Former Homeowners Find Quirk In Law Taxing
Posted March 4, 2004
RALEIGH, N.C. — Next week, thousands of names will be in the newspaper for a reason they would rather not be recognized for. The list is for delinquent property taxes.
In many cases, people are on the list because of a quirk in the state law and a common practice by attorneys who close real estate deals. The combination has Paula and John Jay in a mess.
The Jays moved into their new home in the country last summer.
"We just love it. You know, it's everything we ever wanted, it's everything we ever dreamed of," Paula Jay said.
The Jays' previous house in Garner is causing them to lose sleep.
The couple sold the house last June. As part of the closing, the Jays paid the buyer $888 -- the pro-rated part of the home's 2003 property taxes. The buyers were supposed to pay the entire $1,886 tax bill, but did not.
The Jays received late notices and garnishment threats.
"I thought that's outrageous, that can't be. Something's wrong," she said.
Calls to Wake County offering to prove payment got them nowhere. Paula Jay was told it was her responsibility to pay the taxes, then pursue the the new owner for payment.
"I was just flabbergasted," she said. " I said, 'So the honest taxpayer -- the person who has paid their taxes -- has to pay somebody else's taxes and then go through the effort of taking them to court to collect from them."
"We have a complete understanding of their dilemma," said Emmett Curl, director of Wake County's revenue department.
Curl says under the law, the Jays are responsible for the taxes because they owned the on house Jan. 1, 2003. Curl says the county has no part of what goes on at the closing.
"That's a contractual arrangement that the attorneys make between the old and new owner. The county does not enter into that contractual arrangement," he said.
Curl says this happens all the time. Out of the 21,000 homes sold last year, 4,000 buyers did not pay the taxes -- leaving the sellers holding the bill.
Curl blames closing attorneys.
"This situation could be avoided 100 percent of the time by simply having your closing attorney pay those bills at the time of closing," he said.
"It's not fair. It's totally wrong," Paula Jay said. "I want the current homeowner to pay his taxes."
Curl says the county did send the new owner letters asking for payment. When Five On Your Side spoke with the new homeowners, they said they thought the letters were a mistake.
The county is also allowed to publish names of the previous and current owners on its list of delinquent taxpayers.
The good news for the Jays is that will not be necessary. When Five On Your Side contacted the new owner's mortgage company, it paid the taxes and will get its money back from the owner.