Property taxes: Get it right
It is critical that real estate agents always confirm details of a property using appropriate sources and never make an uninformed estimate on their own about any information in the listing notes. Details, such as property taxes, are particularly important to most buyers when deciding whether to buy a property.
In a recent RECO discipline decision, a real estate agent listed a home where the final property tax levies were not yet assessed because it was a newly constructed home. The agent posted on the multiple listing service (MLS) that the annual tax amount was $1800.One week prior to the closing date, after an agreement of purchase and sale had been signed, the buyer discovered that the actual tax assessment was $5500 per year – more than triple the amount the agent had estimated.
RECO’s discipline committee found that the agent failed to take reasonable steps to determine the correct tax amount, advertised an incorrect amount, and breached the REBBA Code of Ethics. The committee ordered the agent to pay a fine of $10,000 and take the RECO MCE Advertising and Compliance and Ethics course series.
The key learning from this and similar cases is for registrants to use only reliable sources to confirm information that is to be published or shared about the property. The most reliable source is the current tax bill issued by the municipality. If the seller cannot provide it, municipalities will, sometimes for a fee, provide the most current tax bill. It’s also important to keep a record of what was relied upon for the accuracy of the information.
If there is any uncertainty about the accurate amount of property taxes, it’s important to make that clear in listings and to prospective buyers before they make an offer. However, a registrant must not use an estimate or disclaimer to abdicate responsibility to get the facts.