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Property Taxes and Mortgages.

Property Taxes and Mortgages.

Old Nov 19th 2009, 4:51 pm
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Default Property Taxes and Mortgages.

So, not too impressed right now. We bought a house in June and embarked on our 1st Canadian mortgage (we had a line of credit before). We asked the Realtor, the Lawyer and the mortgage broker about what we do about property taxes (a different municipality to what we are used to) EVERYONE said, it's all taken care of in the mortgage. Oh OK.

Thursday a bill of $2100 lands in our mail box - for unpaid property tax due by Dec 31. Increased by $400 as we hadn't paid by end of July. So we dutufully after lots of phone calls cancelled crimbo and paid our taxes yesterday..........So did the mortgage company. Now we are going to get a shortfall letter from the mortgage company, we will be behind on next years taxes and we had to pay extra becuase of the cock up. Just called the mortgage advisor and she is looking in to it.:curse:

SO for anyone getting a mortgage with property taxes included, check, double check and triple check you know what is happening with the taxes please. We thought we had but hey ho.
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Old Nov 19th 2009, 4:57 pm
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Default Re: Property Taxes and Mortgages.

Originally Posted by Piff Poff View Post
So, not too impressed right now. We bought a house in June and embarked on our 1st Canadian mortgage (we had a line of credit before). We asked the Realtor, the Lawyer and the mortgage broker about what we do about property taxes (a different municipality to what we are used to) EVERYONE said, it's all taken care of in the mortgage. Oh OK.

Thursday a bill of $2100 lands in our mail box - for unpaid property tax due by Dec 31. Increased by $400 as we hadn't paid by end of July. So we dutufully after lots of phone calls cancelled crimbo and paid our taxes yesterday..........So did the mortgage company. Now we are going to get a shortfall letter from the mortgage company, we will be behind on next years taxes and we had to pay extra becuase of the cock up. Just called the mortgage advisor and she is looking in to it.:curse:

SO for anyone getting a mortgage with property taxes included, check, double check and triple check you know what is happening with the taxes please. We thought we had but hey ho.

Did the morgage company not add any tax amount to your standard interest/ principal amount then, and you didnt notice? They usually do this to protect "their" investment from being taken for non payment of taxes, but I recall its something that you have to agree to too.

Sometimes the amount the mortgage company takes is based on an incorrect tax level, after all the assesment will likely change to reflect what you paid for the place at some point, but they would still have been taking something...

Did they not take a penny for the property taxes?


Given the cock up you can probably appeal against the $400 penalty, especially if this is the first you have heard of any tax demands from them.

If you bought the place in june then your LAWYER should have seen to it that property taxes for the year up to that point had been paid in full by the previous owner at the very least, so where does a $400 penalty for one months taxes comes from?

Last edited by iaink; Nov 19th 2009 at 5:01 pm.
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Old Nov 19th 2009, 5:08 pm
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Default Re: Property Taxes and Mortgages.

At a guess (it is just a guess) the taxes for the year are about $4,000. In most places there is an automatic penalty of 5% if they are paid late, and 10% if they are more than a month late.

It looks like the former owner has paid half of the year leaving $2,000 owing.

It is usual for whoever owns the property on July 1st to pay the whole year's taxes and make the necessary adjustment on the final settlement of the purchase price. This is something the lawyer should have attended to.

The bank may well be collecting property taxes but they do this in advance. Any collected from July onwards will be to pay the taxes due at the end of June 2010.
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Old Nov 19th 2009, 5:25 pm
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Default Re: Property Taxes and Mortgages.

What was happening with the taxes should have been spelled out in the mortgage documents that you signed. I am sure that you only read them to the extent that specific provisions were pointed out to you by your lawyer but, unfortunately, you would have signed the mortgage documents agreeing to or not agreeing to, how the taxes would be paid.

The realtor is likely to have been totally clueless as to the provisions of the mortgage (as the terms are outside of their knowledge) but your lawyer and your mortgage broker should have pointed such provisions out to you.
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Old Nov 19th 2009, 6:18 pm
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Default Re: Property Taxes and Mortgages.

What a horrible thing to happen. We purchased our first home last December and one of the things we had been concerned about was, of course, Property Taxes. Our mortgage broker (Tom Hogg - Free plug, if you're in the GTA, then DO chat to him, very helpful chap indeed) assured us that the mortgage payment included the property tax, and showed us the paperwork that did indeed reflect this, and it would be taken by MCAP.

I waited until March, which I believe is typically one of the times property taxes are taken and contacted Oakville's fiance department and queried wether I would be getting a bill, as obviously I didn't want to owe anything. They responded stating that according to their records, MCAP is taking property taxes on our behalf and there is nothing owing.

I have had a property tax letter from the town of Oakville, and it clearly stated no taxes were owning, and I've recently had a property tax letter from MCAP, again indicating no taxes are owing.

I agree that the Mortgage Broker should have make you clearly aware of what was happening in regards to property taxes, as that's an expense that you need to factor in when buying a house. No point buying a nice house if the property taxes are absurd.
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Old Nov 19th 2009, 7:04 pm
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Default Re: Property Taxes and Mortgages.

Similar thing happened to ourselves a couple of years back - Just about sh!t myself when I saw the bill - I took the letter to the banks mortgage person and they took care of it
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Old Nov 19th 2009, 7:54 pm
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Default Re: Property Taxes and Mortgages.

There must be something in the air right now as we got a tax bill in for $2,500. Our taxes are taken off with our mortgage but the taxes went up and our mortgage stayed the same. We phoned the Town Hall and they said our taxes were up to date, we then called the Bank and they said they had been making up the shortfall.
Anyway there was a lot of calls and a lot of blaming of each other until finally the bank had said that they had lost our paperwork so they were unable to contact us sooner. we explained that that was not our fault and they agreed to let us pay the shortfall at a rate that suits us.
So our payments went up to what they should have been anyway and we pay a little extra to cover what we owe.
God knows when it will be paid off, but at least we don't have a huge bill hanging over our heads.
You know you can appeal your Property Tax if you think you are paying to much. There is only a short timeframe in which to do this, so when you get your new assessment through early next year have a look at it and go online to see what your neighbors are paying and decide for yourself if you think your paying to much.
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Old Nov 19th 2009, 11:55 pm
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Default Re: Property Taxes and Mortgages.

One of my girlfriend's friends had the same thing happen: bank said they'd pay the taxes but didn't.

That's why we pay ourselves and don't rely on the bank to do so.
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Old Nov 20th 2009, 1:14 am
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Default Re: Property Taxes and Mortgages.

The mortgage company said we had accrued $600 towards 2010 taxes, the Lawyer has said it's not his fault, the mortgage company has said it's not their fault blah blah blah, so it's all crap really, the total years bill was for $1800, then increased to $2100 because we hadn't paid the full amount by end of July. The Lawyer did collect the previous owners share of $850ish so we got paid that out and that's all we were told about the taxes along with it's comming out of the mortgage, so it's all pants really. I think we would die if the property taxes were in the $4000 range, I have no idea how big yer house would have to be for taxes that high
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Old Nov 20th 2009, 1:25 am
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Default Re: Property Taxes and Mortgages.

Originally Posted by Piff Poff View Post
The mortgage company said we had accrued $600 towards 2010 taxes, the Lawyer has said it's not his fault, the mortgage company has said it's not their fault blah blah blah, so it's all crap really, the total years bill was for $1800, then increased to $2100 because we hadn't paid the full amount by end of July. The Lawyer did collect the previous owners share of $850ish so we got paid that out and that's all we were told about the taxes along with it's comming out of the mortgage, so it's all pants really.
You would have hoped that someone would have explained what you needed to do.

I think we would die if the property taxes were in the $4000 range, I have no idea how big yer house would have to be for taxes that high
It depends where you live. If that happens to be White Rock, BC then the answer is not very.
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Old Nov 20th 2009, 1:30 am
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Default Re: Property Taxes and Mortgages.

Originally Posted by JonboyE View Post
You would have hoped that someone would have explained what you needed to do.

Yeah you would have thought so, especially when we asked so many times and so many people as well.
It depends where you live. If that happens to be White Rock, BC then the answer is not very.
The property taxes are higher in the village than in Red Deer, I've put that down to fewer people to fund the amenities in the village - houses both about the same sizes 1200sq footish.
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Old Nov 20th 2009, 1:46 am
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Default Re: Property Taxes and Mortgages.

Originally Posted by Piff Poff View Post
The mortgage company said we had accrued $600 towards 2010 taxes, the Lawyer has said it's not his fault, the mortgage company has said it's not their fault blah blah blah, so it's all crap really, the total years bill was for $1800, then increased to $2100 because we hadn't paid the full amount by end of July. The Lawyer did collect the previous owners share of $850ish so we got paid that out and that's all we were told about the taxes along with it's comming out of the mortgage, so it's all pants really. I think we would die if the property taxes were in the $4000 range, I have no idea how big yer house would have to be for taxes that high
I take it then that your mortgage does not contain a term that the lender is to pay the taxes on your behalf. If this is the case, then the lender has done nothing wrong. The lawyer should have explained the terms of the mortgage to and your mortgage broker should have. However, you should have received a copy of the mortgage from your lawyer. I am not excusing what the lawyer didn't do and I am amazed that a lawyer told you that the taxes were included if they weren't. I would not find it unbelievable that they didn't tell you anything about the taxes.

If you do believe the lawyer was wrong, report them to the Law Society here:http://www.lawsocietyalberta.com/pub...cesspublic.cfm

Such incompetence is inexcusable.
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Old Nov 20th 2009, 5:46 am
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Default Re: Property Taxes and Mortgages.

Hi

Originally Posted by Almost Canadian View Post
I take it then that your mortgage does not contain a term that the lender is to pay the taxes on your behalf. If this is the case, then the lender has done nothing wrong. The lawyer should have explained the terms of the mortgage to and your mortgage broker should have. However, you should have received a copy of the mortgage from your lawyer. I am not excusing what the lawyer didn't do and I am amazed that a lawyer told you that the taxes were included if they weren't. I would not find it unbelievable that they didn't tell you anything about the taxes.

If you do believe the lawyer was wrong, report them to the Law Society here:http://www.lawsocietyalberta.com/pub...cesspublic.cfm

Such incompetence is inexcusable.
One thing, in BC your receive your property tax (in Vancouver twice a year) and on the statement it says "if the company holding your mortgage pays the taxes, forward this statement to them" I would think that other cities would be the same, so the lender should know the amount to be paid.
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Old Nov 20th 2009, 6:15 am
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Default Re: Property Taxes and Mortgages.

Originally Posted by Almost Canadian View Post
I take it then that your mortgage does not contain a term that the lender is to pay the taxes on your behalf. If this is the case, then the lender has done nothing wrong. The lawyer should have explained the terms of the mortgage to and your mortgage broker should have. However, you should have received a copy of the mortgage from your lawyer. I am not excusing what the lawyer didn't do and I am amazed that a lawyer told you that the taxes were included if they weren't. I would not find it unbelievable that they didn't tell you anything about the taxes.

If you do believe the lawyer was wrong, report them to the Law Society here:http://www.lawsocietyalberta.com/pub...cesspublic.cfm

Such incompetence is inexcusable.
The mortgage company DOES pay the taxes, but there has been some misunderstanding somewhere that no one is admitting to.

Originally Posted by PMM View Post
Hi



One thing, in BC your receive your property tax (in Vancouver twice a year) and on the statement it says "if the company holding your mortgage pays the taxes, forward this statement to them" I would think that other cities would be the same, so the lender should know the amount to be paid.
The fist we heard that the taxes were outstanding was this letter last Thursday.

One of the reasons we're so upset about this whole mess is that when we were buying the property, arranging the mortgage and doing everything entailed with buying a house, we ASKED and asked about the property taxes as we were buying in a different municipality and we didn't know what or who to pay the taxes to and everyone we asked said the mortgage takes care of it - which it does, we pay in extra to the mortgage to cover the taxes BUT for some reason 2009 taxes were not thought about by whoever arranges that part when the taxes are taken from the mortgage provider.

SO we have been charged an extra $400, we have used whatever is accrued for 2010, we owe for the rest of 2009 as we didn't have enough accrued, which means next years is a balls up as well, the mortgage company is about as helpful as a sack of $h1t. When we initially called the mortgage company last Friday they said we could either submit the bill to them to pay OR we could pay ourselves. We chose to pay ourselves to avoid problems next year and the mortgage company sent a wire transfer the next day. We wonder how they knew how much to pay, the village are saying they didn't tell them, we didn't tell them so it's a bit twilight zone going on.

Oh well we just have to wait for the adjustment letter for the mortgage company to arrive YAY a bigger mortgage
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Old Nov 20th 2009, 2:17 pm
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Default Re: Property Taxes and Mortgages.

Originally Posted by Piff Poff View Post
The mortgage company DOES pay the taxes, but there has been some misunderstanding somewhere that no one is admitting to.
Then it's their cock up and they will be paying any penalties.
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