Karen, Other/Just Looking in Monterey County, CA

Is it true that a title company's search and insurance responsibilities end at the County level?

Asked by Karen, Monterey County, CA Thu May 8, 2008

Can anyone in the residential real estate or legal professions tell me if it's true that a title company's search and insurance responsibilities end at the County level?

My husband and I became aware of City code violations on our home, which had been on the city books for years and years (much longer than we have owned the home), and the title company is refusing to pay on our claim, saying that they are only responsible for county-level issues.

It has cost us thousands of dollars in construction, permits and fees to get the code violations rectified with the city. We think the title company should have discovered this as part of the prep for issuing the title insurance policy.

Help the community by answering this question:

+ web reference
Web reference:


Claire Macha…, , Santa Cruz, CA
Fri Sep 12, 2008
Buyer Beware!!!

Notices of Violation may be on file with the local jurisdiction (City or County) without being recorded on title. There may be a complaint filed that has yet to be investigated, or a Notice issued that wasn't recorded on title. So, one must always check with the jurisdiction, prior to purchase or sale, to see if there is any 'current' or 'pending' action. Title companies do not usually call the jurisdiction, they look at what comes up in their abstract, which only shows what is 'recorded'.

Further, we, the Alliance for Change, believe the County of Santa Cruz, doesn't have the right to record Notices of Violation without 'due process' because it is an encumbrance on title which is a 'taking' without an appeal hearing by an independent hearing officer (not a County employee), prior to clouding title, which currently is not in their procedure. There are lawsuits on file regarding this, for more information and assistance, you can go to: http://www.straighttalknews.org.

Many buyers have found, after their purchase, that there was some pending or current action they were unaware of. Do not trust your realtor to do this inquiry for you, unless they are very experienced. They only have to disclose defects they are 'aware' of, and many do not want to be fully 'aware'. Reputable realtors will do a full search. You can do it yourself by inquiring at the public General Information Desk, of the Planning Department, by parcel number, whether there 'is now' or 'ever has been' any record of violation on a given parcel. You have a right to see the 'investigation' file, for any 'resolved, current or pending' complaint, which should be available in the Records Room at the County Planning Department. They may have to order it out of Archives, if it is very old. They will remove any 'confidential' information, ie. Assessor's records, by law.

Also, I recommend a complete review of the Assessor's records available in the Assessor's office. You must have a form signed by the owner to allow you to see it. The Assessor's office staff can help you read the record. It will give you information regarding the date of construction of the improvements on the parcel, type and size of improvements, and/or when they were first assessed. This information must be carefully compared to the actual improvements on the property, to determine if there is more construction than the County may be aware of. Also, the date of construction can tell you about the operative laws at the time.. for example, structures built prior to 1956 in Santa Cruz County, did not require a building permit at the time of construction...and there likely will not be much information, except the Assessor's records, unless other permits have been obtained in the interim time. In other words, there may be violations present that the jurisdiction may not be aware of yet, that you could be responsible for in the future, should a complaint arise and enforcement action is taken.
0 votes
Jeanne, , Palo Alto, CA
Wed Aug 13, 2008
The title insurance company issues you a standard policy. What it covers is listed on the first page and is very short. There are several more pages - all of this is what it DOESN'T cover. The very first thing that it lists that it doesn't cover are any problems with the property according to the local government agencies that aren't recorded against the property. Title insurance is required by the lender and it mostly covers things that a lender wants to know in order that it doesn't make a loan for a property that already has claims against the property or that doesn't belong to you.

There are a lot of laws which protect consumers/buyers against fraud in real estate transactions since they are the biggest financial transactions in the lives of most people. One of these laws in California states that the owner must tell you everything that they know about the house when they sell it. If the previous owner knew about these violations and didn't disclose them to you then they are liable.
0 votes
T. Jefferson, , Santa Cruz, CA
Sun Aug 3, 2008
see help resources and ask for Harold or Claire.
0 votes
John Peterson, , 95003
Thu May 8, 2008
I'm not quite sure what you mean by county level, but it sounds like when you bought the property the proper due diligence wasn't done at the city/county building permit office. In Santa Cruz county, we check the records to make sure the property we're selling or buying matches what the county or city thinks it is. The title company makes sure there is clear title to the land. If the property has any "red tags" at the time of sale it shows up in the property abstract. Most, if not all, lenders will not loan on "red tags". So it sounds like someone was asleep at the switch when you bought the property. Sellers or their agents not disclosing and/or buyers or their agents not digging deep enough.
0 votes
Search Advice
Ask our community a question
Home Buying in Salinas Zip Codes

Email me when…

Learn more