Property Tax Question

[SilverStone05]

I closed on my home March 3, 2008. I received a tax credit at closing from the developer for taxes due from 7/1/07 to 3/3/08. Ohio collects taxes 6 months in arrears. I've fulfilled all my current property tax obligations.

I received a letter in the mail yesterday saying that I owe delinquent property taxes from the period Jan 1st 2007 through June of 07. The thing is, I didn't own the property then. The developer did. They just didn't pay the tax.

Furthermore, if there were delinquent taxes on the property due, why didn't these show up in my title search before my closing?

They say they are going to place a tax lien on my property if these taxes aren't paid by 7/1/08.

I called the Treasurer's office and they say that even though the developer was the owner at the time, and didn't pay, the current owner (me) is responsible for all taxes.

Common sense would lead me to believe that they are full of shit. However, this is the government i'm dealing with and nothing would surprise me.

Am I going to have to get a lawyer if these deadbeats (developer) don't pony up their taxes?

 

[JonBoy]

When you purchase the home, you also purchase the obligations (tax and otherwise) that come with it. So, technically, you DO owe them those back taxes.

However, I would presume that you have a contract with the builder/developer that states that they will pay those taxes for you. If you don't have a contract stating it, you're out of luck.

 

[SilverStone05]

And what about the personal title insurance I purchased? Is that useless, too?

The whole mortgage/closing/home buying process is a crime in this country. I consider myself pretty financially savvy....I can only wonder what unsuspecting home buyers go through.

 

[JonBoy]

Personal title insurance could certainly cover anything that was missed unless the tax payments were not listed until after you purchased the house. If you can prove that those taxes were listed prior to you buying the house, you should have a valid claim.

 

[Big_D]

I would contact the title insurance company. This same thing happened to a friend of mine...previous owner owed back taxes and the title insurance company had to pay it.

 

[docjohn]

Developers can be "forgetful" Talk to your legal counsul that issued your title ins.Chances are you may have been rear ended by the developer.

 

[Hothonda]

Title company as stated..........that's why you pay for title insurance. Don't delay.

 

[steveny]

And what about the personal title insurance I purchased? Is that useless, too?

The whole mortgage/closing/home buying process is a crime in this country. I consider myself pretty financially savvy....I can only wonder what unsuspecting home buyers go through.

Ah, you bet. Property transfers are money machine for all parties involved with the exception of the buyer and seller.

In your case your attorney should have done a tax search and known at the closing that taxes were not paid up to date on the property. I think your gripe would be with the closing attorney.

You wouldn't believe the crap sellers try and pull on us when we buy property. Leave water bills unpaid, back taxes, try and collect rents after they no longer own the property.....

 

[sahtt]

I closed on my home March 3, 2008. I received a tax credit at closing from the developer for taxes due from 7/1/07 to 3/3/08. Ohio collects taxes 6 months in arrears. I've fulfilled all my current property tax obligations.

I received a letter in the mail yesterday saying that I owe delinquent property taxes from the period Jan 1st 2007 through June of 07. The thing is, I didn't own the property then. The developer did. They just didn't pay the tax.

Furthermore, if there were delinquent taxes on the property due, why didn't these show up in my title search before my closing?

They say they are going to place a tax lien on my property if these taxes aren't paid by 7/1/08.

I called the Treasurer's office and they say that even though the developer was the owner at the time, and didn't pay, the current owner (me) is responsible for all taxes.

Common sense would lead me to believe that they are full of shit. However, this is the government i'm dealing with and nothing would surprise me.

Am I going to have to get a lawyer if these deadbeats (developer) don't pony up their taxes?

Just realize you do* owe the taxes as the owner of the property. Contact the title insurance company as they are probably liable. Dealing with the state isn't too bad but don't tempt them to do something stupid.

 

[SilverStone05]

Thanks, guys. I contacted the Title Agency and they are working on it. I also had my lawyer/accountant send a scathing correspondence to the developer.

This forgetfulness/cutting corners stuff is so typical of the builder/developer. I'm going to ask my neighbors if they have had the same experience. If there are several documented cases of this, i'm sure the state has a nice tax evasion issue for these guys.

 

[Sig]

You wouldn't believe the crap sellers try and pull on us when we buy property. Leave water bills unpaid, back taxes, try and collect rents after they no longer own the property.....

What is the most effective way to ensure that all back taxes, water bills, and electric bills are paid before you close on a new property? Is the settlement attorney also responsible investigating unpaid utility bills in addition to back taxes?

I am going to be closing on house next month that is 'bank owned' and would like to makes sure all these items are tied off before I close.

 

[SilverStone05]

Good luck. Apparently a title search is about as helpful as a carfax.

 

[steveny]

What is the most effective way to ensure that all back taxes, water bills, and electric bills are paid before you close on a new property? Is the settlement attorney also responsible investigating unpaid utility bills in addition to back taxes?

I am going to be closing on house next month that is 'bank owned' and would like to makes sure all these items are tied off before I close.

Make sure you get a good attorney. Look the papers over yourself at the closing. I also do what is called a stub search just before I close to double check. Threaten to shoot people if they try and screw with you.:wink: :biggrin:

 

[Tantheman]

Can you name who the title company was? They need to pay up.

Tan

 

[Sig]

I also do what is called a stub search just before I close to double check.

I am unfamiliar with the term 'stub search'?

 

[tosugrad]

In my experience whether buying from a builder or personal party THEY pay me for the property tax at closing that will be due from them at the end of the year (or 6 month period). That way no one gets screwed.

Im surprised Ohio is not the same way, or someone screwed up.

The process of buying a home (and the costs of 3rd and 4th parties involved) is truly insane. Here is MN you will not find a Realtor going below 6% commission and closing costs are among the highest in the country.

 

[steveny]

I am unfamiliar with the term 'stub search'?

I am not sure if it is a NY only deal but it basically checks the latest up to date records on a property. In a lot of cases instead of doing a title search on a property that has just changed hands you can do a stub search. It's much cheaper and has the most recent information in it. A title search can be done sometimes days away from the closing and the seller can slip something in between the title search being completed and the actually closing.

The best way to avoid any problems is to require money to be left in escrow for a pre determined amount of time.

 

[SilverStone05]

Can you name who the title company was? They need to pay up.

Tan

Chicago Title.

However...let me reiterate. It was the developer that *didn't* pay their taxes. And as of now, I still haven't heard anything from them. They are the deadbeats.

The Title Agency, though they may have f'd up, are the ones who are trying to resolve the issue. I'm sure they will nag the the developer for the cash.

 

[SilverStone05]

In my experience whether buying from a builder or personal party THEY pay me for the property tax at closing that will be due from them at the end of the year (or 6 month period). That way no one gets screwed.

Im surprised Ohio is not the same way, or someone screwed up.

You are correct. Read my original post again. They did credit me for the current six month period. However, they didn't pay the tax for the period six months BEFORE that.

 

[SilverStone05]

State sent the developer a bill. They paid it. Another pain in the ass resolved.

 

[tosugrad]

State sent the developer a bill. They paid it. Another pain in the ass resolved.

Good to hear it.