Q: After buying a home from a real estate agent, we found out that we actually had title to a different home in the neighborhood and he had title to our home.

If we cannot resolve this problem, who would be liable? The mix-up started with the developer. One of the listing agents was aware of problem and sold the property anyway.

Our title insurance company says they do not have any liability even though the address of the house did not match up with the one on title. We found out of the mistake while researching the incorrect square footage of house we thought we had purchased.

This has been going on since August. Help!*

A: You need to hire a real estate attorney who can help you figure out what, if anything can be done to correct the situation. It may escalate to a lawsuit, at which point you’ll need to talk to an attorney that specializes in real estate litigation.

You have not included much information in your letter, but here’s how it seems to me: you’re living in a neighbor’s home and they are living in yours.

When you closed on the home, you should have received a survey of the home. This survey would have identified the lot you were buying along with the street address for the home. The survey would have also included the legal description for the home as a long paragraph with quite a bit of legal jargon to identify the exact location of the home in the subdivision and in the area and in the county and in the state in which you live.

If you looked at that survey you should have been able to determine that the survey was for a different house in your neighborhood. It should have even shown that the address did not match up with what you thought you were buying.

Next, once you had the survey, you should have compared the survey with the legal description in the title insurance commitment given to you by the title insurance company. And finally, you should have compared the legal description in the survey and title insurance commitment with the document that conveyed title to you from the seller.

I have to assume you did not take these steps to make sure that you were buying the property that you had actually seen. But in all fairness, the title company doesn’t know what properties you have seen. If the title company was told to prepare a title commitment on 123 Main Street and did so and delivered a title insurance policy to 123 Main Street to you, you are probably the owner of 123 Main Street even if the seller gives you the keys to 321 Main Street.

The title company may not have any responsibility in this matter if they closed on 123 Main Street and gave you a title insurance policy for 123 Main Street. It was up to you to object at the closing that you were not getting the right home.

You may, however, have a claim against the seller. Your contract with the seller was for this other home that was known as 321 Main Street, but he conveyed to you 123 Main Street. You need to talk to a real estate attorney first to determine what steps you might have to take to fix this problem.

Here’s a possible non-litigation solution to this problem. If the owner of the other home and you both were innocent buyers of each other’s homes, you can swap titles to the homes. With interest rates rather low, you and they could refinance your homes but take title to the homes as you initially intended.

Assuming both you and your neighbors agree to the process, you need to find a lender that is willing to work with you in cleaning up this mess. There will be expenses in the process, but those expenses might be less than filing a lawsuit against your sellers.

By the way, if the real estate agent knew of the problem, it’s hard to believe that agent did not have an obligation to disclose the problem.

If the seller’s knew of the problem, it’s also hard to believe that they too did not have to disclose the problem – or fix it before closing.

Talk to an attorney and assess your options before you approach your neighbors.

For more information on title insurance issues and also closing costs (including title insurance policy costs), please take a look at the following articles:

Protect Investment With Title Insurance

Seller and Buyer Closing Costs State By State

Title Insurance May Protect Lender And Buyer

Title Insurance May Solve Encroachment Issue

What’s Included In A Title Search?