Attention All Counsel: Consider Ordering Title Searches

As tenant’s counsel, do you think you could be sued for malpractice if you don’t order a title search for a client that plans to make improvements to a space? If you’re not sure, read Davin, L.L.C. v. Daham, 329 N.J. Super.54, 746, A 2d 1034(N.J.Supp.Ct.App.Div.2000).

In Davin, a tenant signed a lease and spent over $125,000 in materials and labor to renovate the space. It later found out that the owner’s interest in the property was in the process of being foreclosed and the lender planned to eject all current tenants and terminate the leases. The tenant sued its counsel for malpractice because counsel did not advise the tenant that it should order a title search before it entered into a lease. The trial court ruled in favor of the tenant’s counsel and the tenant appealed.

The N.J Superior Court, Appellate Division reversed the trial court’s decision and sent the matter back to the lower court to determine whether the tenant’s counsel should have ordered a title search.

In this case, an expert testified that “ordering title work in this matter would have been an extraordinary step and one that is not ordinarily taken by thousands of other attorneys.” But given the fact that the Appellate Court saw fit to return the matter to the lower court, why risk being sued?

The best option in this type of situation is to simply mention the risks involved for your client if a title search is not ordered. Not only will you be protecting yourself from a malpractice lawsuit, but your client will appreciate your efforts to fully protect their interests.

Source: Mark Morfopoulos,Esq., Meislik & Meislik, Montclair, NJ.