Hello. We sold our house 3 months ago and have just seen a problem with the settlement figures - the amt. of prorated property taxes we were charged is higher than the taxes that are actually due. The title company is not interested in fixing the problem - they say they made a best guess and that their figure stands; if we want any redress, we must pursue the buyers privately.

As our contract stipulated prorating of taxes, do I have cause to ask the buyers to return the overpayment (it is about $600)? Do I need a lawyer to handle this?

Thanks for advice/help.

Susan

Buried in your Closing Paperwork... you will probably find a sheet which you signed stating that Proration of Property Taxes are based on the previous years property taxes and that the proration may be larger or smaller than the exact Taxes that will be due at the end of the year of closing.

Most states tax property at the end of the year... we get our notices about October of each year and can pay then or hold off until May of the following year. A small discount is provided it you pay earlier than the May date. Until the October Notices come out... the closing company has no way to determine what the future taxes are. If you close in November or December in my area... we actually know what the taxes are and accurate prorations can occur.... those are the ONLY two months that they are know.

Most of the time the estimates ARE off. Check your paperwork and you will probably find the statement on the estimate. The Closing Company is normally totally out of the loop... if you wish to fight over the difference you normally have to contact the sellers and if they don't offer to make up the difference you will have to pursue legal action.

What I generally ask clients that find such a difference... Is it worth the effort to collect?? In Time, Cost and Frustration? What would your actions be if you found you OWED money back?

Unless the amount is a significant percent... 10 to 15% or more... I would consider it "normal" and would probably not make any effort to collect other than possibly a call to the seller to see if he would be willing to correct and adjust the amount. If not... your legal cost could far exceed your returns... and that does not count for frustration and time you would be spending.

Let it go.... Enjoy your home... don't let relatively minor things that are normal in closings bother you.

Thanks for your reply - the amount is about half of the yearly taxes, so fairly substantial - I had challanged the assessment, so the taxes were dropped.

The tax bill *was* available at the time of closing, because the title company put the correct amount for the (past) year into the seller's escrow funds, they just debited us an incorrect amount.

Do I have actual legal right to the difference? Our contract was for prorated taxes, not an "estimate based on the last known bill"....

Why not try just calling them up and explaining the situation to them before rolling out the heavy artillary???

Most reasonable people are prepared to do reasonable things.

$600 is worth going after.

If your home was listed with a Broker contact them and let them argue it out with the title company. In MI at least the Broker is responsible to see that the transaction is closed according to the contract.