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An ironic situation in legal malpractice is the inverse matchup of legal fees in residential real estate legal fees [especially for buyer] and the potential loss when the attorney fails his due dilligence.  Examples?  Bad title searches, poor monitoring of the deed filing, and this article:

"More dangerous is the issue of what if it’s the previous owner’s loan that was wrongly recorded. The previous owner is obviously no longer making payments on the property. The lender may or may not have been paid off properly; if they were there may not be any difficulties. It could just disappear into some metaphorical black hole of things that weren’t done right and were never corrected, but just don’t matter because everybody’s happy and nobody does anything to rock the boat. However, unlike black holes in astronomy, things do come back out of these sorts of black holes.

However, if the previous lender was not paid off correctly, or if they were paid but something causes it to not process correctly, they’ve got a claim on your property, and because the usual title search that is done is county-based, it won’t show up in a regular title search. Let’s face it, property in County A usually stays right where it’s always been, in County A. There is no reason except error for it to be recorded in County B. Therefore, the title company almost certainly would not catch it when they did a search for documents affecting the property in County A; it would be a rare and lucky title examiner who caught it.

In some states, they still don’t use title insurance, merely attorneys examining the state of title. When the previous owner’s lender sues you, you’re going to have to turn around and sue that attorney who did your title examination for negligence, who is then going to have to turn around and sue whoever recorded the documents wrong. If it’s a small attorney’s office and they’ve since gone out of business, best of luck and let me know how it all turns out, but the sharks are going to be circling for years on this one, and the only sure winners are the lawyers.

In most states, however, the concept of title insurance has become de rigeur. Here in California, lenders don’t lend the money without a valid policy of title insurance involved.

Let’s stop here for a moment and clarify a few things. When we’re talking about title insurance, there are, in general, two separate title insurance policies in effect. When you bought the property, you required the previous owner to buy you a policy of title insurance as an assurance that they were the actual owners. By and large, it can only be purchased at the same time you purchase your property. This policy remains in effect as long as you or your heirs own the property. The first Title Company, which became Commonwealth Land Title (now part of LandAmerica), was started in 1876, and there are likely insured properties from the 19th century still covered. If you don’t know who your title insurance company is, you should. Most places, the company and the order of title insurance are on the grant deed. "

Continue Reading Real Estate Transactional Legal Malpractice

In this New OrleansCase:

"NEW ORLEANS – A federal appeals panel on Sept. 13 reversed and remanded a district court order dismissing a legal malpractice claim against an errors and omissions insurer and its insured law firm because the claimant had suffered a compensable injury sufficient to assert a legal malpractice claim (H.S.

A classic expression we have heard is that if "x" was not able to be an attorney he would have been digging ditches or sewers.  Here is a case from Kentucky which combines the best of both worlds.

"MATHERLY LAND SURVEYING, INC. V. GARDINER PARK DEVELOPMENT
TORTS: LEGAL NEGLIGENCE; INDEMNITY
CIVIL PROCEDURE: STATUTE OF LIMITATIONS…