Title company missed $40k mechanic's lien - now contractor is suing me

I bought a house in Florida in June 2024. We used a title company recommended by our realtor, paid for title insurance, everything seemed fine. Closed on June 15th, got the keys, life is good.

Yesterday I get served with a lawsuit from a roofing contractor claiming the previous owner owes them $40,000 for work done in March 2024. They filed a mechanic's lien on April 2, 2024 - TWO MONTHS before I bought the place.

The title company's search completely missed it. Now this contractor is saying they're going to foreclose on MY house to collect the debt. I'm freaking out. What do I do?

This is exactly what title insurance is for. The title company missed the lien in their search, which means they have a duty to defend you and pay the claim.

Steps you need to take immediately:

1. Contact the title company and file a claim on your title insurance policy
2. Send them a copy of the lawsuit you received
3. Demand they provide you with legal defense

Do NOT ignore the lawsuit or try to handle this yourself.

I called the title company this morning. They said they need to "review the file" and will get back to me in 5-7 business days. Meanwhile the lawsuit says I have 20 days to respond.

Should I hire my own lawyer or wait for them?

Look, don't wait. You have 20 days to respond to the lawsuit. If you miss that deadline, they can get a default judgment against you.

Here's what you do:

• Email the title company TODAY with the lawsuit attached
• In the email, explicitly state you are making a claim under your title insurance policy
• Request they assign counsel to defend you within 5 business days
• If they don't respond in 3 days, hire your own attorney and bill the title company

You have rights under the insurance policy. They can't just slow-roll you.

Just pulled up my title insurance policy. Under "Covered Risks" it says:

"Any defect in or lien or encumbrance on the title, including a mechanics lien, existing at the date of the policy."

The lien was filed April 2, my policy date is June 15, so this should definitely be covered, right?

The purchase agreement says "Seller represents that the Property is free and clear of all liens and encumbrances except as disclosed in writing."

They definitely didn't disclose this lien. But the seller was an estate sale (owner died, heirs were selling), so I'm not sure if they even knew about it.

Estate sales can be tricky, but the representation is still binding. The estate had a duty to disclose all known liens.

That said, your primary path here is the title insurance claim. Let the title company deal with it - that's literally what you paid for. If they try to deny coverage or drag their feet, then you look at suing them for breach of the insurance contract.

Bottom line: File the claim, demand defense counsel, and let the professionals handle it. Don't panic.

Update: Title company finally called back. They're accepting the claim and assigning a defense attorney. Attorney is supposed to contact me tomorrow to file a response to the lawsuit.

They also said they'll work with the contractor to settle the lien. Sounds like they're going to just pay it to make it go away.

Thanks everyone for the advice - I was having a full panic attack on Friday. Glad I pushed them to respond quickly.