I was wondering if someone experienced in dealing with title companies can tell me if I am owed money. I bought a house from HUD about 5 years ago, I fixed it up and sold it about a year later (really slow I know, it was my first rehab). Anyway about 9 months ago I got a call from an attorney who claims that there were unpaid taxes on the home that resulted in late fees and penalties for the current owners, to make a long story short I had to reimburse the current owner. It turns out that HUD was responsible for those unpaid taxes, after speaking with a business aquaintance he seems to think the title company should be responsible for this kind of oversight. Can anyone give me a little advice in this area? Who should be responsible for this situation? HUD, the title company, me?
So you are saying that there were taxes owed on the property when you originally purchased from HUD and no one noticed, not even the title company. Then when you sold the home to your end buyer the title company on that transaction also missed the past due taxes?
My first question would be are you sure this attorney and your buyer were on the up and up when they stuck you with the past due taxes and penalties? If you are satisfied this is the case it would seem to me that you have a cause for action against HUD, title company 1 and title company 2. I would consult a RE attorney in your area.
You probably received a special warranty deed, or your state’s version of it from HUD. Though it is more limited than a full warranty deed, that still means that you should be given clear title.
Your closing agent or whoever did the title search should have been responsible for the taxes in BOTH closings. You should also have purchased title insurance to hedge against any conditions (if you had a loan on this property, then that was probably a requirement) like this.
You’ll have to verify your state laws concerning, but in general, the closing agent/title search company would be held responsible for not catching the unpaid taxes. Example: I sold a property where the closing attorney did NOT allow for any taxes on the HUD. They caught their error almost two months later. They paid the taxes for that year.
71tr - For some reason the attorney I had at the time (he did the buy and sell closing) did’nt notice this or either did’nt bring it to my attention. I had other issues with him as well and I no longer use him for closings.
Roger J - I paid cash for the home so there was no loan. As I mentioned before the attorney I had at the time was not detailed oriented, so it’s not hard for me to believe that he missed details on the taxes. Thanks for the advice, I’ll get my paperwork together and speak with an attorney about what to do next.
Just thought of another question. Do I need an attorney to request a refund from the title company? If I present them the documents proving that there was an oversight along with the penalties I had to pay, would that be enough proof to qualify for a refund?
I am going to throw this out there to see if it sticks… :O)
Are title companies regulated? I believe they are. If they are, I would do (1) contact them and see if they reimburse you; (2) contact whoever regulates the title companies in your estate and see if they could help you get your money back; (3) bring in an attorney.
Another idea that just occurred to me - the buyer probably got title insurance. If you haven’t paid yet, you could tell them that they should submit a claim under their title insurance.