What to do if I’m being held responsible for a previous business’s liabilities?
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What to do if I’m being held responsible for a previous business’s liabilities?
I purchased some store fixtures and inventories from a retail store that was closing down and opened a store of my own at another location under a same business name. A county treasurer showed up at my store one day and told me that the person owed the county some property taxes and I have to pay them since I pur chased equipments that had liened by the county. Would I have to pay?
Asked on June 11, 2015 under Business Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Yes, if that equipment had a lien on it from the county, you'd have to pay the taxes; the lien travels with the equipment and is an obligation of the person owning it. However, you could in turn sue the seller because 1) he was under a duty to disclose this to you, and a failure to disclose may be fraud; and 2) he also had a duty to pay the lien from the proceeds of the price you paid him for the equipment--he could not just take the money and run.
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