real estate taxes not paid at closing now I owe a lot morning

[jose RT]

Jurisdiction

Florida

Sold house in september. In recent days closing agent has contacted me and said we didn't pay enough in taxes and we owe the buyers large sum of $ right now because he paid too much. Apparently the closing agent/ title co factored in our previous years tax bill (in which the house was homesteaded ) instead of the last year we owned (it was a rental property the last year of our ownership). The tax bill has been paid in full at closing. I dont have access to that money at this time. Isnt their some bit of responsibilty on the title agent for not doing due diligence and seeing if the house was homesteaded? If I owe the money I will pay but it seems like somebody dropped the ball.

 

[Zigner]

Read all of your documents.

 

[adjusterjack]

Isnt their some bit of responsibilty on the title agent

No, it's your responsibility for not carefully checking the settlement figures at closing.

You should have known what the taxes were on a rental.

 

[army judge]

It is wise and prudent to retain a real estate attorney to ensure the closing occurs without any error or financial harm to you, whether you're the seller or buyer.

Its foolish and financially unsound to take legal advice from a real estate salesperson.

Lawyer up!!!

 

[hrforme]

In EVERY closing I've been at as either the seller or buyer (7 of them), I've always been told that the taxes are estimated and one side could possibly owe the other once the final annual bill came at the end of the year that was partially split between the seller and buyer. While generally it is able to be calculated correctly sometimes it can't be. Wouldn't you want a refund if it was in YOUR favor?

For example in 2023, there was a referendum on the TX ballot in November that changed property taxes for the whole 2023 year....our taxes dropped quite a bit.....If I had sold that home and estimated higher, I would have wanted my overpayment back.

In the end you owe the ACTUAL prorated amount...anything at closing is an ESTIMATE.

 

[adjusterjack]

The actual tax was probably on the tax agency's website, or by phone, or by visit.

 

[flyingron]

Reproration needs to be in the actual purchase contract, but I can almost guarantee if you used the standard form, it was. If it's not there, nothing that happens after closing changes anything. If there is a statement on reproration when the tax bill comes in November, then you owe. Up here in NC, it's common to make the parties sign an explicit reproration agreement at closing as well.

Note this was your tax anyway. It's just the same as if you are under-withheld on your income tax. Florida tax is collected in arrears (i.e., the bill you get in November covers the year preceding). Last year's tax is the standard thing to use to estimate proration at closing even if things change (reassessment, loss of the homesteading). You owe the tax while you lived there.