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Not enough Escrow Money for taxes from previous owner

We closed on a property on November 29, 2007 on house which was built in 2006. Taxes were assessed only on the lot. The tax bill which just came out and is due in January 31, 2008 is substantially higher since the taxes include the house appraised value now. Taxes in our county in Ohio billed for a whole year behind. The current tax bill covers the first half of 2007; we did not live in the house at the time. The title company collected from the previous owner just on the land.

I talked to Title Company where we closed; they are telling me that I am responsible for the difference on the bill because I signed a document at the closing to pay the difference if it was higher. The local auditor/treasure acknowledges that the bill's responsibility is on the previous owner but taxes do not follow people, it is on the property. Since I am the owner of the property now, I am responsible and there is nothing they can do. What should I do, advice is greatly appreciated?
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December 17 2007 - US
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IF you escrowed, the bank should pay the taxes and raise your payment for 12 months or possibly more to recoup the draw to pay the taxes, otherwise if you paid on your own and did not escrow, it would be your responsibility..

hope this helps, Ed
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December 17 2007
Profile picture for ELender

You will want to take a look through your closing package.  Look for a form called the Compliance and Tax Pro-Ration agreement.  Most title companies have a standard form they put in their package.  Most of them done here in Florida sign where the parties agree to work it out if a higher tax bill comes in.  It may be different in your area but the only way to know is to read through that form.  It may be a possiblity the title company is right, or they might close a lot of loans with the seller and be trying to protect him from the extra money.  It would be very bad business on their part but crazier things have happened.

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December 19 2007
 
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