Skip to main content

If i repossess property i sold because the buyer defaulted, but he owes back taxes on the property, do i have to pay the taxes?

Detroit, MI |

5 years ago I sold a building and set it up as me loaning the new buyer the money (like a mortgage). He has been paying his monthly payments but 2 months ago called to tell me that he would not be able to pay me the balance of the loan that is due at the end of may. as per the agreement of the loan we will be repossessing the property at the end of the month. We have now been notified that he owes a lot of back taxes on the property. Do we inherit this debt or is that his problem?

Thanks

+ Read More

Attorney answers 3

Posted

Property taxes run with the land, which means if they are not paid, (no matter who is supposed to pay them) the County will eventually get a judgment of foreclosure on the property, then sell it if not redeemed. Whether the defaulting purchaser is personally liable to the seller (you) can only be answered by having an attorney review the contract(s) involved.

I handle these matters if you would like to visit my website or contact me.

Posted

Mr. Addy is correct. This is why most lenders, especially banks, escrow the property taxes and insurance, to protect against borrowers who do not make these payments. You may or may not have a claim against your borrower, but that would be separate and apart from the fact that the taxes still have to be paid to the town.

Posted

Mr. Addy is correct. This is why most lenders, especially banks, escrow the property taxes and insurance, to protect against borrowers who do not make these payments. You may or may not have a claim against your borrower, but that would be separate and apart from the fact that the taxes still have to be paid to the town.

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer