Property tax credit after purchasing

[Nicole Assali]

Hi everyone, Investor here from Canada, i just had a quick question regarding a situation i have; we purchased a house last June-July and moved in at that time. Everything went well, at that time the seller had paid their property taxes in full, and as usual when we were completing the transaction the notary or lawyer calculated the pro rated amount of taxes that we owed to the seller based on how many months were left in the year. The problem is that the seller was trying to sell the house for over a year and they weren't able to sell it for an amount close to the city evaluation, so they ended up applying to modify the home value in the city's books (assessed home evalution) so their yearly taxes would be less. Then a couple months after we moved in, we received a letter addressed to us the new homeowners from the city saying that they had re-evaluated the home value and lowered it to a certain amount which ended up lowering that year's taxes by about $1000. That $1000 could either be refunded to us or credited on the next tax bill which we chose to do the credit. about a month later the lawyer who completed our transaction sends us an email saying the sellers lawyer knows that we ended up getting a tax credit and that it is owed to the sellers, and that they would take legal action if we didn't refund it. basically my question is how does this usually work out, are they entitled only to a prorated amount of it, are they even entitled to any of it? I don't mind paying them what is owed to them, but I don't really feel they should have all of it. On the one hand you can see that on the day the transaction was completed they got all The money that was due to them based on the facts of that point, going forward they are not the owners of the house anymore so if we got a tax credit or a tax increase it does not really concern them, on the other hand you could say that they took the effort to do this and since that credit was applied to the year they sold the house they should have a prorated amount based on the months they lived in this house. The second question is why didn't the sellers lawyer contact us directly, as the lawyer we used for the transaction is not really working for us on a regular basis and is not our regular counsellor. Will she be charging us fees normally to be dealing with this? unfortunately it's a case of sellers remorse, where the seller doesn't really sell for the amount someone had put in their head that their house was worth, I think it's taking it pretty far to threaten to take legal action, what do you guys think we should do? Have you been in this situation before? I know this is not necessarily an investing question but it could've happened for an investment property. thank you all in advance for your help, it's really appreciated