Back in 2017 I listed three islands in the Potomac River , consisting of 108 acres between Clear Spring , Maryland and Falling Waters, West Virginia. After tremendous publicity in the media for a unique listing the State of Maryland submitted an LOI to purchase the land. During their title search they uncovered that in the early 1900's one half of the interest in the property was sold to Western Maryland Railway to build piers for a bridge.
This was never recorded in the Washington County land records or reflected on the state tax card information. My Seller purchased the islands back in the 1980's as a novelty purchase and did not think title insurance was necessary since the property had transferred a few times with out any issues.
Sometime in the 1980's Western Maryland Railway was acquired by CSX . My Seller approached CSX to clear up the issue how ever they have been unwilling to work with him to try and complete the sale. After CSX was notified about the issue a few months later their name appeared on the tax card. Once I discover this; not having authorization or signatures from the current owners on my listing contract, I told my Seller I could no longer keep the property for sale, removed it from the market and told him please let me know once the deed dispute is resolved.
So the moral of the story always recommend a purchaser to buy the title insurance policy. Here is a list of items that most policies will cover:
- Forged deeds, mortgages, satisfactions, or releases
- Deed by person who is mentally incompetent
- Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
- Deed challenged as being given under fraud, undue influence or duress
- Deed signed by mistake (grantor did not know what was signed)
- Deed executed under falsified power of attorney
- Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
- Deed affecting property of deceased person, not joining all heirs
- Deed recorded but not properly indexed so as to not be found in the land records
- Undisclosed but recorded federal or state tax lien
- Undisclosed but recorded judgment or spousal/child support lien
- Undisclosed but recorded prior mortgage
- Undisclosed but recorded boundary, party wall, or setback agreements
- Misinterpretation of wills, deeds, and other instruments
- Discovery of later will after probate of first will
- Erroneous or inadequate legal descriptions
- Deed to land without a right of access to a public street or road
- Forged notarization or witness acknowledgment
- Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
- Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises