Full question:
We bought a home in Texas at the end of August 2008. The title company used 2007 property tax rates to determine amount paid to us by seller. 2008 rates ended up being much higher so seller underpaid us $800.00 for his part of property taxes. He is now refusing to pay it. We paid the tax office the amount owed for the 4 months we have owned the property and we paid the amount given to us at closing. The tax office is telling us we are responsible for the full amount. Can they hold us legally responsible for the sellers unpaid part? What can we do to fight this?
- Category: Real Property
- Subcategory: Sales
- Date:
- State: Texas
Answer:
Generally, a homeowner is liable for the property tax liability on a home for current and past due taxes. In a home sales contract, the tax department isn't a party to the sales agreement or the contract governing proration of taxes between the buyer and seller, so the department isn't bound by any of the terms of the agreement made regarding proration of taxes.
When the seller agrees to prorate taxes in a contract for the sale of a home, the seller fulfills its obligation by performing according to the terms of the agreement. If the seller didn't have knowledge that the amounts used in the proration agreement were incorrect, so that it was a deceptive, misleading, or fraudulent agreement, then the agreement as to amounts to be paid will typically be enforced.
It is sometimes agreed that the seller will pay an extra amount to cover the possibility of a tax increase from a reassessment. It is also possible for the seller and buyer to create a proration agreement, in which the buyer and seller agree to make up any difference in taxes among themselves. Without such terms, it is difficult for a buyer to collect unpayment of taxes if the seller has lived up to the terms of the sale in good faith.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
