Q: I live in Georgia. I have a one-third undivided interest in real estate. I have paid my property taxes on my proportionate share but the other owner will not pay his share.
Can the county place the whole property up for sale or only the undivided interest not paid on? I moved to have the property partitioned and have since received ownership title to specific properties. Can the county sell my share of the properties now for amounts owed for real estate taxes?
A: In most places, real estate taxes trump just about anything else. For this reason, in residential and in many commercial real estate transactions, lenders will frequently require borrowers to deposit with the lender sufficient money to pay the real estate tax bills when they come due.
You may be describing two different types of situations. One of the situations is quite complicated and will cause you a massive headache while the other is more manageable.
In the more manageable situation, you and the other owners own three properties together but decide to split them up. When you owned them together, you each owned a third of each property. But after the split up, you each end up owning your own property.
In the complicated situation, you and your two other partners own several properties in common as joint tenants. You have a disagreement and now you and your two other partners own equal shares of each of the properties.
If real estate taxes were not paid for years prior to the split up, the municipal authorities have the right to sell the properties to satisfy any amounts owed to for those taxes.
In the more manageable case where you ended up owning one property on your own, you would have to come up with the money to pay all unpaid taxes to save the property from a tax sale.
But in the complicated scenario, you and your partners still own each of the properties in your respective shares. Even if you pay your share of the real estate taxes to the taxing body, you might not be able to save the property or even your share of the property from the tax sale.
For example, if you take a single family home and you and your partners own it and rent it out, it would be nearly impossible for each of you to separate your ownership interest in the home. Since the real estate taxes affect the whole property, if one of the owners fails to pay his or her share of the real estate taxes, the whole property would be thrown into the tax sale. And, if the property goes into the tax sale, the whole property could be lost to the tax buyer.
Only in certain limited circumstances could you save a property from a tax sale when you split it up between owners. Take, for example, a property that sits on quite a bit of land. One owner could get the house with a small amount of land while the two other owners share the balance of the undeveloped land. In this situation, each owner ends up with his or her separate piece of land and he or she can pay the real estate taxes that are due for that particular remaining property.
If you end up with your own separate piece of the pie coming from a larger property, you can pay the taxes on your share. In some cases, some jurisdictions could even allow you to pay the back taxes for prior years on the part of the property that you end up owning. If you are able to pay the unpaid taxes from the larger share of the taxes and allocate them to the property that you end up owning after the split up, you could end up avoiding any tax sale from prior years and control your destiny going forward.
For more information on real estate taxes where you live, you can start by determining if your local taxing authority has a website that gives useful information on delinquent tax payments and issues that may relate to your situation. You should also call them and discuss your situation and your options. Finally, you might want to talk to an attorney in your area that works with extensively on real estate taxation issues to make sure you get things right.