Canadian Real Estate/mistake at closing
I have just been informed that the taxes on my property that I sold, were not paid up to the completion of the 3rd quarter installment.My lawyer did the disbursements based solely on information that I supplied. I gave the receipts for the 1st 2 installments. I am told I gave a verbal commitment to make 1 more payment. I did not make that payment. Now I am being asked to reimburse this money plus penalties and interest.I do not remember that commitment to pay that installment, but it is possible that I did do it.Is not my lawyer responsible to check with the tax office at closing, to insure all amounts are correct before closing and disbursing funds.
When you sell or buy the responsibility of the two lawyers is to make a ledger of adjustments and make sure that both parties are treated fairly. The vendor's lawyer usually make this up. If you had been living there and did not pay the taxes(before the closing date) then the buyers lawyer is going to want that shortfall. I think it is quite fair that they make the request and that you pay it if you were living there at that time. If it was just a few days or weeks over then they would pro-rate it. If it was an honest mistake then I do not feel that penalties as warranted. As for interest, it can not be much and they probably feel they have been slighted. You want to avoid being sued as this can be very expensive for you, much more than the interest they probably want.
Your lawyer would be the best one to advise what to do but I would advise any of my clients to just pay what the lawyer says is owed and what is fair and try to avoid any potential litigation.