Tenants boat tax is being held on my property

Real Estate Agent · Surf City, NC · Member since 2020 · 25 posts · 13 votes

I am under contract to sell one of my rental properties and found out this morning my tenant in 2015 didn't pay his personal property tax on his boat, which is now being held against my property. The lawyer said I will have to pay it prior to the sale. I had no knowledge about this until this morning. I was using a property manager at the time and they never mentioned anything, but I don't think they would have known or are responsible. Has anyone else experienced anything like this? I am likely going to pay it, but any recommendations on how to prevent it in the future would be great!

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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

Unless you are talking about a very small amount of money I would probably challenge it on notification & due process grounds. NC does have personal property tax, but I am unaware of anything that allows them to place a lien on property in which the taxpayer does not have an interest. A renter has no right of equity in a rental property, only right of use.

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
6y
Unless you are talking about a very small amount of money I would probably challenge it on notification & due process grounds. NC does have personal property tax, but I am unaware of anything that allows them to place a lien on property in which the taxpayer does not have an interest. A renter has no right of equity in a rental property, only right of use.
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Karl B.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y
I would march to wherever the return address is listed as and explain the situation to them. I would also bring the rental agreement the tenant had signed to show he's the renter and not the owner as maybe they're (the city or whomever they are) under the false assumption the tenant owns the property.
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Andrew B.
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
6y
I'd wager that the lien was not filed properly, if you had no prior knowledge on it. I'd start pushing back on that, by researching your local laws/regulations on liens. If its a high dollar amount, I'd hire an attorney. I'd only pay it now if you were closing almost immediately. Regardless, if you end up paying it, you should be able to go after the tenant for reimbursement.
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