Two years ago I sold a vacation property through a national real estate broker. I recently receive a letter from the closing lawyer stating there are unpaid taxes for part the year in which the property was sold. He gave me an amount he stated was my share and requested a check. I don't have the money to pay the taxes and assumed they were handled at closing (that's what I paid the lawyer and real estate firm for). Am I responsible for the taxes if they are in fact due or should the lawyer's or real estate broker's bonding company make good on the mistake of the professionals I paid to represent me in selling this property and cover the taxes?
2006-09-19 07:03:59 · 8 answers · asked by Hawaiian Nut 3 in Business & Finance ➔ Renting & Real Estate
Maybe.
When we do closings in our area, sellers and buyers sign an agreement that if something needs to be corrected or paid that did not appear in the title search, usually with taxes specifically (but not limited to) named, both agree to come back and make it right.
If the buyer was supplied with an owner's title insurance policy that should cover any claims against the property as well. However there may be a claim filed against you by the title insurance agency that paid the claim. But that is why title insurance is issued. You as a seller personally guarantee the title against any claims against it while you owned it and back. Since this was to be prorated at closing, and was not you conveyed a clouded title. Your contract likely stipulated a clear title was to be conveyed, and tax prorated.
You may have a case against the closing attorney/agent. If you refuse to pay, be ready to pay the potential consequences. You may be able to simply refuse to pay the tax. You also need to weigh the cost to pay or fight it. Sometimes the cure is worse than the disease. Good luck to you.
2006-09-19 07:27:24 · answer #1 · answered by tnbroker1 3 · 0⤊ 0⤋
I work for a title company. If we closed a sale and missed the taxes we would pay them. You need to go back and look at your closing papers, if you still have them, and see if they listed these taxes. You hired the closer to do exactly that, close. They should have caught this at that time. You may have to get a lawyer, which will cost you more money, but it may save you some money. All it might take is a letter from an attorney for them to do the right thing. Good Luck
2006-09-19 14:10:50 · answer #2 · answered by Kathleen M 4 · 0⤊ 1⤋
In some states, where there is Title Insurance, the closing company which issued the Title Insurance has to pay the back taxes. Contact your closing agency/company.
Check the county/state for those taxes the letter refers to... I would be VERY suspicious of that letter.
2006-09-19 15:54:02 · answer #3 · answered by paleblueshoe 4 · 0⤊ 0⤋
Did you have your attorney at the closing? If not, why not. If so, you need to take the letter to him for his advice. Usually it doesn't cost you anything to ask a simple question like this.
As far as the taxes go though, it is not the responsibility of you or the title insurance company. Since the taxes are for the current year, it is not a question of handing over a clear title. This falls on the attorney who handled the HUD, and he is the one who should have to pay.
2006-09-20 03:13:57 · answer #4 · answered by Steve M 3 · 0⤊ 1⤋
It should have been taken care of by the them. If it indeed was not taken care of , then it is your responsibility to pay the taxes due. They should have caught that. More often than not people forget the little details.
You could contact the tax office for the county you live in. Check if it's been payed.
2006-09-19 14:14:55 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes, you are responsible for the taxes.
The current owner may have to pay them in order to avoid a lien on the property, but they can and will sue you for them.
The fact that someone should have caught the error does not release you from your obligation to pay.
2006-09-19 14:39:21 · answer #6 · answered by BoomChikkaBoom 6 · 0⤊ 0⤋
If I'm not mistaken, unpaid taxes are collected through a lien on the property - not through the person who owned it at the time. I expect it will be the title company/fee attorney's loss. (if you decide not to pay)
2006-09-19 14:07:01 · answer #7 · answered by daniel.foster 2 · 0⤊ 1⤋
You may want to ask your local legal clinic for specific advice on this. Properties are usually transfered with clean titles and that's what title insurance is about. Looks like someone made a mistake and wants you to pay it for them.
2006-09-19 14:13:57 · answer #8 · answered by Michael Myklin 3 · 0⤊ 1⤋