What is the name of your state (only U.S. law)? NJ & FL
We sold a property in NJ and closing was over 2 months ago. We live in Florida. All paperwork was done through email & fax, and we did not attend the closing, which was held in the buyer’s attorney’s office in NJ. Although we filled out and returned the non-resident seller’s tax declaration form that the Title Company sent to us before closing, the HUD-1 form that everyone signed off on did not include a deduction from our proceeds for the 2% “exit tax” and no such deduction was made at closing from the funds we received. The amount in question is $6700.00.
One clause in the purchase agreement / contract of sale, authored by the buyer’s attorney - and which everyone signed off on - states:
“If there is an error or omission in the adjustments or sums set forth within the HUD-1, the mistake shall be corrected and paid by the party owing same within ten (10) days following receipt of notice of the error or omission. This provision shall survive closing for 30 days then be of no force or effect.” All parties signed off on this contract.
Note: “ . . . RECEIPT of notice . . . “
We received no notice of our responsibility for any error or omission from either the Title Company, the buyers, or the buyer’s attorney within the 30-day post-closing period. After closing, the title company’s email address was deleted, no voicemails were received, and no snail mail was received.
Now, over 60 days beyond closing, the Title Company is attempting to contact us through the real estate agent, alternate emails and third parties regarding payment of these monies – which were not collected by them at closing due to their own negligence – and they are now claiming that they attempted to contact us within the 30-day window (we don’t know if they MADE any attempts – we only know that we did not RECEIVE any contact or notice – from anyone). We have not responded to their current attempts at contact. They are claiming that the buyer’s deed cannot be recorded by the county because this “tax” was not paid by us. We have also read that this “tax” is to be collected at the time of closing – i.e., deducted from the seller’s proceeds, which it was not – due to their negligence.
Interestingly, although the closing was held in the buyer’s attorney’s office, this attorney apparently did not notice or address this omission at that time, and to date neither he nor the buyers have contacted us regarding this.
It has now been over 60 days beyond the closing date. Our questions on how to proceed:
What are our rights regarding this situation that we did not create, but that exists due to the negligence of the Title Company?
With regard to the above clause in the purchase contract, are we, the sellers, now released from any responsibility should we now receive notification of this error / omission? – since such notification was never received by us within the 30 days post-closing window?
Should the Title Company be held responsible for their negligence in not including this deduction on the HUD-1 - that everyone signed off on? – and if so, should they pay the amount in question themselves? – or file a claim through their errors / omissions insurance? – or through the buyer’s title insurance?
Should the buyers and/or their attorney bear any responsibility for not raising this issue during the time period for doing so?
Would the title company / buyers / buyer’s attorney be able to file a lawsuit against us since we are not in their jurisdiction – and – since THEY were all negligent?
We did not have an attorney during the sale because we did not need one - their was no lack of understanding the process.
PS: Also, it should be noted that the Title Company was extremely unprofessional and messed up on several other smaller details, such as neglecting to order special readings for municipal utilities, and neglecting to include credits for property taxes on the HUD-1, neglecting to send us our funds until almost 2 weeks after closing, and neglecting to release the real estate agent’s commission to him until 2 weeks after closing.
Thanks for any insight.
We sold a property in NJ and closing was over 2 months ago. We live in Florida. All paperwork was done through email & fax, and we did not attend the closing, which was held in the buyer’s attorney’s office in NJ. Although we filled out and returned the non-resident seller’s tax declaration form that the Title Company sent to us before closing, the HUD-1 form that everyone signed off on did not include a deduction from our proceeds for the 2% “exit tax” and no such deduction was made at closing from the funds we received. The amount in question is $6700.00.
One clause in the purchase agreement / contract of sale, authored by the buyer’s attorney - and which everyone signed off on - states:
“If there is an error or omission in the adjustments or sums set forth within the HUD-1, the mistake shall be corrected and paid by the party owing same within ten (10) days following receipt of notice of the error or omission. This provision shall survive closing for 30 days then be of no force or effect.” All parties signed off on this contract.
Note: “ . . . RECEIPT of notice . . . “
We received no notice of our responsibility for any error or omission from either the Title Company, the buyers, or the buyer’s attorney within the 30-day post-closing period. After closing, the title company’s email address was deleted, no voicemails were received, and no snail mail was received.
Now, over 60 days beyond closing, the Title Company is attempting to contact us through the real estate agent, alternate emails and third parties regarding payment of these monies – which were not collected by them at closing due to their own negligence – and they are now claiming that they attempted to contact us within the 30-day window (we don’t know if they MADE any attempts – we only know that we did not RECEIVE any contact or notice – from anyone). We have not responded to their current attempts at contact. They are claiming that the buyer’s deed cannot be recorded by the county because this “tax” was not paid by us. We have also read that this “tax” is to be collected at the time of closing – i.e., deducted from the seller’s proceeds, which it was not – due to their negligence.
Interestingly, although the closing was held in the buyer’s attorney’s office, this attorney apparently did not notice or address this omission at that time, and to date neither he nor the buyers have contacted us regarding this.
It has now been over 60 days beyond the closing date. Our questions on how to proceed:
What are our rights regarding this situation that we did not create, but that exists due to the negligence of the Title Company?
With regard to the above clause in the purchase contract, are we, the sellers, now released from any responsibility should we now receive notification of this error / omission? – since such notification was never received by us within the 30 days post-closing window?
Should the Title Company be held responsible for their negligence in not including this deduction on the HUD-1 - that everyone signed off on? – and if so, should they pay the amount in question themselves? – or file a claim through their errors / omissions insurance? – or through the buyer’s title insurance?
Should the buyers and/or their attorney bear any responsibility for not raising this issue during the time period for doing so?
Would the title company / buyers / buyer’s attorney be able to file a lawsuit against us since we are not in their jurisdiction – and – since THEY were all negligent?
We did not have an attorney during the sale because we did not need one - their was no lack of understanding the process.
PS: Also, it should be noted that the Title Company was extremely unprofessional and messed up on several other smaller details, such as neglecting to order special readings for municipal utilities, and neglecting to include credits for property taxes on the HUD-1, neglecting to send us our funds until almost 2 weeks after closing, and neglecting to release the real estate agent’s commission to him until 2 weeks after closing.
Thanks for any insight.
