Title Company Missed $1200+ In Delinquent Taxes. Buyer Has No Title Insurance. Who's Reponsible?
I sold a home last May of 2003. My taxes were being paid by the bank in the mortgage payment (so I assumed). The new owner informed me (calmly) that he has an increase of $100 to his payment to cover the escrow deficiency since May or June, 2004. Who is most at fault? Should the title company have to pay the buyer or should I be looking over my shoulder for a possible lawsuit?
looks like the increase is after the transfer of title and that is nobodies fault unless this was a sub 2 and then you look at the state of tax delinq at time of trans. But no title insurance on transfer of title got to be a sub 2.
Check it out. Lucius
Don't know nothin' bout sub to.
This was just a regular purchase. My bank was paid off and his bank took over - just a regular transfer between 2 regular people. The taxes were delinquent at the time of transfer, the title company just missed it.
I'm not a lawyer, just a RE agent in WA state, so here goes: Looks to me that the Escrow Company is at fault. Did you have an Escrow Co. perform the transfer? The Escrow company in a RE transaction is responsible to make sure ALL bills get paid, and the title is conveyed to the new owner. That's why you pay them 400 - 500+. If there where unpaid taxes, insurance, etc. at the time of closure, the Escrow company needs to pay them off. Here in WA state this can be utilities too. If you used an Escrow Co., have the new owner contact the Escrow Co and get the bills paid. The Escrow Co can lose their license if they fail to perform their duties. They are bound by the same laws that lawyers are. This responsibility was granted, the same as RE agent too, to perform lawyer tasks at the same level and standard as any attorney.
Well it seems very unlikely that a "normal" sales transaction with mortgages on both ends could be done without title insurance.
It doesn't seem unlikely that such a thing could be missed by a title co. -- happens all the time.
So, my guess is the title co. will pay.
If there really is no title insurance my guess is you are liable.
sounds to me like you acknowledged that you were (without your knowledge) behind on your property taxes. Seems to me the right thing to do would be for you to pay them - just because the title company probably should have caught your mistake, is no reason for them to be punished - after all, if they had pointed out the mistake at the closing, the money would have been taken from you right then and there.
anyway, my 2 cents. please let us know how this turns out!
I am a loan closer 'by day'. I mainly do refinances. People all the time are telling me about how they don't know that their taxes aren't paid, that the bank messed up, etc. I am a firm believer that it is your property and you should know what is going on. if your taxes are $1200 a year and the bank isn't escrowing $100 a month then as an adult individual of reasonable intelligence you should realize something is not right. If they collect $100 a month and you don't see the balance drop dramatically at tax time, you should be making a phone call.
Well, I should not have said there was NO title insurance. The buyer's bank, of course, protected themselves with a policy.
If I had an extra $1200 lying around, then I would not care. I'd simply say "Oh, let me write you a check. Sorry about the misunderstanding." Unfortunately, whatever I made on that house has long since been spent.
I know now how to go to a website and easily check my tax bill now; however, I had had that house for several years with no tax problems and my payments were on time. I think the loan closer, with "reasonable intelligence", should have caught a delinquent tax bill.
Don't know when, but I'll try to keep y'all informed as to the results.
Suggest you put this on Tax Forum as it should generate some good discussion there.
John Merchant