Legal Question in Business Law in California

A title company is a middleman between the buyer and the seller in real estate.

It draws up the contract and then processes it into a final statement after signature.

However, if the title company does not inform the buyer until after the deal is sealed that some conditions of the contract will not be met in the future, are there laws that allow the buyer to force the middleman to compensate for misleading the buyer?


Asked on 7/22/09, 5:48 pm

1 Answer from Attorneys

Adam Telanoff Telanoff & Telanoff

A title company will generally only be involved in a real estate transaction by issuing a policy of title insurance. If the title actually tendered does not match the title reported, then the beneficiary of the policy (usually the Buyer) will have a claim against the insurance.

Often title companies have divisions that are escrow agents. When they act as an escrow agent they are not a party to the agreement between buyer and seller, but simply hold funds on behalf the two contracting parties. They are bound by the written escrow instructions, which are from the Buyer & Seller, not from from the escrow company.

An escrow makes no representations to a Buyer or Seller related to a property. Really the only representation that they make is to hold the money in trust, and pay the money out as required by law and the escrow instructions.

If there is a problem with the transaction, the claim is against the Seller and possibly the Seller's real estate broker (if there was one). There is almost never a claim against an escrow company.

Your statement of the facts is too ambiguous for me to see any claim against the escrow company.

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Answered on 7/22/09, 6:07 pm


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