What is a title agent required to do upon discovering a title defect?

A title agent plays a crucial role in ensuring that real estate transactions proceed smoothly, and part of that responsibility includes addressing any title defects. When a title agent discovers a defect, it is essential for them to disclose that information to the client. This transparency allows the client to make informed decisions regarding the transaction.

Additionally, if the defect is significant or potentially complex, the title agent may need to seek legal counsel to understand the implications of the defect fully and to explore options for resolving it. This step is vital because failure to address a title defect can lead to serious legal and financial repercussions for the client, including potential loss of property or inability to secure financing.

In contrast, ignoring a defect, only consulting with the client if prompted, or merely listing the defect without taking further action could lead to a breach of the title agent's fiduciary duties. These approaches do not prioritize the client's best interests or the integrity of the transaction. Therefore, the correct action aligns with best practices in the industry, emphasizing the importance of clear communication and legal due diligence in handling title defects.