Managing a Tax Lien through Title Insurance
Rental Property Investor · New York NY (brooklyn, ny) · Member since 2019 · 76 posts · 79 votes
Managing a Tax Lien through Title Insurance
Most Popular Reply
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
3y@Kristina Anderson PAY THE TAX LIEN Then worry about being reimbursed later.
You don't want the additional cost of overturning a foreclosure. Even if someone else ultimately pays the cost; it is time, money and risk you don't want to take.
I am not an attorney, this is not to be considered legal advice but it sure is how I would handle it.
52 Replies
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Ned Carey:
@Kristina Anderson in Maryland a tax sale foreclosure takes about six months to a year. In Maryland you can apply to the court to set the cost of redemption. This will stall the case for two months+ until the court rules on the exact amount. It is just a stalling tactic but may work in OH too.
@Frank Greg wrote
A BBB complaint might only get you a giggle from the title co here. You want to deal with an entity or body that can prosecute -- attorney general office, some governmental agency, whoever regulates their activities etc.Title companies are basically just insurance agents for the underwriting insurance company. Your insurance is actually from one of a handful of national title insurers. They would be one of the first to go to to get this resolved and put pressure on the local title company.
A title agent's role can be considerably different than that of say an auto insurance agent or life insurance agent who basically takes the application and submits it to the underwriter. A title agent frequently does the title search and exam, prepares the commitment, handles the closing, collects and disburses the funds and issues the policy. The underwriter receives their portion of the premium and hopes there isn't a claim.
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Matt Ellis:
I'm on here researching tax lien investing, and stumbled on this thread.
I don't have any prudent advice beyond what all you other experts have stated since I am learning, but this is interesting to learn mistakes like this can happen. So I am wondering from the perspective of the person who purchased the tax lien certificate (I'm assuming someone purchased it): do they not get paid there money back plus interest in this case? or maybe they get paid back their initial investment plus interest as soon as Kristina pays it off..
Or maybe there was no Tax Lien Certificate sale yet since the tax delinquent date was some time overlapping the sale of the asset to @Kristina Anderson?
The holder of the tax lien certificate is the one who would have called for the foreclosure and either receives title to the property if no one bids at the sale, is paid from the proceeds of the sale, is paid by the property owner, like Kristina, or their title underwriter in their stead, like Westcor.
- Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
@Peter Walther
The thought of someone relying on deed warranties for relief is really funny.
It seems you might have some relation or connection with whoever this underwriter is. Perhaps you are also not familiar with general warranty deeds?
This transaction apparently occurred in the state of Ohio. So what does the Ohio code say about a general warranty deed?
...A deed in substance following the form set forth in this section, when duly executed in accordance with Chapter 5301. of the Revised Code, has the force and effect of a deed in fee simple to the grantee, the grantee's heirs, assigns, and successors, to the grantee's and the grantee's heirs', assigns', and successors' own use, with covenants on the part of the grantor with the grantee, the grantee's heirs, assigns, and successors, that, at the time of the delivery of that deed the grantor was lawfully seized in fee simple of the granted premises, that the granted premises were free from all encumbrances, that the grantor had good right to sell and convey the same to the grantee and the grantee's heirs, assigns, and successors, and that the grantor does warrant and will defend the same to the grantee and the grantee's heirs, assigns, and successors, forever, against the lawful claims and demands of all persons.
The buyer here can also go after seller or seller's title insurance policy. You just don't get any type of deed! - 3yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Quote from @Frank Greg:
@Peter Walther
The thought of someone relying on deed warranties for relief is really funny.
It seems you might have some relation or connection with whoever this underwriter is. Perhaps you are also not familiar with general warranty deeds?
This transaction apparently occurred in the state of Ohio. So what does the Ohio code say about a general warranty deed?
...A deed in substance following the form set forth in this section, when duly executed in accordance with Chapter 5301. of the Revised Code, has the force and effect of a deed in fee simple to the grantee, the grantee's heirs, assigns, and successors, to the grantee's and the grantee's heirs', assigns', and successors' own use, with covenants on the part of the grantor with the grantee, the grantee's heirs, assigns, and successors, that, at the time of the delivery of that deed the grantor was lawfully seized in fee simple of the granted premises, that the granted premises were free from all encumbrances, that the grantor had good right to sell and convey the same to the grantee and the grantee's heirs, assigns, and successors, and that the grantor does warrant and will defend the same to the grantee and the grantee's heirs, assigns, and successors, forever, against the lawful claims and demands of all persons.
The buyer here can also go after seller or seller's title insurance policy. You just don't get any type of deed!I agree with Peter. A general warranty might turn out to be worth $0 and it could cost thousands in attorneys fees and costs to find that out. I’ll take the insurance.
Go after the seller’s title insurance policy? Not happening.
Gimer Law516 Reviews - Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
This is all a moot argument. You cannot expect the buyer to be responsible for your incompetence or gross negligence.
Based on the conversation here I am aware this might be a little complicated for a title company or title agent to comprehend (apparently) but in just about every state, you have to have the right and ability to sell a property before it can be legally conveyed.Conveying a property with an 11K lien on it (recorded or not) is not clear title and constitutes in this case a breach of warranty based on exactly what type of deed they got from the seller and what type of title insurance policy the seller had. The seller is liable to the buyer. Title insurer is also liable to the buyer. This has nothing to do with your 'feelings'.
Before you keep trying get into further moot arbitrary arguments on the issue or boast of your legal prowess, first figure out how to get a darn title search done and don't expect a buyer who paid you for this... to contact title company with a tutorial on how to perform title related due diligence correctly.
- 3yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
@Frank Greg It's fairly obvious from the fact pattern that the seller got paid too much due to a title company mistake. Unfortunately the overage was for unpaid real property taxes, which could cause a loss of title in the very near future. The whole point of the thread is to try to help a fellow BP member deal with this situation... and quickly.
Trying to educate readers about warranty deeds and telling somebody facing tax lien foreclosure to go after the seller or the title insurer who insured the seller's acquisition is not helpful. Try being less rude and more helpful.
Gimer Law516 Reviews - Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
I read about this nonsense all the time. There are way too many threads on here where you have many frivolous quacks, running around blatantly defrauding people and extorting money from them in broad daylight and all your suggestions usually are -- "...it was probably just a mistake..." or "...just pay and move on..."
No! They'll try the same mess with someone else.
Let me guess.. your so-called solution here is that she write them an additional $11K check and then wait around to get reimbursed for it? No! Why don't you write her an $11K check? You can make all the flimsy excuses you want... but there is a probability both the seller and the title co knew about this.
The buyer here says she had title insurance, she was advised the title insurer is liable, she filed a claim with title insurer, was also in touch with the tax department or whoever was trying to foreclose. She was then told she can in fact ALSO go after seller. If you've read the thread, whats all the phony word twisting about?
Buyer was told that an incompetence of this sort is why you would never request anything short of a general warranty deed to which your buddy who claims to be an underwriting guru apparently suggested deed type didn't matter. How about you make it a habit to be getting quit claim deeds with your purchases knowing how unreliable your title agent buddies are.
You don't need to try to scare the buyer into paying an additional $11K on a property after closing. You don't need to tell anybody to expect or to get used to title company "mistakes" of this sort.
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Frank Greg:
@Peter Walther
The thought of someone relying on deed warranties for relief is really funny.
It seems you might have some relation or connection with whoever this underwriter is. Perhaps you are also not familiar with general warranty deeds?
This transaction apparently occurred in the state of Ohio. So what does the Ohio code say about a general warranty deed?
...A deed in substance following the form set forth in this section, when duly executed in accordance with Chapter 5301. of the Revised Code, has the force and effect of a deed in fee simple to the grantee, the grantee's heirs, assigns, and successors, to the grantee's and the grantee's heirs', assigns', and successors' own use, with covenants on the part of the grantor with the grantee, the grantee's heirs, assigns, and successors, that, at the time of the delivery of that deed the grantor was lawfully seized in fee simple of the granted premises, that the granted premises were free from all encumbrances, that the grantor had good right to sell and convey the same to the grantee and the grantee's heirs, assigns, and successors, and that the grantor does warrant and will defend the same to the grantee and the grantee's heirs, assigns, and successors, forever, against the lawful claims and demands of all persons.
The buyer here can also go after seller or seller's title insurance policy. You just don't get any type of deed!I did in fact work for Westcor for a while and in fact work with many of the people there previously at American Pioneer Title Insurance Company. I also work at several other underwriters so am somewhat versed both with the nature of the various types of deeds as well as the possibility of recovering under them which in my opinion is somewhere between slim and none. Have you successfully recovered from a grantor for a breach? As an aside
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Peter Walther:
Quote from @Frank Greg:
@Peter Walther
The thought of someone relying on deed warranties for relief is really funny.
It seems you might have some relation or connection with whoever this underwriter is. Perhaps you are also not familiar with general warranty deeds?
This transaction apparently occurred in the state of Ohio. So what does the Ohio code say about a general warranty deed?
...A deed in substance following the form set forth in this section, when duly executed in accordance with Chapter 5301. of the Revised Code, has the force and effect of a deed in fee simple to the grantee, the grantee's heirs, assigns, and successors, to the grantee's and the grantee's heirs', assigns', and successors' own use, with covenants on the part of the grantor with the grantee, the grantee's heirs, assigns, and successors, that, at the time of the delivery of that deed the grantor was lawfully seized in fee simple of the granted premises, that the granted premises were free from all encumbrances, that the grantor had good right to sell and convey the same to the grantee and the grantee's heirs, assigns, and successors, and that the grantor does warrant and will defend the same to the grantee and the grantee's heirs, assigns, and successors, forever, against the lawful claims and demands of all persons.
The buyer here can also go after seller or seller's title insurance policy. You just don't get any type of deed!I did in fact work for Westcor for a while and in fact work with many of the people there previously at American Pioneer Title Insurance Company. I also work at several other underwriters so am somewhat versed both with the nature of the various types of deeds as well as the possibility of recovering under them which in my opinion is somewhere between slim and none. Have you successfully recovered from a grantor for a breach? As an aside
I doubt the Seller's title insurer would provide coverage for this as acts of the Insured and matters created subsequently to the Date of Policy are both generally excluded from coverage.
- 3yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Quote from @Frank Greg:
I read about this nonsense all the time. There are way too many threads on here where you have many frivolous quacks, running around blatantly defrauding people and extorting money from them in broad daylight and all your suggestions usually are -- "...it was probably just a mistake..." or "...just pay and move on..."
No! They'll try the same mess with someone else.
Let me guess.. your so-called solution here is that she write them an additional $11K check and then wait around to get reimbursed for it? No! Why don't you write her an $11K check? You can make all the flimsy excuses you want... but there is a probability both the seller and the title co knew about this.
The buyer here says she had title insurance, she was advised the title insurer is liable, she filed a claim with title insurer, was also in touch with the tax department or whoever was trying to foreclose. She was then told she can in fact ALSO go after seller. If you've read the thread, whats all the phony word twisting about?
Buyer was told that an incompetence of this sort is why you would never request anything short of a general warranty deed to which your buddy who claims to be an underwriting guru apparently suggested deed type didn't matter. How about you make it a habit to be getting quit claim deeds with your purchases knowing how unreliable your title agent buddies are.
You don't need to try to scare the buyer into paying an additional $11K on a property after closing. You don't need to tell anybody to expect or to get used to title company "mistakes" of this sort.
My "so-called solution" had you bothered to read the thread was in fact just the opposite:
based upon what I've seen in this arena I would just make certain that notice of the claim has been properly given under the policy and then let the insurer deal with it.
Twice in this thread you suggested that the seller's title insurance should respond to this. No word twisting. Plain as day and simply wrong.
Yes, a general warranty deed is always preferred as a buyer. Who is arguing otherwise? The problem is if you have to sue the seller under the warranty and they have no money or attachable assets the warranty is worth $0.
Gimer Law516 Reviews - Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Frank Greg:
This is all a moot argument. You cannot expect the buyer to be responsible for your incompetence or gross negligence.
Based on the conversation here I am aware this might be a little complicated for a title company or title agent to comprehend (apparently) but in just about every state, you have to have the right and ability to sell a property before it can be legally conveyed.Conveying a property with an 11K lien on it (recorded or not) is not clear title and constitutes in this case a breach of warranty based on exactly what type of deed they got from the seller and what type of title insurance policy the seller had. The seller is liable to the buyer. Title insurer is also liable to the buyer. This has nothing to do with your 'feelings'.
Before you keep trying get into further moot arbitrary arguments on the issue or boast of your legal prowess, first figure out how to get a darn title search done and don't expect a buyer who paid you for this... to contact title company with a tutorial on how to perform title related due diligence correctly.
I think you are misconstruing my suggestions. Nowhere did I write this matter is not covered under Kristina's title policy. I also think everything posted on BP is moot since it all consists of people's thoughts and opinions and has no real effect on the underlying matter. Unfortunately, it appears you are taking this conversation personally and have somehow placed me in the middle of the transaction when in reality I had nothing to do with it. I'm just providing my opinion as are you. I also try to give some of my background to give some credence for my opinion, not to boast, as if handling title insurance matters is something to boast about. Though handling as many legal matters as I have, I did learn to rarely deal in absolutes such as "the seller is liable to the Buyer", maybe the seller is maybe not. You might want to check and see if there are statute of limitation laws that prevent an action for a breach after a period of time.
- Rental Property Investor · New York NY (brooklyn, ny) · Member since 2019 · 76 posts · 79 votes3y
Just off phone with title insurance who says they will assign the claim "this week". Seeing as how we were given until Jan 15 to pay up or continue accruing fees, title insurance says we can go ahead and pay (thank god we have the money) and then send in our proof of payment to the attorney assigned to the claim. I think we will wait a day or two to see if it's assigned and then just pay it off. This is just an update for you all - I appreciate all the conversation!
- Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
You are welcome! You also need this. It might help ensure the buyer gets something more than grief for title services: http://shorturl.at/szBC1
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Kristina Anderson:
Just off phone with title insurance who says they will assign the claim "this week". Seeing as how we were given until Jan 15 to pay up or continue accruing fees, title insurance says we can go ahead and pay (thank god we have the money) and then send in our proof of payment to the attorney assigned to the claim. I think we will wait a day or two to see if it's assigned and then just pay it off. This is just an update for you all - I appreciate all the conversation!
Fingers crossed for you
- Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
@Kristina Anderson:
Just off phone with title insurance who says they will assign the claim "this week". Seeing as how we were given until Jan 15 to pay up or continue accruing fees, title insurance says we can go ahead and pay (thank god we have the money) and then send in our proof of payment to the attorney assigned to the claim. I think we will wait a day or two to see if it's assigned and then just pay it off. This is just an update for you all - I appreciate all the conversation!
Its obviously a personal decision but the general expectation that you (the buyer) are supposed to deal with this just rubs me the wrong way.
They (the title insurer) knows they ultimately have to pay... so if you were told by forecloser to pay by Jan 15 or get additional fees, you simply convey this information to title insurer's attorney and they can delay at their expense or calculate when forecloser will get payment and include whatever interest is warranted. The title insurer needs to be on the phone with your forecloser to work out whatever he has to including any late fees.The net effect of all this is the seller is walking away with $11k in unpaid tax liens which in collaboration with the title agent they somehow are getting the title insurer to pay.
- Rental Property Investor · New York NY (brooklyn, ny) · Member since 2019 · 76 posts · 79 votes3y
@Frank Greg Trust me, I feel the same way you do. Another update: I spoke to the city who says that the foreclosure is in the most early stages and this wouldn't even show up in records with the county clerk. We have some time. Based on that, and the fact that I don't care whether title insurance accrues additional fees, we are going to wait until an adjustor is assigned this week, then speak with them to determine how quickly they can get this done. We are NOT going to pay the lien - yet! I want to let them work out their due process.
Yes, this seller - it was a trio, all based in different places. There were a lot of issues during closing - and after (a water bill that never got paid to the tune of a couple thousand dollars, etc. that they actually coughed up the money for). I chalk it up to incompetence versus malpractices. The person getting the bills wasn't tell the person who was paying them, etc. etc. We haven't approached the seller about their tax lien. Likely they had NO idea how to handle taxes. You forget, guys, not everyone is suited to this business. BP would have us believe anybody can make it rich but it's not for everyone. These sellers seemed out of their league. Now, the title company. This was April 2022. I chalk it up to being overworked, too many cases, etc. And, incompetence/cutting corners. Nothing, again, malicious. We had such a hard time getting them to look at our package. Emails that went unanswered. Having to send 2nd and 3rd requests to get information. Felt like they started doing the work the day before the closing. HUD came late enough that we worried the title wouldn't have monies at closing, etc.
We laugh, my husband and I, when we hear the term "passive" income and REI. It has never felt passive! Passive is dumping money in investments and watching it grow and grow and taking dividends, etc.
(But I do like the rent rolls).
- Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
Deutsche Bank once lost a foreclosure action (as I am sure many banks have) for sending notices to the wrong address. What would be interesting is if they have your name or seller’s name on their foreclosure action. It sounds like this will likely be resolved prior.
Sellers do come in different forms. Sometimes people inherit properties so experiences can vary when you have sellers who don’t quite comprehend contractual obligations and civil tort generally.
Sometimes areas with high cap rates can often have headaches which can be an additional cost of doing business.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes3y
@Kristina Anderson it sounds like you are taking all the right actions. I hope comments in this thread were some help.
You wrote:
They at least need to own that they should have caught this and apologize for my headache.Sadly most people, especially title companies, don't apologize. I like to try to avoid, with limited success, wasting emotional energy worrying about such things.
Good luck
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Frank Greg:
@Kristina Anderson:
Just off phone with title insurance who says they will assign the claim "this week". Seeing as how we were given until Jan 15 to pay up or continue accruing fees, title insurance says we can go ahead and pay (thank god we have the money) and then send in our proof of payment to the attorney assigned to the claim. I think we will wait a day or two to see if it's assigned and then just pay it off. This is just an update for you all - I appreciate all the conversation!
Its obviously a personal decision but the general expectation that you (the buyer) are supposed to deal with this just rubs me the wrong way.
They (the title insurer) knows they ultimately have to pay... so if you were told by forecloser to pay by Jan 15 or get additional fees, you simply convey this information to title insurer's attorney and they can delay at their expense or calculate when forecloser will get payment and include whatever interest is warranted. The title insurer needs to be on the phone with your forecloser to work out whatever he has to including any late fees.The net effect of all this is the seller is walking away with $11k in unpaid tax liens which in collaboration with the title agent they somehow are getting the title insurer to pay.
You're really starting to annoy me. No one, including the title insurer, has said anything about expecting Kristina to pay. Here's a suggestion for you, next time you buy property, do it without getting title insurance and save yourself the annoyance of having to deal with it. I don't know what you do for a living, other than ***** and moan, but I have no doubt no one has ever complained about how you did your job.
- Lender · rate.bid · Member since 2022 · 324 posts · 62 votes3y
Then why do I keep hearing from you?... on postings clearly addressed to someone else. Complete the tutorial... that's what you need. I clearly ignored several of your ramblings earlier so now you keep responding to comments addressed to others. Find something better to do.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes3y
@Frank Greg you link doesn't work. Can you please send an updated link. I am curious what you posted.
- 3yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Quote from @Ned Carey:
@Frank Greg you link doesn't work. Can you please send an updated link. I am curious what you posted.
Frank doesn't know how to post links, or reply to posts properly, and as a bonus for readers of this thread he knows nothing about the tax sale or title claim process.
Gimer Law516 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.