Ahf-Arbors at Huntsville I, LLC and Ahf-Arbors at Huntsville II, Llc v. Walker County Appraisal District
410 S.W.3d 831
| Tex. | 2012Background
- CHDOs are tax-exempt on property they own under Texas Tax Code § 11.182(b) if they meet NAHA-defined charitable and housing provisions.
- Main issue: whether a CHDO must hold legal title to qualify for the exemption; Court holds equitable title suffices.
- Arbors at Huntsville I & II are LLCs owning a single apartment complex; Atlantic Housing Foundation, Inc., a CHDO, is the sole member and controls the Arbors.
- District denied exemptions; Arbors sued; court of appeals affirmed on a narrow point about Section 11.182(g) audit delivery.
- Court reverses, holds Atlantic’s equitable ownership of the Arbors fulfills §11.182(b); remands for further issues; audits delivery discussed but not fatal to exemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does equitable title satisfy 11.182(b) ownership? | Arbors: equitable ownership by Atlantic suffices to own the property. | District: legal title must be held by CHDO; Arbors not CHDOs so no exemption. | Equitable ownership qualifies; exemption imputed to Arbors. |
| Is delivery of audit to TDHCA mandatory to obtain exemption? | Delivery to TDHCA is required by statute and the district should not deny exemption for non-delivery. | Noncompliance with contents/delivery can foreclose exemption; delivery is part of requirement. | Non-delivery to TDHCA alone cannot defeat exemption; audit requirement must be satisfied but strict non-delivery denial was not upheld. |
Key Cases Cited
- Flores v. Millennium Interests, Ltd., 185 S.W.3d 427 (Tex. 2005) (statutory compliance tied to timely delivery, not contents)
- TRQ Captain’s Landing v. Galveston Central Appraisal District, 212 S.W.3d 726 (Tex.App.-Houston [1st Dist.] 2006) (equitable title imputed to CHDOs via control of entities)
- Jim Wells County Appraisal District v. Cameron Village, Ltd., 238 S.W.3d 782 (Tex.App.-Houston [1st Dist.] 2007) (court required record ownership by CHDOs for exemption)
- Harris County Appraisal District v. Primrose Houston 7 Housing, L.P., 238 S.W.3d 769 (Tex.App.-Houston [1st Dist.] 2007) (split on equitable title and CHDO ownership in limited partnerships)
- Orange County Appraisal District v. Agape Neighborhood Improvement, Inc., 366 S.W.3d 715 (Tex.App.-Waco 2010) (context for CHDO ownership in subsidiary structures)