Real Estate Matters: Property owner suspects closing attorney made an error on the title
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.