New North Texas Homeowners Hit With Unexpected Tax: 'We Would Not Be Living Here'
DENTON, Texas (CBSDFW.COM) - Nearly 100 homeowners in Denton say they bought new homes, moved in, and months later got hit with a much higher than expected property tax bill.
They say their builder intentionally withheld the information to sell houses.
"I opened up the tax bill, looked at it and thought 'why is it so much more than what we thought it was going to be'?" said Diane Owen.
She and her husband, Gary, say they had never heard the three letters, P-I-D, until they showed up on their tax bill with charges that completely took them off guard.
"I was like, 'what is a PID and why is it so much money'?" said Diane.
The Owens started knocking on the approximately 150 doors in their neighborhood asking other neighbors about their tax bills.
"I got probably over 75 homeowners in our complex that didn't know anything about the PID," said Diane.
"I'm mad. I'm mad..." said neighbor Robert Fillingim, His wife, Vanessa, is a realtor who says she, too, had never heard of a PID.
"Neighbors came to me to look at their escrow account and I did, and I am like, "Oh, your taxes are way higher than what your escrow account was set up, " said Vanessa. "It was actually after helping all of my neighbors I thought I should check mine, too."
They all say they were discovering they lived in a PID which stood for Public Improvement District.
WHAT IS A PID?
A PID allows a city or county to charge a builder to develop roads, water, sewage, sidewalks, etc.
A builder can pass that cost on to buyers and you'll see it on your property taxes.
At the Steeplechase development in Denton, homeowners say each house was assessed nearly $31,000 for the PID, an amount they say they could have paid in full, upfront, at closing if they had known about it.
But over time, they say the interests could have added up to $40,000 more on their property taxes.
"Seventy-six thousand dollars!" said Vanessa.
Her husband added, "We would not be living here today."
And the Owens' say neither would they, nor would their son.
DID THE BUILDER DISCLOSE?
The I-Team has learned the builder, D. R. Horton, did provide a document disclosing the PID to the residents at closing, but Attorney Rachel Khirallah says that should have happened long before then.
And she says, nowhere on the document provided does it show the costs. Khirallah also says it was buried in a stack of documents homeowners were signing at closing.
"Anyone who's watching this, if you hear the word public improvement district, make sure you understand what that is and force the builder to tell them what it is and to give you the amounts of that that cost," said Khirallah.
Homeowner Randy Gibbons is one of Khirallah's key witnesses.
He also lives in Steeplechase, but unlike the others, he moved in knowing it was a PID.
The former Corinth City Council member says he found out on his own and then sent an email, which the CBS 11 I-Team obtained, to the builder's sales representative assuming she would share the breakdown of the additional costs with future buyers. He says he was surprised to hear other buyers say they were not informed.
"I was shocked because I knew I provided that information for them previously. ...This practice has got to stop, buyers need to be aware that this is happening," said Gibbons.
IS THIS AN ISOLATED INCIDENT IN NORTH TEXAS?
Khirallah does not believe this is an isolated innocent with this builder. "I think it's probably happening all over Texas. I think as public improvement districts start to become more popular and more widely used it, it will continue to happen."
Four of these cases have gone to arbitration. Homeowners lost three of the cases and won one. The arbitrator ruled in the Owens favor. D.R. Horton has agreed to pay for their PID assessment.
Now, more than 40-more cases are heading to arbitration.
An attorney for D.R. Horton says the company cannot comment.
The cases appear to involve a lot of "he said, she said" about what was disclosed, but public improvement districts in Texas appear to be becoming more common in developing areas.
Homeowners says more clarification or regulation about disclosure at the state level could be helpful, but for now, you need to know what to do and what questions to ask.
QUESTIONS TO ASK IF YOU'RE BUYING
-Am I moving into a Public Improvement District (PID)?
Get your answer ("yes" or "no") in writing.
-How much will the PID add onto my taxes?
Get that in writing also!
-Also, if you live in a new development, check your documents and see if a PID is on your itemized list.
ARE YOU LIVING IN A PUBLIC IMPROVEMENT DISTRICT?
The I-Team received the information below about Public Improvement Districts from Public Information Officers in the following North Texas cities:
ALLEN
There are no Public Improvement Districts within Allen currently. Any data regarding the requirements associated with the creation and management of a Public Improvement District can be found in Chapter 372 of the Local Government Code, available here.
ARLINGTON
-Downtown Business Improvement District applies to commercial properties only
-Arlington Tourism Public Improvement District applies to hotels 75 or more rooms only
-Viridian Public Improvement District created by the Viridian Municipal Management District, not the City.
We do not have any residential PIDs.
CELINA
Here is a list of the City of Celina PIDs:
The Lakes at Mustang Ranch
Creeks of Legacy
Ownsby Farms
Wells South
The Parks at Wilson Creek
Sutton Fields II
Wells North
G Bar 7/Glen Crossing
Cambridge Crossing
The Columns
Chalk Hill II
Glen Crossing West
Wilson Creek Meadows
Celina Hills
Mustang Lakes Annex
DALLAS
This information can be found on our website.
FLOWER MOUND
The Town of Flower Mound currently has one PID, in the River Walk at Central Park development. A map of its boundaries is located here.
It was approved by voters in November 2013.
The Town does not have any formal requirements for builders regarding how a potential homebuyer is informed the property they are interested in is part of a PID. However, the PID paperwork is part of a homebuyer's closing documents.
FRISCO
The following webpage has the information.
GARLAND
Garland doesn't have any PIDs at this time.
PLANO
The City of Plano has two PIDs and plan to approve another in a few months.
The Downtown Plano PID was established by a petition of the property owners (approx. 55) in Downtown. This PID helps Downtown fund events and marketing. The other PID, and the future one, cover the 99 acres of the Collin Creek Mall. Again, established by petition.
Criteria to establish PIDs are found in State law. That's Chapter 372 of the Local Government Code.
PROSPER
The Town of Prosper does not have any Public Improvement Districts (PIDs).
RICHARDSON
We have no such areas.
