes the hearing.

The arbitrator has ten (10) days to make a determination. If the arbitrator comes $1 dollar closer to the the property owner/agent’s value, then 100% of the fee is returned less the $50 state fee and the local appraisal district ultimately pays the fee. If the arbitrator comes $1 closer to the local appraisal districts value, then the owner/agent does not get a fee refund. 

Bottom line is the loser pays so it is important to put a good opinion of value on the form when originally submitted. 

Litigation: 

In order to file litigation in District Court you must have an ARB Order Determining Protest and file suit within 60 days. Litigation is generally reserved for properties in excess of $5 million and the value is discrepancy is more than $200,000. Litigation typically costs between $5,000 – $10,000 provided no 3rd party uniform and equal/appraisal reports or discovery is needed. (A $200,000 reduction with a 2.50% tax rate saves $5,000 in tax).

The professionals at Advaloremtax.net have 21 years experience in filing litigation and have been filing arbitration since its inception in 2005. We have filed over $1 Billion dollars annually for the past 10 years in litigation and/or arbitration. If you think you might qualify or want to pursue one of these options, contact our office early so we can advise in a timely manner.

See for yourself.

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• view account status
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• find out about hearing results
• print or save reports to your desktop

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