DennisBeaverNovember 04, 2010 (Original publish date) • By Dennis Beaver

At times, a question about a bill – where something just doesn’t seem right – opens a door revealing information, which, if known years earlier, would have prevented us from losing a great deal of money. Hanford reader Susan received such a bill which took her in a direction she would never have imagined.

“Your articles on legal research caught my attention, because I was recently billed by my new lawyer for researching the title on an apartment house my former husband owns,” she wrote. “In our divorce, the attorney I had at that time worked out a settlement in which the apartment house would be my security for money he owed for past due child and spousal support. This became part of the court’s order.

“During our marriage, we went from driving Lincoln Town Cars to hitchhiking – several times. Sam made and lost fortunes. While he was obsessed with the next deal, I was petrified our children would not have enough to eat. Daily life was unpredictable. No sooner had he closed one deal and made a great deal of money, he was then off to the next project, which frequently was a disaster. He refused to save money, reasoning that what would be saved meant less to invest later.

“When I pleaded to let me put something aside, the bully in him emerged. I was weak, and it took me 15 years to grow up.”

Protection in a piece of property

As part of property division and support, it is common for courts to order a lump sum payment several years down the road, secured by real property with a value adequate to protect the other spouse. Judges will order the paying spouse to keep taxes and insurance current, and to not take a loan against the property or otherwise impair its value.

Before such an agreement is approved, it is absolutely critical to be sure the property is either free and clear or has no other liens or claims against it aside from the monthly payments.

There are two ways of verifying this: Going to the appropriate county office, usually the Recorder’s Office, or by calling the customer service department of any title company who can tell you – in five minutes – if there are outstanding liens, tax notices, seconds and so on – and at no cost. Even lawyers who specialize in real estate rarely do their own title research.

It is malpractice if a lawyer fails to have a proper title search conducted which would have found recorded liens, seconds, loans or other encumbrances against the property.

Where’s my money?

The divorce decree specified that Susan was to be paid this July, but nothing was received. She phoned her ex and was given one excuse after another. Finally, an appointment was scheduled with an attorney who practices law not far from Fresno. This told her precisely what she did not want to hear:

“The only way to protect yourself is for us to file what amounts to a breach of contract suit against your former husband and what is called a “lis pendens,” basically freezing the property so that he can’t sell it.”

She agreed and paid a substantial retainer to the attorney. His first statement, showing how her funds were being applied, listed three hours researching title to property, judgment liens and lis pendens.

“The accompanying letter recommended that we immediately file suit, but I did not want to do that, as my ex and I always had a very good relationship and visitation was never a problem where the kids were concerned.

“I knew it was important to find out if there were any problems with title to the apartment house – if there were any claims against it, or if my ex had used it as collateral for a loan. I was relieved that my attorney’s letter said nothing at all about there being any such issues, and that Sam had respected the court’s order. In fact, by this time it should have been paid off.

“When I read your article about legal research, a number of questions came to mind. Was I being charged for something which the lawyer should already know about, that is, a lis pendens and judgment liens? And why was I being charged so much for title research?

“What’s involved in finding out who owns the property and if there are claims against it?” she asked.

More to worry about than two hours of research

I phoned Susan. “My attorney didn’t raise any red flags; doesn’t that mean I’m OK?” It was a good question. Should she question her lawyer? Was there anything to lose in checking out the property herself, by calling a title company and speaking with customer service?

We’ll reveal her mind-blowing discovery next week.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.