Homeowners Cautioned About Property Tax 'Consultants'

The era of plunging real estate values has been a busy one for a new business niche - property tax consultants.

With some municipalities still valuing property for tax purposes at bubble levels, many homeowners understandably would like to have those tax valuations rolled back to reflect the current market. Texas Attorney General Greg Abbott says homeowners should get all the facts, however, before hiring a property tax consultant.

Late last year Abbott's office resolved a 2009 legal action against Houston-based O'Connor & Associates, a property tax consultant that represented residential property owners before local appraisal districts. The settlement negotiated by the State may affect the rights of current and former O'Connor clients who are residential homestead property owners in Texas.

Failed to appear

According to Abbott, state investigators found that O'Connor's representatives routinely - and improperly - filed property tax protests without the actual homeowners' consent. Sometimes, O'Connor representatives failed to appear on their clients' behalf at scheduled tax protest hearings.

As a result, property owners who thought O'Connor & Associates was formally representing them at appraisal district hearings lost valuable tax protest rights.

Under an agreed judgment obtained by the State, O'Connor & Associates must implement multiple changes to its business practices. The State also required the firm to establish a $300,000 restitution fund for any clients that suffered financially from its improper conduct.

The restitution fund is currently pending court approval. The State is working to ensure that eligible homeowners can seek their restitution payments by June.

The State also required that O'Connor allow customers to opt out on its services if they do not want the firm's representation during the 2011 tax year.

Expectations

A Texas homeowner who hires a property tax consultant firm should expect the firm to honor the contractual agreement it executes with the property owner, Abbott says. Importantly, when the agreement pledges that the firm's representatives will appear at a formal appraisal hearing on the client's behalf, the firm has a legal obligation to ensure their staff is present to represent the homeowner's interests before the district.

Who, exactly, can be a property tax consultant? Apparently, just about anyone. Internet ads promote property tax consulting as the perfect home-based business.

"Give potential customer the upper hand when it comes to reducing their property taxes," one ad proclaims. "This is not rocket science, but most homeowners and businesses do not have the time or knowledge to conduct a successful appeal. With this complete course you can help them."

The ad says normal fees property tax consultants charge their customers range from $1,000 to $2,000.