Property tax prorated wrong at closing

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Purchased some land last summer. At closing I received $350 from the seller for their prorated portion of the property taxes. Fast forward to now and I get a property tax bill for $700 for that time period. After calling the PVA office they basically say there was some miscalculation on their part as the property was converting from ag valuation to regular property and to just ask the seller for the money. I'm currently waiting to hear back from the title company. Anyone ran into an issue like this?

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does your title ins cover this?

The title co paperwork usually (at least mine did) includes a disclaimer that any property tax proration is an estimate and that buyer and seller agree to handle it when tax is due. Look through your paperwork. I'm sure this was also excluded from my title insurance.

In my case, the estimated taxes/appraisal were already done when i purchased but title co was using prior year for estimate. I made them change it (seller obviously has option to agree or not) so i wouldn't have to get it back from them when i paid it in January... Which probably almost never happens even though it is agreed to in the closing paperwork. You'd have to hunt down seller location and make them understand they owe you it(assuming paperwork agreed to settle when actual taxes due) and maybe even sue them.

nic3456 said:   Purchased some land last summer. At closing I received $350 from the seller for their prorated portion of the property taxes. Fast forward to now and I get a property tax bill for $700 for that time period. After calling the PVA office they basically say there was some miscalculation on their part as the property was converting from ag valuation to regular property and to just ask the seller for the money. I'm currently waiting to hear back from the title company. Anyone ran into an issue like this?
  Why would the seller be responsible for the extra taxes from you converting the zoning to residential? 

They had to convert from ag to residential prior to closing and pay back some ag recoupment fees. The county just made a calculation error at the time that they just corrected.

Bend3r said:   You'd have to hunt down seller location and make them understand they owe you it(assuming paperwork agreed to settle when actual taxes due) and maybe even sue them.
this.

i've been through this once. the sellers reluctantly complied once i applied a little pressure. remind them that they legally must pay you, and it will be far cheaper to do so rather than incur a lawsuit.  

Depends on the wording but they are typically responsible for their portion-at the closing time they just estimate the best they can but ultimately they are responsible for the exact (prorated etc) amount of taxes for the time they owned the land. I'd contact the seller.

Glitch99 said:   
  Why would the seller be responsible for the extra taxes from you converting the zoning to residential? 

Zoning changes may be a separate issue (op said the seller changed the zoning, though)

Property taxes are paid in arrears. If you buy on July 1, the taxes paid in Dec/Jan are for that prior year when you only owned it for half a year. This means the prior owner's portion is 50%. Dates vary, but usually the years' taxes aren't finalized until sept or Oct, so the closing company will just use the prior year's taxes as a very poor estimate because they don't want to do any actual work ("estimates" for the current year are usually out from the taxing authority around March and would clearly make for a more accurate estimate when available).

I had the same issue. I realized the error months later. And the error was around $600 (I overpayed, seller underpayed).

I contacted the seller. He was one of the worst human beings I ever met. He basically said "f off". Then I contacted the title company and they paid because it was their mistake. Title company said "we'll request it from the buyer but we don't have much hopes".

IMO the title insurance industry is one of the worst on-going legal scams. They pay less than 5% of the premiums they collect as claims. So it did not hurt them to pay $600 after getting 3K-4K from the seller and me as premiums.

Bend3r said:   Property taxes are paid in arrears
 

not necessarily. regional variation.



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