Delinquency Property Tax Levy not caught by Title Company

[Andrew Javellana]

Hello Bigger Pockets Community,

Hope this message finds you well. I recently purchased a rental property and after closing escrow I found out a month later there is a levy placed on the property tax due to delinquencies and unpaid utilities from the former owner of said property. I checked the closing settlement statement and there was no credit back to me for these delinquency fees. So I immediately contacted the Tax Assessor's office and they explained to me that the Title Company did not send the full payment for the levy (delinquency penalties). Their check from close of escrow only covered a portion of the levy. When I spoke to the Title Company about the unpaid balance of the levy they told me they could not help me out and very rudely dismissed my inquiry (maybe because I discovered that they did not do a good job of uncovering all liens or levies due to previous owner's delinquencies). Now I am left to either pay this levy or file a claim against the Title Company in some sort of way. I was just curious if anyone in the Bigger Pockets forums has a similar experience or has any advice on how to proceed. Any help at all is much appreciated.

[Andy Mirza]

@Andrew Javellana I don't have the experience that Don has but his advice is completely in line with what I've been hearing from others and experiencing myself. We just bought a non performing note with title issues that are being worked out in court and our attorney advised that title companies drag their feet and resist paying until they have to.

The only thing I'd add is that I believe you should pay whatever delinquencies that exist now and clear that up. The taxing authority doesn't care that the title company messed up. They just want their money and the fees and penalties will add up. Who knows how long it will take for the title company to pay up and you're still stuck with the problem in the meantime. Pay the taxes now, then go after the title company (with an attorney as Don suggested).