I don't see the title company having any liability, unless you purchased a ALTA owner's policy. A CLTA policy only insures against defects in the title as shown by public records. Off-record matters affecting title are excluded from coverage in a CLTA policy.
I don't know where you are at in the process, since you mention attorney's fees, but it sounds as if a lawsuit against the developer/ HOA, and maybe a claim with the title company are in order, depending on the policy. Your case would have to be reviewed by an attorney.
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You should consult an attorney to review all the documents and try to negotiate either a lot line adjustment or an easement.
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