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COA affirms judgment in property-tax dispute

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The Indiana Court of Appeals released an opinion today dealing with a topic that gives many homeowners headaches - property taxes. The appellate court held as a matter of law regardless of when the assessment of the real property was actually completed and the tax statements issued, the March 1 statutory assessment date controls the operation and effect of a tax provision in a real-estate purchase agreement.

In Van Prooyen Builders Inc. v. Earl L. Lambert Jr. and Mildred Lambert, No. 45A04-0811-CV-662, Van Prooyen Builders appealed the trial court's monetary judgment in favor of the Lamberts for real-property taxes owed under their real-estate purchase agreement, in which the Lamberts closed on their home July 6, 2006. The tax provision of the agreement specified who would be responsible for what taxes and stated all real-estate taxes assessed against the property after closing shall be paid by the buyer, regardless of any reassessment.

The parties disputed whether, because of the "late" assessment of real property in Lake County, their agreement required the proration of 2006 taxes payable in 2007. At the time of the closing, the county hadn't assessed the property for 2006 taxes, and the Lamberts didn't receive credit for any part of those taxes.

They sought more than $1,500 from Van Prooyen or the property's tax liability prorated from Jan. 1 to July 5, 2006. The trial judge ruled in favor of the Lamberts, finding the tax provision in the agreement was contrary to public policy and void.

The Court of Appeals noted that many counties have experienced delays in the implementation of the new trending assessment system, which has caused uncertainty and inconveniences in the payment of their real estate taxes. Based on Indiana statute, March 1 of each year the state acquires a lien against taxable real property, even if the tax amount is unknown, wrote Judge Edward Najam.

But the fact the lien amount is unknown on the date of closing doesn't abrogate the statute and doesn't preclude the parties from contracting to allocate responsibility for the unknown tax liability between the buyer and seller, he wrote.

Even though Van Prooyen was personally liable for the 2006 taxes payable in 2007, the statute also allows for agreement to other terms in a contract, which is what the parties attempted to do within the tax provision.

The first two sentences of the tax provision are unambiguous; however, the last portion dealing with all real-estate taxes assessed after closing shall be paid by the buyer disregards the statutory definition of "assessment date" and conflicts with the two previous statements in the provision, wrote the judge. Because the parties didn't define "assessment date" in the agreement to mean the actual assessment date, the only date of relevance is the date provided in statute.

The tax provision's last sentence means the Lamberts would be responsible for satisfying any tax liens against the property that attached after they acquired the title, Judge Najam wrote in affirming the trial court judgment.

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  1. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  2. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  3. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  4. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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