Previous homeowner’s unpaid taxes can come back to haunt current homeowner. If that happens, what do you do? Without an owner’s title insurance policy, unpaid real estate taxes could come back to bite you. The key words here are OWNER’S POLICY.
When you buy a home, your mortgage company will probably require you to purchase a policy, but this is to protect them. Don’t get me wrong; I’m not talking down on that. It’s simply a good business practice by them. However, it doesn’t protect you.
You should purchase a title insurance policy as well. They are usually offered as a one-time payment during closing, and if chosen during closing can be really inexpensive. Title insurance protects you against claims and issues (taxes and liens) that existed before the date you purchased the home and that become known after closing.
If you didn’t purchase a title insurance policy when you purchased the home, you could have to pay any tax bill that surfaces or risk losing your property. To avoid paying it without title insurance, you will need to thoroughly investigate and make sure the bill is legitimate and not duplicative or in error, which costs time and money.
In some states, there are attorneys or services that help homeowners contest real estate taxes; you may want to reach out to them to help you navigate the process if you find yourself in this mess. Even then, if the tax bill is correct, you could end up paying more than the amount of the taxes owed in legal fees. Protecting yourself with title insurance is a simple but sound practice.
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