Title company closes deal when property is foreclosed.

[Eugene Mar]

Hey everyone, 

I've got a really good one here.

My property was sold for 42k and net proceeds came out to 35k.  The Title company did all the work with a warranty deed and Title insurance.  Funds were wired to my account.  The next day the Title company emails me and wants the money back.  Apparently they messed up and the property was foreclosed by the county and was then forwarded over to the Land Bank.  I called the Land Bank to see if I could redeem the property but it has already been sold to a developer.  I've bought and sold many properties in the past and this case is very bizarre.  My attorney tells me that Title screwed up and it's their responsibility to clean up this mess.  The property is in Detroit.  I'm Canadian.  Legally speaking, do I keep the money and tell Title to fix the problem on their own?

[Wayne Brooks]

Well, You can not sell something that You do Not own.  Yeah, the title co. missed the tax foreclosure, but in the end You sold something you didn’t own......of course you owe the money back.  You could have plead ignorance, but now that you know, it would be fraud and you absolutely will lose this battle....you got the money, the buyer got nothing.  Remember, You gave the Warranty Deed.

And for those who will say “the buyer can collect from the title co.”, that may be true but if so, guess Who is going to lose the suit to pay the title co. back.....the one who collected the money for a property they didn’t own.