Saturday, 27 of May of 2017

Category » Real Estate Law

Real Estate Taxes in Kentucky

One of the most confusing parts of a real estate transaction is who pays the property taxes, when those taxes are due, how to pay the taxes, and how much tax will be due. I hope this guide will help you understand how the process works.

ASSESSMENT DATE/CALCULATION OF TAXES

In Kentucky, taxes are assessed each year on January 1 by the local Property Valuation Assessor. The property owner of record on January 1 is the person in whose name the tax bill will be issued. This means that if you buy your property in the middle of the year, the tax bill will come out in the name of the prior owner and NOT your name. Hopefully you will receive the tax bill at the proper address, but it is a very real possibility that you may not.

Keep in mind that it is the buyer’s obligation to determine what taxes are due and to pay them at the end of the year. If you buy property, you cannot depend on the PVA and Sheriff to send you the tax bill. You need to affirmatively seek out the taxes you owe and pay them in a timely manner.

The PVA calculates the tax bill based on the tax rate applicable to the property in question. For instance, if you live in the city limits of Murray, your tax rate is different than if you live in Hazel. And each city and county has its own tax rate as well. Marshall County’s tax rate is going to be slightly different based on whether you live in Benton or Calvert City. And Graves County’s rate is going to be different from Lyon County’s rate.

Here are the links to the various PVA offices to help you determine what your tax liability will be.

Calloway County PVA

Marshall County PVA

Graves County PVA

Lyon County PVA

Trigg County PVA

TIMELINE FOR MAILING OF TAX BILLS AND PAYMENT WITHOUT PENALTY

After calculating the amount due on each bill, the PVA has a record of the taxpayer and sends out the tax bills to the last known address for each taxpayer in the fall of each year.

Here in Calloway County, the tax bills are sent out on October 15 and can be paid with a discount by November 15. The deadline to pay without penalty is December 31, and the Calloway County Sheriff’s Department here in Murray even has access to the current year’s tax bills online at its website.

For instance, in Marshall County, the tax bills are sent out on October 1 and can be paid with a discount until November 1. The deadline to pay the tax bills without penalty remains December 31. You may pay your tax bill by mail or in person at the office of the Marshall County Sheriff in Benton, Kentucky.

If you live in Graves County, your tax bills will run on the same timeline as Marshall County. The bills will be sent out around October 1 and can be paid with a discount until November 1. As long as you pay your tax bill to the Graves County Sheriff in Mayfield on or before December 31, there will be no penalty.

Most of the surrounding counties are on a similar schedule. If you live in Western Kentucky, Trigg County taxes can be paid to the Trigg County Sheriff in Cadiz, and Lyon County taxes can be paid to the Lyon County Sheriff in Eddyville.

WHO IS RESPONSIBLE FOR PAYING TAXES AT CLOSING?

Now that we know when the taxes are due, how to find out how much is owed, and where we go to pay our taxes, the question always arises – who is responsible for paying the taxes at closing?

Unless instructed otherwise, I will prorate the taxes due at each closing I conduct. This means that for most of the year, the seller will pay the buyer an amount equal to the estimated portion of their taxes for the year, as of the date of closing. Until the tax bills come out, we don’t actually pay the taxes due at closing, we just give the buyer the seller’s portion so the buyer can pay them when the tax bills are out.

From the time the tax bills are sent out in October until the end of the year, at closing I will either pay the taxes due and prorate the amount between buyer and seller OR give seller a credit for the taxes which they have already paid. If you are selling property during this time of year, please be in communication with our office so that we can determine whether we will pay taxes at closing or if you are going to pay them ahead of closing.

I hope this guide has been beneficial in helping you understand how real estate taxes work in Western Kentucky. After closing thousands of real estate transactions over the years, I would love to be the real estate attorney who helps you close on your next property. Feel free to call me at 270-761-4558 or email me at greg@gregtaylorlaw.com if you have any questions that I did not cover in this guide.


New welcome video for Greg Taylor & Associates website.

Check out our new welcome video for the Greg Taylor & Associates website!


Hazel Office Grand Opening

We were so thrilled to have so many people come to the Hazel office grand opening. The new office in Hazel, Kentucky is now open at 403 Main St, Hazel, KY 42049. Thanks so much for all your support!

The crowd at our Hazel ribbon cutting


Coming soon – Hazel law office

A big part of my story starts in Hazel, Kentucky, where my mother, Peggy, was born and raised. My grandfather, Bill Forres, owned and operated the U-Tote-Em grocery store in Hazel for over 30 years, and one of my first jobs was stocking shelves at the grocery store. I have many fond memories of working with D-Daddy, as we called him, and the ladies in the store.

I have been so glad to see the recent investment in Hazel and wanted to make my own contribution. I am happy to announce that I will be opening up a law office in Hazel at 403 Main Street and will serve clients in both Calloway County and Henry County, Tennessee on a part time basis from that office. As I am licensed to practice law in both Kentucky and Tennessee, I hope to be a local alternative for people in Hazel and Puryear. I believe that having a lawyer in Hazel will be a real benefit to the community.

We will be opening this Spring and look forward to seeing old friends and making new ones in Hazel. If you have a need for a real estate lawyer, probate lawyer, estate planning lawyer, or business lawyer, feel free to call my office at 270-761-4558 or email me at greg@gregtaylorlaw.com and I will be happy to help.


FEDERAL: Juror’s use of internet research results in juror misconduct and new trial in taser death case

Source: FEDERAL: Juror’s use of internet research results in juror misconduct and new trial in taser death case


New Legislation on Wrap-up Insurance And Indemnity Clauses

By Edward B. Lozowicki and James G. Higgins

Owners, developers and major general contractors are ramping up their use of wrap-up insurance policies on building and industrial projects. When sponsored by an Owner, wrap-ups are dubbed  Owner-Controlled Insurance Program (“OCIPs”). If the general contractor sponsors the wrap-up, it is termed a Contractor Controlled Insurance Program (“CCIPs”). These policies offer significant cost savings to owners and generals. Traditionally, bid packages required the general contractor and its subcontractors each to carry liability insurance and to indemnify the Owner and name it as an additional insured. This arrangement has been criticized as requiring costly duplication of coverage, and causing needless litigation over indemnity rights. Wrap-ups seek to avoid these consequences by affording liability coverage to all participants on a project under a single policy. However there have been problems with wrap-ups such as inadequate policy limits and gaps in coverage. And the controversy over contractual indemnity clauses continues.

To address some of these problems California has enacted a new law, Assembly Bill (“AB”) 2738, which affects wrap-up policies in residential, commercial, and public works construction. It also restricts indemnity clauses in residential projects. In light of the increased use of wrap-ups and continuing controversy over indemnity clauses, AB 2738 will likely have an immediate effect. AB 2738 is codified in California Civil Code sections 2782, 2782.9, 2782.95, and 2782.96.

On new for-sale residential projects which commence construction after January 1, 2009, AB 2738 places restrictions on self-insured retentions (“SIRs”); and requires disclosure of other policy terms. SIRs are limited to a “reasonable” amount but such term is not defined. No premium contribution or SIR allocation to contractors or subcontractors is permitted unless several disclosures are made, for example: the policy limits, the scope of policy coverage, the policy term, and the basis upon which the deductible or occurrence is triggered by the insurance carrier. Moreover, the party obtaining the wrap-up must disclose an estimate of the available limits remaining under the policy. However if the policy is a multi-project or “rolling” wrap, such disclosure could prove difficult, if not impossible, to make accurately. Further, indemnity clauses between participants in the wrap-up on any residential project are unenforceable for claims covered by the policy.

Separate disclosures are required for public works projects and non-residential projects put out for bid after January 1, 2009. For wrap-up policies on these projects, the bid documents must clearly disclose the total amount or method of calculation for subcontractor premiums. The named insured shall also disclose policy limits, exclusions, and the length of the policy term.

In addition contractual indemnity provisions on new for-sale residential construction contracts executed after January 1, 2009 are restricted. Indemnification for reimbursement of insurance or defense costs for claims unrelated to a subcontractor’s scope of work is unenforceable. In addition a subcontractor owes no defense or indemnity obligations until the builder or general contractor provides a written tender of the claim to the subcontractor. Upon tender arising from the subcontractor’s scope of work, the subcontractor may either: (1) defend with counsel of its own choosing and maintain control over that portion of the claim against the builder or general contractor to which the indemnity applies. Written notice of this election must be made within a reasonable time and no later than 90 days after receipt of tender. (2) Alternately, a subcontractor can pay within 30 days of receipt of an invoice from the builder or general contractor, no more than a reasonable allocated share of the builder’s or general contractor’s defense fees and costs on an ongoing basis during the pendency of the claim. Ironically this defense-election provision may lead to higher litigation costs because multiple subcontractors, having cross-claims against one another, could also be paying for a portion of defending third-party claims against the builder / general contractor based on the latter’s reasonable allocations.

AB 2738 may create some conflicts. For example, what is the scope of an insurer’s defense obligation? The legislation states that it does not affect the holding of Presley Homes, Inc. v. American States Insurance Company (2001) 90 Cal.App.4th 571, which held that if the insurer has a duty to defend any portion of a claim, it is obligated to defend the entire claim. But the indemnity provisions of AB 2738 invalidate for-sale residential construction contracts that require the subcontractor to insure, indemnify, and defend the builder/general contractor for claims not arising from the subcontractor’s scope of work. Will insurers be permitted to refuse a defense to an insured subcontractor which is sued for claims which it is not required to defend under AB 2738? This new law could well lead to more litigation over such issues.

This article was originally posted on Sheppard Mullin’s Construction and Infrastructure Law blog, which can be found at www.constructionandinfrastructurelawblog.com.

Authored By:

Edward Lozowicki
(415) 774-3273
ELozowicki@sheppardmullin.com

and

James G. Higgins
(415) 774-2926
JHiggins@sheppardmullin.com

Source:
New Legislation on Wrap-up Insurance And Indemnity Clauses