County Assessed a Late Fee, but Never Sent Me a Tax Bill

[NateW]

I am a new resident of Frederick County, Virginia as of October 8th (2019). The house I bought was a cash purchase, so there is no mortgage company involved or escrowing. Yesterday I received from the County a real estate overdue tax notice which included a 10% late fee and interest for a month (about $120 over the tax due amount) and threatened to take collection action.

I promptly called the County treasurer asked them for what period this reminder notice was for and noted I closed on the property in late September and that I never received a tax bill and asked her to explain the late fee. The clerk said a bill for July through December 2019 real estate taxes was sent to my address on October 31st and taxes were due Dec. 5th. I asked who the bill was addressed to. She checked and it was the previous owner! I then commented that I never saw the bill and most likely the post office forwarded it to the previous owner, who moved out of county.

I said I would promptly pay the taxes if the late fee was removed. She refused and said that even if I do not receive a bill, it is my responsibility to pay on time (to know when the due date is or find out if I am not sure) and any penalties and interest if paid late. Really? I thought the deed transfer would initiate a tax bill to reflect the current property owner. I was expecting to get a tax bill, so I never thought about it beyond that.

I first checked my HUD-1 and I was issued a credit for July through September taxes to cover the previous owner's share when I was billed for the second installment.

I then checked the Code of Virginia and found the following:

The County must send a tax bill by mail to the the person who owned the property as of the first of the year. The bill must be sent 14 days before it is due (The County did this and it was the previous owner). But in another section the following appears:

"In the event a transfer of real property ownership occurs after January 1 of a tax year and a real estate tax bill has been mailed pursuant to §§ 58.1-3281 and 58.1-3912 (mailed to the previous owner), the treasurer or other appropriate local official designated by ordinance of the local governing body in jurisdictions not having a treasurer, upon ascertaining that a property transfer has occurred, may invalidate a bill sent to the prior owner and reissue the bill to the new owner as permitted by § 58.1-3912, and no penalty for failure to pay any tax for any such assessment shall be imposed if the tax is paid within two weeks after the notice thereof is mailed." (Notice that the word "may" is used here).

And in the next paragraph of the Code the following appears, in part:

"Penalty and interest for failure to file a return or to pay a tax shall not be imposed if such failure was not the fault of the taxpayer, or was the fault of the commissioner of revenue or the treasurer, as the case may be."

So my take on this is the County needs to send me a tax bill in my name and without any penalties and If I don't pay it in 2 weeks I then can be assessed a late fee.

I checked my tax account on the County web site and the bill that appears is still in the previous owner's name.

Looking for guidance from the collective wisdom of the group on how to handle this. Should I just suck it up and pay the penalty and be thankful I was able to ER at 59 AND purchase a new house with cash before selling my old house (with plenty of funds to spare)? But this irks me the County staff takes this punative attitude without proper billing.

Thanks.

 

[pb4uski]

I would talk about it with the laywer who represented me on the real estate transaction.

What you might do is to pay the extra $120 and then file for a refund based on the statute and your facts and circumstances.

Ultimately, you'll need to decide how much of a fight you want to make for $120... but it won't hurt to write a letter citing the statute and requesting a refund.

I'm not sure how it works where you live, but where I live the tax collector gets the late fees so they are reticient to waive them... you may have to run any rejections up the chain of command.

 

[audreyh1]

With this new information, this would warrant a visit in person to the main office.

 

[braumeister]

Two reasonable approaches.

One is to escalate it above the clerk you spoke with and get the actual county treasurer involved. Sounds like they could give you relief.

If I were you, I would say that $120 is not that big a deal and just pay it. Not worth the hassle. In retrospect it would have been wise to check with the county when making the purchase, but not obviously necessary.

 

[njhowie]

I said I would promptly pay the taxes if the late fee was removed. She refused and said that even if I do not receive a bill, it is my responsibility to pay on time (to know when the due date is or find out if I am not sure) and any penalties and interest if paid late. Really? I thought the deed transfer would initiate a tax bill to reflect the current property owner. I was expecting to get a tax bill, so I never thought about it beyond that.

Take a step back and think for a moment. Do you seriously want to it to be handed over for collection, potentially have a lien placed on the house, and if you're really stubborn enough, have your new house go to auction...over a silly $120? Every day you wait is going to be additional penalty and interest.

Go to the tax office in person today, and pay the entire amount they say you owe. If you want to waste your time fighting to get it back later, go for it. However, the amount of time and effort you expend will likely not be worth the $120. Just chalk it up to part of your expenses in making the purchase. We all have unexpected additional costs when buying a home - $120 is nothing. 5 or 10 years from now you won't remember or care and the $120 will not have made any difference in your quality of life...unless you do not take care of it quickly and let it escalate in to a significantly larger issue.

 

[CardsFan]

With this new information, this would warrant a visit in person.

^^^This.

 

[pb4uski]

Take a step back and think for a moment. Do you seriously want to it to be handed over for collection, potentially have a lien placed on the house, and if you're really stubborn enough, have your new house go to auction...over a silly $120? Every day you wait is going to be additional penalty and interest. ....

+1 A few years ago DD got all indignant over something that a creditor said she owed that she should not have owed and she refused to pay, probably justifiably so. They dinged her credit record and it came back to haunt her for a while, though it has cleared off by now.

Pay it and appeal the charge and ask for a refund.

Some fights are not or are hardly worth the effort. Keep the big picture in mind.

 

[Jerry1]

With this new information, this would warrant a visit in person to the main office.

^^^This.

Yep. Ask to speak to the county treasurer. If you can’t get an appointment immediately, I would write them a letter with the information you provided here and politely ask for a waiver of the penalty.

 

[Rex]

I agree with the others. As much as you are "right", with government, it's not worth it to not pay the minor fee......but........

I like the idea of paying it and then fighting it. I would start with clear and concise information (as you have gathered) with the county official who heads up the treasury dept.

If no go, I'd go see my county commissioner.

I think it's important that we peasants uses laws and our focus on the facts to help our public "servants" know where their power comes from. We are in this together.

(And I find it interesting that your fellow citizens in Virginia are fearful their 2nd amendment rights are in jeopardy.....that makes tax collection for the government a lot easier!)

 

[Stormy Kromer]

I would also include the county commissioner who represents your district. They are typically elected in contested races every 4 years or so and are usually very approachable to the people who vote for them.

 

[MrsHaloFIRE]

With this new information, this would warrant a visit in person to the main office.

Print out the statute with relevant part highlighted, bring paperwork showing your closure date, bring evidence if you have it of the bill being mailed to the prior owner and lay them out for the person at the tax office. THey will disappear behind a fabric wall and prob emerge and say OK. THat is my bet. THey will reissue the bill correctly in your name.

 

[CRLLS]

I would try to schedule a face to face meeting with the Treasurer, not just someone in his/her office over the next few days. Take your reference "code" with you. Explain what has happened and see if your facts and their facts agree. Ask for them to follow the code. I generally find that reasonable people can, most often, come to a reasonable conclusion. Regardless, pay the bill in full. The consequences are not worth the $120.00

Listed below is a brief explanation of the types of collection actions taken by our office. From their website:

BANK LIEN
A lien placed on the bank account of the delinquent taxpayer, bank remits funds to County to pay delinquency, subject to administrative fees from County and often from bank

DMV STOP
Delinquent taxpayer is no longer able to renew vehicle licenses until all taxes are brought current and stop is released, subject to administrative fees from County and DMV

EMPLOYER LIEN
A lien is placed on the delinquent taxpayer's wages, employer remits funds to County to pay delinquency, subject to administrative fees by County

DISTRESS WARRANT
Law enforcement in jurisdiction enforces warrant on available property owned by delinquent taxpayer, property sold if necessary to fund payment of tax debt, subject to County administrative fees, as well as fees incurred removing property (ex. towing bill)

JUDGMENT
County files judgment with Court extending the statute of limitations on delinquency, judgment is reported on credit report, subject to administrative fees by County

TAX SALE
Judicial or non-judicial sale of real property by County to fund payment of tax debt, subject to administrative fees by County and fees incurred in process

Whatever the end result, I would make certain that they correct the misinformation in their county tax site so that this mistake doesn't happen again. It is probably just a timing issue between the two databases.

FYI, There is a list 65 pages long of delinquent RE taxes listed on the Frederick County, Virginia website! That is a lot of delinquency.

 

[Bamaman]

The Tax Collector in most locales is an elected official, and they're not always completely up to date on how their office works. And in many cases, they'll have a lead clerk that they depend on to manage the office that's they're the real authority to talk to.

I would be in the County office in person talking to the lead clerk. And be armed with a copy of the regulations you quoted.

Right is right, and wrong is wrong. I was under the impression that it was up to the closing attorney to collect any taxes owed up to the day of the closing and forward it to the Tax Collector.

 

[CRLLS]

The Tax Collector in most locales is an elected official, and they're not always completely up to date on how their office works. And in many cases, they'll have a lead clerk that they depend on to manage the office that's they're the real authority to talk to.

I would be in the County office in person talking to the lead clerk. And be armed with a copy of the regulations you quoted.

Right is right, and wrong is wrong. I was under the impression that it was up to the closing attorney to collect any taxes owed up to the day of the closing and forward it to the Tax Collector.

OP said there was a credit in the closing statement for the prorated taxes. That is the standard way it is done here in Illinois too.

 

[Just_Steve]

Dealing with most govt entities it's "Pay and appeal"

 

[pb4uski]

.... I was under the impression that it was up to the closing attorney to collect any taxes owed up to the day of the closing and forward it to the Tax Collector.

No, not to the tax collector. If the property taxes are paid past the closing date then the seller is reimbursed for taxes from the closing date to the paid to date. If the property taxes are not paid up to the closing date then the buyer is credited with property taxes from the paid to date to the closing date.

Either way, the buyer is responsible for the next property tax bill due... even if it is addressed and sent to the seller.

While there may be jurisdictions where the closing attorney remits taxes to the taxing authority as you suggest, I've never transacted in one like that or even heard of one like that.

 

[Winter]

Either way, the buyer is responsible for the next property tax bill due... even if it is addressed and sent to the seller.

This.

No matter how it was handled by mail, it is our responsibility to pay the taxes for property bought.

I hope you can recover the late fee though.

 

[Teacher Terry]

I would go in person with a copy of the statues. You won’t be any worse off than if you had not tried. I don’t like to be cheated so it would be worth it to me.

 

[NateW]

Thank you all for your input. Lots of good suggestions/information.

Yesterday I also called the title attorney's office and was promised a return call today from the closing attorney and will get their feel for how the County staff behaves in general in these matters (at first I too thought the title company was to collect the taxes (this is the first time I bought a house with cash), but viewing my HUD-1 proved otherwise).

Tomorrow I will visit the treasurer's office with supporting documentation and ask to speak with someone other than the clerk, explain what happened, cite the Code and politely ask that the late fee be removed and the bill reflect my name. If not removed, I'll pay the tax and fees in full and drop the matter and chock it up to a learning experience. Correct, it's not worth spending much more time on this.

Hopefully my post will alert other ERs purchasing real estate to actively watch their tax account and if not billed, download their property tax bill from the jurisdiction's web site and pay it on time. It's good to be able to help others wile being helped

 

[Chuckanut]

I would pay the everything including the penalty, then see if you can get the penalty back. I would not put to much time and effort into the process as it is probably stacked against you. My guess is wining would cost you more than $120 in dollars, time and effort.

Sometimes it's best to just Pay the $2, and get on with life.

 

[NateW]

Issue has been resolved. I just visited the treasurer's office and paid the base tax amount without penalties and account balance is $0, have receipt in hand

In this case it all depended on which county employee answered the phone. About two hours ago I decided I had better check on our personal property tax bill too, since we did not receive one for our two cars which I registered with the County within two weeks of moving in. Personal property taxes are due Dec. 5th as well. Well, I needed an account number to check online, which I don't have. So I called the number listed on the County web site and explained what happened on the real estate side, hence the reason for my call.

I then realized it was the same number I called yesterday, but a different clerk answered. After a quick check the clerk said, "This is not right, your real estate account has been assessed a late fee and interest, but you never received a bill. If you drop a check by today and see me (gives her name) I will remove all penalties. No tax is due on the cars, both are registered. You will receive a prorated bill in a month for the 3 months in 2019 you lived in the County."

Thanks again everyone who gave your input.

 

[REWahoo]

Nice outcome. Congrats on getting it resolved!

 

[CRLLS]

Great solution in the end. You investigation into the codes is exactly what I do when something doesn't work out the way I thought it should . It usually resolves any conflicts of opinion whether my misunderstanding or the other's.

 

[grasshopper]

I love a happy ending.