Real Estate Agent · Cleveland, OH · Member since 2017 · 184 posts · 253 votes
Delighted to receive 5 offers when we put our Cleveland rehab up for sale this spring! Needless to say, it went for well above asking price. So I called the title company to start service and to my dismay, I come to find out there was a 30k lien on the property when we bought it! Fortunately, my title insurance company said they will clear up the lien but said it's a process that could take "5 days to 5 years"
Moving on... we let the buyer and her 2 huge dogs move into the house until we can deliver a clean title. She pays a tiny fraction of the market rent. I'm worried she might walk and I'll be starting at the beginning if this thing drags on.
My question is this: Is the title company that missed this lien of record liable for damages if this thing falls apart? After all, my livelihood is renovating homes and most of my capital to start the next flip is tied up in that house.
If the insurance pollicy addreses the title issue you only have theoretical damages. I don't even know if that will get you into court. Even if it does that is going to be hard to prove. You are not going to get any money because of a minor pain in the butt dealing with this transaction.
Now if it literally takes 5 years to get resolved, you may have a real issue to fight over. You have to chose your battles in life. Most are not worth fighting. My guess is you are not even close to that point and not likely to get there. So relax and focus on somethiing more productive.
Did you get title insurance when you purchased the property? Presuming you did the prior title company is on the hook. Depending on the type of deed you received the prior owner is probably also responsible.
The prior title company may have found something that allowed them to insure the property. They may even gotten a release that is in their files. Has the new title company contact the last one. Is the last one willing to indemnify the new title company?
@Ned Carey WFG Title Insurance policy was purchased and they will honor our claim. My question is can the title company be held liable for damages due to negligence on their part?
If the insurance pollicy addreses the title issue you only have theoretical damages. I don't even know if that will get you into court. Even if it does that is going to be hard to prove. You are not going to get any money because of a minor pain in the butt dealing with this transaction.
Now if it literally takes 5 years to get resolved, you may have a real issue to fight over. You have to chose your battles in life. Most are not worth fighting. My guess is you are not even close to that point and not likely to get there. So relax and focus on somethiing more productive.
@Ned Carey WFG Title Insurance policy was purchased and they will honor our claim. My question is can the title company be held liable for damages due to negligence on their part?
No.
This is a contract issue. If there is a genuine title problem they are obligated to resolve it... nothing more.
Delighted to receive 5 offers when we put our Cleveland rehab up for sale this spring! Needless to say, it went for well above asking price. So I called the title company to start service and to my dismay, I come to find out there was a 30k lien on the property when we bought it! Fortunately, my title insurance company said they will clear up the lien but said it's a process that could take "5 days to 5 years"
Moving on... we let the buyer and her 2 huge dogs move into the house until we can deliver a clean title. She pays a tiny fraction of the market rent. I'm worried she might walk and I'll be starting at the beginning if this thing drags on.
My question is this: Is the title company that missed this lien of record liable for damages if this thing falls apart? After all, my livelihood is renovating homes and most of my capital to start the next flip is tied up in that house.
This is why we have Title Insurance Policies. As for litigation and receiving damages no, I see no way you'd win that. Also as a side note I do not recommend allowing the buyer to move in before title transfer going forward.