california tax-law real-estate property
Selling property to low-net-worth buyer
<p>Suppose that someone inherited a plot of undeveloped land in a small town in California.  The town has a few houses and businesses, but is mostly comprised of undeveloped lots.  Even so, suppose this town levies property taxes to suppose the local services (fire, waste disposal, etc.) which are in excess of the market value of the property (a few hundred dollars per year).  If there are no conventional buyers of such a plot, are there any legal ramifications to selling said property to, say, an indigent buyer who has questionable means and perhaps low propensity to pay the taxes, but who could be incentivized to purchase the property for only a small loss to the seller?</p>

<p>The question seems to assume that the purpose of the sale is to avoid property tax liability.</p>
<p>First, property tax liability on a parcel of property with marginal value is generally only a tiny percentage of the fair market value of the property, and the usual remedy if the property is overvalued is to contest the valuation of the property when it is made. Property taxes on property with a fair market value of a few hundred dollars would almost never be more than $1 per year.</p>
<p>Second, the usual remedy for non-payment of property tax, if it continues long enough, is for the property to be sold for tax liens in foreclosure sale. It would be extraordinarily exceptional for a lawsuit against the owner to be pursued to collect (lawsuits against owners are used in California to collect property taxes on tangible personal property that is subject to a property tax).</p>
<p>So, the implicit motives behind the question are misguided.</p>
<p>But, a property owner is free to sell real estate to an unrelated third-party at any price the seller wants, even if the buyer can't afford to pay the property taxes on the property. The buyer takes subject to property tax liens for unpaid property taxes on the property.</p>

<p>Your job as a seller is not to vet or guarantee the ability to pay debt for a particular buyer. There are no legal problems here unless your intent is to defraud.</p>
