Real estate law is particular to the state that you are in – here’s the Texas answer…..

Not “A”. He got foreclosed upon. He’s out of the loop and had no requirement to disclose anything to anybody.

Not “B”. In Texas, the seller of a single family residence must disclose these kinds of defects EXCEPT for eleven particular situations. One of them is if the owner acquired the home by means of foreclosure. In this case, “B” was the lender.

Title Company? Perhaps yes, perhaps no. If a title policy was paid for and issued (must have happened if “C” got a loan for the house) then yes. However, if “C” bought the house with cash (so no lender was involved REQUIRING a title policy) and “C” decided to save some money at closing and only ordered a Title Search (also called “Opinion of Title”), then the title company did what it was paid to do – they checked out the validity of the title, (missed something), but gave their opinion. If this is the case, then “C” owes the money to the lien holder.

The title company. That is what you get title insurance for, to cover these issues.

Although I agree somewhat with the other people who answered, I would like to add, That ,in my opinion, owner B is not liable, if in fact he bought after foreclosure, either forced sale, or short sale. In any event the litigation should be focused on the sale between A and B, and review the title commitment on that date. The title co’s cannot clear existing liens, they can identify them, and have them addressed by the parties involved. If at the first closing, it can be proved a lien was placed prior to the closing date of the first sale, then it would be prudent to contact the states atty’s office of License and Regulation of that state, also the error’s and omissions carrier with these documents from the initial title company. The title company who first missed this will have to respond, or prove there was no doc’s recorded prior to the closing. I would give the notice to this title co. prior to filing. If they still refuse, file, and you will get a response. Hope this will help! Good Luck!

Owner C should first sue the Title Company, because a lien was left on a transfered property which should have been disclosed and removed.

Owner C should also sue owner B if Owner B did not disclose the liens and did know about them. This is a material fact about the property and a seller is liable to disclose all material facts they are aware of.

Owner A, Owner B and Title for non-disclosure. Owner A knew so therefore his disclosure statement was false. Owner B finding out about remodel with no permits should have gone back to Owner A for clearance. Since Owner B did not he is also responsible for non-disclosure in his transaction. Title company is also at fault for not receiving clearance so therefore property is recorded wrong. All will be in trouble for fraud as well.

title company…..thats why you have to pay for title insurance at closing…to protect you in the event that the title company missed something.

Title company