So, I have an interest situation with a pending home purchase.
My wife and I made an offer on a home that was accepted. The title report came back, and it seems that the owner’s deed has the wrong legal description of the lot. The legal description for the rectangular lot is supposed to say, “Start at point A, go north 60 feet, go west 100 feet, go south 60 feet, and go east 100 feet.” Instead it says, “Start at point A, go north 60 feet, go west 100 feet, go south 60 feet, and then go south 100 feet.”
The current home owner brought the home 10 years ago, and his current deed has the incorrect legal description. His mortgage note has the wrong description as well. The previous home owner, I think, had the correct lot description on his deed.
I know you’re not a lawyer. Well, some of you might be, but I’m not your client. I just want to know how serious of a situation is this and whether I should consider backing out since I’m still within my contingency period. My impression is that the current owner now has a big problem on his hand, but the real estate agents and the escrow people seem to be relatively nonchalant about it.
So, I guess the question is whether it’s a deal killer in a home purchase when the owners have a materially incorrect lot description. Thanks in advance.
I remember a while back at the auto dealership, there was a whole pile of forms to sign, and the dealer gave a very short explanation of each one. One of them, he showed me, was that I agree not to quibble over any obvious typos. He may even have given the example that if one of those forms showed the vehicle’s VIN number being off by one digit, I would not be able to claim that it was talking about a different vehicle.
My WAG is that the current owner really has no problem, and that you should make sure the correct wording appears henceforth.
OTOH, not only am I not your lawyer, but I’m not a lawyer at all.
Such a property deed of sale could be used to sell part of the land.
Despite the deed being registered, its not clear that it provides ownership of more than a line… if the description is all that there is, or your state law makes the description more important than what the state believes the block of land should be .
For example, if the deed says "being the same block of land as deed #xyz " , the previous deed for sale of the land, perhaps the law says that its the same.
It would be better to have the current owner re-register his deed so that the registry has the accurate description. This may have already happened and the search simply returned the poor description, but perhaps the addition of a note “being the same block as previous registered deed”…
I would make sure you have a very good lawyer. Title searches are often not completed until just before, even the date of a closing, you may want to schedule more time for that. When I bought my first house there were some irregularities that would have been detected had I had a better lawyer, and in New York state which has very strong real estate laws a good lawyer could have taken advantage of the situation for my benefit.
My mother recently went through this with her cabin and the cabin next door. Mom and dad bought their cabin back in 1979. The neighbor recently bought his cabin and his title and deed were incorrect - it basically cut a slice into mom’s property. He was adamant HIS title and deed were correct (which makes no sense, who would want a random thin pie slice into someone else’s property?)
Mom ended up spending approximately $3K getting it resolved, between a regular lawyer, land surveyor, an attorney specializing in land surveys, and correcting all the documents.
I had to sign that for my car too, but not for my house.
Your house, I’d guess is probably registered correctly with the city/county/state etc, it’s just wrong on YOUR paperwork. I’d work to get it straightened out. But anytime money comes up, I’d make it clear that ‘Hey, I didn’t type it wrong, you guys made the mistake, I’m just trying to get it fixed before it’s problem someday’.
Also, interestingly regarding mistakes, someone I know that used to work in the banking industry had a mistake on her HELOC. Her’s is attached to the prime rate. I guess they usually put in a floor, so that it’s, for example Prime + .5, but can’t go lower than 3%. On her’s they forgot to put in the floor. She noticed the mistake but kept her mouth shut. At one point, it was supposed to drop below the floor and it didn’t, she called they said ‘we’ll, we just…’, she basically told them to pound sand, it’s not in the contract, it doesn’t matter what you meant to do, you have to do what it says. They adjusted it to agree with her contract.
ETA, I assume that ‘you’ll work with us to fix a mistake’ is for something like ‘we got your VIN wrong’ or ‘we put someone elses name on one of your papers’, but if they told you your bill was going to be $200 a month and it came out to $175, I’m not sure if you’d have any obligation to help them with that. I should glance at it.
I would not close the deal with an incorrect description of the property on the table. It doesn’t have to be a deal killer, and if they fix it, it won’t be. If they won’t fix it for some reason, kill the deal.
Re-reading this, I see that the purchase is still pending. I’d stop everything, call the person you’ve been in contact with at the bank (probably your mortgage banker, but you can go for a multi pronged effect and use all the 800 numbers you can find) and let them know about the mistake.
You can understand that they were just copying the last mortgage, but it’s still wrong, what they’re describing doesn’t even make an enclosed space. Just let them know they need to work to get it cleared up. How much involved in it you want is up to you and how willing you are to spend a few dollars (which they may ask you for) is up to you as well. Personally, unless I had a lot of money into it already, I’d probably push for either ‘I didn’t make the mistake, I just caught it why do I need to pay to have it fixed’ (playing dumb about it being that way on the last mortgage) or telling the previous homeowners that it’s on them to have it straitened out…keeping in mind that they may be legally required to disclose this to future potential home buyers.
However, if you have the deed and it’s correct, I might bring that to the bank, with the current mortgage paperwork and tell them they need to update it to this. You might need to gently remind them that your not adding or subtracting property or doing anything that needs to trigger a new appraisal or inspection or anything like that, they just need to correct their mistake (at no cost to you).
Okay, so I just got off the phone with the title officer. His suggestion is precisely the same as above.
He basically pointed out that the Assessor Parcel Number (APN) is correct on the deed. So going forward, the owners will not do a corrective deed to fix the mistake. He said the sale can carry forward and the escrow company will make sure the new grant deed has the correct legal description. After that, if a claim comes up against the house, title insurance will take care of it.
If you don’t have a lawyer, I’d get one. I had one when I bought my house and it was dirt cheap. Something like a hundred bucks for him to flip through all the paperwork, nod his head and say “yup that’s all good” and then give is a couple of things he wanted (required) us to do. Then I think I paid him like another 75 to attend the closing. He basically just sat quietly, but ready to say something if anything was ‘off’.
If you have one, I’d have them look at it and get their opinion. If they’re okay, go ahead, if not, ask their advice.
Personally I’d have a hard time signing anything I know and they admit is wrong. It’s like buying a new car and the sales person saying ‘yeah, I know there’s a nail in that tire, but your warranty covers it, so when we’re done, just make a claim and we’ll get it swapped out’…and what happens when you find out they don’t cover nails. What happens when there’s an actual problem and you find out title insurance doesn’t cover this specific case because someone somewhere realized that because of this reason or that reason, it’s excluded.
I dunno, it would bug me.
Maybe you could suggest to the mortgage officer that if they’re going to refuse to change it, that each time it shows up on something you have to sign, you can strike out South and write in East and both you and the mortgage officer can initial the change. Barring that, I think I would, at the very least, request something, in writing, stating that the bank understands that the boundaries as written on the deed are incorrect and should be [correct version]…or something like that. I’m not sure about the wording, just something, whether it’s from the bank or the city/county even the title insurance, just something acknowledging that they understand that there’s a simple clerical mistake. Even better if you can get the title company to specifically state that they’ll take care of any claim that involves that issue and not hold it against you. But I’d get a lawyer (or even if you have a friend in the insurance biz) to look at something like that. Stuff like waivers of subrogation get very tricky to navigate.
In the end, you’re probably fine, nothing will probably ever become of it. But I might try a few more times to see what I could do.
I wouldn’t rely on the word of one person, especially one who has an interest in seeing the deal signed.
Get a second opinion from an impartial lawyer .
But if the Parcel Number references an official plat map, and your title deed references the same map,then it seems to me that you are okay. On that map, there is no ambiguity about where your plot of land is or what its dimensions are.
Maybe have a lawyer add a signed document that the plat map is part of the sales contract, and its measurements take precedence over the verbiage in the deed?
The most recent deed will be the description on file.
IAAL, but probably not licensed in your jurisdiction, and real estate isn’t my bag. However: the seller has a duty to convey marketable title. A deed which does not correctly identify the real property being conveyed clouds title. So as a general rule the buyer could rescind the sale contract.
The only really sure-fire to protect the buyer in these circumstances to have a new survey made of the property followed by a suit for quiet title. In practice, that’s not really necessary unless the adjoining owner disputes the property line, but a court order is the only guarantee of clear title.
