What is the name of your state (only U.S. law)? Texas
In July 2008 I sold my house. According to the sales contract if the first tax bill due after the closing differs by more than 10% of the amount upon which the proration is based, I have to make up the difference. The buyer is now claiming that I owe him prorated taxes for 2007; he also claims I owe him prorated taxes for 6.5 months in 2008. I say he is wrong on both counts and I'd like your opinion.
The full section in the sales contract reads:
16A
“The general Real Estate Taxes shall be prorated based upon 102 Percent of the most recent available tax bill.”
16B
“Buyer and Seller agree that if the first tax bill due and payable after closing differs by more than 10 percent (10%) from the amount upon which the proration was based, buyer and seller shall re-prorate taxes based on the total number of days used on the closing statement. When the total real estate tax bill for the Premises for the year of 2007 due in 2008 is received, the Buyer shall provide to Seller a copy of the real estate tax bill, calculations showing the amount of the proration based on the actual taxes less the proration for real estate taxes paid or credited at the time of closing and a remittance of, or demand for, the balance due…”
The buyer sent me a letter claiming that:
“The breakdown of the adjustment is as follows: according to the contract the tax proration was based on 102% of the 2006 tax bill. This amounted to $6.99 of property tax per day which totaled $2550.73. The actual property tax amount per day for the 2007 property taxes is S7.70. The buyer is requesting the difference of $257.99.”
“The amount the Seller paid the Buyer for 2008 property taxes was based on the same $6.99 which totaled $1377,03. The adjusted proration for the 2008 property taxes are based on the current $7.70 per day. The Buyer is requesting the difference of $139.87.”
First, though the Buyer never address the issue of percentage difference which, as I understand it, should be the basis for any claim to re-proration of taxes, the 2007 taxes are exactly 10% more than the 2006 prorated taxes I paid at closing. When queried, the buyer argued that when the proration was calculated, they figured past the whole dollar to several decimal points (even though, again, he doesn’t actually say what he thinks the percentage difference is). Am I right in basing my claim that I don’t owe additional re-prorated taxes on the basis that the difference is exactly 10%?
Second, as I read the contract, I see no stipulation for estimating 2008 taxes based on the 2007 tax bill. The buyer claims that the following statement in the contract allows him to ask for prorated 2008 taxes" "buyer and seller shall re-prorate the taxes based on the total number of days used on the closing statement." I say that by pulling this statement out of the context of the whole section, they are misinterpreting the stipulation.
I would appreciate any advice. Thank you. Kim
In July 2008 I sold my house. According to the sales contract if the first tax bill due after the closing differs by more than 10% of the amount upon which the proration is based, I have to make up the difference. The buyer is now claiming that I owe him prorated taxes for 2007; he also claims I owe him prorated taxes for 6.5 months in 2008. I say he is wrong on both counts and I'd like your opinion.
The full section in the sales contract reads:
16A
“The general Real Estate Taxes shall be prorated based upon 102 Percent of the most recent available tax bill.”
16B
“Buyer and Seller agree that if the first tax bill due and payable after closing differs by more than 10 percent (10%) from the amount upon which the proration was based, buyer and seller shall re-prorate taxes based on the total number of days used on the closing statement. When the total real estate tax bill for the Premises for the year of 2007 due in 2008 is received, the Buyer shall provide to Seller a copy of the real estate tax bill, calculations showing the amount of the proration based on the actual taxes less the proration for real estate taxes paid or credited at the time of closing and a remittance of, or demand for, the balance due…”
The buyer sent me a letter claiming that:
“The breakdown of the adjustment is as follows: according to the contract the tax proration was based on 102% of the 2006 tax bill. This amounted to $6.99 of property tax per day which totaled $2550.73. The actual property tax amount per day for the 2007 property taxes is S7.70. The buyer is requesting the difference of $257.99.”
“The amount the Seller paid the Buyer for 2008 property taxes was based on the same $6.99 which totaled $1377,03. The adjusted proration for the 2008 property taxes are based on the current $7.70 per day. The Buyer is requesting the difference of $139.87.”
First, though the Buyer never address the issue of percentage difference which, as I understand it, should be the basis for any claim to re-proration of taxes, the 2007 taxes are exactly 10% more than the 2006 prorated taxes I paid at closing. When queried, the buyer argued that when the proration was calculated, they figured past the whole dollar to several decimal points (even though, again, he doesn’t actually say what he thinks the percentage difference is). Am I right in basing my claim that I don’t owe additional re-prorated taxes on the basis that the difference is exactly 10%?
Second, as I read the contract, I see no stipulation for estimating 2008 taxes based on the 2007 tax bill. The buyer claims that the following statement in the contract allows him to ask for prorated 2008 taxes" "buyer and seller shall re-prorate the taxes based on the total number of days used on the closing statement." I say that by pulling this statement out of the context of the whole section, they are misinterpreting the stipulation.
I would appreciate any advice. Thank you. Kim