back property taxes owed
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back property taxes owed
Is there a way to sell a building that has property taxes owed? Can they be paid with the proceeds from the sale?
Asked on May 10, 2009 under Real Estate Law, New York
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
Yes to both questions. In fact it is done all the time.
I assume since back taxes are owing that your mortgagor has not stepped in to make the payments which is something that they can do. That being the case, the mortgage and taxes will get paid off and then you will receive the proceeds, if any. To the extent that the proceeds aren't enough to cover the taxes owed, you would be liable for their payment.
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
Depends. Is there a lien on the house? Who has the lien? In most circumstances, if let's say you owe property tax, and you didn't pay it, and there wasn't enough in your escrow account to pay, the mortgage lender/servicer will pay it and put itself in first position on the debts owed. Why? Because taxes always trump other debt. If the debt is now most likely gone, all you have to deal with is your lender. If you sell your house, which is security for the loan, and there isn't enough (i.e., short sale), in most states you will be responsible for the deficiency and the lender can sue you.
If none of the above is the case, and you owe directly to the government, and the government hasn't put a lien on your house yet, when you sell the house, make sure you sell for more than you owe in total so there are no issues with payment.
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