Legal Question in Real Estate Law in California

It depends on the terms of your contract, your escrow, and the deal with the seller's lender for the short sale. In a normal escrow, taxes and assessments that are prorities over the mortgage are paid first, the mortgage is paid of second, and any balance goes to the seller (though of course in a short sale there is no balance). Just make sure that is what is going to happen in your escrow, and that the seller's lender knows that what they are agreeing to accept is net of the back taxes and Mello-Roos facilities district assessments. You should also make sure that your escrow instructions say not to close unless seller delivers title clear of all taxes, assessments, liens and encumbrances. That should cover you, and in fact should all already be in place.

Property taxes and assessments under Mello-Roos are liens against the property and will survive a change of ownership unless paid. In ordinary real-estate purchase-and-sale transactions, liens are paid in escrow, including mortgages, taxes, judgments, and so forth. In a short sale, things are a little less predictible in most areas of the deal's negotiation, terms and documentation.

First, you are supposed to be able to rely upon your agent and broker. You are paying them a commission to represent you and to use their skills and knowledge to protect you from avoidable problems, They are fiduciaries, and can be sued if they fail to look out for you. I would ask for a written promise that the house will be free from liens.

Next, I would want the deal to be closed through an escrow with a licensed and reputable escrow holder which will prepare or at least examine all the documents, and I would want title insurance. Is there an escrow? Have you received a preliminary title report? Will you be getting title insurance? If so, what exceptions will it show?

If you are going through escrow, you can also ask the title officer or closing officer assigned to your deal to explain whether the taxes and assessments will be paid at closing, and by whom, and where that shows in the closing estimate and other papers.

As a standard practice, a buyer is entitled to receive title free from liens, or at least free form undisclosed liens and liens the buyer has not agreed to assume. However, short sales vary from deal to deal, and it is possible someone has designed a deal in which these liens are passed along with the property.

If neither your agent and broker, nor the escrow officers, can give you comfort, maybe show the deal package to a local real-estate lawyer. A quick review should not cost more than a couple hundred bucks.

Property taxes attach to the property and follow the property. Taxes have priority over any mortgage. Mello-roo's are property taxes and attach to the property. Before you purchase this property you need to have a title report to determine exactly what you are purchasing. Consulting with a local attorney regarding the purchase would be a good investment in your peace of mind.