Oregon 30-Hour Real Estate Law Practice Test

What should a real estate professional do regarding property taxes?

1. File the property tax return for clients

2. Check the title report for property tax liens

3. Negotiate property taxes with the local government

4. Notify clients of property tax increases

The correct answer is: Check the title report for property tax liens

Checking the title report for property tax liens is essential for a real estate professional because it provides vital information regarding the property's financial standing. Title reports will reveal any existing liens, including those related to unpaid property taxes, which can affect the property's title and the buyer's decision to purchase. Being aware of property tax liens prior to a transaction is crucial since these liens can create a legal obligation that would need to be settled before the property can be sold or transferred. If these liens are not identified and addressed, they can result in ownership complications or additional fees for the new owner. Therefore, ensuring that the title report is reviewed for these liens is a fundamental responsibility of the real estate professional, helping to protect both buyer and seller from potential financial pitfalls associated with unpaid property taxes. In contrast, filing tax returns is typically the responsibility of the property owner, while negotiating taxes is generally handled directly between the property owner and the government entities involved. Notifying clients of tax increases is also important, but it comes after ensuring they are fully informed about any potential liabilities such as liens that could affect their investment.