[WSBARP] Omission of Property Taxes in Title Report

[Gregory L. Ursich]

I agree with Bob Ordal’s analysis. -Greg

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Gregory L. Ursich | Shareholder
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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Robert Ordal
Sent: Tuesday, December 06, 2016 2:22 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Omission of Property Taxes in Title Report

I assume the buyer got a title policy that insured there were no liens.  Seems to me taxes are liens that would be covered by the policy.  Also, it seems likely the same liens would breach of the seller’s deed to the buyer.  I would think that the escrow company relied on the commitment that did not list the taxes, so I don’t see that the escrow company made a mistake.

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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