Property Tax Change between Closing & Jan 1; who pays? (condo, credit)

[astrohip]

We bought a condo in May 2018, so at closing, the title company prorated the prop tax based on the current values. But when we received the 2018 tax statement, the valuation had gone up substantially. The prorated amount no longer covered the seller's share.

Is this just the way it is, or does a buyer have recourse?

Thanks.

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Random numbers used as an example to clarify:

At time of closing, tax was $200. Based on closing date, we were credited $80 towards taxes (40% of year at date of closing).

Tax statement comes in, and tax is now $300. Seller should have paid $120 if this was known. They are $40 short.

Multiply this by hundreds, and it becomes significant enough to ask about.

[WRM20]

What does the contract say? Or the closing statement. You can always request the seller pay the actual amount.

[astrohip]

The contract is vague (at least to me). It says "the current year’s ad valorem taxes" will be prorated. And that's it. No other language at all.

Is that last Jan, or this Jan?

[Texascrude]

The seller owes their share of the actual 2018 property taxes. If the valuation changed significantly after you purchased the house, you should have some claim to a refund. I'd ask them, expect a "no" and then decide if it's worth pursuing (which it probably isn't).

[astrohip]

Originally Posted by Texascrude

The seller owes their share of the actual 2018 property taxes. If the valuation changed significantly after you purchased the house, you should have some claim to a refund. I'd ask them, expect a "no" and then decide if it's worth pursuing (which it probably isn't).

I'm assuming by "refund" you mean a refund from the seller against what I just sent the County?

It's mid four figures, it's worth at least investigating. I've asked the title company what my options are.

Thanks.

[creekstone]

The title company that handled your closing (and prorated the settlement taxes) should facilitate a solution.

[Texascrude]

Originally Posted by astrohip

I'm assuming by "refund" you mean a refund from the seller against what I just sent the County?

It's mid four figures, it's worth at least investigating. I've asked the title company what my options are.

Thanks.

Yes, thanks for the clarification. Remember, they should only "owe" for the prorated time that they owned the property for.

[astrohip]

Originally Posted by creekstone

The title company that handled your closing (and prorated the settlement taxes) should facilitate a solution.

Thanks, I've reached out to them. Will post back what I hear.

Originally Posted by Texascrude

Yes, thanks for the clarification. Remember, they should only "owe" for the prorated time that they owned the property for.

I'm clear on that, thanks.

[Failed Engineer]

This doesn't help in hindsight, but HCAD appraisals should have been received in April for the current year. If the current year appraisals come in before closing, I will ask the seller's agent and the title company to prorate taxes based on the current year appraisal or selling price rather than the prior year actuals and typically everyone is good with it. I always do have to ask though. I don't think title companies do that by default because technically the appraised value can change by protest. If it's before the appraisal it's 4 months or less the seller owned the property so I don't usually bother unless there is some unusual reason that I'd expect a huge change in the appraisal (I never have had that situation arise).

[astrohip]

Originally Posted by Failed Engineer

This doesn't help in hindsight, but HCAD appraisals should have been received in April for the current year. If the current year appraisals come in before closing,

Thanks, interesting info. I've looked at the HCAD page, and don't see any notation for when the appraisal was listed, just by the year. Am I missing anything?

I'm curious what, if anything, the title company will respond with.