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Ask Legalease Your Own Question
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16215
Experience:  14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements
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We began leasing a bar in July of 2015 then purchased the

Customer Question

We began leasing a bar in July of 2015 then purchased the property in August 2015. The village of Saukville WI is not coming to us for some personal property taxes owed for 2015. The Village claims we are responsible for the entire year. Based on our accountant we are not responsible for those taxes until 2016 calendar year. The tax bill is listed as the previous owner. Please provide our next steps in straightening up this tax question. Thank you, Cindy
Submitted: 7 months ago.
Category: Business Law
Expert:  Attorney2020 replied 7 months ago.

Do the terms o the lease address this issue. If so, the terms of the lease govern.

Customer: replied 7 months ago.
The issue is related to the business personal property tax issue. When we purchased the property we also purchased the bar so it is now our business. Maybe I was not clear on that. The village is not looking to the new business owner (us as of August 2015) to pay the personal property taxes for the year 2015. There is no lease in play with the previous business owner.Please respond. Thank you Cindy
Expert:  Attorney2020 replied 7 months ago.

I see.

Customer: replied 7 months ago.
is the previous owner responsible for the personal property for 2015 or are we as the new owners?
Expert:  Legalease replied 7 months ago.

Hello there --


I apologize for the delay in responding -- I was not aware that this question was reopened until just now.


Typically these things are taken care of in writing in a written purchase agreement for the property. In the absence of such an agreement, the responsibility to pay the taxes is on the prior owner for the period he owned the property in 2015 and then on you for the time period that you own the property in 2015 (this is actually how it is usually handled at a closing -- on a pro rata basis -- the sale documents should show the two portions of the taxes owed and how much each the seller and buyer are paying). Now, if the taxes being sought are part of the business and the prior owner failed to disclose that to you then you have a lawsuit against the prior owner for the full 2015 year for the failure to disclose that these taxes are due and you are responsible for them. However, if he did disclose these taxes to you and there is nothing in writing stating how the taxes are to be treated at closing, then each of the owners in 2015 is responsible for their portion for the months each owned the bar and property during 2015. Unfortunately, in either situation, you will have to pursue the prior owner for payment of these taxes yourself because the taxing authority/assessors office has no legal obligation to do so. You see, the taxing authority is assessing the taxes against the property and not you personally and so if they remain unpaid, they will simply place a lien on your property and eventually foreclose on that lien if the taxes remain unpaid for a year or two after the assessment of the taxes. Legally, it does not matter who is the legal owner of the property because the taxing authority has the power to lien the property and foreclose on it.


My suggestion here is to send the prior owner an invoice with his portion of the taxes and ask him to pay it or you will seek legal recourse for misrepresentation and failure to disclose the assessment and imminent nature of the taxes at the closing. If he refuses or you get no response, then I suggest you either take the matter to small claims court against the former owner (depending upon the amount of the taxes, you may be able to do this simply in small claims court in your local county civil court without using an attorney) or you contact a local attorney in your area to pursue further legal action against the prior owner.


Please let me know if you have further questions. If not, can you please press a positive rating above so I will be paid for my time. I am paid nothing unless you press the middle star or the fourth or fifth star on the right of the middle star above in the ratings section. Doing so will not cost you any additional money -- it simply acts as the trigger to Just Answer to pay me for my time. THANK YOU VERY MUCH



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