Property owner suspects the closing attorney erred
Q: Earlier this year, I sold my house through a real estate company. I then moved next door to a rental home I own. A few months later, I checked online to view the title to my property and noticed that the closing attorney used the legal description for both properties.
I only sold the newer home that I moved out of. The closing law firm did not do a survey. They did a survey over a month ago. Is there anything you could suggest to get this corrected ASAP? I’m 72 and might need to sell the home and would like it to have a clean title.
A: Good for you for checking. We’re glad that you did. You probably were very stressed to see that it appeared that you “sold” both properties instead of only one of them.
From your email, we understand that you live in a state where you were not represented by an attorney but, rather, you had a closing attorney handle the transaction. This is an extremely confusing issue and relates directly to how the problem might have started. So, let’s begin with the difference between a closing attorney and an attorney that represents a seller in a real estate sale.
A closing attorney is an attorney hired by the seller, buyer or the buyer’s lender to handle the paperwork relating to the sale of the home and the lender’s documentation. This attorney acts as a settlement agent but does not represent either the buyer or the seller in the transaction. The attorney’s role is to prepare closing documents and follow the terms of the purchase and sale contract.
On the other hand, if you (the seller) hire an attorney to represent you in the sale of the home, this attorney has a fiduciary duty to represent your best interests and only your interests in the sale of the home. (Confusingly, this person may also be known as the closing attorney, although they are usually referred to as the seller’s attorney.)
In many states, home buyers and sellers only deal with closing attorneys and not an attorney that represents either the seller or the buyer. In some states, the closing attorney may be (again, confusingly) referred to as either the escrow agent, settlement agent or closing attorney. The closing attorney’s engagement letter will let you know that the attorney does not represent you but rather only prepares documents for the closing, so be sure to look closely for that wording in the document you sign.
We mention all of this as background. We suspect that your purchase and sale agreement listed the property address of the home you sold, and at one time this home and the adjacent home were purchased using that same address even though the home in which you’re living may have a different address. We also suspect that when you purchased both properties it was at the same time and the closing attorney that handled that purchase prepared all the documents using a combined description of both properties.
Here’s where we think it all went wrong: When you sold just the one home, the new closing attorney may have wrongly assumed you were selling both properties together, as one, just as you did when you purchased them.
If the closing attorney made that assumption, it was obviously wrong. We suspect your purchase and sale agreement specified only one property address, not both. All residential real estate contracts will specify the address of the property you are selling, and most will have other property identifiers in the contract, including the tax parcel identification number and approximate dimensions for the property.
If you hired the closing attorney, who would have owed you their fiduciary duty to represent you, the attorney should have reviewed this information with you to make sure the documents were properly prepared for the transaction. If the bank hired the closing attorney, the closing attorney should have looked more carefully at the purchase and sale contract to determine exactly what was being sold.
If the closing attorney (hired by you or the bank) made the mistake, the closing attorney should fix it. The issue for you is to figure out how to get the attorney to correct what we agree is a serious error. Your first step is to review the agreement you signed with the closing attorney. Look it over. Then, look at the purchase and sale agreement. Figure out if all the information is accurate. Make sure that it is clear in the purchase and sale agreement that you were only selling the one home and not both of them. Check the address on the purchase and sale agreement, check the tax parcel identification number on the contract, and check if the approximate acreage or lot dimensions were listed on the contract.
You have to check the purchase and sale agreement, because the addresses and property descriptors could have been wrong from the start and you need to determine where the mistake was made. When the buyer made the offer to purchase your home, your buyer could have mistakenly used the wrong information on the contract and neither you (nor the attorney) caught that mistake.
If the closing attorney sent out a surveyor, the closing attorney must have questions about the identification of the land you sold and what you kept. Think of it this way: If the closing attorney had no way of knowing that your intent was to sell part of the property and you never told the closing attorney, it would be hard for the closing attorney to know since they weren’t part of the property negotiations. On the other hand, if the closing attorney knew, but simply made the mistake, the closing attorney could have prevented this from happening.
Either way, the buyer knew that they were only purchasing one home and should be willing to cooperate to fix the mistake. We suggest that you talk to the closing attorney and get clarification on what the closing attorney is doing to fix the issue and figure out the timetable that it will take to fix it. Remember, this error not only affects the buyer but the buyer’s lender. The closing attorney may have the ability to fix the conveyance documents from you to your buyer, but it may take more work to fix the mortgage documents that the buyer signed to the buyer’s lender.
Buckle up: We don’t think it’s likely to be an easy fix, so it will take the closing attorney some time to rectify the situation, especially with the pandemic and the fact that some governmental offices have limited in-person operations. Your first step is to talk to the closing attorney and get more information. Once you have that information, if you feel that the closing attorney isn’t doing anything to fix the issue or you find out that the mistake was on the purchase and sale agreement, you’ll need to contact an attorney in your area to help you with this.
At that point, the attorney you hire might have to sue the buyer to fix the issue, if the buyer does not cooperate. We’re sorry you’re going through all of this and hope the situation resolves quickly.
Contact Ilyce Glink and Samuel J. Tamkin through her website, Thinkglink.com.