Fort Bend County Property Tax Binding Arbitration and Lawsuits

Value Reduction from Judicial Appeals for Fort Bend County

Fort Bend County Value of Accounts in Judicial Appeals

Property Tax Savings from Judicial Appeal

Experts at O’Connor conducted an analysis of the ongoing Fort Bend County Property Tax binding arbitration and lawsuits, based on data from fall 2023.

HOUSTON , TEXAS , UNITED STATES , February 13, 2024 / — The Texas property tax protest process includes administrative and post-administrative appeals. Administrative appeals include the informal hearing and appraisal review board hearing. Post-administrative appeals include binding arbitration, judicial appeals, and the State Office of Administrative Hearings. This post summarizes binding arbitration, property tax lawsuits, and SOAH filings in Fort Bend County versus Texas.

Fort Bend County is one of the leading counties in Texas for binding arbitration and judicial appeals. Fort Bend has the sixth-highest number of binding arbitration cases and the sixth-highest level of lawsuits (judicial appeals) compared to the other 253 Texas counties. The volume of binding arbitration cases and property tax lawsuits (judicial appeals) in Fort Bend has exploded since 2012. The volume of binding arbitration cases in Fort Bend rose 186% from 2014 to 2021. The volume of Fort Bend Central Appraisal District property tax lawsuits rose 564% between 2012 and 2021.

Fort Bend County ranks sixth highest number of binding arbitration cases for Texas appraisal districts. Binding arbitration cases in Fort Bend County increased from 117 in 2014 to 335 in 2021, a 186% increase.

Statewide the number of binding arbitration cases rose from 1,705 in 2014 to 10,057 in 2021, a 590% increase.

Fort Bend County judicial appeals filed in 2021 were 15% less than the statewide level, based on the portion of the tax roll subject to a property tax lawsuit (aka judicial appeal). Fort Bend County property owners filed judicial appeals for $7.17 billions of $110 billions of property valued by Fort Bend Central Appraisal District. This is 6.5% of Fort Bend County value versus 7.5% of property subject to a judicial appeal statewide. Property tax lawsuits filed (aka judicial appeals) in Texas in 2021 include property with a value $324 billion, out of a total of $4.335 trillion.

Property tax savings via judicial appeals have been flat in Fort Bend County from 2012 to 2021. Judicial appeal property tax savings ranged from $2.6 million to $4.3 million between 2012 and 2021. Fort Bend County property owners used judicial appeals to reduce their property taxes by $4.1 million in 2012. Fort Bend judicial appeal property tax savings fell to $3.7 million in 2021, a 10% decline.

Texas-wide judicial appeal property tax savings have risen from $215.9 million in 2012 to $832.4 million in 2021, a 285% increase. Texas property owners effectively use judicial appeals as part of the property tax management process.

Binding arbitration is limited to property valued under $5 million (except homestead residences have no binding arbitration cap). Binding arbitration involves a deposit of $450 or higher which is refunded (except $50) if the filing is settled or the property owner wins the hearing. Binding arbitration is not subject to discovery in most cases. No discovery is an important factor in appraisal districts enamored with paper discovery. Judicial appeals involve costs not associated with a binding arbitration including filing/service fees (~$375), legal fees for attorneys, and the cost for expert reports. Binding arbitration cases are typically resolved in 6 to 9 months versus judicial appeals which often linger for 12 to 36 months.

The costs of judicial appeals discourage most property tax consultants and property owners from pursuing judicial appeals for property valued below $20 million. The average value of single-family accounts in lawsuits is about $2.2 million in Fort Bend County and $4.8 million in Texas. However, the average assessed value of multifamily in judicial appeal accounts is $112.0 million in Fort Bend County and $28.0 million in Texas. Commercial property involved in a judicial appeal had an average value of $63.1 million in Fort Bend County and $16.3 million statewide in 2021.

The average value for tax parcels subject to a property tax lawsuit dwarfs the value of most properties. The average value of a home subject to a property tax lawsuit in Fort Bend is $2.2 million versus a median Fort Bend County home sale price in November 2023 of $399,960. The Texas average assessed value for a home subject to a property tax lawsuit is $4.8 million. To put this in perspective, there have been 105 home sales in the Houston metropolitan area with a price of $4.8 million or higher in the last two years. There have been about 200,000 home sales in the Houston metro area in the past 2 years. Homes over $4.8 million account for just 0.05% of all sales.

O’Connor coordinates teams that file judicial appeals, coordinate with clients, prepare expert witness reports on market value and unequal appraisal, and negotiate settlements. O’Connor pays all the costs including filing fees, legal fees, expert witness fees, etc. Clients pay nothing unless their property taxes are reduced below the appraisal review board level in a judicial appeal. Few if any competitors pay all the costs for judicial appeals. Most competitors consider judicial appeals for accounts valued over $10 to $15 MM. O’Connor is willing to coordinate judicial appeals for commercial accounts valued over $750,000 and residential over $1,500,000. O’Connor can pursue binding arbitration for properties valued well below $1,500,000.

O’Connor is not a law firm but instead of just providing the legal component, O’Connor coordinates and pays for attorneys, filing fees, tax consultants, expert witnesses, and staff to coordinate.

Total annual property tax savings at Fort Bend County Judicial Appeals ranged from about $2.5 million to $4.3 million. Regrettably, most Fort Bend County property owners who could benefit from a judicial appeal simply quit after the appraisal review board (ARB).

FYI- if you have a Fort Bend County commercial property valued at $750,000 or higher, you will likely benefit from a judicial appeal or binding arbitration.

O’Connor handles all aspects of binding arbitration cases including paying the arbitration deposit and taking the risk of losing the deposit ($450 to $1,500). Most property tax consultants require the property owner to pay the binding arbitration deposit. O’Connor handles the binding arbitration filing, negotiating a settlement, and/or attending binding arbitration hearings. O’Connor prepares expert reports on market value and unequal appraisal. The client incurs no cost related to pursuing binding arbitration unless we reduce their property taxes and then the fee is a portion of property tax savings. The fee is never higher than the property tax savings.

A dispute of just $20,000 to 30,000 in assessed value is sufficient to get O’Connor to work for you in binding arbitration. O’Connor pays costs and you only pay if we reduce your property taxes further below the appraisal review board level. No flat fees. No upfront costs.

State Office of Administrative Hearings (SOAH) is a quasi-judicial remedy in lieu of binding arbitration or a judicial appeal. SOAH judges hear disputes regarding licensees in Texas such as brokers, appraisers, and barbers. Unlike binding arbitration, there is no maximum value. However, there is a $1 million appraisal review board value minimum and a $1,500 deposit. The $1,500 deposit is returned if the case is settled and can be used to pay a SOAH judge if the case goes to trial.

SOAH filings have been under 100 statewide but appear to be increasing. There are situations where SOAH is the best option. Discovery is generally minimal for SOAH, leaving the focus on market value and unequal appraisal arguments. In some judicial appeals, appraisal district attorneys focus on voluminous discovery with limited relevance to resolving the value dispute.

There were 3 SOAH filings against Fort Bend Central Appraisal District from 2014 to 2021. There have been 195 SOAH filings across the state of Texas from 2014 to 2021.

Appeals after the appraisal review board (ARB) are minimal related to initial protests. Binding arbitration cases total about 10,000 annually versus 17,000 judicial appeals annually, or about 27,000 total including binding arbitration and judicial appeal. This total number is small compared to the 2,190,000 total initial protests in 2021; only 1.2% continue past the ARB. Many property owners who stop at the ARB are leaving money on the table. In practice, a high percentage of binding arbitration and judicial appeals reduce property taxes below the level of the appraisal review board (ARB). Appraisal districts are flexible in reviewing binding arbitration cases filed in good faith.

The amount of value in dispute exceeds $20,000 to $30,000, and the case is solid, binding arbitration would make sense at most appraisal districts. Most appraisal districts are inclined to settle cases with well-documented evidence.

Fort Bend County Appeals after ARB Fall Below Statewide Average

There was a total of 893 binding arbitration / judicial appeals filed in 2021 versus 84,680 property tax protests. The appeals after the ARB account for 1.05% of Fort Bend County property tax protests. This is slightly lower than the Texas average of 1.2% of accounts that are appealed past the appraisal review board (ARB).

About O’Connor:
O’Connor is among the largest property tax consulting firms in the United States, providing residential property tax reduction services in Texas, Illinois, and Georgia, as well as commercial property tax reduction services across the United States. O’Connor’s team of professionals possess the resources and market expertise in the areas of property tax, cost segregation, commercial and residential real estate appraisals. The firm was founded in 1974 and employs more than 600 professionals worldwide. O’Connor’s core focus is enriching the lives of property owners through cost effective tax reduction.

Property owners interested in assistance appealing their assessment can enroll in O’Connor’s Property Tax Protection Program ™ . There is no upfront fee, or any fee unless we reduce your property taxes, and easy online enrollment only takes 2 to 3 minutes.

Patrick O’Connor, President
+1 713-375-4128
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