Quite often, when presented with the option of getting Owner's Title Insurance at the closing table, clients will ask me for some guidance. In most cases, I will recommend that they get it. I was in a training session recently an the instructor was an attorney who was going over recent court decisions regarding real estate during the first half of the session. The second half of the session was related to title insurance an a review of some relevant situations. He relayed several anecdotes. I thought this one was both humorous and demonstrative. (Names & facts have been changed to protect the innocent.)
It seems that a man purchased a plot of land and obtained bank financing. Naturally, the mortgage was recorded.
The man proceeded to subdivide the land into five lots. He created a servitude of passage. The subdivision with the servitude along with the restrictions for the subdivision were recorded.
A doctor, Doc, purchased lot #5 and built his home on it.
Shortly thereafter, a lawyer, Law, purchased lot #4 and built his home on it.
Well it seems that Doc had a Rotweiller, Sigfried. Each morning, Doc would take Sigfried out for a walk and Sigfried would go over to Law's front yard to do his business. Law was understandably upset and repeatedly asked Doc to keep Sigfried in his own yard. Doc ignored Law's requests.
Doc & his wife decided to go on a European vacation. Meanwhile, the man who had originally developed the property fell on to hard times and the mortgage was foreclosed upon. The mortage, it seems, when filed was superior to the restrictions and the subdivision which created the servitude of passage. When the mortage was forclosed, the forclosure wiped out the restrictions and the servitude of passage. Well, Law knows this and, while Doc was enjoying his vacation, he had a brick fence built right down the property line between his land and Doc's. Doc was fortunate enough to have purchased Owner's Title Insurance. The title insurance company ended up paying Law $70,000 to reinstate the servitude of passage.
Moral of the story... Get title insurance and keep your dog in his own yard.
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