Posted by Shoshana/AZ on 7/3/12 5:40pm
Msg #425502

A question.....

If an entity purchased an unimproved lot and the title company collected the property taxes due as per the HUD, who is responsible if the county comes back and says the entity owes more taxes on that transaction?

Reply by Susan Fischer on 7/3/12 6:18pm
Msg #425505

My question back: If the County provided the "taxes due"

bill for the unimproved PIQ as requested by the TC, how can there be two different county tax liability amounts? What is the timeline for the County's revelation of "more taxes" due ~after~ the date of completion of this transaction?

If the purchase has been recorded and the file closed, if I were the entity, I'd call the TC, and ask them how they plan to respond, and go from there, since I purchased the property in Good Faith that all details on the HUD were signed off by the Lender.

Reply by davidK/CA on 7/3/12 9:22pm
Msg #425519

Re: My question back: If the County provided the "taxes due"

California tax assessors can and will issue "supplemental assessments" to adjust the total taxes due as if the property would have had a higher assessed value if it had been assessed on the date of sale instead of the original assessment date. The additional tax bill will be issued after the closing and is due upon receipt.

It's California after all.

Reply by Susan Fischer on 7/3/12 10:50pm
Msg #425525

But the question was, who now has that tax liability. Was

that "supplemental assessment" accounted for in the HUD approved by the lender?

And, suspiciously, was the "reassessment" based on the actual sales price on a day certain?

Seems to me, the state wants to tax the blue sky sales price if it was more than the assessed value of a "for sale" unimproved property. Wouldn't there have to be a new "appraisal" of the "value" of unsold vs sold property for neighborhood assessments?

I dunno. Just questions I would ask.

Reply by Buddy Young on 7/3/12 11:07pm
Msg #425526

Re: But the question was, who now has that tax liability. Was

If the selling price was more than the appraisal, then the tax would be based on the selling price. There is no appraisal better than what someone is willing to sell for and what someone is willing to buy for.

If there was a new appraisal done, I would bet that the new appraisal would match the selling price.

Reply by Shoshana/AZ on 7/3/12 11:08pm
Msg #425527

The property is in Northern AZ, not CA n/m

Reply by ReneeK_MI on 7/4/12 6:07am
Msg #425540

Depends ...

... on the agreement which would've been signed at close. I've never seen a title agent leave this scenario uncovered, ensuring that they themselves would NOT be liable but that either the seller or the buyer would be.

It would most likely be agreed (in writing) that whomever was the owner during the period of time for which the taxes are applicable would be the responsible party. I've seen plenty of agreements to the contrary, though - stating that the buyer would be responsible for any corrections or adjustments to taxes (be they proration calculations, transfer taxes or any other flavor of taxes) that might be made post-close.

So, it depends on what the 'entity' agreed to abide by at close. I can't imagine a transaction lacking this agreement.

Reply by Joan_OH on 7/4/12 3:21pm
Msg #425560

Normally, I would see a tax-proration notice in the closing package accepting the pro-ration based upon the current bill. However, it looks like the title company did not get a correct current bill. Taxes are a lien and I would be calling title, then my owners title policy insurer to investigate filing a claim.

Reply by Linda_H/FL on 7/5/12 8:05am
Msg #425597

My question - the person bought an unimproved lot

Did they build on this lot, resulting in "more taxes due"?

Reply by Shoshana/AZ on 7/5/12 9:47am
Msg #425600

Re: My question - the person bought an unimproved lot

Nothing was built on the lot.