(Ontario)
Question:
Taxes on the Listing show $5,500.00, the Buyer takes possession and receives a bill from the municipality for $7,000.00. What can be done?
Answer:
Actually, this happens quite frequently. The annual taxes are $5,500.00 but the outstanding taxes are $7,000.00. If the Purchaser obtained Title Insurance on closing rather than a Legal Opinion, then the lawyer didn’t check for outstanding taxes with the Municipality. This search wasn’t done. It costs $30.00, but this step was skipped because of the Title Insurance Policy.
The Seller still has to pay the properly adjusted amount specified on closing. If the $7,000.00 was disclosed, then the Buyer already received credit for this on closing. If it wasn’t disclosed to the Seller’s lawyer prior to closing, it wasn’t in the Statement of Adjustments, and the Buyer is entitled to reimbursement.
Assuming that the Seller has left the country and cannot be located, then the Title Insurance Company will cover it. Remember that one of their marketing tools in the first place was “save $30.00 for the tax arrears Certificate and put the savings towards the Policy”.
Brian Madigan LL.B., Broker
Comments 2
Realtor since 1999 responding as a former legal secretary (1976-1999) who was that lady in your lawyer’s office who specialized in real property law. Everyone in this totally avoidable situation deflected responsibility to title insurance instead of doing their own jobs which is so basic. I have refrained from using my not-so-polite words out of respect for Brian!
Author
Easily solved as you mention.