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mathgirl

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Posts: 2
Reply with quote  #1 
Hi, I have a question about the legality of my lease.  I am concerned that I might be booted out without much notice.

My landlord, who lives on the west coast, is renting his house on the east coast to me.  It's been discovered that he has been claiming homestead exemption on the home for several years while not living in the home.  Does this illegal tax action make my lease illegal and therefore void?  Does this mean if the tax auditors go after him that I might be on the street?

Thanks,

Mathgirl

OHlandlord

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Posts: 3,809
Reply with quote  #2 

Just like the landlord not paying his mortgage, not paying the correct taxes will get HIM in trouble.  It has no effect whatsoever on your lease.  By claiming a homestead exemption, he has been getting a break on his property taxes for the house you live in.  However, the owner of the property is supposed to live in the house to get that tax break.  (He has been cheating on his property taxes is what it boils down to.)  The county auditor will inform him of what back taxes he owes, and what penalty he will have to pay.  This is all his problem.  As long as you follow the terms of your lease, and pay the rent promptly, he has no action against you.  The only problem you might have would be if he does NOT pay those back taxes he owes.  Then, most counties file to take the property for back taxes.  If they do this, you may have to move then.  Don't worry about this yet.  Most counties let taxes go unpaid for at least a year before they even start the process.

mathgirl

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Posts: 2
Reply with quote  #3 
Thanks for answering. While knowing that I am renting from a shady character makes me nervous I am not ready to move! I feel a little bit less nervous knowing I won't suddenly find myself on the street. I can't imagine he won't pay the back taxes. The property taxes are not insignificant in this ares (about 2K a year). Even if he's avoided paying them for 10 years (I made that number up as an example) that's only 20K in basic back taxes. And this house is likely worth about 200K. I know I wouldn't NOT pay and lose my property.

Thanks, again!
OHlandlord

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Posts: 3,809
Reply with quote  #4 
Here in OH, you also have to pay a 50% penanlty for not paying those taxes.  Following your example - if he failed to pay any of the 2k x 10 yrs = $20,000 owed + penalty of $10,000 = $30,000 he'd owe.  But remember that having had a homestead exemption, he was paying some tax, just not all of what he owed.  Here, a homestead exemption would get you a discount of maybe 25-40%.  Even if had gotten a huge 40% discount, if he paid everything else, on 2k per year he'd have just skipped paying $800 per year.  Over the same example, with penalties, he'd only owe 12K.  That's not enough to lose a 200k house over unless you are REALLY stupid.  Don't worry about it unless you get a notice from the county taped to your door or addressed to the occupant.
kurt

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Posts: 137
Reply with quote  #5 

in columbus it's 2% deduction in taxes.. that's what I get for my house and what is listed on the franklin county web site under property info. It's a mild amount out here though might be different out there..

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