30K Back Taxes Nightmare

8 Replies

Hey BP! My wife and I have been scouring our little city for a house or duplex to buy. My dream is the duplex, she would prefer a house unless we can find a duplex in a nice location where she can relax. The other day we were walking down a street we hadn’t been down before (we like to walk and look for properties) and she noticed a duplex that was clearly vacant for a long time. It was the first time we’d found a duplex that she immediately had a good gut feeling about so I was determined to figure out more about the property. I did some digging with the tax assessor’s website and found the owners name. I then talked to some friends we have a city hall and they also had some more insight on the duplex. I called the owner tonight and she went into a very elaborate story. She told me that she had bought the property almost ten years ago. She claimed that there were $30,000 in back taxes that the bank promised they were going to pay after closing. 6 months after she bought the property she said that they dumped the taxes on her and she tried to fight it for 4 years to no avail (she said they had done this to 2 precious buyers.) She has since “walked away” from the property, but all the records I can find are in her name and the bank says it is still personally owned. What should we do at this point? It could be a beautiful property, but I also don’t want to get stuck with a $30,000 tax bill after we close on the property. This will be our first purchase and we both feel great about the property, but we don’t want to get caught in a ten year battle. I would appreciate any insight you have and please ask questions if I’ve seemed to leave anything out. Any help is welcome :)

this does not add up... if she bought through a title company with title insurance they should have paid the tax's unless it was clear in the purchase agreement that she was buying the property SUB TOO the tax's which can happen.. also this should have been sold years ago for back tax's I would have thought. 

but if 30k taxs are owed and U got that info directly from the tax collector.. there is nothing you can do.. 

you have to pay those then what ever equity the seller wants..

Thanks @Jay Hinrichs it definitely didn’t seem like a normal situation since it’s been siting for ten years. The city called her a couple weeks ago because they had to board up a window before the whole thing fell out onto the sidewalk. When she talked to them she used the same terminology of “walking away” years ago. She said it hasn’t affected her credit and she doesn’t even know if she owns the property anymore. I’m stumped, but I think she’d be willing to take $1 if it would take it off her hands. Not unheard of!

@Jay Hinrichs do taxes like that ever get “forgiven” in order to sell a property. A house could sit there for 100 years without being bought and add up such a high tax bill that it would never sell right? It’s a shame because there’s a ton of vacant properties that are just falling apart.

you have to talk to your city or county tax collector but what I have seen in other markets like this were tax's many times exceed the true value of the properties .. IE low value real estate markets... sometimes the property can revert to the city or county and then they can sell it as surplus.. 

but do check with the taxing authorities they are the only one's who can really answer these questions.

I dont know much about NY but here is Texas they dont forgive the taxes. They might sell at a reduced price if it is struck off but most counties around here dont. Like @Jay Hinrichs said it should have already been sold unless it is struck off and no one else wanted it. 

@Tim Moore   As Jay said it is awfully odd that this wasn't cleared up years ago or that something like being sold at tax sale hasn't happened.  There could be a lot of different scenarios here.

There could be taxes other than property taxes, like an IRS lien. It may like Jay says have gone to tax sale and no one bid. There are literally thousands of properties in Baltimore that have been abandoned and taxes are well above the property value. It could be that the property was sold in tax sale and the new owner never did anything with it. We have tax sale properties we have walked away from. 

I would put it under contract for $1 or whatever, with all cost of transfer and clearing title to be covered by me. however I would make it contingent on those costs being an amount I can live with.  Once under contract then I would spend a little money for title  work to see what it will actually take to get clear title.  If you know how to do the research you can do some of it yourself before dishing out for title work. 

Yes taxes can be negotiated in some municipalities but not all and not all the time.

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