Title Company has No Duty to Provide Chain-of-Title Info

| September 06, 2012
A cautionary tale for home buyers who are seeking title insurance to protect themselves from potential third-party claims on the property.

In United Community Bank and McDonough v. Prairie State Bank & Trust, et al. (PDF), 2012 IL App (4th Dist.) 110973, the court determined that a title company’s failure to discover a memorandum of judgment affecting the subject property was not misfeasance or negligence.

McGargill said this decision is beneficial to title companies because it clarifies what their duties are to customers, and he said real estate attorneys can easily assist their clients in investigating the chain of title and any potential claims against it if they are concerned that such claims might exist.

“If you want to know the status of a title, you can get a title abstract,” McGargill said. “This decision is absolutely fair to everybody. Everyone is really in the position they thought they were in before, but for what turned out to be a mistake.”


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