Anyone who remembers using typewriters knows what a time-saver word processing software is, especially if you’re working on multiple documents that have a lot of the same information in them. With a few strokes and clicks of the keyboard and mouse, you can copy that information from one document to the next without having to retype all of the text, and then use the word processing program to reformat the text as needed in the different documents. Ta-da! – you’ve saved yourself a lot of time.

Like so many things in life, there’s a catch: you need to be careful that you copy and paste only what you need in the second document. This is particularly true in legal documents, where having incorrect information can have very unfortunate results, as experienced by a title company in Nevada.

The title company was handling a closing for the sale by a developer to a homebuyer, whom we’ll call the “Homebuyer“, pursuant to a contract to buy a single-family home in Washoe County, Nevada, near Reno. The seller was a developer of a subdivision that contained 85 lots and two Common Areas. After the closing, the title company sent the deed to the Washoe County Recorder’s Office, and the deed was forwarded to the Washoe County Assessor’s office. The problem? The Homebuyer’s deed described 85 lots and the two common areas, not just the lot that the Homebuyer had purchased.

Before the Assessor’s office flagged it, at least 64 of the lots had been put in the name of the Homebuyer – including some lots on which the developer had already built homes and sold to other parties. The Assessor’s office notified the title company after the Assessor flagged the transaction. They determined pretty quickly that the error resulted from someone copying and pasting a description from a prior transfer involving the developer, but instead of limiting the pasted text to the one lot that was sold to the Homebuyer, all 85 lots and the two Common Areas were pasted into the deed. The single-family home was valued at about $595,000.00. The value seemed out of line with the amount of property listed in the deed, which in the aggregate is worth millions of dollars. That is part of what led a deputy assessor to flag the transaction.

When the deputy realized that some of the listed lots had already been transferred by the developer to other people, she realized it was probably a mistake, and that’s when the Assessor’s office got in touch with the title company.

The title company had to start working to correct the errors, which required the cooperation of the Homebuyer, the developer, and some other parties who were the rightful owners of some of the lots. This all needed to be corrected quickly, because anyone whose property was affected and who was trying to complete a transaction with his correct property would have title problems, delaying the transaction and probably causing financial headaches.

It is likely that a court would have issued orders and judgments to correct the problem, since there would have been evidence of the lot and purchase price listed in the Homebuyer’s contract with the developer, but that would have caused further delays and expense. Presumably, the title company would be liable for all of those expenses, so this could be a very costly error – all the result of a copy-and-paste mistake. Fortunately for the title company, all of the required parties cooperated, and everything was corrected within a few weeks, without having to start litigation.

The Lesson for Property Owners and Lenders

The lesson for all of us is to take advantage of technology, but make sure to proofread your work to make sure you don’t have copy-and-paste errors like the one described here.

But the lesson for property owners and lenders is work with an experienced title agent.

In this case, there was a title agent for the title company that handled the transaction, and the title agent did what was needed to correct its errors, at its own expense. This is a big part of the value of title insurance and experienced title agents. Good title agents fix problems that they create accidentally, and do so quickly and at their own expense, so that property owners and lenders can continue with their transactions. Here, the title agent undertook the corrective work without the parties even having to file a claim with the title insurer, saving everyone involved a lot of time, expense, and anguish.


Filed under: Commercial Real Estate, Industry News, Residential Real Estate, Title Insurance, Title Insurance, Title Insurance Litigation, Title Law
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