Q: Is my title company my advocate if it is holding monies paid by the seller before closing?
The seller gave the title company monies to hold for the install of a septic system to be done after we closed. A company, Earth 1st., came, did the work and left without talking to me. I called them a week later to ask them when to expect them to come to finish the work and was told they were only hired to do what is called a "rough install" which leaves 1/3 of my land mud with exposed tank and pipes. This contract for the septic tank was between the seller and Earth 1st ... I never saw it. The title company is holding enough money the seller gave them to allow Earth 1st. to finish the job, which Earth has said they would be glad to do, but the seller is now refusing to agree to the release of the monies still held in escrow by the title company. The seller, via a phone call, told me he only offered bids on the rough install. I would never have agreed to this before closing. What is my best option to get this problem solved? My realtor, like the seller, told me to get an attorney.
A: Generally speaking, a title company does not act as an advocate at all. It is a neutral third party to a transaction. If there is a disagreement about funds held in escrow, you should talk to an attorney about how best to reach an agreement on disbursement.
A: Unless the parties come to an agreement to release the funds then the title company will eventually file an interpleader action, deposit the funds into the court, and let the court decide. The title company will get its fees covered, however. I don’t know how much money is a issue. If it is significant, then pay to hire an attorney.
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