Title Company Error Liability

Summary

If a title company makes an error during a property sale, they typically have errors and omissions insurance to cover such mistakes. Signed documents are legally binding, and if the title company insists you owe them, you might consider seeking legal advice to review your closing documents. You could potentially file a claim against the title company for their error, but consulting a legal professional is advisable to ensure your claim is valid.

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We sold a house in January, we had a tenant. During escrow we sent title all of the security deposit, pet deposit and last months rent info. They failed to include the last months rent in the closing. And now 3 months later they contacted us and are asking us for the money. Can they do that after the transaction has been finalized
Hello Stefanie,
Based on Idaho law:
- The buyer typically assumes responsibility for all deposits when a property is sold.
- However, if there was an error during the closing process, it might need to be rectified.
Could you please provide more details about the agreement made during the sale?
We notified title during the escrow period of all deposits our tenant paid us. There were * separate ones. Title made a mistake and did not include one of them in our signing, thus it was not paid. The title company had to pay the buyer the monies. Now three months later they contacted saying that we owe them. Can they come to us after closing for a mistake they made in the paperwork. We did not fail to give them the correct amounts. They, the title company, failed to figure the closing amounts correctly and now are saying it is our fault and that we have to reimburse them.
Based on your situation, here are some points to consider under Idaho law:
- Title companies usually have errors and omissions insurance to cover such mistakes.
- If they're claiming you owe them, it's generally because they believe you're at fault.
- You may want to seek legal advice to review your closing documents and the agreement you had with the title company.
After reviewing our closing documents once they reached back out to us, they did clearly miss putting it in the final transaction. But that shouldn't be our fault. We notified them of all the deposit amounts. The escrow officers assistant was the one that failed to write up the documents we signed correctly. Once they are signed I would think it is not our responsibility.
Based on your situation, here are some points to consider under Idaho law:
- Signed documents are legally binding.
- The title company's error may be covered by their errors and omissions insurance.
- If the title company is insisting, you might consider seeking legal advice to review your closing documents again.
Thank you for the info. This gives me another avenue to research. So we could file a claim against the actual title company stating they made the error, from what I am gathering?
Yes, you could potentially file a claim against the title company, asserting that they made an error. However, it would be advisable to consult with a legal professional beforehand to review your documents and ensure your claim is valid.
Thank you.
You're welcome, Stefanie. I'm glad I could provide some guidance. If you have any more questions or need further clarification, feel free to ask. Remember, a legal professional can provide more personalized advice.