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Out with The O&E Report; In With The Property Information Report

On June 23, 2017, Florida Statute Section 627.7843 was amended significantly. Many real estate investors and others are intimately familiar with the Florida Ownership and Encumbrance (O&E) reports that title insurers and agents have issued for years. Those reports were typically limited in scope as compared to a title search report or a title insurance commitment and policy. For instance, an O&E report typically listed only the current property owners, some of the easements, and liens or mortgages of record. The liability of the issuer of the report could limit its liablity for mistakes in the report to a maximum of $1,000.00.

The Property Information Report (PIR), in contrast, can be issued by anyone. There is no requirement that they be issued by anyone with any type of license or experience in title abstracting or examining. The PIR can include as much or as little information about the property’s title as the requestor wants. For instance, it may include as little information as the names of the vested owners, or as much as information from the State Corporation’s databases, all liens, easements, and pending litigation records related to the property. Unlike the O&E Report, if particular language is included in the PIR, the issuer’s liability is limited to a refund of the amount that the requestor paid for the PIR. Therefore, if the issuer made mistakes in the PIR that cost the requestor hundreds of thousands of dollars, the issuer would only have to refund to the requestor the amount that the requestor paid for the report, even if that amount is as little as $50.00.

Contrast this with an opinion of title from an an attorney. If an attorney makes a mistake (commits malpractice) in preparing a title opinion for a client, there is no limit on the damages that the recipient of that opinion can seek. Also, contrast this with a title insurance commitment and policy where the damages that the insured can seek are limited only to the face amount of the title policy.

Since a PIR can now be issued by anyone, whether an attorney, title agent, or Joe Schmo off the street, and damages are limited to the amount paid for the PIR, we recommend that clients be wary of requesting or relying upon such PIR’s when making major financial decisions in buying or investing in real estate. Even when considering purchasing a property at a foreclosure auction, one should be wary of relying upon a PIR which may miss the priority of the mortgage being foreclosed, or other major issues. If anything, PIRs should only be used as a first step in evaluating a property (i.e. prior to preparing a letter of intent), but should not be used for final and potentially expensive decisions.

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