Developer didn't pay property tax out of occupancy fee... any examples?

[pickleberry]

Hi all

Posting on behalf of a friend...

Does anyone know of a case where the developer of a new condo took the occupancy fees from owners before closing and didn't pass on the property tax portion of those fees on to the city?
Friend could potentially be in this situation - she got a bill for a full year off the city even though she only "owned" the unit for 4 months of that year. The city and MPAC are telling her that the full amount must be paid, and to talk to her lawyer about getting it back from the developer.

As the lawyer fees could exceed the amount owing, she would like to see if this has happened before and what the outcome was before instructing.

Cheers!

 

[carturo15]

Builder never pass on the property taxes to the City, what they do is to hold the money and when the property is assessed by the city, the owner receives the bill and then the owner can recover that money from the builder. Ask your friend to contact the builder and send them the property tax bill, the builder will refund the money.

 

[simuls]

Builder never pass on the property taxes to the City, what they do is to hold the money and when the property is assessed by the city, the owner receives the bill and then the owner can recover that money from the builder. Ask your friend to contact the builder and send them the property tax bill, the builder will refund the money.

That is incorrect. I purchased from Canderel/Stoneridge in DNA and they did, when requested from the city, pass on the property taxes. We did, however, have to go after them for the remainder as most developers will keep 1-1.25% for property taxes in the interim occupancy fees when the actual tax is closer to .85%.

 

[carturo15]

That is incorrect. I purchased from Canderel/Stoneridge in DNA and they did, when requested from the city, pass on the property taxes. We did, however, have to go after them for the remainder as most developers will keep 1-1.25% for property taxes in the interim occupancy fees when the actual tax is closer to .85%.

That was my own experience with Lanterra and twice with Freed Developments. Maybe not all the builders do the same thing

 

[pickleberry]

Thanks so far for the feedback...

Regarding the developer taking it and then giving it back to you - this is what my friend was told by the city.

This makes no sense to me, why would the developer take it from you, hang on to it, and then give it back to you? It's not the developer's concern if you pay your property taxes or not - when the bill comes years later, they're long gone.
I would think they'd only take it from you if they're expected to pay it. They owned the property up until closing - it should be their bill?