Can we be held liable for the seller's part of property taxes if he under paid us at time of sale?
Full Question:
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.