Tuesday, March 31, 2015

Be a savvy consumer. Pay attention at closing.

The company was given $3100 at our closing last June and neglected to pay the School Real Estate Taxes that said money was put in escrow to pay. When we received an invoice showing it was unpaid, the school district had added penalties and fees. We contacted Diane at The Closing Specialists and were told that it was our fault and that we had to pay the fees and penalties. Unacceptable. She then said she would remit the $3100 when she felt like it rather than when it was due. Bad business.

Hi, Sherry: As we discussed yesterday, the escrow agreement you and your husband signed at closing clearly stated in bold that you were responsible for getting a tax bill to our office. The statement we received yesterday was the first statement we received. The amount owing was higher than the escrow balance. The escrow agreement also said that you were responsible for any amounts owed beyond the amount held in escrow. Upon receipt of your statement while talking with you on the phone, you were clearly upset and told me you would not pay the difference. I said we might either send the full $3100 to the tax authority or might hold it and wait for you to send us the difference. 

After having a couple of minutes to think about the best solution to your problem, we cut a check in the amount of $3100 and mailed it to the tax authority. I then sent an email to the email address we had on record, I believe it was your husband's email and let him know we mailed the check and suggested that you send the remaining balance to the tax authority to avoid the filing of a lien against your property. 

All actions performed by The Closing Specialists in this regard are according to the terms of the escrow agreement. We understand after having received your email later in the day that you are in the title business operating as an abstractor. This puts you in an unusual position as a consumer. Unlike most consumers you are professionally familiar with the tax collection process in PA and also, as an abstractor trained to read documents carefully with close attention to detail. Every document related to a real estate closing is important. We do understand that there are many documents that will be signed at the time, however, that doesn't mean that the terms of the documents can be ignored. Thank you for taking the time to post this on Facebook. I'll include it in a discussion on our blog, Title Insurance Talk. It's always good to remind consumers to pay attention. Every party in a transaction has their part to play. 

Best wishes. Diane Cipa

Saturday, March 14, 2015

Did the condo come with parking spaces or not?


We bought a condo unit that has had two indoor parking spaces since this building went condo in 1985. This unit was a REO foreclosure by the VA and was subsequently listed for sale by a local agent. The MLS listing showed the two spaces clearly identified. After our cash offer was accepted and we got the various forms to review and sign, we noticed that there was no mention of the parking spaces and we and our agent questioned the selling agent, and the title company that the seller has selected to handle the closing, several times about the lack of this inclusion. They kept assuring us that there was no problem. We went to closing prepared to refuse to close unless it was resolved.

> The closing attorney went to great pains to tell us that everything was above board and that detailing the specific parking spaces was not done anymore on the deed as they could be bought and sold outside of the unit itself. He said as long as the deed had the statement “including limited common elements” then we were protected. So reluctantly we went through with the closing, signing the various pages that required signatures. He then made copies, assembled the various documents with the signature pages and gave us the whole package in a folder. He had a copy of the deed from the previous foreclosed owner that he also gave us. I know the proper thing to do was to just walk away from it until things were resolved but relied on his objective statements that it was done properly. A number of warning flags should have caused me to be suspicious, especially when he did not go over every document in detail before having us sign it. Evidently, he felt that the subject had been already discussed in detail so there was no need to go over the deed.

Once we got away from there and I reviewed the deed, I saw that there was no mention of “including limited common elements” at all. I saw a number of items of concern on the deed. The preparing attorneys stated that they did no title search nor made any representation about the accuracy of the legal description, as well as the legal description omissions. I determined to do my own title search and went to the Alexandria VA courthouse and tracked each deed for this unit. Every deed back to the original condominium document assigning indoor parking spaces to specific units had the appropriate comment  “…, including limited common element parking spaces 96 and 97, established by Condominium Instruments…” in the legal description, except one. To my surprise, and which had been omitted from discussion at the closing, there was another deed between the deed of the foreclosed owner and mine, which I should have known if I had thought about it. When the VA foreclosed there was a Trustee’s Deed prepared that made no mention of the “including limited common elements”. I can only assume that the attorneys that prepared the deed that we got at closing used the Trustee’s Deed from which to copy the legal description.

Now if I can find this with a little looking at the courthouse then anyone doing a title search before issuing owners title insurance would have easily seen the difference and taken corrective action, or so it seems to me. There is no indication that a title search was made, or if it was done, was done incorrectly.

I relayed this problem to the management office of the condo assn. and they sent me a strongly worded letter stating that since I cannot prove ownership of the two spaces, I am prohibited from using them and they will keep watch that I don’t disregard their letter. I have copies of the previous deeds, the letter from the condo, the title insurance, the HUD-1, and am going to write a letter to the titling companies, the VA, the selling agent, and anyone else that might have an interest in this situation.

That is my story, do you have any concerns that I should be aware of, or strategy to follow?


Hi, D.  First,please be aware that I am not an attorney and am not offering legal advice. To be certain you are covering all bases, I would suggest hiring an attorney to straighten out this mess.

That said, the first thing I would do is to look at the title insurance policy if you have received it. It may take up to 60 days after closing to get the policy.  If you don't yet have the policy, look at the title insurance commitment.  You should have received this prior to closing so you would have a chance to review what property was to be insured and what the exceptions are.  If you did not receive a title insurance commitment prior to closing, report this to your state insurance department.

If you have either the policy or commitment in hand look for the page that describes the property.  It might be called Schedule C.  The legal description should identify the condo unit and typically would also make note of common elements included with the unit.  If you see common elements listed there then the title insurance company has insured that whatever is described there is part of what you own.

I would also get a copy of the Declaration of Condominium.  Look to see how your unit is described in the Declaration.  There may be a specific reference to the common elements assigned to your unit.

Don't get hung up yet on the condo association comments because in my experience very few condo managers or officers actually have read or understand the condo documents.  You need to read them yourself and either on your own or with the help of an attorney get them to understand what common elements go with your unit.

Don't get hung up on what deeds say.  If the Declaration says that each unit gets two parking spaces, then you get them even if it's not in your deed. Every deed does not have to specify all information that is already on record at the courthouse.  For instance, if you buy a house in a plan, the plan says there are roads. Your deed doesn't have to describe the roads, they are already described on the plan document.  As long as the deed describes the correct unit and the correct condominium, then whatever the Declaration says you get, you get.

Now, it is entirely possible that the REO people who marketed the property had incorrect information about parking spaces.  If that is the case, when you look at the Declaration, you will find that you don't get parking.  Perhaps it is sold separately.  In that case, your attorney will help you sort out who did what wrong and how it can be fixed.

The key to everything is reading the Declaration document - including any revisions or amendments.

Good luck and I would like you to report back to let me know if the parking was in the Declaration.  I'm kinda curious!


Thursday, March 12, 2015

Hello and happy spring!

Just wanted to let you know I'm still living.  ;)

I have a post ruminating about an incident with a counterfeit cashier check. Will get that one up as the story matures.

In the meantime I've been answering lots of questions by email.  Keep em coming!