Bulletin: KY2015001

Dear Associates:

We have experienced some claims lately involving Jefferson County, KY properties where the assessed property value has been appealed. Statutory law in Kentucky allows the property owner to pay taxes on the amount they believe their property should be assessed at while the appeal process is underway. If the result of the appeal process is ultimately that the new PVA-assessed value prevails, then a delinquent tax bill is issued for the difference between what the owner actually paid and what should have been paid using the new value. In the meantime, properties that are the subject of an appeal can be transferred to a new owner, who is then insured by Stewart Title. When the delinquent tax bill is received, the new owner makes a claim on the title policy.  

After meeting with Matt Golden in the County Attorney’s office, we can offer some guidelines to help prevent this issue in the future.  First, at the commencement of an appeal, PVA has agreed to file a document indexed under the property owner’s name and titled “Real Property Taxpayer’s Opinion of Value.” These documents are recorded in the Executive Order Book in the Jefferson County Clerk’s Office, and are designed to provide notice that there is an ongoing appeal of the property’s assessed value. Although PVA attempted to record these documents in the past, they were very behind due to the deluge in appeals, and the documents weren’t always of record at the time title exams were conducted. We have been assured that this situation has been remedied, and that the documents are now being timely recorded. Please pass this information along to your title examiner, and if you find such a document of record, please take exception in your commitment/policy to the appeal, any potential reassessment of the property value, and any resulting tax liability. It may be possible to ascertain the status of an appeal and address possible delinquent taxes by use of escrowed funds and indemnities, but any attempt at this should be authorized by the local Stewart office.

Matt Golden was able to provide the attached spreadsheet [LINK HERE] listing properties that he has identified as causing the majority of the problems – typically where the owner has been through foreclosure or bankruptcy. Please check this spreadsheet as a starting point. If the property involved in your transaction is listed, we recommend that you contact Matt Golden directly at 502-574-3350 for appeal status/taxes owed. Matt has indicated his willingness to provide guidance as to these properties, due to the complex nature of determining the exact appeal status/back taxes owed. You may also contact the local Stewart office for further guidance. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter. 

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