Does a New Owner Have to Pay Debt Owed to the City from a Previous Foreclosed Owner

[eba28]

My question involves a foreclosure in the State of: Texas

I am unclear on how foreclosure law works and what rights lenders have to seek reimbursements from future property owners.

The city I live in recently sent me a bill because my house falls in a Public Improvement District (PID). The PID ordinance was passed in 2003. The house was built in 2006 at which time the owner had the choice of either paying the full PID at closing or pay it out over 20 years with a high interest rate. The previous owner chose to pay it out over 20 years, and then never paid any of the 2006, 2007 or 2008 payments. The owner was then foreclosed on and in mid 2009 I purchased the house.

The bank and Title company I purchased the foreclosure from stated at the time there were no liens on the house. I have an 80/20 mortgage and both mortgage companies also told me the same thing.

I called the city asking about this bill they sent and they informed me that the bill had not been paid for the above mentioned years and they told me I am required to pay for those years even though I was not a resident at the house. They also informed me that there were 3 liens on my house for these unpaid bills. They said if it was a foreclosure then the title company should of taken care of the liens and previous bill and since they didn't I am required to pay.

My question is: Am I responsible for the unpaid bills for 2006, 2007 and 2008? Is my title company required to pay that bill? I thought that when a property was foreclosed on, the money from the sell goes to the 1st lien holder, then 2nd, and so on until all funds are gone. The rest of the liens on a property are just loses by the lenders.

If this is true, am I responsible for ANY of the PID bill since the agreement of how to pay this bill was established with the previous owner who was foreclosed on?

I am unclear on how foreclosure law works and what rights lenders have to seek reimbursements from future property owners. If I am entitled to pay this bill then I will do so, but I do not feel I am responsible to pay for property bills for years I wasn't even living at the property.

When I informed the city of this situation and how I do not wish to pay for the previous years owed, the account collector said she would have to pass my information up the chain to see how to proceed.

Any help on this topic so I can close this matter with the city would be greatly appreciated.

Thanks.

[SChinFChin]

Generally, tax leins survives a closing, a foreclosure, so it is still open and outstanding.

After this, there are a few other issues. First, did the bank sell it "free and clear of liens" as a condition of the sale. If they did, then, they are the ones to pay.

Second, if they did not sell it free and clear of liens, but represented it is clear of leins, it is a different issue. In this case, they might have relied on an incomplete title search. However, it all depends on what type of title search they conducted.

Third, the issue is if YOU conducted an independent title search yourself. I have bought foreclosures, and banks had told me it is not necessary to do my own, since they have done it already. My attorney begs to differ, so we indedpendantly did our own. If you did, then if YOUR title company missed it, they be on the hook.

Finally, the deed you have would not be a full warranty deed, so the seller, i.e. the bank , could say they do not guaranty "no liens", and not meant to be.

If I were you, contact a local real estate attorney for guidance on these issues.

BTW,the home I live in currently I bought as a foreclosure, and my next door neighbor bought his as a foreclosure, but from another bank, unaware there were tax leins, and "free of tax liens" is not a condition of his sale. It was for me via my bank. He got hold of ann attorney, but nothing could be done.

He was stuck paying off over $20,000 in tax liens.