I bought a house in 3/2013 and recently sold it (9/2018). I was eyeballing the figures in my accounting software and noticed a large county tax payment 3 months after we originally bought it ($4,345.01 paid on 6/13 out of escrow). At the time I thought nothing of but looking at the full picture now, I realized I paid taxes at the beginning and now, at the end. Turns out the county charges tax in arrears, the seller didn’t pay their taxes for 2012 and when the county sent my mortgage company the outstanding bill for 2012 they paid it. On the HUD I see I did get a credit for 1/1/13-3/27/13, but nothing for 2012. The seller should have paid the 2012 taxes but neither the title company nor the mortgage nor I noticed. I think the title company should have caught that.
Start by looking at how much money is at stake and then decide how much time and money you want to spend pursuing it.
You might be able to recover the amount of the taxes from the title company on a theory of breach of contract or negligence. However, the passage of time is going to be a problem. A negligence claim generally needs to be filed within 2 years and the clock begins to run when you discover OR SHOULD HAVE DISCOVERED the issue. Not noticing for five years is likely to be a problem.
Is the money at issue worth investing the time and money into litigation for a chance of recovery?
A Title Company actually represents neither the Seller or the Buyer in a real property transaction, but they have a fiduciary duty owed to all involved. They complete the necessary investigation related to all relevant issues and prepare the appropriate documentation. One of those issues is regarding taxes that are owed associated with the property. As others have pointed out, this is a situation in which you have to determine whether or not there is enough money involved to justify pursuing recovery. Remember the Title Company most likely has access to legal professionals and other resources to protect themselves. Also, the passage of time without bringing the matter to the attention of the Title Company is a big problem. I would suggest that you consult with a local experienced Attorney to review the closing documents from the sale so they can provide you with a more detailed expression of your options and likelihood of successfully recovering anything from the situation.
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