Sold Rental. Title company incorrectly estimated taxes on HUD

[Stephen D.]

As stated above, I sold a rental in August, paid the estimated taxes at closing, and now buyer has come back asking for an additional $1,000 based upon the properties 2016 actual taxes. 

Am I liable for this?

The property is in Houston (Harris County) TX 

Thanks in advance.

[Shaun Vembutty]

Stephen,

This typically happens when appraised value increases significantly from one year to the next because the title companies use previous year's appraised value to calculate proration of taxes at closing. If you used the TREC contract to sell the property, refer to Section 13 where it clearly states that if the actual taxes end up being different, buyer and seller will have to settle the difference. So, yes, legally, you are liable. But I will say this. This is one of those contractual things that hardly ever gets enforced unless it is a significant sum and the pursuing party does not let go. The title company will not interfere, so it is up to the buyer to take legal action to recover the amount. I have been in this position several times where sellers owed me money but it just has not been worth it for me to go after them legally.