Buyer Denied Excess Tax Monies
When a property was sold on March 30, 2017, the deed provided that the seller was transferring "all of Seller's rights ... claims ... and causes of action ... with respect to the premises.”
Thereafter, when the seller secured a real-estate tax refund for monies paid for the period June 1, 2013 through October 1, 2016, the buyer asserted an entitlement to those proceeds (arguing that the right had been conveyed to the buyer based on the deed’s wording).
After the New York County Supreme Court dismissed the buyer’s case, an appeal to the Appellate Division, First Department, ensued. And in mid-December of 2022, the AD1 determined that, pursuant to state law, the monies rightfully belonged to the party that paid the tax. [See RPTL 726(1)(b) (excess real-estate taxes must be “paid to the petitioner or other person paying such tax”)].
As the appellate court noted, “The bill of sale conveyed the property and claims relating to the property, not claims personal to the seller as the person who paid the real estate taxes.” And, in any event, the buyer was found to have bargained for “’a title that was free and clear’ of liens,” and couldn’t recover real-estate tax over-payments made by the seller in the fiscal years which preceded the closing.
You get what you pay for, folks ....
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