Bulletin: GA2011005

Date:
October 10, 2011
To:
All Georgia Issuing Offices
RE:
Exceptions to Taxes and Assessments in Georgia

Dear Associates:   

The purpose of this Bulletin is to remind Issuing Agents of their responsibility to search for taxes and assessments before issuing the Policy and to standardize the exceptions currently used in Schedule B to avoid ambiguities in the Commitment and Policy with regard to taxes and assessments in Georgia

NATURE OF AD VALOREM (REAL PROPERTY) TAXES

In Georgia, real property taxes become a lien on all of the land owned by the taxpayer as of January 1st of each tax year until paid, even though tax bills may not come out until later in the tax year. O.C.G.A. §48-2-56. This lien is not divested by a transfer of any kind, including non-judicial foreclosure and judicial sale. The County Commissioner collects all taxes levied upon property upon receipt of the rate and valuation from the County Tax Assessor in the county where the property is located. The date when the tax bills go out each year and when they are due and whether the taxpayer has the option to pay all amounts due in full or in two equal installments is determined by each County Tax Commissioner and may vary each tax year. Remember that once the tax bills are issued by the Tax Commissioner in each county, taxes are "due and payable", even if amounts may be paid in installments or are not delinquent until some later date in the tax year.

NATURE OF TAX ASSESSMENTS

Generally, Special Assessments are imposed on real estate to pay for improvements such as streets, sewer lines, sidewalks, and drainage installments or for utilities, such as water and sewage. Special assessments are liens against the property benefited by the utility or improvement. Pay close attention to special assessment notices by cities. Municipal assessments are also a perpetual lien upon the land against which the assessment is levied from the date of assessment until paid.

Sometimes the Assessor fails to assess the property or assesses property without improvements then goes back and assesses the land with improvements leaving a balance owing. These "escape assessments" are also a lien upon the real estate relating back to the date of what should have been the original date of assessment. This is true even if the Assessor is at fault for failing to assess or missing an assessment. Pay close attention to property that is assessed as vacant land when there is evidence of improvements.  A lien for delinquent taxes or assessments is not void or avoided simply because the Assessor failed to assess it the first time.

Remember that just because an assessment is not filed as a lien on the record is not conclusive proof that an assessment is not a lien on the land at the date of the Policy. We refer Issuing Agents to our Bulletin GA2008002 for requirements for unpaid water and solid waste charges in Georgia

EXCEPTION: TAXES/ ASSESSMENTS FOR THE CURRENT YEAR

The exceptions for taxes and assessments in Schedule B of the policies need to be broad enough to cover both real property taxes and assessments. The Company has approved the following exceptions for taxes and assessments to be inserted in Schedule B of the Commitment and Policy:

"Taxes and assessments for the year 20__, and subsequent years, which are a lien not yet due or payable." [This exception should be used for the current tax year when tax bills have not yet been issued by the County Tax Commissioner in the county where the land is located. This exception assumes that all prior tax years are paid in full and that there are no pending appeals.]

"Taxes and assessments for the year 20__, and subsequent years, which are a lien now due or payable." [This exception should be used for the current tax year when tax bills have been issued by the County Tax Commissioner in the county where the land is located. This exception assumes that all prior tax years are paid in full and that there are no pending appeals.] 

Since property taxes are paid in arrears in Georgia and closing attorneys generally collect only for current taxes due, Issuing Agents may need to change their tax exception to comply with the statute when issuing commitments and policies in this State. In addition, we refer Issuing Agents to our Bulletin GA2011004, which discusses requirements and exceptions for Pending Tax Appeals, Re-Assessment, Interest and/or Penalties. Please contact your local underwriter if you have any questions regarding taxes and assessments in Georgia

SEARCHING PROBLEMS

It is not uncommon for the county tax digest to be imprecise and contain errors or defective legal descriptions of property. Problems can also result when land is transferred to a new owner. These problems may include the following: 

  • The tax digest description is so vague and indefinite that the property cannot be properly identified.
  • A portion of the property has not been assessed.
  • A portion of the property has been assessed in conjunction with an adjoining property.
  • A portion of the tax digest omits the description of a portion of the land.
  • A portion of the property is part of a vacated street, road or abandoned railroad right of way and a description of this portion is omitted from the tax digest.
  • The property is exempt from taxation but the tax digest does not show it as "exempt."
  • Taxes for the property are being paid by someone other than the record owner.

Please contact your local underwriter to discuss additional requirements or exceptions, which may be necessary where the tax exam reveals one of these issues.   

Remember that it is risky practice to search the tax rolls yourself or perform your tax search on the tax commissioner’s website or rely on verbal reports of taxes or assessment from the Tax Commissioner’s office. The best practice is to order a tax report from a tax service in those counties where such service is available or to use an experienced examiner, who understands proper examination of the tax digest in Georgia.
 
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.