Phoenix, AZ asked in Real Estate Law and Tax Law for Arizona

Q: I recently purchased a house and found out there is a tax lien on the house from the previous owners. What do I do?

Turns out there are two parcel numbers for my home's property taxes and only one has been getting paid. The other hasn't been paid since 2015 (I purchased the house in August 2018) leaving a tax lien on the house. I contacted the title company which has been claiming to be working on a resolution only to find out they are trying to get the seller to pay for everything and the seller is refusing to pay since everything has been transferred to my name and its something the title company should have caught.

What can I do to ensure the previous owners taxes get paid? How does this effect my future purchasing power with a tax lien now on my record? Should legal action be taken?

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1 Lawyer Answer
Peter H. Westby
Peter H. Westby
  • Scottsdale, AZ
  • Licensed in Arizona

A: You were right to make a claim against your title insurer. The title insurer will try to collect from the seller. The taxes are the seller's obligation. But the title company should bring the taxes current asap even if they cannot collect from the seller. I would continue to follow up and insist that the title company pay off the tax lien now. I also recommend monitoring your credit reports, but this tax lien should not be reported on your credit report and should not affect your credit. At this point, I would not recommend legal action. It would likely be cheaper to pay off the tax lien yourself than pay legal fees for litigation. This will change should the investor attempt to foreclose the tax lien. In this event, you will need to take legal action.

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