Property Q&A in 92880>Question Details

Shaqeen54, Home Owner in California

They added mello roos taxes to our home 18 months after living it! is that legal? we do not have this information in writing and no one told us.

Asked by Shaqeen54, California Fri Apr 1, 2011

We bought a new home in October 2009. Our taxes are impounded monthly. we bought the house for 414,000.00 in Eastvale 92880 at a fixed rate. This past March 2011 our monthly payment jumped $900 and when we asked about it, escrow said that we underpaid our taxes for the year before and our taxes doubled from 4500k to 9k a year due to mello-roos. We chose to pay off the late taxes over 5 years but it still raised our mortgage by $500! My problem is that no one told us that we had mello-roos or that this form of taxes should be expected at a later date. We would not have purchased in this area! Is this legal??? What can we do about it? The city is in total shock...

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Answers

6
Unfortunately, there are so many disclosures and unfamiliar concepts to the buyer of a home that most have difficulty really understanding what is disclosed and what is not by the time they close. A good agent and a good lender can go a long way to alleviate this confusion.

I can tell you that there is a necessary disclosure that tells you about the property in terms of earthquake zones, flood zones, fire zones, etc......and mello roos/special assessments. It should be in your paperwork.

Another necessary disclosure informs you that you will eventually have an adjustment in your taxes. "Supplimental Tax Bill". This is because you pay taxes on the former assessed value until the new sale is processed with the county assessor. This should be foreseeable.

Your question should be brought to an attorney. Agents and Brokers don't have the authority or knowledge to properly advise you on this situation. It's possible that a lawyer's assistance will not require up front out of pocket costs to you.
Web Reference: http://coronasbesthomes.com
0 votes Thank Flag Link Sun Apr 10, 2011
You've received some erroneous information regarding Mello Roos/Supplemental Taxes.

Talk to an area expert to get more information.

Good luck,
Cameron
0 votes Thank Flag Link Sat Apr 2, 2011
It sounds like you didn't have a buyer agent representing you & that you went straight to the builder & used one of their onsite agents. None of that is generally bad, however that onsite agent still has to follow rules & be ethical, they are after all, licensed real estate agents & do need to follow the Code of Ethics rules. It should have CLEARLY been laid out for you what fees were for the community or for the city/county, namely property taxes.

Your mortgage lender (especially if you used a Preferred Lender for the builder) should have known about the Mello Roos & should have included this fee ON your Good Faith Estimate which they must give you by law. Your ability to qualify for the loan includes weighing your income to debt & this Mello Roos tax IS a part of your total payment & total debt liability for a monthly mortgage payment.

It's all about what the agent "should have know, could have known" & did not tell you or make it clear to you. At the very least the onsite agent should have had you initial a paragraph specifically pertaining to Mello Roos tax & its' relation to base property tax.

I think you should hire an attorney & try to sue for Non-Disclosure. I don't think you're going to get the builder to pay your Mello Roos tax for the next 30yrs, but maybe you could win a few years worth. If the payment is too high for you, maybe you'll need to sell. I'm sorry this happened to you, I hope you win your case.

Feel free to email me directly for an attorney referral. Take my email address down anyway, I would personally be very interested to know if you do win a settlement for non-disclosure.

EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
0 votes Thank Flag Link Fri Apr 1, 2011
Shaq -

Please review your paper work and make sure you received a supplementary tax disclosure. Mello Roos and the Bond Act of 1915 should have been disclosed. Sometimes, these disclosure reports are included in the complete Natural Hazards and Geological Survey report along with other local disclosures of the city or county the property is in.

When you purchase a home, you are prorated the property tax rate of the previous owner (seller). This bill may be significantly less than what you will be assessed as the new owner based on an increase value. At closing you pay the seller's rate for the remaining tax record. Then the county re-assesses the tax rate based on purchase amount and sends you a supplemental tax bill. Although you have impounds for the initial rate, the impounds will have to be adjusted and therefore increased when the supplemental tax bills is received. This is a critical part of impounds and tax assessment that is normally explained by the escrow coordinator or the loan officer.

If you can't find your copy, your agent or the broker will most likely have a copy. The disclosure is a part of the California required and there is a formula within the disclosure for calculating the supplemental portion.

Note the following link for other California required disclosures.
http://www.dre.ca.gov/pub_disclosures.html

CJ
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Fri Apr 1, 2011
Unfortunately you had an agent who did not help you out..part of jour job is to make sure we know hoa's and special assessments...I will tell you if you had a preliminary title report ,tax information would have been in there. You can always try to sue, but I don't think it will hold up if you have the report was given to you..
Celeste Pafford
Pafford homes
951-317-5571
0 votes Thank Flag Link Fri Apr 1, 2011
Hi Shaqeen54,

I have seen this happen before. I would check back in your paperwork for something you signed about your taxes. More than likely the mello-roos was always there but your lender did not account for it in your impounds so they were not pulling enough out to put in your impound account to cover the taxes during tax season. Check with the builder, they should have copies of your file at the corporate office. You may also hire a Real Estate attorney to review the documents.

good luck
0 votes Thank Flag Link Fri Apr 1, 2011
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