Background:
We bought a house in The Woodlands in August, 2021. The previous owners were not married and owned the house 50-50. I have now learned that the state required them to have separate MUD & County tax accounts. After closing, only one of the names of the sellers transferred into our names.

So, I got two notices over the last two weeks that I was delinquent on 50% of each of these taxes. I immediately paid what was owed - which included about $600 of interest.

Please help:
I'm now ready to file to have the County reimburse me for the interest because the error was made at either the tax appraiser or county tax office. Does anyone have any advice about the wording and / or documentation I should include?

I have the mortgage deed that was filed by the title co. and it clearly shows two sellers.

Only in providing copies of forms. They were my first call.

If the county tax office isn't being helpful call your commissioner and yell at him maybe? No idea on the mud though.

oldag00 said:

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How is this not a title policy claim?

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Can you expand a little and help me understand your thought process?

I re-read the deed and it clearly states, Seller #1, a single man, and Seller #2, a single woman, as the sellers. This was accepted and recorded by the County Clerk of Montgomery County.

This issue is that when the clerk's office went to update the owner of the property, only one Seller's interest was changed.

The sellers got a credit at closing for taxes paid in early 2021. I received tax bills that were due in early 2022, but I wasn't aware it wasn't for 100%.

I am confused by the proration. What was the date of closing?

Typically, the title company has both parties sign an agreement that the taxes are just an estimate and it is the responsibility of both parties to settle up if the estimate is off. This applies to transactions from Jan. 1 through Oct. 15. After about Jun 15, the estimate is based upon the new value, and unless it is being disputed or the tax rate changes it is usually pretty accurate.

It looks like the title company did everything they were supposed to do. The failure of the tax authority to update their billing properly has been pretty common since 2020. They will require you to appeal to each taxing authority to get your late payment back which they figure you will not do. They will also hide behind the law that says it is your responsibility to pay and not theirs to correctly bill you.

Out of curiosity, did you file for a homestead exemption? If yes, was it granted? That should have been another chance for them to catch it.

If it was me, it would be nice to the title company to explain that you want either the $600 or open an insurance claim against the title issuer. It would be easier for them to pay you than hassle with a claim.

Be prepared that if you open a claim, the first response will allege fraud on your part. It is the standard response to all claims. I was a part of a $100 million dollar title insurance claim and a $6 million dollar one and both got the exact same letter from Fidelity. They even joked that they don't even get it to legal before they send that letter.

You purchased the house in Aug. 2021. The taxes paid by the sellers in early 2021 were for the calendar year 2020 when they owned the house for the entire year.

You paid the calendar year 2021 taxes in early 2022. You should have gotten a credit from the title company for the taxes for Jan 1, 2021 thru the day you purchased. Seller should have been charged for that period in 2021 by the title company.

Sounds like a title company problem.

Mas89 said:

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You purchased the house in Aug. 2021. The taxes paid by the sellers in early 2021 were for the calendar year 2020 when they owned the house for the entire year.

You paid the calendar year 2021 taxes in early 2022. You should have gotten a credit from the title company for the taxes for Jan 1, 2021 thru the day you purchased. Seller should have been charged for that period in 2021 by the title company.

Sounds like a title company problem.

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It would be a title company issue if the unpaid taxes/assessments were past due at closing, but it doesn't sound like that is the case here. Sounds like what happened in this case is the account with MUD didn't get properly switched after the closing.

Even if taxes for 2021 were prorated at closing, the OP would still have been responsible for paying them when they came due in 2022. The OP did not pay 1/2 of the taxes on time and is being charged penalty and interest now. The reason OP didn't pay them on time is he didn't get the bill because the account wasn't switched over into his name, but that does not mean the taxes/assessments aren't due.

The title company doesn't contact the tax office or MUD office and verify accounts are properly switched. They record the deed which transfers title to the property.

This. Doubt the title is responsible for the taxes, but the taxing authority should waive the penalties.

Thank you all. I have enough to begin the 1st step of emailing the research department. I'm old and cranky enough to spend a lot of hours and phone calls to get my way.

Bump to hear about resolution

I had a similar situation when we bought our current house - the sent the supplemental tax bill to the original owner at their new address instead of to me at the property address. I just wrote a simple letter with my remittance and they waived the interest for late payment.