Title company screwed up taxes and county back charging taxes for 4-5 years

[Mak K.]

Location: TEXAS

We closed a property where there was a deceased person few years back. Title company paid the taxes showing tax payment certificate cleared. But county came back removing the exemption (65y+ homestead) since the death few years back and now are charging all the previous 4-5 year taxes resulting in $10-12K (County, ISD, Mud taxes etc). Also taxes are due by July 1st to avoid penalties.

Ofcourse title company is playing the game they are not responsible. County tells me that it is common practice by title company to prorate back year taxes when a person is death as they know taxes will be back charged once exemptions are removed. Also now I see tax certificate issued was 3 weeks before our contract start date.  So they failed to recheck the records may be?

So, in this case, who is responsible for the back taxes? Is it Seller or Wholesaler (Assigner) or Title company. My understanding is reason we use title company/title insurance is to make sure buyer is not responsible for any previous liens, tax or legal issues before closing date.

I am trying to understand this at high level so I can have a path forward. Should I just go after title insurance or need a lawyer? 

[Ty Coutts]

In this situation, the responsibility for back taxes typically lies with the seller, but the title company's role is crucial. Title insurance is meant to protect you from such issues, and it seems the title company may have failed in their due diligence by not rechecking the tax records closer to the closing date. You should first contact the title insurance company to file a claim, as they should address any issues missed during the closing process. If the title company remains uncooperative, consulting a lawyer to pursue legal action may be necessary to resolve this matter and ensure you're not held liable for the previous taxes. Please feel free to reach out if you have any further questions/just want to discuss!