Also related: What’s the deal with mail-away closings?
Also related: What’s the deal with mail-away closings?
So you sold your house this year, but property taxes are still in your name? Did you get the actual bill and wonder if you should pay it? Well, no need to worry! This is perfectly normal, and everything is just fine.
Here’s the thing. The property tax bills weren’t available when you sold your house. If they were, they would have been collected for and paid at closing. But when you sold your house, they weren’t out. And since most tax offices don’t release the yearly bills until autumn, this happens for most closings.
That’s why there are prorations. If you look at your settlement statement, you should see a credit from the you to buyer; and this represents your portion of the taxes. Everybody’s responsible for their part of the taxes, after all!
When the bill finally does come out, the buyer is responsible for paying the entire amount that’s owed. If you actually received the bill, all you need to do is forward it on to the buyer.
So why would the bill still be in your name, even though you sold the house? That’s just how the tax offices work, honestly. Property tax bills are always sent with the name of whoever owned the property on January first of that year. If you sell your house before the bills come out, the bill will still be issued in your name, and the tax office won’t update their records until the next year. No worries!
A Mail-away Closing is one in which one or more of the parties is most often, though not necessarily, out-of-state and asks if the closing documents be emailed to them and then executed in front of a notary or other signing service. Unfortunately, the ethical permissibility of these types of closings is suspect at best and we really can’t use mobile notary services for our closings. It’s just how Georgia’s legal ethics rules are.
You see, Georgia is an attorney state. Real estate closings are considered the practice of law and must be conducted, and all the documents signed, in the presence of a Georgia lawyer.
In fact, the Georgia’s State Bar and Supreme Court have consistently held that a Georgia attorney must be physically present at closing:
[A] lawyer cannot delegate to a nonlawyer the responsibility to “close” the real estate transaction without the participation of an attorney. Formal Advisory Opinion No. 86-5 also provides that “Supervision of the work of the paralegal by the attorney must be direct and constant to avoid any charges of aiding the unauthorized practice of law.” The lawyer’s physical presence at a closing will assure that there is supervision of the work of the paralegal which is direct and constant. Supreme Court of Georgia, Formal Advisory Opinion 00-3. (Emphasis added).
The Supreme Court of Georgia additionally wrote:
…[W]e have issued formal advisory opinions which confirmed that a lawyer cannot delegate responsibility for the closing of a real estate transaction to a non-lawyer and required the physical presence of an attorney for the preparation and execution of a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt). Supreme Court of Georgia, In Re: UPL Advisory Opinion 2003-2. (Emphasis added).
Not only that, but the Ethics Committee of the Real Property Section of the State Bar of Georgia states that an attorney must
“[a]ttend the closing of the transaction. An attorney must be physically present at the closing of a transaction and may not telephonically supervise a nonlawyer officiating at the closing.” Ethics Committee of the State Bar of Georgia, Residential Real Estate Closing Procedure Handbook. (Emphasis added).
Not only is an Georgia lawyer’s presence required when closing documents are signed, the Georgia Supreme Court approved an advisory opinion by the Georgia State Bar’s Standing Committee on the Unlicensed Practice of Law finding that the preparation and execution of a deed of conveyance by a non-lawyer represented the unauthorized practice of law:
[W]e have consistently held that it is the unauthorized practice of law for someone other than a duly-licensed Georgia attorney to close a real estate transaction or to prepare or facilitate the execution of such deed(s) for the benefit of a seller, borrower, or lender. Supreme Court of Georgia, In Re: UPL Advisory Opinion 2003-2.
Ultimately, this means that an attorney would not be satisfying his or her ethical obligations by merely sending closing documents to be signed in front of a mobile notary or other similar service. Closing documents simply must be signed in a Georgia attorney’s presence.
So you bought a house and just received a bill for the whole year of property taxes? No need to worry! This is perfectly normal, and everything is fine.
You see, the property tax bills weren’t available when you bought your house. If they were, they would have been collected for and paid at closing. But when you bought your house, they weren’t out. And since most tax offices don’t release the yearly bills until autumn, this happens pretty much every time someone buys a home.
That’s why there are prorations. If you look at your settlement statement, you should see a credit from the seller to you; and this represents their portion of the taxes. The proration amount is based on the last available bill, and the credit reduces the amount you otherwise would need for closing. Everybody’s responsible for their part of the taxes, after all!
When the bill finally does come out, you are ultimately responsible for paying the entire amount that’s owed. If you have a mortgage, most of the time all you need to do is forward the bill to your mortgage company. They’ve already been collecting escrow in anticipation of paying those taxes. If you own your home free and clear, then you should go ahead and pay that bill – but know that the seller contributed their portion at closing.