Title Insurance Claim Denied -- Need Advise

[Maryann Fialdini]

Purchased a condo and received an estoppel from HOA - had multiple special assessments identified plus seller's HOA unpaid dues listed and all were paid from proceeds at closing. One month later, lawyer for HOA wrote me a letter saying they made a mistake in computing the special assessments and $62K more is owed. I filed a claim with WFG title insurer and they just denied me saying: "Title insurance is not a casualty insurance that covers every possible loss, nor is it a guarantee of any facts regarding title to real property. Title insurance does not represent the status of title to real property, and an insured cannot rely on the title policy to represent the title. An insurer owes no duty to investigate the condition of the title and makes no representation as to the condition of the title inissuing a title insurance policy.

EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses resulting from the terms and conditions of any lease or easement identified in Schedule A and the following matters:

4. Terms, covenants, conditions, easements, restrictions, reservations and other provisions, including provisions which provide for a private charge or assessment and also provide for an option to purchase, a right of first refusal, or the prior approval of a future purchaser or occupant, according to that specific Declaration of Condominium"

But

There is also ALTA 4.1 CONDOMINIUM--CURRENT ASSESSMENTS ENDORSEMENT which states: The Company insures against loss o rdamage sustained by the Insured by reason of: Any charges or assessments provided for in the State condominium statutes and condominium documents due and unpaid at the Date of Policy.

Looking for advise on next steps.

[Jay Hinrichs]

Quote from @Kevin Sobilo:

Quote from @Jay Hinrichs:

if the info was not avaliable when WFG ran title I am not sure they are on the hook for this.

I think the OPPOSITE. If a title issue exists and is known, usually title insurance will only be issued if it EXCLUDES that known issue. I have gotten title insurance in situations like this.

For example, I bought a property that had a judgement lien that was about to expire if the plaintiff took no further action. I was able to get insurance only because I agreed to exclude coverage of that known issue. I took on the risk that the plaintiff would take note of the transfer and move to foreclose. They could not foreclose previously because it was a primary residence.

I believe the insurance is for issues that are NOT known at the time of sale.

well without reading all the exclusions no way to really know.. you excluded something that was known.. this HOA is after the fact and was not known at least the way I read it.. I suspect WFG wont be paying that one.