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REO Property with Past Due Taxes
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Posted by bucgravy (My Page) on Wed, Jan 28, 09 at 18:27
| Hello,
Thanks in advance for any information provided.
I am planning on attending an auction for bank owned properties in Tampa, Fl on Feb 7th. The house I am interested in has deliquent taxes for 2007 and unpaid taxes for 2008. There is not a tax lein on the property, I don't think enough time has passed yet. Is the bank that now owns the property responsible for the taxes or would I have to pay them if I am the winning bidder?
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Follow-Up Postings:
RE: REO Property with Past Due Taxes
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| The owner of the property when the taxes came due is responsible, but the tax lien is on the house. As I understand it, as a buyer you would have little choice but to pay the past due taxes, but in theory could sue the prior owner to recover your expenditure. Good luck on that. Ask an attorney to be sure. |
RE: REO Property with Past Due Taxes
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| Title cannot be transferred without clearing the lien. The bank will have to pay at settlement. |
RE: REO Property with Past Due Taxes
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Here, taxes are paid in arrears.
If the owner/banks owns the property, they have to pay the taxes up to the date of ownership/closing. When you close on the property, the previous owner/bank will give you a credit for all the taxes when they owned the property (tax proration).
When the taxes are due in the following year, you, the new owner is responsible for ALL previous years taxes, since the bank gave you their part at closing. |
RE: REO Property with Past Due Taxes
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| "When the taxes are due in the following year, you, the new owner is responsible for ALL previous years taxes, since the bank gave you their part at closing." The important point is that you will not be paying them.
The bank will have provided the money if they did not actually pay them. The new title insurance policy will exclude the lien (and any back taxes) if they have been paid (non-issue) or if you are given money to pay them. |
RE: REO Property with Past Due Taxes
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| "The bank will have provided the money if they did not actually pay them." Here, where I live, RE taxes can't be pre-paid, they have to be paid when due.
Maybe other locations operate differently. Consult your closing agent as to local customs. |
RE: REO Property with Past Due Taxes
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| Unlike some states, title can be transferred in Florida without bringing the ad valorem (property) taxes current. The owner is not required to pay them in order to transfer title. However, transfer taxes on the title and mortage (if any) must be paid. These are separate and distinct from the ad valorem tax. Normally, closing agents will arrange for all taxes to be brought current at closing. This is usually in the written contract and is in the best interest of the buyer and will done automatically. In the case of a bank owned home with unpaid taxes being sold at auction, all bets are off. Check the terms of the autction. |
RE: REO Property with Past Due Taxes
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Thanks for responding.
The auction company said the purchase agreement will be posted on their website soon and will cover this topic.
I reviewed purchase agreements for other auctions they have held and it does look like the seller will pay all taxes incurred prior to the closing. |
RE: REO Property with Past Due Taxes
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| Here, when a property that has taxes owed in arrears to the Treasurer, it can't be transferred with a deed, unless all taxes due or overdue have been paid at closing. This is regardless of who owns the property, an individual or a bank. Even when a property is sold at the courthouse steps in a tax lien sale, the Treasurer requires that: "before issuance of a tax deed, all processing expenses, subsequent taxes, special assessments and liens collectible by the Treasurer must be paid." |
RE: REO Property with Past Due Taxes
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| I'm a Real Estate Agent. My client had closed a cash transaction on October 30 for an REO house. In Florida taxes are paid in arrears, they are due on Nov 1st, and title agents can pro-rate the taxes. On the Hud1 the bank was giving a credit for 10 months taxes based on an estimate from the title company (I don't know why since the Oct 30 tax amount was public) and when my client went to the website to pay the taxes she found out that seller/bank/title underpaid them by $2,900 for the taxes. I contacted the title agency and they said that in REO properties all Hud's are final and the buyers are responsible for the difference. Can we do something about this, other than accept to pay for their back taxes? Can the title company be negligent on something like that and leave us without recourse???? It is true that you can't claim any tax difference's on an REO? |
RE: REO Property with Past Due Taxes
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| Lawyer up if the bill is large enough, or go after the seller in small claims court. You should also check your owner's title insurance policy. |
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