Title Issues - Part III of a Series
Today's
newsletter concludes my series on title issues with examples of "bad
title" and suggestions for how you, as a broker, can best help your
clients when title is an issue.
By far the most common title issue I see impacting closings is a shared
access easement. This issue takes two forms: (1) lack of a valid
easement to reach the subject property, or (2) the existence of an
easement for someone else's use across the subject property.
Problems arise when these uses have no formal written agreement, or when
the access actually used is in a different location than specified in a
written agreement. Uncertainty can also arise in urban areas
where there are numerous historic alleys that may or may not be
open to the public. Nothing kills a deal quicker than lack of
valid access.
A second common title issue is a boundary problem. Such problems
can be either gaps or overlaps. A gap is when two boundary lines
described in the deeds for adjoining properties do not meet and leave an
area owned by no one. An overlap is when two boundary lines cover
the same area. In either situation, you can be sure that the
adjoining owners have opinions about who really "owns" the impacted
area. Also, someone is almost certainly using that area, and it
may not be the person who actually owns it.
A final common title issue is lack of full ownership. This
happens most frequently in family transfers, especially in deceased
persons' estates. For example, I have seen a title where five
children inherited the property, and four of the children got together
and "sold" the property to another family member because no one knew
where the other child lived. As you can imagine, the variations on
this theme are endless.
There are several things you can do to help avoid and cure title
issues. First, you should do a very thorough investigation of the
property, especially when something looks odd on the ground. If it
looks like a retaining wall comes over the property line, ask about
it. If it looks like two houses share the same driveway, ask about
it, and find out if there is a written recorded agreement regarding the
shared drive. If you see pipes running from a spring or well on
the property to another house, investigate. Be sure to share your
observations with the attorney doing the title search because attorneys
do not visit properties as part of the closing process.
Finally, be prepared to advise your clients to obtain a survey when
necessary to sort out any of these issues, especially boundary problems.
Second, if a title problem impacts a closing, pay attention to the
contract deadlines. Get amendments resetting the closing or due
diligence dates while title problems are being resolved. This will
avoid a party under contract having an excuse to end the contract
because of the length of time it is taking to fix a title problem.
By extending due diligence and closing dates, you will keep all parties
in the game, and find out if one is becoming unwilling to wait for a
title cure.
Finally, you should stay in close communication with your client and
the other broker. Title cures may involve getting information, and
sometimes signatures, from neighbors or other family members.
Keeping the lines of communication open and doing the legwork to get
information and signatures can greatly help with fixing title issues.
This concludes my series on title issues. I hope you have easy
closings without title problems, but if you do, I hope you feel better
prepared to understand and help resolve them.
Do
not hesitate to contact me to receive more information on this topic or
to suggest topics for future editions of 'A Legal Moment'. You may not
rely on this content as legal advice for any specific situation, but
should instead contact an attorney for specific advice. | 
