Last Update: 02/24/16
At most real estate closings, there’s lots of paperwork. Page after page of single-spaced language that has to be reviewed, and then affirmed by the signor that they read and understood all that language in all those pages.
Which is what Barbara and Rick Borchers did when when they sold their Florida home eight years ago and paid off their mortgage. Imagine their surprise when they got sued by Bank of America, who wasn’t even the lender involved at closing, for foreclosure on that house they sold 8 years back.
Real Estate Closings: The Title Company
What the Borchers learned was that when they sat down at that real estate closing in 2003, the title company they paid to make sure they were conveying clear title apparently made a mistake. A big one, one that was clear for all to see in those closing documents, but which no one caught.
Seems simple enough: there was a typo, a one letter typo, on the deed. In the legal description of the property being sold. Instead of the deed referencing the right house, in “Bloomingdale Section R,” the deed mistakenly had the description as “Bloomingdale Section H,” which in reality was a totally different piece of real estate.
Admittedly, it was a teeny, tiny error. One letter: R instead of H. No one caught it at the 2003 closing, and no one caught it as the house changed hands three more times. Four closings in all, and no one picked it up.
Cloud on the Title Brings Florida Homeowners into Foreclosure Action Eight Years After They Sold the Home
But it was still a very big deal. Legal descriptions in a deed are a very, very big deal under Florida law.
When the latest purchaser of the home failed to make his mortgage payments to Bank of America, the lender took steps to foreclose. And in doing so, the lender discovered that error in the deed’s legal description of the property.
There was a cloud on the title.
So, what did Bank of America do? It brought all of the people in the chain of title — all the way back to the Borchers – into the foreclosure lawsuit. Which means that the Borchers now have a duty to report that they’ve been sued in all future requests for credit, etc. and this foreclosure suit will pop up on their credit reports.
Demonstration of Importance of Representation at Closings
This experience is just one more example of the importance of having experienced Florida real estate attorneys involved in closings, to go through and read all those lines of legalese, word after word. It’s true that most home owners aren’t going to know the legal impact of a typo in a legal description on a deed, but a Florida lawyer practicing real estate law will understand the importance of this and other language in the closing documents.
What about that title company that the Borchers relied upon back in 2003? They’ve gone out of business. No way to hold the title company responsible for what many would argue was their mistake in the first place. That happens a lot.
A good piece of advice when you and your family are purchasing or selling your family home in one of the biggest transactions of your life is to at least talk with a Florida real estate lawyer. Getting someone to review all of the paperwork including the all important promissory note, isn’t as costly as most of us think it is. And it’s always a lot cheaper than paying to fix a problem after a closing occurs. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
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