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Old 12-31-2008, 08:22 PM
 
542 posts, read 1,287,720 times
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Default does title insurance cover 'after' closing issues?

Does anyone know if title insurance covers ‘unknown’ liens or other title liens after the closing? I was told that they will only cover issues that were ‘known’ that happened before the closing. For instance, if there was a lien that was against the property before closing, and the same lien happens again after the closing, then the insurance will cover this. If it’s something that the title insurance company has never heard of and occurred as a new issue after the closing, they will not cover it, but this doesn’t make sense to me, because insurance suppose to cover things that we do not know what’s going to happen? Thanks.
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Old 12-31-2008, 08:29 PM
 
Location: Seaford, Delaware
3,350 posts, read 10,057,078 times
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Ask the title company. what your saying is kind of confusing. if there was a lien and dated before closing, the title company should cover it. if it occured after closing, then they may not be responsible. also, it may be a lien that was satisfied and popped back on the title. the title company should handle that. if it's another scenario, you need to talk to the title company.
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Old 12-31-2008, 09:52 PM
 
Location: Huntsville, AL
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Any lien on the property before you purchased it should be covered by your owners title insurance policy. They run a search to make sure you get a general warranty deed / a clear title. In our contracts, the only way something isn't covered is if a lien pops up that would have been uncovered if a current survey would have been done prior to closing.
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Old 01-01-2009, 09:12 PM
 
Location: Visitation between Wal-Mart & Home Depot
8,310 posts, read 21,032,096 times
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If there was a pre-existing title failure that the title company did not catch, it seems to me that the responsibility would fall squarely on their shoulders. That's their stock in trade: Certifying marketable title. If they render a legal opinion certifying marketable title (which is basically what closing is) and you later find out that they missed something prior to your closing that has clouded your title to the property, they are vulnerable. Any new conditions after closing date will be your problem.

More information would be helpful if you are having a specific problem.
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Old 01-02-2009, 04:55 PM
 
Location: South Dakota
733 posts, read 2,771,265 times
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You're probably faced with a lien that attaches prior to filing. In some jurisdictions a mechanic or materialman's lien arises upon undertaking work and/or delivering material incorporated into the work. Proof of the lien does not have to be filed for a specified number of days - some as long as 4 months. There are a host issues involved ranging from craftsmen's lien waivers, estoppel affidavits of the seller, and faulty searches by the title examiner. You need to clarify EXACTLY what the lien is, when and how it arose, and consult with an attorney having familiarity with title issues. The short answer is the title insurer may OR may not be on the hook.
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Old 10-04-2011, 08:39 PM
 
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I purchased a property and a month later was notified of a betterment lien in the previous owners name that was attached to our property tax. I recieved a second letter that we could either pay this lien in full or have it attached to our property so the decision was made to attach it to my taxes because I didn't have the money to pay the amount in full.
I placed a claim with my title insurance for this lien and they denied due to it not being included in the cost of the home prior to closing, is there anything I can do?
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Old 10-05-2011, 06:11 AM
 
20,798 posts, read 31,338,303 times
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Quote:
Originally Posted by rmboobiffa View Post
I purchased a property and a month later was notified of a betterment lien in the previous owners name that was attached to our property tax. I recieved a second letter that we could either pay this lien in full or have it attached to our property so the decision was made to attach it to my taxes because I didn't have the money to pay the amount in full.
I placed a claim with my title insurance for this lien and they denied due to it not being included in the cost of the home prior to closing, is there anything I can do?
This is the reason you BUY title insurance, to cover things that come up like this after the closing. The title insurance company should have caught this. I will tell you that they will do everything they can NOT to pay this. You may need to take this to your state insurance commissioner for help.

We had an issue, VERY minor but still. There is a tract of land attached to our property that was quick deeded to our lot about 4 or 5 years after our house was built. We bought the house from the original owners. We talked AT CLOSING with the previous owners about this parcel of land and what happened and why we own it now. Well, about 6 months later we get the property tax bill, in the previous owner's name. I called the title company to let them know that they never got this changed over and they refused to do anything about it because it wasn't "part of the sale"--well, duh, is was SUPPOSED to be part of the sale which is why I am calling you. It wasn't worth fighting for the $48 it cost to file the change with the county and the taxes run $12/year on that parcel.
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Old 10-05-2011, 10:42 AM
 
Location: WA
4,027 posts, read 12,945,798 times
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It depends upon the situation but in my case the title company agreed to indemnify me when the taxing authority decided a year after the sale to go after taxes owed by the previous owner. Because there were suits filed I had to take care of the immediate threat (tax debt sold to a collection firm) and it took me 11 years to get a settlement from the title company (which did not cover any interest or damages).

I still think title companies charge way more than can be justified but lawyers and bureaucrats have make it a required commitment of your money.
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Old 03-13-2012, 01:16 PM
 
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I have a somewhat similar problem: I purchased a home and then two weeks later received a $600 charge for a "minor privilege." This is an annual fee tied to the property because it has oriel windows and a balcony that stick out onto public property. Because the annual fee had been paid the year before, it didn't hold up the title on my house, so the title company says they're not at fault. I paid for a survey and yet nobody let me know about this annual fee -- neither the seller nor the title company. Is there anyone that should be liable for this?

It seems like a major flaw in real estate if information like this can be withheld from buyers when they take the normal steps to ensure they know what they're getting into. I don't have an attorney yet, but I feel like this isn't something I should get stuck with and I'm not sure how to proceed...

Last edited by jc1900; 03-13-2012 at 01:30 PM..
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Old 03-13-2012, 07:10 PM
Status: "Don't worry, be happy..." (set 5 days ago)
 
Location: Out there somewhere...
27,913 posts, read 20,426,780 times
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Basically Title companies, before delivering a deed to you, are suppose to clear up all problems related to that property before the recording and handing over the deed to you. If something arises after the deed is delivered to you that was a problem before the sale, the title company is responsible for clearing that up. If a problem arises that you caused after the deed delivery then you are responsible. But remember you paid for title insurance and that should cover it. If you feel you're being wronged then file a complaint with your State Insurance Commission or get yourself a good real estate lawyer.
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