Posted by Alexis (CA) on October 27, 2003 at 11:25:36:
I share your thoughts.
On the other hand, I spent around $800 for title insurance and escrow fees. I thought that was supposed to give me peace of mind.
I could have done my own closing, but wanted the title company to handle all the payoffs and insure clear title.
I am still on the fence on this one. I am sure I really need the money more than the HOA :-).
Payoff Mistake ? Should I Pay It? - Posted by Alexis (CA)
Posted by Alexis (CA) on October 26, 2003 at 15:54:12:
I bought a property with title insurance. The deed has already been recorded by the title company. Escrow is closed. One and a half weeks later, my title company calls and tells me the HOA made a mistake on their demand letter. The HOA forgot to include $900 for a HOA lien and to work it out with the HOA. I specified buyer (me) would pay all liens, not the seller.
I want clear title for my buyer down the road, when I sell. Should I pay for this? Should I negotiate this amount down? I could pay this amount. However, I am not sure if this is why I bought title insurance for.
Re: Payoff Mistake ? Should I Pay It? - Posted by Robert TX
Posted by Robert TX on October 28, 2003 at 08:40:51:
Had a closing yesterday at an attorney’s office and I asked him the exact question that you have set forth. His reply was that, at least in Texas, you need to get your checkbook out. There are several points that indicate that it is now your bill to pay: (1) you agreed to pay it in your contract, (2) you would be “Unduly enriched” should you not pay it, and (3) he litigated a similar situation and the buyer ended up losing the case and having to pay the HOA.
The title company is not responsible, you probably signed a document that stated, in effect, that you recognize that the title company is only acting as an intermediary and is only responsible for items that are of record. If a third party, the HOA, makes a mistake it is not the fault of the title company.
Good Luck.
Re: Payoff Mistake ? Should I Pay It? - Posted by Kristine-CA
Posted by Kristine-CA on October 26, 2003 at 20:16:00:
Alex: I’m not an attorney, but my understanding from the title policies that I buy is that the title company is responsible for discovering any recorded liens. If it is listed on your title report, that it would seem it is covered. But I’m wondering about the gray area of the HOA reporting the wrong amount in the demand. The title company paid the amount requested and probably thinks they are not responsible. The HOA probably thinks they can correct a demand after the fact??
Wouldn’t that be like BofA deciding that amount of the payoff is different after closing of escrow.
My suggestion would be to call your title company and ask how binding the demand amount is/was. I’ve never seen a demand, but I’ve always assumed that it is a signed statement where the signer agrees that the amount stated is the amount to clear the debt. If your escrow or title officer doesn’t have the answer, then ask to speak to their legal department.
My other concern would be if the HOA would then attempt to file an additional lien for the unpaid amount.
Keep us posted. I, too, wonder what title insurance is for sometimes.
Sincerely, Kristine
Re: Payoff Mistake ? Should I Pay It? - Posted by Dimpil
Posted by Dimpil on October 26, 2003 at 16:09:36:
Was it a lien? IF so then the title company is responsible. That is why you have title insurance and paid the fee for title insurance.
Re: Payoff Mistake ? Should I Pay It? - Posted by Dimpil
Posted by Dimpil on October 27, 2003 at 04:40:36:
Kirstine:
Demands are not signed but they are binding if closed within the date and proper funds are given (per diem). Now if they cashed the check, they accepted payment in full and are SOL.
Re: Payoff Mistake ? Should I Pay It? - Posted by Alexis (CA)
Posted by Alexis (CA) on October 26, 2003 at 21:48:43:
Thanks for responding Kristine.
Yes, it was the HOA’s mistake, giving the wrong payoff amount. However, my title policy reads I am free from encumbrances, lists the specific HOA lien, and does not except that lien.
The demand is titled, ?Demand ? Account Past Due?, gives Total Amount Due, and is signed. Total Amount Due is of course $900 less than it should have been per the HOA, after the fact.
The specified HOA lien is already recorded and shows up in the title report. The HOA will not record a ?release of lien? if the lien is not paid (Although, I have not pressed them at all. Just inquired, so far).
Re: Yes, It is a Recorded Lien… - Posted by Alexis (CA)
Posted by Alexis (CA) on October 26, 2003 at 18:28:22:
Thanks for responding Dimpil.
This lien is recorded at the county recorder’s office. The lien shows on my title report with the document number.
One quirk: The amount on my title report does not show the delinquent assessments amount ($600)–which shows on the actual recorded lien.
The title report shows the smaller amount of $200 (attorneys’ fees, late charges & costs of collection in an amount not less than $200).
This is my first time using this title company. So, I wanted to build rapport. However, I think this is something the tile insurance should cover.
Obligated to Record Release of Lien? - Posted by Alexis (CA)
Posted by Alexis (CA) on October 27, 2003 at 11:12:28:
So, do you think the HOA should be forced to file a “Release of Lien” giving me clear title, even though this amount was never actually paid off?
As I stated in message to Ken SC, the delinquent assessment year shows on the demand letter. However, they mistakenly forgot to add that delinquent assessment amount to the total payoff amount. They did accept the funds and escrow closed.
Seems to me the title co. should insure my clear title and pay it off from the insurance reserves, since I bought title insurance. They can go after the HOA, if necessary. I thought I bought title insurance for them to sort this type of situation out. Although, I could be wrong.
Re: Payoff Mistake ? Should I Pay It? - Posted by Kristine-CA
Posted by Kristine-CA on October 27, 2003 at 10:04:34:
Dimpil: thanks for the clarification. I was wondering how demands could be anything but binding–how would title companies be willing to insure if lien holders can change their mind after closing. But that thing about cashing the check–good point. Hope it works out in Alex’s favor. One of the problems with an HOA, though, is that the person you aren’t paying …is you. Another thing to consider…Sincerely, Kristine
I’m not a title expert… - Posted by ken in sc
Posted by ken in sc on October 27, 2003 at 07:12:12:
But my understanding is that if the title company new about this lien, the probably had an “exception” for this on your policy, which leaves you on the hook. You basicaly bought this property subject to that lien. Read your policy and look for the exception.
Ken
Wasn’t Excepted… - Posted by Alexis (CA)
Posted by Alexis (CA) on October 27, 2003 at 10:12:23:
Please read my post to Kristine.
I did not take subject to the liens. I paid all the liens off that were on the title report per my wishes for clear title, including the disputed HOA lien.
My title policy reads I am free from encumbrances, then lists some exceptions (taxes yet not due & payable). That lien was not on the list of exceptions, but is on the title report.
The HOA demand letter shows the disputed year of delinquent assessment. However per the HOA, the $900 for that year assessment was mistakingly not added in.
Re: Wasn’t Excepted… - Posted by Kristine-CA
Posted by Kristine-CA on October 27, 2003 at 10:19:29:
Alexis: another thought after I posted above is that the HOA is technically you. If you don’t pay, aren’t you just making the overhead costs of the HOA that much greater (not to mention their legal expenses, etc.). Getting a free year of HOA dues might not be that great of deal, especially if the HOA really needs the money.
However, I agree that it’s maddening that they can’t get their act together enough to request the right amount of money on their demand.
Sincerely, Kristine