Buyer Discovers Back Taxes Owed
REM #LAW582
By Ilyce R. Glink and Samuel J. Tamkin
Summary: A buyer discovers the sellers owe three years of back taxes. Ilyce and Sam suggest the buyer makes sure his contract for purchase of the land specifies that all taxes are to be paid in full and that he will receive a credit at closing for any taxes for the current year that have not been billed but are for the period of time that the seller owned the property.
Q: I made an offer on some vacant land and the sellers accepted. I just found out that the sellers owe back taxes on the land for the last three years. How can I get them to pay the taxes before I actually sign the closing documents? Am I going to be responsible for the back taxes if they don't pay them?
A. If the back taxes are not paid before, or at, the closing, you will be responsible for them.
Make sure your contract for purchase of the land specifies that all taxes are to be paid in full and that you will receive a credit at closing for any taxes for the current year that have not been billed but are for the period of time that the seller owned the property.
If the sellers are not willing to pay the taxes before, make sure you do not close until the closing company (either the title company or escrow company) cuts a check for the taxes out of the closing proceeds.
Your attorney should help you structure the contract so that you are protected. Please consult with him or her for more information.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com
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