Real Estate law: Surprise shortage
Dear Mr. Feichthaler:
I purchased a home last month, and the seller used an out-of-area title company for title and escrow. It was a bumpy experience to say the least, poor communication, last minute changes. They even had my name spelled wrong on the deed, which thankfully I caught prior to closing.
Over the weekend I received an email from the title company asking me for $3,000. They are claiming that my lender sent $3,000 less than promised, and that they didn’t note this until now. I already have the property in my name. Given my terrible experience with them, I plan to ignore their request. I did check the closing statement, and it is true my lender sent the title company $3,000 less than they said they would.
Carrie P.
Dear Carrie:
The first action I would take is to contact the owner or manager of the title company to determine if this e-mail is authentic. If so, I would ask questions so you can confirm whether they are actually short or not. Part of your inquiry should be whether the lender has a mortgage on your house for $3,000 more than it should be.
If you determine that the wire was short, ultimately you paid $3,000 less than you should have for the home. As part of a closing transaction, it is likely you signed an agreement to cooperate with the title company and lender to correct any mistakes made. This would include payment of a shortage, if that shortage was a result of you or your lender not providing sufficient funds to close. Even though this title company doesn’t sound like one I would prefer to do business with, I would also not want to be involved in a legal dispute with them. It is likely the title company would have a cause of action against you to recover the funds, based on the facts you have provided.
It is vital that a buyer take a proactive approach to review of closing documents and figures to ensure good value is attained. In your case, if this error had not been identified, it appears you would have benefited to the tune of $3,000. With its discovery, if the shortage can be documented and confirmed, I would advise a client to make the payment to the title company to “complete” the purchase from last month. I hope you enjoy the new home, and that this surprise request is not a burden to you.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral 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 the Cape Coral Caring Center, and Cape Coral Kiwanis. He has been married to his wife, Mary, for 22 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and primarily practices in real estate law and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
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.
To reach ERIC P. FEICHTHALER, please email news@breezenewspapers.com