#WhyTitleMatters | Property Taxes and a City Assessment
- May 23, 2017
- Posted by: Gabbi Hruska
- Category: Industry News, Title Tips
Property taxes can be a determining factor in deciding to purchase one home over another, help determine which city or township you decide to live in or come as a complete surprise after you’ve purchased your home because of an unknown city assessment. This is yet another reason why title insurance matters and should always be purchased when closing on a home.
In simplified terms, a city assessment is a lien (until it is paid in full) that is assessed to your property due to a city improvement that increases the value of your property. Many times these are assessed to a homeowner due to some sort of street project.
Imagine you just moved into the perfect home and receive a letter in the mail from the city notifying you of an assessment for a street project that wasn’t paid for at your closing. What are you supposed to do? What can you do?
This 2012 Star Tribune article, featuring an Edina, Minnesota couple that received a letter in the mail with a $16,000+ price tag for a street project after purchasing their home one month earlier, is a great example of this scenario.
What sort of city street project could be assessed on my property while I own the home? Well, this can be any number of things:
- Street Lighting
- Sewer Improvements
Like the Edina couple mention, “If we had known about the assessment, we may not have event purchased the home.” This would probably be the thought of many if the same situation arose and has not been disclosed in and/or negotiated as part of the purchase agreement. All of the above scenarios affect your property taxes in the end, but what can you do? You notify your title insurance company because that’s what title insurance is there for. Protection.