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Property Tax Situation
Posted on 2/18/13 at 4:43 pm
Posted on 2/18/13 at 4:43 pm
I bought a building in December 2012. At closing the seller paid the pro-rated property tax by having it reduce his proceeds from the sale. I would then be responsible for paying the 2012 tax bill in January. (FYI: The building was assessed much higher than the sales price). In January I met with the assessor and was able to get the 2012 assessment reduced to the sales price, thus lowering the 2012 tax bill that I had not paid yet.
Question: Am I legally and ethically responsible to rebate the seller for the tax savings?
Question: Am I legally and ethically responsible to rebate the seller for the tax savings?
2
Posted on 2/18/13 at 4:50 pm to tigerrocket
What do you think?
Posted on 2/18/13 at 4:53 pm to tigerrocket
quote:
Question: Am I legally and ethically responsible to rebate the seller for the tax savings?
I say no, if the seller was concerned he/she should of done the leg work and called the assessor etc,
Think of it this way, what if the tax bill would of come in higher? would the seller be responsible for paying a higher prorated portion, i say no there too, at the closing both parties agree to a deal.
Posted on 2/18/13 at 5:00 pm to Tigerpaw123
quote:
Think of it this way, what if the tax bill would of come in higher? would the seller be responsible for paying a higher prorated portion, i say no there too, at the closing both parties agree to a deal.
Posted on 2/18/13 at 7:02 pm to BigAppleTiger
I was considering an offer to split the tax savings, because without me spending the time an effort , the seller would get nothing. He could have challenged the assessment before the sale if he was interested. I'm curious about the legal liability.
Posted on 2/18/13 at 7:24 pm to tigerrocket
Part of our closing docs is a tax pro-ration agreement that says the parties will get together and make things right in this situation. And hold us harmless.
Posted on 2/18/13 at 7:49 pm to rmc
Nothing was done wrong at closing. I decided tochallenge the assessment after the closing. The assessor agreed to lower the assessed value based on the sales price. Am I legally responsible to the seller to pay him the difference in the taxes?
Posted on 2/18/13 at 8:43 pm to tigerrocket
quote:
Nothing was done wrong at closing.
I'm sure there wasn't. But taxes go up and down all the time regardless of the buyer's actions. We (meaning the title co. I work for) have an agreement that specifically says you will pay the difference to the seller. Also, the information may be included in the body of the cash sale or deed. Read over your closing docs. I'm unaware of any particular point or theory of law that says you are required to pay him the difference. Maybe unjust enrichment. Morally, I don't think there is any question.
This post was edited on 2/18/13 at 8:45 pm
Posted on 2/18/13 at 9:05 pm to rmc
It's not exactly unjust enrichment. Had I not filed an appeal and met with the assessor after closing, we would not be having this discusion, because the taxes would not have changed. My time and effort must be worth something??
Thanks for your input.
Thanks for your input.
Posted on 2/18/13 at 9:33 pm to tigerrocket
quote:
It's not exactly unjust enrichment. Had I not filed an appeal and met with the assessor after closing, we would not be having this discusion, because the taxes would not have changed. My time and effort must be worth something??
Thanks for your input.
I wouldn't have a problem with that line of thought. I would think the guy would be happy just to get a few bucks back. How big of a difference are we talking here? Hopefully its on the order of $1k or more, otherwise I'm not sure its worth anyone's time to worry about.
Posted on 2/19/13 at 6:48 am to rmc
the property was way over assessed. The sale is what allowed me to challenge the assessment and get it reduced. The tax bill went down $5k.
Posted on 2/19/13 at 7:22 am to tigerrocket
Well you hold all the cards. He'll likely never know unless you tell him. If you are going to try and give him some back, just explain the situation and tell him you think you are entitled to retain X% of the difference because the work you did. If he was entitled to $4800 and you are offering him $2400, its probably not worth his time and money to file suit over the difference. No attorney I know is going to want to get involved in that either.
Posted on 2/20/13 at 7:41 am to tigerrocket
If the situation was flipped and you had to pay much higher taxes, the other party would probably fight having to pay more for a deal that has been completed. I knew someone this happened to. The reasons given were that the taxes are based on what the sheriff gave at the time of sale. They are not responsible for the changes. I would keep the savings.
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