Property Tax Arbitration Hearings: What to Expect
Texas allows property owners to protest what the appraisal district has determined to be their property value. To dispute the appraisal, taxpayers can choose litigation or arbitration. Many owners feel property valuations are incorrect or unfair, and those who put in the time can get their property taxes corrected or even reduced.
Have you selected arbitration in protest of your property tax valuation? Here’s what you can expect from the process.
What Is an Arbitrator?
Arbitration is an alternative to filing an appeal with the Appraisal Review Board. An arbitrator is an independent, neutral individual who can hear and analyze your property tax appeal, ending in a decision that is binding for both you as the property owner and the appraisal district.
It’s up to the arbitrator to determine if the appropriate value of your property is closer to the value appraised by the district or the your determination. Arbitrators also decide when a case should be dismissed because it doesn’t meet legal requirements.
How Does the Comptroller’s Office Select an Arbitrator?
The Comptroller’s office maintains an Arbitration Registry containing the names of individuals who meet the required qualifications to practice in Texas.
An arbitrator must follow the statutory requirements to be placed on the registry:
- The individual must file for the registry with the Comptroller’s office
- If the person is not an attorney, they must complete 30 hours of training on arbitration or an alternative dispute resolution procedure from a legal trade association, real estate trade association, a university, or a college.
- The individual must complete a Comptroller-approved four-hour training program on property law meant for the training and education of arbitrators.
- Arbitrators must also complete New Member Training and Continuing Education courses established for members.
- The person must receive a certificate for each course indicating satisfactory completion.
The Comptroller’s office selects an arbitrator living in the county where your property is. If there are none or if all the arbitrators in a county decline the assignment, the Comptroller selects from the statewide list.
Arbitrators lack eligibility for assignment in counties where they have served as an appraisal district officer, employee, or Appraisal Review Board (ARB) member within the past five years. They are also ineligible if they were paid to represent a person or entity in any tax code proceeding, such as:
- Notice of protest filing
- Communication with appraisal district employees regarding a protested matter
- Protest settlement negotiations
- Any involvement in binding arbitration
- Any appearance at an ARB meeting
- Any involvement in district or appellate court of an appeal pursued under Tax Code Chapter 42
- Serving as an officer or employee of any firm, company, or other legal entity that has represented an individual or entity in any tax code proceeding
All arbitrators in Texas must follow these rules and eligibility requirements. Once assigned, the arbitrator is responsible for setting the date, time, and location of the hearing where both parties may attend.
When to File for Arbitration
You must file for arbitration within 60 days of receiving the Appraisal Review Board’s determination of your property value. You file with the appraisal district, not the Comptroller’s office, although the deposit is made out to the Comptroller of Public Affairs.
The appraisal district office is responsible for forwarding the request and payment to the Comptroller’s office, which then selects an arbitrator.
The Hearing Process
Once the Comptroller’s office assigns an arbitrator, that individual will schedule the date, time, and location of the hearing once the 45-day settlement period is complete. If you need to delay the hearing, you must work with the arbitrator, not the Comptroller’s office.
The Comptroller rules encourage arbitrators to conclude all arbitration within 120 days of being assigned a case. If there is a delay, the arbitrator must know.
During the hearing, the arbitrator listens to evidence from both you and the appraisal district before determining which valuation to support.
To prepare for an arbitration hearing, gather as much information as possible to support your case, including:
- Images of your property and comparable property
- Receipts or estimates of repair
- Sales price documentation like listings and closing statements
- Property surveys and deed records
- Engineering reports
- Architectural drawings or blueprints
It is always a good idea to retain professional, experienced representation for an arbitration hearing. Property tax professionals can help you determine what information you need for the case.
If the arbitrator decides the value is closer to what you believe it to be, then the appraisal district pays the arbitration fee. If the appraisal district is seen as closer to the correct valuation, you must pay the arbitration fee.
In all cases, the Comptroller’s office retains $50 from the deposit as an administrative fee. The remainder, if any, is returned to you. If you do end up paying arbitration fees, there might be little left.
In Case of Settlement or Withdrawal
Once you request arbitration, you and the appraisal district have 45 days to decide whether or not to proceed. If you reach a settlement with the ARB or either party chooses to withdraw, the Comptroller’s office requires notification so it doesn’t assign an arbitrator to your case.
If you decide to settle or withdraw after 45 days, your deposit goes to pay the Comptroller’s office a $50 administrative fee and whatever portion of the allowed fees charged by the assigned arbitrator.
Arbitration fees are based on the value of the property under consideration, the type of property, and any exemptions on the property.
The hearing process for arbitration is not complicated. The arbitrator assigned to your case sets the date, time, and location. The Comptroller attempts to assign an arbitrator working within the same county as the property in question. If you require a delay, contact the arbitrator to change the schedule, not the Comptroller’s office.
Arbitrators must meet specific educational requirements to qualify for the state Arbitration Registry, and they can be removed if there is convincing evidence to do so.
If you want arbitration representation or have a few questions, contact Republic Property Tax for assistance.