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Property taxes assessed on a single tract of land which is later subdivided into individual lots are due and payable with respect to the lots even if the lots were not assessed individually.
The seller, Trinity Homes, LLC’s tract of land was assessed on March 1, 1999, with taxes to become due and payable in May and November of 2000. The seller subdivided the tract and sold a lot to the buyer, Frank Fang, which was assessed on March 1, 2000. The transaction closed on March 3, 2000. The seller drafted the purchase agreement, which made the seller responsible for all taxes and assessments due and payable with respect to the real estate at the closing and provided that it would pay the first installment due after settlement. In 2000, the seller paid the May and November installments. The buyer claimed that the seller was also responsible for the May 2001 installment because it was based on the first assessment of his land as a separate lot and was therefore the first installment. The trial court determined that the tax provision in the Agreement was ambiguous and construed the agreement against the seller.
Was the seller responsible for the May 2001 installment on the basis of the ambiguity of the tax provision in the Agreement?
The appellate court reversed the decision of the lower court, finding that the contract was not ambiguous. The tract assessed in 1999 included the lot later bought by the buyer. The entire tract was subject to the taxes for the entire tract as of the closing, and the May 2000 payment was the first installment due and payable. The May 2001 bill was the third installment and was the buyer's obligation.