Wednesday, June 06, 2012

living through a title insurance claim is no fun

hi came across your website, which I really enjoyed reading, I have a question maybe you can help me.
I purchased a property with a small house on it right after we closed some siblings of the previous owner started fighting about it, so my title insurance company hired a lawyer and this is been in court for over 3 years, 2 months ago we were granted the motion and we won the case, but today we got a call that they are appealing, which they have 6 months to prepare if they will go to the appeal or not, my question is as follow I am pretty much fed up, i need to renovate and put in a lot of money in the house, I know normally i should wait till everything is over and done with, but its just so long and i'm living like temporary cause i didn't want to put it any money just in case we lose,...
so now my question is, what are my rights? can I put in the money fix up the property now? and hold the title insurance responsible if something goes wrong, or do I have to put my life on hold for so many years?
thanks appreciate if you can help me with any answers,


Hi, S:  Wow, that's a frustrating case.  This is the unfortunate side of title insurance claims.  A title insurance claim process can really interfere with your use and enjoyment of a property, even when you win.

I can't give you any comfort about improving the property.  That's a risk assessment you have to make.  Your title insurance is limited to the amount of your coverage and if you improve the property beyond that amount, you won't be covered.  Keep in mind that the legal fees have accrued against that coverage.

I hope folks who read about your case realize all title insurance is not equal. The type of search and knowledge and motivations of the examiner that laid the foundation for the title insurance policy play a major role in the level of risk assumed by the consumer. It is entirely possible that in your case the examiner was highly competent and simply made an error.  It is also possible that there was an automated search or a title examiner operating under a conflict of interest. 

I wish you well and if it were me, I'd be interested to know if the title agency was owned by any interested party in your transaction.  If so, and if I felt like taking this to a different level, I'd try to find out if the examiner found the risk of sibling interest and chose to insure over it without discussing the risk with you.  The conflict faced by examiners working in closely affiliated businesses is huge and one we have a hard time getting regulators to grasp.  These examiners may be working for a company that is getting a large sum of money from the real estate transaction and if the examiner finds a problem that will cause the buyer to walk away, could cost them their job.  I'm not saying this is what happened in your case but it's the most likely reasoning that comes to my mind other than simple human error, which could just as easily been the case.

Thanks so much for reading and sharing your story.  I do hope it works out for you and you can relax and enjoy your home.


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