Who is responsible for error in real estate sales documents

Question

My sister and I just received an email that the calculation of real estate taxes on the sale, completed  this past September, of the house our father left to us, was done incorrectly  and we have to settle it with the buyers. This would presumably have us reimburse the buyers nearly $3000. Who is responsible  for this error in the calculation of the pro-rated taxes owed by the seller to the buyer?  I am not in the USA and can't  easily get an answer. The taxes apparently  increased because  my father had exemptions that ended with his death, but I did a still-timely last-minute filing for homestead  exemption in that state (Florida) as I had lived there and in that house just prior to the sale, and the title company  would  have had the final calculation  available  from the state taxing agency.

Wayne Brooks · Answer

@Marjorie Martin There is no question what amount the county charged for taxes for the year 2019......anyone can simply go to the Tax Collector site for that county and enter the address.

The reason the property taxes went up significantly when it transferred from your father to you and your sister, as you are apparently unaware, was likely due to FL Save Our Home laws which cap the annual increase for a person’s homestead in assessment value at 3%/year.  Values have risen much more than that so the owner pays an artificially reduced amount.  When the property transferred to you that restriction went away and the property was assessed at actual value for taxes.  Even if you received the exemption, again reflected on the county site, there would have been a significant increase in the tax bill.

And yes....you owe the portion of taxes for the time you lived in the property during 2019, approximately 3/4 of the tax bill that came out in October/November.

Whatever theory of law you referenced does not apply to this situation.  I assure you, that you signed closing documents specifically acknowledging and addressing this Estimation of taxes in which both oartirs agreed to pay the Final proper amount....that can only be determined when the actual tax bill for 2019 came out.

Wayne Brooks · Answer

@Marjorie Martin There was no actual “error”.  The tax assessment, and the resulting tax bill, aren’t known until about October of the tax year. It is always an “estimate” of what the tax bill will be. Whatever attempted filing you did is irrelevant.  It sounds like you failed to get the exemption. The closing documents included language that both parties acknowledge this and will settle up for the correct amount once the actual taxes are known.

This is your bill to pay, pure and simple. It is very clear, even though it may seem new to you. Same thing as if they had deducted too much from you for taxes, the buyer would owe you the difference.

Tom Gimer · Answer

Who is responsible for the “error” is irrelevant if the closing docs allocate ultimate responsibility to the party who should pay the item... which they should.

This is like refusing to pay your share of a final water bill.

Marjorie Martin · Answer

Actually there was an error because the number indicated on the contractual attachments, and upon which basis the parties acted, was a number that was not reflected on the county's records.  A number was on the county records applicable to my sister and my tenure with the house, and the title agent did not use that number in the contract - she used a number based on my father´s tenure, which she had known to be incorrect.  As I noted, we do not know now what the original number was and the number indicated on county records now applies to the new owners, who have lived there six months (and who are much younger than I am and are likely to have different exemptions).  I practiced law for twenty years in the U.S. (very little time in Florida), but common law has the error of drafting construed against the drafter.  The statement regarding the parties ¨settling¨the matter would have no legal significance in any jurisdiction I practiced in because it does not specify the manner in which such settlement should be determined (in other words, that language is too vague), and again, I don´t live in the U.S. and will not be returning, thereby making any type of research or settlement somewhat difficult.  Moreover, we remain stuck with the lack of knowledge about what our original tax bill should have been in order to determine what amount of payment might be outstanding. We can´t pay an amount that has not actually been determined, which is a problem due to the title company´s clear error.  If the contract had reflected the amount that was in county records at the time of sale, we would know for sure what was the actual difference between the amount

Marjorie Martin · Answer

Thank you for your insight all, but the problem is considerably more complex than perhaps was indicated.  The contract documents either completely failed to specify an amount owed for taxes as of the date of sale, or the amount indicated on certain schedules was incorrrect (clear title company error as the correct amount would have been accessible online, and it was their job to obtain the figure provided for the relevant year from the county database), and none of the parties were aware of that.  I was not present for the sale because I live in Europe, so I was told that certain gaps would be filled in by my representative after I signed the documents, but this particular line was the responsibility of the title company to fill in.  They further failed to adequately assign responsibility and the agreement only states the parties will settle any errors in the calculation on their own. Besides the fact that I am not in the same country as the buyers and communication with these unknown people would be difficult, the title company representative who emailed me of the error provided completely erroneous figures for the amount owing, and now we do not know what the taxes actually were that were applicable to my time living in the house (just prior to and for nearly a year after my father´s death). The county records reflect the current assessment for the current buyers for 2019, and in no place show what the assessment would have been for the period the house belonged to me and my sister (a higher assessment than the period when the house was my father´s).

Theresa Harris · Answer

@Marjorie Martin  The lawyers who handled the closing should have done the calculations.  Your dad likely had exemptions because he lived in the house and the estimate would have been based on the previous year's taxes.  The buyers should be talking to their lawyer who handled the closing and their title company-one of them should be responsible and admit their error.

Who is responsible for error in real estate sales documents

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