QUESTION
Who is responsible for informing home buyers of the uncapping of the taxable value of a home after purchase?
Asked on Mar 06th, 2017 on Residential Real Estate - Michigan
More details to this question:
We purchased our home in Sept. 2016 and were told by our mortgage company our mortgage would not increase. We recently received a tax statement that our taxable value increased by 135,000 in a year which impacts our mortgage payment substantially ($600+). We are filing an appeal with the city since we feel the assessment is inaccurate, but feel we were blindsided by this and should have been told this by someone prior to purchase. We would not have bought this home if we would have known this was a possibility since we can not afford an increase in payment. I am just curious if this is something that is required to inform buyers within the real estate/mortgage lender process?
1 ANSWER
Real Estate Law Attorney serving Holland, MI
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Cunningham Dalman
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No one is required to tell you this except a buyer's agent, although sometimes closing documents prepared by a title company mention it. In truth, no one can tell you when you purchase a property what the taxable value will be in the subsequent year. When it "uncaps" in the next year, you don't get the assessed valuation the seller had in the year of the sale. And in the new year, the assessed valuation can be substantially higher than it was before. Some assessors neglect to keep assessed values current because taxes are paid on the taxable value and then, when a property sells, the assessor jumps it up to where it should have been. I recently handled an appeal similar to yours in which the assessed values on a street fluctuated up and down over 40% over a period of a few years. That is bad assessing, unfair to all.
Answered on Apr 03rd, 2017 at 6:06 PM