Alleged Land Records Search Screw Up, Issuance Of Unauthorized Coverage Lands Attorney In Hot Water With Title Insurance Underwriter, Says Suit

In Winfield, West Virginia, The West Virginia Record reports:

• A California insurance company is suing a Putnam County attorney to recoup losses it incurred from the attorney's failure to conduct a thorough title search, and obtain the sufficient amount of [title] insurance for the purchase of commercial real estate in Hurricane. Alexander J. Ross is named in a two-count professional negligence suit filed by First American Title Insurance Company. In its complaint [...], the Santa Ana, Calif.-based firm alleges Ross not only failed to discover a 50-year-old conveyance on a .6 acre parcel of property being developed for a strip mall, but also obtain the additional [title] insurance to cover the nearly $500,000 purchase price.(1)(2)

For more, see Inadequate title search, insurance results in suit against Putnam attorney.

(1) Pursuant to their agreement, Ross was authorized to act on First American's behalf on purchases of property up to $250,000, the story states. Reportedly, the agreement also called for Ross to "conduct a search of all relevant public records affecting the real property at issue." However, Ross insured the property for full amount of the $495,000 purchase price. Pursuant to their original agreement, Ross was to obtain authorization from First American to insure for amounts exceeding $250,000. Also, First American alleges Ross only conducted a title search going back 40 years instead of the customary 60. It was later discovered that one of the previous owners conveyed .2 acres of the property to the state of West Virginia through a corrective deed on July 18, 1958. The "outconveyance" reduced the true acreage the buyer purchased from .68 to between .452 to .498. The deed Ross prepared for the buyer, First American alleges, did not account for the outconveyance. First American says they had to pay a claim made against them, the story states.

(2) The two factors to consider when shopping for title insurance are the:

• quality of insurance, and
• quality of the title search.

The goal is to find a title company or attorney that will do a thorough search (in order to avoid the alleged title screw-up described in the story above) and an underwriter (insurance company) that will be there in 10 or 15 years if there's a problem. In many states, the title insurance premiums are regulated so there won't be much of a price difference between companies. See Bankrate.com: 6 questions to ask about title insurance. title insurance legal issues