Typically at some point in a real estate transaction prior to closing, the buyer’s attorney will order a title commitment from a title insurance company. That commitment will contain all pertinent searches pertaining to the property being purchased, such as judgments, taxes, flood area and tidelands status and county land records. The title commitment is an accurate picture of the title as of the date stated in the title commitment.
However, it is always possible that some new lien, judgment or mortgage may arise between the time of preparation of the title commitment and the date of closing. In that event, the buyer may not get clear title, because there is a new mortgage or other lien on the property which is not being paid off at the closing because it is unknown. This may be intentional or unintentional on the part of the seller. The buyer’s mortgage lender which is expecting to receive a first lien position on the property may be compromised by the recording of a new lien which would be superior to its mortgage.
This problem and risk is usually addressed by the buyer’s attorney ordering a continuation search for the day of closing. This is also known as a “rundown” search or a “bringdown” search. The searcher goes back and checks the records for the time period from the date of the title commitment to the date of closing. That will reveal most new items. It will not discover new items in the “gap”, i.e. items not discoverable due to delays in recording in the county clerk’s office.
Occasionally, a title agent will forget to order a rundown, which can represent a significant risk to a homebuyer. It is therefore imperative that purchasers select competent counsel to manage their real estate transactions to minimize the risk of a title problem.
