Lesson learned, even when you get the week for free title insurance is important

[Panina]

I am in the process of giving a week back to the association and there is an issue.

The title transfer to the person I got this week from was improperly done because is was transferred To her as an individual when she received the property as a trustee. Now ownership is in my name and the hoa won’t take it until title is fixed.

They are trying to help by contacting the attorney who did the deed. Unfortunately I did not take title insurance because I got the week for free.

This was a week I got from Redweek who handled the whole transaction.

Now am I really the owner? What is my recourse if the selling party can’t be found? Probably will just stop paying maintenance fees? How do they foreclose on me if I don’t have clear title? This could be a big mess, hopefully the seller can be found and fix the issue.

 

[elaine]

atty who prepared deed should have done title search and put proper names put on deed. Sally Jones and Sally Jones Trustee for XYZ trust are not the same. How did Redweek "handle" the transaction? Does Redweek give any guarantees? Did Redweek supply the atty?
I bought one on ebay for $700 years ago that was supposed to be a summer floating week at HHI. At closing, I found out it was actually RCI points attached to a floating week. That was better for me. But, I never even considered doing a title search, getting insurance, etc. yikes!
I did get title ins. for a $8K resale week. During the process, they discovered that the seller had already banked her next week with RCI. I refused the RCI deposit and took a discount--but without that investigation, I'd have likely been stuck with higher price and no use of that year's week.
good luck.

 

[CalGalTraveler]

Sorry to hear about this mess. Hope you can find the seller and they are willing to comply.

As a back-up is this property in Florida or South Carolina? If so, you might be able to stop maintenance fees and let them foreclose if you don't object to the foreclosure, but you still might end up with a ding on your credit record if you used the unit and paid maintenance fees. You should find an attorney to provide clarity.

Check out the sticky on non-judicial, anti-deficiency judgments in the state of your timeshare by @Grammarhero

P.S. FWIW...After averting a deed location filed in error by one of the popular closing companies. I now always insist on title insurance because they would have uncovered such an error during the search. They would be responsible for getting this fixed. However Tuggers have ridiculed me for doing so. IMO...$300 well spent to sleep at night.

 

[rapmarks]

What a lot of hassle, good luck to you, I guess we do have to look a gift horse in the mouth.

 

[vacationtime1]

Don't forget that title insurance is generally limited to the amount you paid for the property, so if you bought the unit for a dollar, title insurance wouldn't have helped here.

 

[Panina]

Sorry to hear about this mess. Hope you can find the seller and they are willing to comply.

As a back-up is this property in Florida or South Carolina? If so, you might be able to stop maintenance fees and let them foreclose if you don't object to the foreclosure, but you still might end up with a ding on your credit record if you used the unit and paid maintenance fees. You should find an attorney to provide clarity.

Check out the sticky on non-judicial, anti-deficiency judgments in the state of your timeshare by @Grammarhero

P.S. FWIW...After averting a deed location filed in error by one of the popular closing companies. I now always insist on title insurance because they would have uncovered such an error during the search. They would be responsible for getting this fixed. However Tuggers have ridiculed me for doing so. IMO...$300 well spent to sleep at night.

It is in NC

 

[Panina]

Don't forget that title insurance is generally limited to the amount you paid for the property, so if you bought the unit for a dollar, title insurance wouldn't have helped here.

Wouldn’t they have to help to either clear title or get it out of my name?

 

[vacationtime1]

Wouldn’t they have to help to either clear title or get it out of my name?

I just looked at the policy issued by Chicago Title in 2006 insuring title to one of my Kierland units.

The policy insures me against "loss or damage, not exeeding the Amount of Insurance stated in Schedule A" (which was the purchase price).

Chicago Title's liability under the policy arises from title issues but Chicago Title's obligation is defined in dollar terms -- loss or damage up to the purchase price. If the insurance were on something valuable (such as my house), I would expect the title company to hire lawyers and fix the problem. But for the dollar amounts typical of the timeshare world, it may be cheaper for them to write a check.

 

[Panina]

I just looked at the policy issued by Chicago Title in 2006 insuring title to one of my Kierland units.

The policy insures me against "loss or damage, not exeeding the Amount of Insurance stated in Schedule A" (which was the purchase price).

Chicago Title's liability under the policy arises from title issues but Chicago Title's obligation is defined in dollar terms -- loss or damage up to the purchase price. If the insurance were on something valuable (such as my house), I would expect the title company to hire lawyers and fix the problem. But for the dollar amounts typical of the timeshare world, it may be cheaper for them to write a check.

Interesting. So even with title insurance this could be a problem.

 

[jabberwocky]

Interesting. So even with title insurance this could be a problem.

You can't only think of it in terms of refunding your purchase price - but I think they would have picked up on the issue when underwriting the policy. I think it adds an extra level of due diligence.

I just made a resale purchase which was about 1/4 the price one would normally pay. I added the title insurance (extra $275) to help increase the probability of passing ROFR and to also help ensure that the title would be clean.

 

[CalGalTraveler]

Don't forget that title insurance is generally limited to the amount you paid for the property, so if you bought the unit for a dollar, title insurance wouldn't have helped here.

Did not know that but we have never received a free timeshare. So it sounds like they would cover legal bills in the $7000 - $12,500 range for our resales which is what we paid. Better to get that $ to pay for a lawyer or their lawyers for that price than pay out of pocket later. Not a bad return for $275.

 

[CalGalTraveler]

You can't only think of it in terms of refunding your purchase price - but I think they would have picked up on the issue when underwriting the policy. I think it adds an extra level of due diligence.

I just made a resale purchase which was about 1/4 the price one would normally pay. I added the title insurance (extra $275) to help increase the probability of passing ROFR and to also help ensure that the title would be clean.

+1 getting the due diligence title search up front even if the TS is free is a big part of the value especially if a resale timeshare has traded hands more than once. IMHO still worth it.

 

[rapmarks]

Many years ago I bought a lot from mike xxxxx. We went through title insurance. Bluegreen was the developer. They would not recognize us as the owners, never even cashed the check for three years back maintenance fees. Title insurance said they would not be responsible because their title search was correct and Mike xxxxx Was the owner the lot and bluegreen had sold it to him. Someone at bluegreen had changed their records to indicate mikes father Charles xxxxx owned the lot, but that was on no other record anywhere. They finally recognized us as owners, but title insurance didn’t help at all.

 

[dioxide45]

Yup, title insurance is about so much more than covering the cost of your ownership. It will also cover the costs associated with quiet title to get things fixed if prior owners can't be located or are deceased. These costs can run in to the thousands of dollars.

 

[dioxide45]

I just looked at the policy issued by Chicago Title in 2006 insuring title to one of my Kierland units.

The policy insures me against "loss or damage, not exeeding the Amount of Insurance stated in Schedule A" (which was the purchase price).

Chicago Title's liability under the policy arises from title issues but Chicago Title's obligation is defined in dollar terms -- loss or damage up to the purchase price. If the insurance were on something valuable (such as my house), I would expect the title company to hire lawyers and fix the problem. But for the dollar amounts typical of the timeshare world, it may be cheaper for them to write a check.

However, it is likely that the title insurance company would have found the clouded title and the buyer would have been forewarned of the issue before buying.

 

[5finny]

If you got a warranty deed buyer should be motivated to co-operate to avoid a claim she breached warranties
If a quit claim deed not so much incentive

 

[CalGalTraveler]

Yup, title insurance is about so much more than covering the cost of your ownership. It will also cover the costs associated with quiet title to get things fixed if prior owners can't be located or are deceased. These costs can run in to the thousands of dollars.

Clouded title is one of my biggest fears because the TS developer will not deed back unless it is clear. You could get stuck.

 

[CalGalTraveler]

If you got a warranty deed buyer should be motivated to co-operate to avoid a claim she breached warranties
If a quit claim deed not so much incentive

This is interesting. Could one file a claim in small claims court to keep legal costs low since the TS sale would be under the cap?

Problem still remains that since many TS sellers are elderly, the seller could be deceased or has moved so there is no one to sue.

 

[5finny]

You certainly could file a small claims case but I doubt you would want to.
Best to take a "We are all reasonable people here and can easily get this done if we work together " approach.
If a seller signed a deed individually when it should have been signed in her capacity as trustee it is probably an easy correction-- as long as she cooperates
The real risk is that she is just so happy to be rid of this that she refuses to engage

 

[Wgk101]

If I recall, you can only use small claims to recover money, not for specific performance. So your recovery may only be for $1 unless you incur costs to get the matter fixed.

 

[dioxide45]

If I recall, you can only use small claims to recover money, not for specific performance. So your recovery may only be for $1 unless you incur costs to get the matter fixed.

It would seem that the process would be to try to remedy, if they fail to help fix the issue you would have to sue in court. You could then possibly reclaim those costs in small claims court. This could be a long and expensive process to fix if the past seller is not willing to remedy.

 

[Panina]

If you got a warranty deed buyer should be motivated to co-operate to avoid a claim she breached warranties
If a quit claim deed not so much incentive

Limited warranty deed, now this is sounding even more complicated then I thought. In 2010 transfer from owner with same last name as owner who sold to me was improperly done because it was transferred as an individual when she received the property as a trustee to those who signed the deed to me.

I just emailed Redweek closing department as I got it from them as a verified week. I have emails and address of who signed the deed to me. I will see what Redweek says as it would be best if they contacted them.

 

[Theiggy]

This sounds complicated! What happens if the former owner is deceased? Then what?


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[5finny]

I know nothing about limited warranty deeds
Here is what I found on the internet:

"The second type of deed in North Carolina is a special warranty deed, which may also be called a limited warranty deed. A special warranty deed typically includes the same protections given in a general warranty deed, but in a special warranty deed these protections only exist for defects in the title that are a result of actions of your seller, or arose during the possession of your seller. Thus, a special warranty deed does not protect the buyer from issues that arise before the buyer’s immediate seller purchased the property. Special warranty deeds may also be used to exclude one or more of the covenants normally found in a general warranty deed, thereby further limiting any recourse for the buyer. "

This may or may not be applicable to your situation but if it is then the warranties probably still apply since the defect results from an action of the seller (executing an improper deed)
If I was a betting man I would bet that Redweek will contact the seller and the seller will sign a corrected deed and the Association will then take the week back.

Things could certainly go in another direction but I would not worry about that unless and until they do.

 

[Panina]

I know nothing about limited warranty deeds
Here is what I found on the internet:

"The second type of deed in North Carolina is a special warranty deed, which may also be called a limited warranty deed. A special warranty deed typically includes the same protections given in a general warranty deed, but in a special warranty deed these protections only exist for defects in the title that are a result of actions of your seller, or arose during the possession of your seller. Thus, a special warranty deed does not protect the buyer from issues that arise before the buyer’s immediate seller purchased the property. Special warranty deeds may also be used to exclude one or more of the covenants normally found in a general warranty deed, thereby further limiting any recourse for the buyer. "

This may or may not be applicable to your situation but if it is then the warranties probably still apply since the defect results from an action of the seller (executing an improper deed)
If I was a betting man I would bet that Redweek will contact the seller and the seller will sign a corrected deed and the Association will then take the week back.

Things could certainly go in another direction but I would not worry about that unless and until they do.

Thank you for info. Not worried, just a pain. It is actually my best trading week by a longshot.

Being I will get eliminate 1/2 my timeshares due to moving into an active community I decided this was one of the weeks to get rid of because it was easy as bluegreen agreed to take back.