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Buyer's title company requiring affidavit regarding medical debt


denco
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Advice requested:

 

I have been in the process of selling a parent's home to get them into a smaller living situation more conducive to someone living in a wheelchair. After we accepted the offer, the buyer's title company is now requiring an affidavit. Our real estate agent said this is considered standard but when we purchased the new place, no such affidavit was requested.

 

Included below is the demand with some personal information redacted.

 

"Furnish an Affidavit stating that (parent name) has never received any Medicaid
payments and that all funeral expenses, as well as all expenses of the last illness of
(parent name), including nursing home expenses, if any, have been fully paid
and satisfied. In the event that (parent name) is deceased, we require proof from
Missouri Healthnet that no Medicaid debt is currently owed on behalf of said (parent name)."

 

Parent is alive, not on nor has been on Medicaid. I read the below as stating they want her to pre-pay for a funeral and want documentation of medical debt. I find this to be outrageous. This is my first real estate purchasing transaction where I have been involved. Perhaps one of you can explain if this is common or even legal.

 

I am curious as to how the buyer's title company has any information regarding the seller's medical condition. The house has a clear title, the credit report came back without any medical debt. Is this a HIPAA violation? Is this enforceable? Should I refuse? I am the full time caretaker for my parent who is in a wheelchair and they had a stint in a hospital / rehab facility. It is common knowledge that medical billing coding has frequent errors and I do not like the idea of the seller adding this at the last minute.

 

I have the contact information for the our title company and that of the seller. Before I make a fool of myself, I would like any advice if a member here has dealt with this issue.

 

If I sell you a car and the title is clear, what right do I have to ask for your credit report or if you owe any medical debt? Thanks for any input.

 

 

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Advice requested:

 

I have been in the process of selling a parent's home to get them into a smaller living situation more conducive to someone living in a wheelchair. After we accepted the offer, the buyer's title company is now requiring an affidavit. Our real estate agent said this is considered standard but when we purchased the new place, no such affidavit was requested.

 

Included below is the demand with some personal information redacted.

 

"Furnish an Affidavit stating that (parent name) has never received any Medicaid

payments and that all funeral expenses, as well as all expenses of the last illness of

(parent name), including nursing home expenses, if any, have been fully paid

and satisfied. In the event that (parent name) is deceased, we require proof from

Missouri Healthnet that no Medicaid debt is currently owed on behalf of said (parent name)."

 

Parent is alive, not on nor has been on Medicaid. I read the below as stating they want her to pre-pay for a funeral and want documentation of medical debt. I find this to be outrageous. This is my first real estate purchasing transaction where I have been involved. Perhaps one of you can explain if this is common or even legal.

 

I am curious as to how the buyer's title company has any information regarding the seller's medical condition. The house has a clear title, the credit report came back without any medical debt. Is this a HIPAA violation? Is this enforceable? Should I refuse? I am the full time caretaker for my parent who is in a wheelchair and they had a stint in a hospital / rehab facility. It is common knowledge that medical billing coding has frequent errors and I do not like the idea of the seller adding this at the last minute.

 

I have the contact information for the our title company and that of the seller. Before I make a fool of myself, I would like any advice if a member here has dealt with this issue.

 

If I sell you a car and the title is clear, what right do I have to ask for your credit report or if you owe any medical debt? Thanks for any input.

 

 

 

The title company will issue an insurance policy that insures the covered party(ies) against title defects after the transaction closes. It is their responsibility to make sure that there are no liens or encumbrances, recorded or otherwise, against the property. No reputable title company is going to have you sign an illegal affidavit.

 

What is legal and customary varies widely from jurisdiction to jurisdiction, although you cite the federal HIPAA statute but I don't see the angle.

 

What did your real estate agent say? If you still have questions you should call the title company. After you've exhausted those options you could consult with an attorney, and then the Missouri Land Title Association or the American Land Title Association, in that order.

 

A car is not real property, and when you transfer ownership of a vehicle there is no one like a title insurance company that is on the hook in case a previous lienholder attempts to assert his or her claim against the asset. The transfer of a car and the transfer of real estate are two dramatically different transactions.

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I have been doing mortgages for over 15yrs I have never heard of such a thing.

If it is truly the title company requesting the data I would find another title company.

 

 

Valid points, but OP is the seller. Buyer chose the title company.

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What did your real estate agent say? If you still have questions you should call the title company.

 

 

-He said he thought it was no big deal and gave me the contact info for both title companies. I'll be reaching out in a few days after figuring out why the buyer's title company is pushing this and if it is common. Also, thank you for the car vs real estate differences. I couldn't get that example of me selling a car to another party out of my head. This is my first real estate transaction.

 

Title company must be considering the possibility this is an asset dump to qualify for Medicaid and the potential clawback by the state

 

 

-Is it an asset dump though when parent is downsizing from a house to a condo with both assets in their name? We are downsizing to a small condo because parent is likely in a wheelchair the rest of their life and our current house is two stories and not accessible for them.

 

If it is truly the title company requesting the data I would find another title company.

 

 

-Odd thing is that the bank used by the buyer provided much more information about the buyer than I would think is allowed. Things such as verifying they have an account and implying they have the money. What is odd to me is the buyer's title company coming up with this request. I get it that they are separate from the bank but how would they find out if my parent has been in a nursing home/hospital/rehab facility or not if we did not provide this information?

 

 

although you cite the federal HIPAA statute but I don't see the angle.

 

The HIPAA angle I was attempting to bring up was something I read on the credit card forums here referring to credit reporting medical bills on credit reports and the ability to dispute due to HIPAA violation. I imagine this is different.

 

Thanks for all replies. I have a 13 page document sent from the buyer's title company to read and just want to protect closing the sale without opening us up to any legal or future legal/financial issues.

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Got around to reading this document and see "furnish an affidavit that all funeral expenses have been fully paid and satisfied". The seller is alive, the real estate agent is somewhat dismissive of my concerns and I just left a voicemail for our title company for some additional information. I am wanting to tell the seller's title company to shove it but need some ammo.

 

I have never heard of this (provide an affidavit that medical expenses and funeral are paid for) but this is new to me. Does anyone have experience with telling the buyer's title company you will not agree to these unreasonable conditions?

 

Thanks to all.

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Agree that the request is extraordinary. However, what additional liability do you fear were you to provide the statement? To move things along, I'd be willing to sign an affidavit that I don't wear my shoes on the opposite feet.

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My concern is that due to the extent of the medical issues that there is some bill that we don't know about floating around. I wouldn't want to sign an affidavit and then get caught in a situation where it looks like we acted in bad faith. I also am reading something here that states her funeral has to be pre-paid. The more I dissect this the more ridiculous it seems. I have a call in to our title company to get their take on this and see how to push back.

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