Is a Title Insurance company responsible when they do not disclose an open permit?
May 16th, 2010
To make it short and simple:
Refinancing a house now
An open permit from 1949 came up, can’t close with out resolving
House was purchased in 1978 and this “open permit” never came up. Title Insurance was issued @ purchase.
Can we hold Title Insurance Company responsible for this?
Thanks for your replies.
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Where did the issue of the “open permit” come from? Title searches involve property title history and encumbrances – not building permit issues.
Responsible for WHAT? You have no financial loss, as of this time.
Whatever the open permit is FOR (to put in an extra bathroom?) it’s probaby not an issue having to do with your clear title.
Who told you that you cannot close without resolving? If this is the result of a new title search, or a statement made by your lender, than I suspect that there are additional issues. An open permit should impede nothing, unless it is a permit by a third party to do something to your property.
Title insurance covers a cloud on your title. It does not have anything to do with permits, and as such, your title agency would never have seen the permit. However, if this is some other issue which tied to your home’s title, then the insurance company is responsible.
Have your broker or current title agent contact the original issuer. If they are out of business, check to see who underwrote your policy, and have your broker / title agent contact the original underwriter. Any issues for which the original policy insures, are the responsibility of the title agency or its underwriter. They will fix these issues with little argument. However, if this is an issue not covered by title insurance, you will be required to resolve the issue on your own.