All Forum Posts by: Peter Walther

 Thanks for the info, but am I correct on the limitation of liability?

I hadn't heard of FastTitleSearch.com before so I just looked at the site and saw they advertise they have a $1M O&E policy but I also saw they guarentee that:

If we omit or do not show accurate information, a full refund will issued.

I assume that means that if they miss something and you bid in reliance on their report, their liability is limited to the price you paid for the report.

So say you pay $50.00 for the report and bid $50k at a foreclosure sale relying on the report showing no other mortgages and win.  Then, six months later you're served with a suit to foreclose a prior mortgage and you tell Fast Title, I think you probably get your $50.00 back, not your $50k.  I'm not sure but based on my past experience that may be what happens.  I'd ask Fast Title to be sure.

In addition to prior lien holders you'll also take title subject to any junior lien holder who were not named and/or served in the foreclosure.  That's another reason to make sure you get a title insurance commitment before bidding to be sure if there is a problem with the foreclosure you have some ability to recover your money or have an attorney provided to you by the title insurer.  Check the commitment to make sure there's no exception for problems with the foreclosure before bidding.

While title insurance is not ubiquitous it is available in many countries i.e Canada, Mexico, England, Costa Rico etc.

I agree that a cash offer is one with no financing contingencies. I believe that even if the Buyer has a briefcase filled with twenty dollar bills (s)he can still decide not to close for any or no reason. The Seller then looks to the contract for a remedy, the EMD as liquidated damages or a specific performance suit.

I always recommend getting a survey of the property, you'd be surprised how many times it shows something the buyer wasn't aware of.

For example, the title commitment takes exception for a recorded access easement over the East 20' of the West 75' of the property and for matters that would be reveled by an accurate survey and inspection of the property.  You look at the property and see a dirt road a neighbor uses to get to his property and assume that's the easement the commitment was referencing and you're ok with it.

Two months after you close a bulldozer shows up and starts cutting in a road in a different location than the existing road and you're told its for a different neighbor who holds the recorded easement.  You then get a survey that shows the location of the new road is right where the recorded easement provides for it.  You then find out the dirt road was put in years ago so that neighbor now claims to have a prescriptive easement.  You submit a claim to the title underwriter who denies it because of the exception.  You're on your own to deal with the problem.

This is based on my experience deals with title insurance claims for a long while.  Good luck.

In general, if there is a total failure of title and it is a covered matter, you would receive the amount of insurance shown on the policy. However, if you're convinced the foreclosure is defective why would you want to get involved in what could be protracted litigation and tie up your money?

I'm believe your question refers to property insurance but make sure you consider what transferring title may do to coverage under your title insurance policy if you received one. If you own the property by yourself and you are the named Insured under the policy, conveying it to an LLC that you do not own by yourself may result in the LLC not being an Insured under the policy. Take a look at the definition of Insured in the Conditions and Stipulations section. Good luck.

By South Florida I assume you mean Miami-Dade, Broward & Palm Beach and not including Monroe County which is a world unto itself.  I bought my first house in Key Largo in Monroe but have never owned anything in the other three counties.  I have handled title insurance claims in all four and recommend you tread carefully.  It's easy to be parted from your money, particularly if you're out of town.

A good place to look for information on the property market is The real Deal.  

https://therealdeal.com/miami/

Good luck

Your situation is not that unusual though that won't make you feel any better.

You can try contacting the title insurer and explain the problem but keep in mind you are not their insured, your lender is. The underwriter may also take the position that as long as payments are being made on the Deed of Trust (DOT), their insured has not suffered a loss so they don't need to do anything. In addition, if the title policy that was issued to the lender has an exception for the "1st" DOT then title is as they insured it and they probably won't do anything.

You didn't mention if the DOTs to the same lender or different ones or if you worked directly with the lender or a broker.  In either case you can try contacting whoever you worked with to get the loan and see if they can help.

I would also make sure that I had sent a certified letter to the attorney explaining the problem and demanding resolution by a date certain.  I would also contact the NC Bar Association, first to see if anyone has filed a complaint and then to file one myself. 

https://www.ncbar.gov/lawyer-discipline/