Any Contingency Title Insurance Attorneys?

Question

Hey guys, I had recently purchased my first apartment for Airbnb about 3 years ago.

After I purchased the unit, the City of Miami Beach had sent a notification about my unit having unsafe structures violations and work without permits. The city was going after the previous owner for 6 years before I purchased it. The last owner racked up fines of about $130,000 and I had to pull permits to clear the violations. Cost me about $30,000 to clear everything.

Turns out the title company we selected did a poor job and let all of that slip by. Luckily we had purchased title insurance. And I reached out to the title insurance and let them know the situation I went through and that I wanted to recoup my expenses.

They denied my claim and said because it was not "City of Miami" public record, they cannot take my claim. But the property was purchased in City of Miami Beach and it was on their public record.

I don't have the money to pay a retainer and ongoing attorney's fees. I know I have a strong case I just don't have the funds to keep spending. I was wondering if I could come to you guys and you would know anyone that does these cases on a contingency. I'm not fully sure what the structure is called when you take on the case with no pay, win the claim, and take a percentage of the earnings.

I would appreciate any help, suggestions, or recommendations I could get from you legal professionals.

Thanks so much for everyone's time reading this!

Stuart Udis · Answer

Was the lien was filed the day after you settled on the property or was the lien filed before you took ownership? In your original post you were contacted about unsafe structures and  work completed without permits, now you were contacted the day after settlement about liens. The facts pattern is not clear but absent a lien at the time you settled there’s ordinarily not coverage. Might have a disclosure claim against the previous owner nevertheless you’re going to continue to spin your wheels looking for an attorney willing to take this on as a contingent matter. All that’s clear at this point is you found out about the issue over 3 years ago but you’re not clearly explaining whether there was a title defect when you took ownership.

Stuart Udis · Answer

@Mario Pons You purchased the property 3 years ago at what point did you become aware of the violations and address them? I’m not familiar with Miami but in most municipalities fines either remain as such and don’t run with the land as a lien does or becomes a lien only after a period of time lapses (highly dependent on the municipality). If this was merely fines when you settled and not something impacting the title of the property than that’s ordinarily not covered by title insurance.

What makes the fact pattern worse for you, absent a lien being missed when the title company completed their search is if 3 years went by where you were the owner without identifying the violations before correcting them and during that timeframe liens were filed. It’s a stronger fact pattern that you were negligent as the property owner than anything done by the title company.

This doesn’t sound like a strong case and certainly not a fact pattern that would interest contingent based representation. The lesson here is to understand the license and inspection standards where you buy property, understand the scope of title insurance and conduct thorough diligence for aspects that fall outside of title searches

Mario Pons · Answer

@Stuart Udis Well we were contacted by City of Miami Beach the day after we closed letting us know about the lein. We spent the last 3 years mitigating the violations/fines in between rentals. The case just closed a couple of weeks ago with the city and we have been looking for attorneys for this.

Stuart Udis · Answer

This ordinarily would not be covered by a standard title policy. Code violations, unsafe structures and unpermitted work are generally excluded unless there was a lien filed against the property. If the fines became recorded liens that’s a different story but you did not confirm that was the case.

Title insurance covers defects affecting ownership or title, not the costs of bringing a property into compliance with building and permitting requirements. Also, contingent representation is generally reserved for other types of engagements. This is ordinarily something that would require retainers and progress billing if there’s more to the fact pattern that was omitted that could lead to coverage issues.

Mario Pons · Answer

@Stuart Udis Hi Stuart! Thanks for your time. Yes the fines did end up becoming a lein and we had it removed while we worked on closing out the violations. But isn't it the title company's fault that they completely missed all of those violations and fines before closing?