Title company missed Common Drive agreement

13 Replies

We have owned a duplex in our area for approximately 12 years. Our elderly neighbor moved out and sold the home to a couple that is currently renovating the property and has produced a common drive agreement from 1953. I am in the process of finding the original paperwork from purchase of the home to clarify my thoughts as I have been under the impression that we own the driveway and the neighbor has no rights to it.  We refinanced a couple years ago and nothing was included about the common drive agreement that our new neighbors produced in late October. When we contacted our closing attorney for the refinance asking about the common drive agreement she replied that it probably follows the chain of title but because it was a refinance they "only did a deed forward search and tacked onto a prior title policy as that is the standard of practice for a refinance". She is now asking for a retainer of $750 to look into it any further. I am very confused as to how this was missed and who would be responsible for the confusion and why I would pay the title company any money at all to research this further. I feel like she is asking me to pay her to find her own mistake. I can sympathize with the new neighbors as their house doesn't have any off street parking but I feel like we are obviously confused as to what we originally purchased and its' value. I am posting this under this section because I feel that this may have or has the potential to cloud the title if decide to sell. 

Any comments or help would on how to move forward would be greatly appreciated. Thank you. 

Look at your Original title policy to see if there is a mention/e caption to this and also look at your original deed.

@Tom Gimer wouldn’t a title policy automatically reference/exclude any recorded easements/agreements?

Originally posted by @Wayne Brooks :

Look at your Original title policy to see if there is a mention/e caption to this and also look at your original deed.

@Tom Gimer wouldn’t a title policy automatically reference/exclude any recorded easements/agreements?

 I have no idea as this is all new to me. I assume that the purpose of the title search is to reference/ exclude any recorded easements like you are saying. None of my paperwork says anything about a common drive agreement. I just pulled out the original documentation from when the home was purchased in 2007. There is some verbiage on the deed that says the title is marketable and free and clear of all encumbrances, and that Grantor will warrant and defend the title against the lawful claims of all persons whomever, other than the following: easements, restrictions and rights of way of record and to any utility lines in existence over or under the subject property.

I don't understand how this could be missed during two separate closings over the years. 

@Wayne Brooks @Jon A. Every state has a standard period for how far back a title search (for a purchase) is conducted. Around here (mid-Atlantic) it's 60 years. In NC it appears to be 30+ years... so the original agreement from 54 years earlier (at the time of acquisition) would likely not have been located in a 30 year search. I do believe a surveyor would have looked at the layout, researched further, and perhaps discovered it.

A current owner search conducted in connection with a refinance would certainly not have found it.

The existence of a shared driveway agreement is not a title defect that makes title unmarketable.

Paying a $750 retainer for that information is not warranted, imo.

Did it show on the original title report?  In OR, I've seen stuff from the 50s still recorded, so I find it hard to believe a title search by escrow wouldn't show up something IF it was recorded.

In any case,  read the title insurance policy to see what exactly the do/don't payout on.

@Tom Gimer , @Steve Morris , @Wayne Brooks Thank you for all your responses. I will look for the original Title report. I have looked at all the deed page and plat page references I can find online and cannot seem to find a copy of the common drive agreement. According to the neighbors, it was indeed found after they had a survey done on their property. I will get back with more information when I can. I would just like to know for sure that what they are producing is real and was recorded correctly. I suppose I will take a trip down to the register of deeds tomorrow since I cannot seem to find it online. I have not been able to locate the original title report in my paperwork but I am sure it is there. Thanks again for your time. 

Originally posted by @Guy Gimenez :

Did you get a survey when you purchased? 

Well, if he wanted extended title insurance and then pay $2000 for an ALTA survey, don't know if  you want that on every deal.

Not really the point - Point is what is recorded now and what standard title will pay for.

 

@Steve Morris

What will his cost be to fix the problem now? More than $2K? Methinks yes. No one here has seen his policy (and its exceptions and exclusions), so no one here knows what will be covered. I get a survey on almost every purchase I make because I want the additional coverage offered by same. In Texas, I can get a Cat. 1, Condition II survey for about $600 but I know each state is different, as is their promulgated title policies.