I am buying a HUD owned property. We were ready to close on 5/13/11 (the day I closed with my buyer), HUD wasn't and delayed until 5/27/11. My buyer has charged me rent to stay and has been gracious enough to allow us to stay until June 3rd at a rental rate of $40/day. When I spoke with my agent and closing attorney on 5/27/11 I was informed that we still weren't ready to close, we are waiting on HUD attorney to give a clear title statement. HUD attorney has had the paperwork since 5/24/11. I cannot get a confirmation on a new closing date. Can I hold HUD liable for my additional expenses? Any idea on how long this process should take?

You need to talk to the HUD attorney to see SPECIFICALLY what the title issue is.What the title issue is will affect how long it will take to clear it.

Could take a few days to a year depending on what it is.HUD can't sell to you without clear and marketable title.

You can't recover any money from HUD.They have nothing to do with your choice of selling your property to a buyer.Yes they have delayed closing but they do not have clear title to convey.

So talk to the HUD attorney to see what the title issue is.You might have to extend time with your buyer to live there longer or do the hotel thing for a few weeks and have stuff in storage.

no legal advice

HUD does make sure every i is dotted and t crossed before they take the next step in any transaction. I am not sure on the liability there, but I would recommend consulting an attorney as well.

Do they not clear up title issues before listing. I recently had a client worried about a HUD home because she thought there was issue with title. I told her that HUD would not list it if there was. Was I wrong?

It's not unheard of to find title issues until AFTER it's listed and they do the final title search prior to closing. It happens around here on about every 1 in 100.

As far as title issues are concerned, HUD wouldn't be able to convey the house with title insurance if there were "issues".

The exception would be if the buyer agreed and it would be listed as not covered by the title insurance. I had it happen recently where we had an HOA noted on title, but the HOA had been dissolved many years ago. Title search and our investigation was unable to find anything on this dissolution, so it was noted as not covered on the title insurance.