Who is responsible for the acts of its authorized agents in title commitments for residential property sales?

Who is responsible for the acts of its authorized agents in title commitments for residential property sales?

• A. The title entity
• B. The insured
• C. The lender
• D. The buyer

Answer: (A)

In a title commitment, the title entity is responsible for the acts of its authorized agents. When the title company hires or uses staff to perform title searches, examinations, and the preparation of the commitment, those actions are considered taken on behalf of the title company. Under agency principles, the principal (the title company) is accountable for the acts of its agents when those actions are within the scope of their authority. This liability runs to the insured party (often the buyer or lender) because the commitment and eventual policy are issued in the title company’s name. The buyer or lender relies on the accuracy and thoroughness of the commitment, and any misstep by the company’s agents falls back on the title entity, not on the insured, lender, or buyer.

In a title commitment, the title entity is responsible for the acts of its authorized agents. When the title company hires or uses staff to perform title searches, examinations, and the preparation of the commitment, those actions are considered taken on behalf of the title company. Under agency principles, the principal (the title company) is accountable for the acts of its agents when those actions are within the scope of their authority. This liability runs to the insured party (often the buyer or lender) because the commitment and eventual policy are issued in the title company’s name. The buyer or lender relies on the accuracy and thoroughness of the commitment, and any misstep by the company’s agents falls back on the title entity, not on the insured, lender, or buyer.