Title Insurance Easement

Maker102 · Sep 29, 2003

OK guys here is the biggie question of the day. I bought some land and now low and behold there are high pressure natural gas lines on the property. I thought I goofed and did not note they were there when we closed. But after some digging and careful reading their are none noted on the title. I called the gas company and they said they were covered by an easement and gave me the number. I believe they are correct and that the title company did not discover it or note it on my paperwork. Anyone ever have a similar problem? What was the resolution? I talked to the attorney who wrote the policy and according to him he has never had a problem with a claim and he has been writing them for 10 years.

Chet · Sep 29, 2003

I have a high pessure natural gas line traversing my property and am very thankful, because they came right out and tapped a meter and I do not have to buy propane! The line is buried 8-10 feet deep. I did not examine the title when we bought the land for the easement. I would guess that they have one. What exactly are you wanting to do? Have the line removed?? I would venture to guess that would be a no-win expensive legal battle. Chet

Maker102 · Sep 29, 2003

No I am not looking to have it removed, I believe the gas company has the right to the ground from the easement that they quoted. What I am wondering is what has happened in the past with other people when the title insurance company screws up. From my understanding the Title Insurance is a snapshot view of the property when you buy the ground. Well if the snapshot does not include two high pressure gas mains well...... Just wondering if anyone else out there had the same problem and what the final solution was.

MossRoad · Sep 29, 2003

Are you wanting to get out of the deal, since the seller didn't let you know that there were gas lines on the property? If it wasn't in the title, how did you find out they were there?

riptides · Sep 30, 2003

I thought the purpose of "Title" Insurance and Deeds were to protect, you, the current property owner from "false" claims against your property.

As you are the owner of the property now, and an easement has been stated and recorded, I see no adverse circumstance of the Title omission. What can you do to yourself?

Now if the pipes were not present and the company were to claim "easement" and it is not on your "Title" then perhaps
you could do something?

I slept at a holiday inn last night.

-Mike Z. /forums/images/graemlins/grin.gif

Bird · Sep 30, 2003

I certainly don't know what, if anything, can be done about it, but it does sound to me as if whoever did the title search failed to do a proper job. The paperwork that came from my title company specifically mentioned all easements.

akman · Sep 30, 2003

We recently settled a claim with our title insurance company for NOT catching a horse riding easement on our property.

The title company was very professional and hired a third party appraiser to asses the claim. It turned out to be a fairly large setlement (much more than I expected), and we came to a great understanding with our neighbors who own the easement too !

Sometimes things actually turn out the way they are supposed to and everyone is happy /forums/images/graemlins/smile.gif /forums/images/graemlins/smile.gif

Most Title insurance companies bean count. They plan for the occasional missed deed items like ours. In this case the intern doing the search just wasn't thorough enough.

Good Luck,

Tony

Docsknotinn · Sep 30, 2003

I guess The thing I would do is talk to an attorney. You might be entitked to damages but I dont understand the gas line. I mean are we talkin 10' down one side or are we talkin 40' through the middle of the property. This should have showed on your survey as well. Most counselors dont charge for reviewing a potential case so you have little to losse getting a professional opinion. Dave

Briarwood · Oct 1, 2003

My understanding of Title Insurance is to insure that you have a good and merchantable title. If not, the TI company will do what is necessary to clear the title or pay damages incurred. What are your damages? Was the location or existance of the gas line taken into consideration in your appraisal? Did you pay more than fair market value because the gas line was not disclosed? Would you suffer a loss if you sold the property because of the existance of the line? Does the easement impair you from using the property as you intended? The liability may lie more with the realtor and previous owner for nondisclosure. However, I would certainly first look to the deeper pockets of the title company or at least put them on notice that they erred by not reporting the easement. If I was unhappy about the situtation and concerned about the location of the gas line or its effect on the value or saleability of my property, I would first seek the advice of an attorney. Find one that is familiar with real estate law in your county and state (ask your banker for a recommendation). Don't pick an ambulance chaser that will just muddle up the situtation by trying to make it a pxxxing contest with everyone concerned.
FWIW
John

heehaw · Oct 2, 2003

several years ago, i bought 10 acres with a gas line running right thru the middle...it didn't bother me, but when i decided to sell it, wow, i couldn't believe how many people wouldn't touch it because of the gas line. i didn't know they had a 65 ft easement..i had just figured a 30 ft was probably all they had...that part was my own fault..but i would have still bought it, even if i had known it was 65 ft..i just couldn't see a problem with a buried gas line..but some folks seem to?? if i hadn't known it was there, and found out later, i think i would have been pretty upset...especially when i wanted to sell.
heehaw

MossRoad · Oct 2, 2003

i just couldn't see a problem with a buried gas line..but some folks seem to?? 

Here's why some folks are scared of gas lines. Scroll down to the bottom of the story and there are many links to more stories related to gas line explosions. While the odds of it happening to you are slim, people remember these horrific stories and are forever leary of gas lines.

kensfarm · Oct 2, 2003

Isn't there something called full disclosure.. seems to me you'd have a case against.. the previous property owners.. the selling realitor.. and or the title company. Someone knew it was there.. title company should have caught it if they did the proper research. The easement lowers the value of the property.. they didn't disclose that information.. and you got taken. Do you know how much was paid for the easement.. I'd consult w/ some legal's who have dealt w/ this before.. def. isn't right.. and against the law! The bank could even default your loan if they thought the difference in $ was great enough not to cover the loan.

Currmudgeon · Oct 2, 2003

( What I am wondering is what has happened in the past with other people when the title insurance company screws up. )

I'm not a lawyer. If you purchased a property and there is an encumberance on the property that you had not been made aware of, and that the title insurance company and/or surveyor did not discover, then I would argue that your professionals made an error or an ommission in their work.

You can't get compensation from the gas company, because they obtained a legal easement and are presumably in compliance with its terms.

You are due compensation for the faulty work of the Professionals you hired to protect you. Your land is arguably worth less than the amount you negotiated in good faith. You could seek damages against the Title Insurance Company - that's what you bought title insurance for in the first place - or the land surveyor.

A fair value for your loss might be the value of the land (not the buildings) occupied by the easement.

You'll need to retain a lawyer to fight this out.

Maker102 · Oct 7, 2003

Sorry Guys the computer gave its last gasp so had to get that fixed before I could answer. Anyway I went to see the Title Insurance Company Lawyer just went to listen. He explained that they were in the wrong and that it was their fault. He also wanted me to name a price to make this problem go away. Now I am back to square one. If I pull in a lawyer from the outside he is going to want at least a third plus expenses. Any Ideas?

Henro · Oct 7, 2003

I would talk to someone with expertise in real esatate in your area and see what the impact of that gas line would be if you were to sell the property today.

That would give you a baseline for what is reasonable and fair, etc.

Then you could float a higher number and see what the response is...or take any approach you like...with some idea that you are being reasonable in what you are doing.

You could always get a lawyer later if the title company is unreasonable in what they are willing to do for you.

Around here the lawyer might get about 40% of the settlement... /forums/images/graemlins/frown.gif But if there is no other way [sounds like there is in your case] 60% of something is better than 100% of nothing... /forums/images/graemlins/smile.gif

kensfarm · Oct 7, 2003

How about calling the Gas company and see how much they would have to pay for an easement today..

MarkV · Oct 7, 2003

Keep in mind that most easements not only effect selling price but will restrict what can be done on that part of your property. If you want to put a pole barn or sub-divide that part of the property, buildings will most likely not be allowed on the easement.

MarkV

TimSullivan · Oct 7, 2003

Sorry Guys the computer gave its last gasp so had to get that fixed before I could answer. Anyway I went to see the Title Insurance Company Lawyer just went to listen. He explained that they were in the wrong and that it was their fault. He also wanted me to name a price to make this problem go away. Now I am back to square one. If I pull in a lawyer from the outside he is going to want at least a third plus expenses. Any Ideas?


Basic negotiations rules tell me it is their responsibility to make an offer. Once you get that you can sit down with a lawyer and anyone else to determine if the offer is fair. Make sure that the lawyer is hired by the hour and do not let the lawyer do the negotiating. Two lawyers in the same room will take far more time to solve the problem.

Currmudgeon · Oct 7, 2003

( He explained that they were in the wrong and that it was their fault.)

Good. That sets the stage for everything that follows.

( He also wanted me to name a price to make this problem go away. )

Can you estimate the price of your raw land, without the buildings. Take that per-acre price and apply it to the area of the easement. That figure may be a little high, but you want to start high. The Title Insurance company sure won't tell you, "Oh, you're not asking for enough."

Your realtor should be able to give you a back of the envelope per-acre price for your area.

The Title Insurance company should have an appraiser on staff. He should be able to come up with a number, quickly.

It's not going to be a real big number, anyway.