title assurance

By
Real Estate Agent with Perry Wellington Realty

Title Assurance

 

Common law – first title transfer is efficient and subsequent ones are not

Since ownership has already transferred there is nothing they can give you

Response is recording acts – unless recorded it does not stop a good faith purchaser for value

Usually done at the country level – indexed by grantee, grantor, and by tract

Indexing by tract is easier in the west due to government survey system

Trace the title back in grantees index and then forward in grantors index

Some claims are not recorded – adverse possession

There is no way to do a perfect search – was it delivered, was it properly recorded, etc.?

Title companies have their own title plants – include tract indexes

They can also reuse their work – only look since the last time the insured it

 

Luthi v. Evans p. 668

Oil and gas assignment lists some of the tracts affected but not all of them

When it is indexed it is not indexed under the tract index for all those that are affected by it

Court rules that there must be some type of notice – accessible in a practical manner

 

Messersmith v. Smith p. 689

Must be notarized but there is no proof that it was signed in the presence of the notary

There is nothing to indicate that it may be fraudulent and thus your purchase may be at risk

Adverse possession is another risk you face

 

Orr v. Byers p. 678

Attorney identified the last name as Elliot instead of Elliott.

idem sonans does not apply here – too great of a burden to search all possible names

Usually idem sonans only applies to criminal cases – right person but wrong name

You do have to check diminutive names – Joe, Liz, Jon, etc.

 

Mortgages don’t have a visible claim on the property – must be recorded

It is a security interest in the property

 

Types of recording acts

  1. Race – first to record prevails (was the first form originally used)

  2. Notice – protects bona fide purchaser for value against recorded or unrecorded instruments

  3. Race-Notice – protects bona fide purchasers for value as long as you record first

 

Lick Mill Creek Apartments v. Chicago Title Insurance p. 738

Title company is more likely to be around and in a better position to pay

They also pay lawyer expenses for litigating a quiet enjoyment claim

 

Walter Rogge v. Clelsea Title p. 731

Title company does not disclose information they find about incorrect acreage and do not protect against such a risk

Title company says they were only providing a policy, not a search so the information was only for them

They also handles the closing – do they have a duty to get the price right?

 

Torrens System – registration of title

It has not worked well as the bookkeeping has not kept up

People also have the problem of living on land for which there is no certificate

 

Marketable title acts

Usually there are laws that provide if you trace the land back 40 yrs then that is enough

 

Recording act issues

  1. What is a proper recording?

    1. Acknowledgment

Messersmith v. Smith p. 689

    1. “In Chain”

Board of Education v. Hughes p. 696

  1. What dates must be searched?

Usually just look at all the time in the chain of title

  1. Who is protected?

    1. Creditors and Subsequent Purchasers

    2. Must be a good faith purchaser for value

Alexander v. Andrews p. 712

Lewis v. Superior Court p. 708

Daniels v. Anderson p. 706

  1. Notice

    1. Quitclaim deed p. 713

    2. Inquiry notice

Harper v. Paradise p. 713

Waldorf Insurance p. 717

 

Do you have to look at previous owner’s title even before they acquired the property?

Most jurisdictions say no, some say it is effective as long as a reasonable search would find it

Do you have to look at prior ownership even after they have already deeded it out?

Most jurisdictions say no – there is no constructive notice

 

Guillette v. Daly Dry Wall p. 699

Subdivision – deed or map should list any restrictive covenants

Developer failed to list covenants in each deed – no mention anywhere else in chain of title

Court finds it applies – need to look at more than just your deed from the subdivision

One issue was that other deeds said all the deeds had such a restriction

Inquiry notice – all the other houses are singe-family dwellings

 

Nuisance

 

Intentional Trespass v. Intentional Nuisance

  1. TP does not require substantial injury

  2. TP has no requirement of unreasonableness

  3. TP protects only possessory interests

  4. Different Statute of Limitations

 

Nuisance

Private tort action involving property rights

Owners of real property enjoy

  1. Freedom from Trespass

  2. Water Rights

  3. Support

  4. Freedom from Nuisance

Must show that it was unreasonable and intentional (the act, not intent to cause a nuisance)

Unreasonable can be a cost/benefit analysis or in terms of the type of neighborhood

Intentional also covers acts that you had reason to know would happen

Nuisance covers acts that do not physically invade your property (light, noise, air pollution)

Nuisance plays a relatively minor role today (most things are covered by regulations or zoning

Statutes deal with these issues much more effectively

Provides for advance notice and planning

Courts can’t really deal with interconnectedness of problems

 

Morgan v. High Penn Oil p. 747

Oil refinery cannot be operated without occasional noxious gas

If it is unreasonable then you have to cease – even if it causes you more damage then them

 

Restatement says that you have to consider risk of harm to others against utility of conduct

 

Estancias Dallas Corp. v. Schultz p. 755

Central air conditioning tower makes tons of noise – only cost effective means at the time

Court upholds the injunction even though it means a huge cost to defendant

Result is that parties can agree on a price to buy the injunction

But if they do then there is an incentive for others to bring suit

 

Boomer v. Atlantic Cement p. 759

There are other 300 employees and they have to produce cement somewhere

Court finds that it is a nuisance but allows permanent damages instead of an injunction

Permanent damages – economic loss for both the present and the future

Departs from the rule that they should not balance equities

Owners essentially have to sell their rights against pollution

 

Spur Industries v. Del E. Webb Development p. 766

New development builds right up to a feed lot and then charges them with nuisance

Usually first in time matters – it determines what is reasonable

Court grants an injunction but says that developer must pay costs of moving them

Balances need for new houses and development with easing the way out for the feedlot

 

Potential Nuisance Remedies

  1. No damages, no injunction

  2. Damages to plaintiff, no injunction (Boomer)

  3. Damages to plaintiff, injunction granted (Morgan)

  4. Damages to defendant, injunction granted (Spur)

Can have a partial injunction – control the nuisance in these ways

 

Right to farm – Many states allow that there is no nuisance if the farm has operated for a number of years and it is still the same type of farm

 


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