[WSBARP] Ommission of Property Taxes in Title Report

Tue Dec 6 14:29:32 PST 2016

You’ll need to review a copy of the Escrow Closing Instructions or Settlement Instructions etc.  They may well say the Escrow Company is only obligated to remove items listed on the preliminary title report – which Parcel 2’s taxes were not.  They are not, to my understanding, under a mandated ‘inquiry notice’ where they should investigate the title report based on the listing of the other parcel in the legal description.  I suspect that while Title will have to eat it that going after the independent escrow is a waste of time but it depends on the paperwork.

Odd that it was missed by so many parties though.  When I see this it is usually because “Parcel 2” is actually a mobile home and not legally described but treated by the taxing authorities as real estate and no one thinks to look further into it and then the title company wants to avoid it because they disclosed there was a mobile home on the property without and eliminated title and the policy doesn’t cover those.

Sincerely,

Richard L. Holland

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Jay Goldstein
Sent: Tuesday, December 06, 2016 2:05 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Ommission of Property Taxes in Title Report

Good question—pls respond to the list.

I would contact escrow company and submit a claim.

J

Jay A. Goldstein
[cid:AEF18ED8-6AEE-403C-99E7-30A379E62D84 at local]
1800 Cooper Point RD SW NO. 8  |  Olympia, WA 98502
Telephone 360.352.1970  |  Fax 360.357.0844 |  www.jaglaw.net<http://www.jaglaw.net/>
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Randall Cornwall
Sent: Tuesday, December 06, 2016 1:59 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Ommission of Property Taxes in Title Report

Listmates - I represent an independent escrow company who closed a residential real estate transaction in King County last summer.  The "Exhibit A" legal description of the title report lists two lots (A and B) and 2 tax parcel numbers at the bottom of page (lets call them tax parcel numbers "1" and "2").  The Schedule B of the commitment only lists the property taxes due for parcel 1, and there is no reference to parcel 2 anywhere else in the commitment. Escrow closes the transaction.

6 months later buyer's lender contacts escrow and asks why taxes were not collect for parcel 2 in closing.  Of course previous owner neglected to pay taxes for parcel 2 for three years.  Lender has now advanced payment of all delinquent taxes for parcel 2 and increased new buyer's monthly P&I reserve payment to make up the difference.

My thought is that the title company is on the hook since parcel 2 was never listed an an exception in the commitment, but is there a claim against the escrow company for non-collection of taxes due for parcel 2 simply because it was listed in the legal description?

Your thoughts are appreciated.

Thanks, -Randy.
___________________________
Randall J. COrnwall
DEMCO LAW FIRM, P.S.
(206) 203-6000
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