Thursday, December 14, 2006

Another example of bad lawyering...

This isn't a first-hand situation I'm in, but I'm consulting with one of the lawyers involved.

Where the case sits now is that a Buyer of real estate is suing a Seller twice removed for issues regarding property taxes. The long and short of this situation is that this twice removed Seller was a senior citizen and had the senior citizen property tax exemption while she lived there. The person she sold it too only owned for a few months. Then the next (and current) Buyer gets the property and did a traditional 105% real estate tax proration at closing and now he's gotten slammed with the property tax bill and is looking for someone to recoup some $$ from. I don't think he has a leg to stand on in terms of going after the initial twice removed Seller...no privity of contract, right? Buyer should be looking in the mirror in terms of who to blame or frankly, he may want to look at his lawyer (I don't know whether or not he had counsel during the transaction).

The teaching point is: when you're representing a Buyer, you better pull the property's tax bill to see what the status of the exemptions are. Then you negotiate the property tax proration properly rather than just doing the old 105%/110%...that's not always appropriate.

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