What can be done when a ‘clear title’ isn’t?
Q: I purchased a house in Cape Coral in June and went through a title company that said I was getting “clear title” with no liens. When I received my tax bill, I noted that my property taxes included payments for water, sewer and irrigation assessments. I asked the city of Cape Coral about this, and they said there are a total of $13,000 in assessments still owed! What can I do?
A: The answer will depend on many factors. The first document to review is the contract you signed to purchase the property. Typically, the buyer will assume assessments on the property, which means that the seller will pay the annual assessment amount until they sell, at which time the buyer would assume responsibility for these payments until they are paid in full. There are situations, however, where the seller agrees to pay the assessments in full at closing. Review your contract to determine which method was chosen.
The second issue is whether the title company informed you of this lien. The first document you will receive from a law firm or title company is a Title Commitment, which shows the steps that need to be taken to clear title, as well as other restrictions on title that will remain (such as, for instance, assessments). The title company in this case may not have advised you of these liens on the title commitment. If the title company did not mention these liens on the commitment, you may have a cause of action against the underwriter of the title insurance policy for these assessments.
Finally, most properties are listed on the MLS through a Realtor. If the seller or Realtor advised that assessments were paid, when in fact they were not, either of them may be liable for these costs under various legal theories.
In the meantime, the remaining assessments will be on your tax bill annually until they are paid in full.
Eric P. Feichthaler has lived in Cape Coral for 27 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 13 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.