How Do You Deal with Settlement Adjustment Errors?

Settlement Adjustment Errors

Bills are an expected part of life, but an unexpected invoice in the mail is something else entirely. This extra cost could be particularly unwelcome if you’ve just invested in a new home or property. In some cases, these unexpected bills may be because of a settlement adjustment error. 
 

How do settlement adjustment errors happen?

From time to time solicitors and conveyancers may incorrectly account for council rates, water rates, strata levies or land tax adjustment at settlement, even despite their expertise and careful attention. These mistakes might be due to miscommunication from third parties such as councils or strata committees, or because of simple human error. Mistakes can lead to arrears being issued to the new property owner once the mistake is rectified – even if they weren’t the one to incur the cost. 
 

So what can be done about settlement adjustment errors? 

When you’ve bought a property you should have been made aware of all outstanding amounts associated with that property. If you weren’t notified of an outstanding amount, or this amount is different to what you were expecting, then you may be able to make a claim with your title insurance policy to cover the amount. 
 

What is title insurance? 

Title insurance can provide cover for a variety of property ownership risks including several land and property boundary issues, encroachment issues, property-related identity theft and fraud, and disputes regarding boundary fences and property boundaries. A title insurance policy with First Title also includes cover for wrongly calculated rates, strata fees, water rates and land tax. 
 

How can title insurance help to resolve a settlement adjustment error?

Let’s look at some recent experiences for property owners.
•    One of our clients in Victoria received an unexpected notice for $745.91 in strata levies. It turned out that this quarterly payment had been incurred yet not paid by the previous owner, and that the client’s conveyancer had not been informed by strata that this amount was outstanding prior to settlement. After making a successful claim through their First Title insurance policy, the client had the full outstanding amount of $745.91 amount paid by their cover.
•    Two years after one client had purchased their home in South Australia, they received a Land Tax Assessment noting Land Tax arrears of $224.41. This amount had been incurred by the vendor when he subdivided the parent lots – yet, the client had no luck when requesting the vendor to pay the arrears. The client made a claim through their First Title insurance policy and we reviewed the purchase file. Given that there had been no disclosure of this amount at the time of purchase, we covered the $224.41 in Land Tax Assessment arrears.
•    Another client purchased a property in South Australia, and shortly after settlement received an invoice from RevenueSA for outstanding land tax due of $1,493. The conveyancer made an enquiry with the vendor’s solicitor; however, the vendor was unable to pay as they had filed for bankruptcy. Given that the arrears hadn’t been clear at settlement, First Title covered the $1,493 amount following a successful claim.

These are just a few examples of how a title insurance policy could save you from the hassle and the costs of an unexpected settlement adjustment error for your property. It’s fast, easy and cost-effective to take out a policy, and the single premium provides cover for the entire time you and your beneficiaries maintain ownership of your property. You can get a quick quote for your property now, or request cover with just a few key details.

How Do You Deal with Settlement Adjustment Errors?

...

Read more

What is Encroachment. And What Happens Next?

...

Read more

Insurance to Consider When Buying a Property

...

Read more