Appointment of 7-A Administrator Not Listed in Title Report

Landlord sued title insurance company after landlord bought a building, claiming that the title report it received didn't state that a 7-A administrator had been appointed for the building. Landlord claimed that this was an encumbrance on the property that should have been disclosed. The title company asked the court to dismiss the case. The company claimed that the appointment of a 7-A administrator didn't create a lien or a debt that had to be listed in the title report. The court ruled for the title company and dismissed the case. The appointment of the 7-A administrator did create a special lien, but it didn't have to be listed in the title report. And if landlord had performed due diligence before it bought the building, it would have learned about the 7-A administrator by inspecting the building and checking HPD's building index.

Zev Cohen LLC v. Fidelity National Title Ins. Co.: NYLJ, 4/4/07, p. 25, col. 1 (Sup. Ct. Kings; Schack, J)