Who do I sue first?

[Nat C.]

I purchased a property in Dade County in 2013. The property was on the same parcel as another condominium building.

The purchase contract stated this in the additional terms-

“Seller, as a condition subsequent to closing, shall remove and sever the subject properties from the condominium regime.”

When I recently went to sell the building, the buyers attorney informed me the land was never separated from the condominium with the city. Furthermore the city will not allow the separation as it would not meet their size and setback requirements. The buyer therefor backed out of the sale.

After extensive investigation, it was discovered that the sellers attorney executed the separation of the property with the county but not with the city.

The city will not issue any permits for work on the property unless it rejoins the condominium association.

Rejoining the condominium could trigger them to ask for backpay of 7 years HOA dues. It will also reduce the value of the building as it will be tied to a HOA and have ongoing fees payable.

I am trying to decide the best course of action forward.

1. Make a claim with the title insurance company because I feel they never should have issued title insurance on the property to begin with. I am unsure if I can make a valid claim and would value any feedback here.

2. Request the seller and his attorney hire a zoning attorney to battle with the city and obtain a variance to allow the plot to be legalised.

3. Sue the seller alleging they had an intention of fraud. I would argue they were aware the city would not allow the separation due to the size and setbacks, hence they sold the property and said the severance would be done after the sale. I am not sure how much I would try to claim in damages though?

I purchased the building for 80k. Funds spent over the years adds up to 40k.

The recent contract I had to sell the building was for 150k.

[Peter Walther]

The first thing you should do is submit a claim to the title insurance underwriter, not the agent that sold you the policy.  Assuming its a Florida Modified 2006 form ALTA policy the place to submit a claim should be found under Conditions 18 of the policy.  There may also be an online claims submission web site, try searching the underwriter's name and "claims" to see if you can find it.  I would also pull out a copy of your title policy and look at the legal description under Schedule A 4 and see how the property is described.  If it says a part of the condominium described in the declaration of condominium for XYZ Condominium as recorded in Official Record Book 1234, Page 5678, Public Records of Miami-Dade County I think there's a good chance there will also be an exception for the Dec of Condo on Schedule B and the underwriter will deny coverage because they insured the property as part of the condo.  If those two things are not there, it may be covered.

This sounds like it wasn't a run of the mill sale.  Were you represented by an attorney at closing?  If so I would immediately contact him/her.

If the release of the property was a condition of closing I would expect the settlement agent, who probably issued the policy, would have addressed the requirement so I would also contact them and ask how.  Along those lines, look at the title commitment that you should have received in advance of the closing and see if there is a Schedule B-1 requirement for the release from the Dec.  If its not there I suspect the policy will describe the property as above.

If it all goes south you're going to need a good real estate attorney to fix this.  I don't know what you paid but the repair probably won't be cheap.  If you need a referral I've retained an attorney in South Florida to fix many complex title related problems I'd be happy to refer you to.  Good luck.