Q: I sold a property almost a year ago and my lawyer insisted that she hold back $3,000 because the property taxes had not been assessed and the purchaser’s lawyer was trying to make sure there was adequate money available to pay the tax for the time that I owned the property.
I have contacted my lawyer recently to see what the status of this is and her assistant has indicated that the money is still being held in trust pending the tax bill.
This is ridiculous after a year. What should I do?
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A: Your situation is quite familiar and happens fairly often to property that is being re-assessed.
Unfortunately, municipalities are working against the clock to get their tax systems and assessments up-to-date but there is a time lag (sometimes up to two years).
Your lawyer would have given what is known as an ‘undertaking’ to the purchaser’s law firm and purchaser to hold back the $3,000.00 pending the assessment of the property.
She cannot release that money until such time as the municipality has the time to value your former property and determine what the outstanding taxes are.
Until such time, that money is tied up and cannot be released by your lawyer.
I realize it is frustrating but the funds are earmarked for unpaid taxes which the municipalities take very seriously.
Jeffrey Cowan is the principal of Cowan Law and can be reached at email@example.com.