Would you tell your bank

30 Replies

I have a property that was landlocked and sewage lines crossed families property to the city. The issue the family has decided to cut my access to sewage access off and won’t even talk about turning it back on. I don’t have any savings to pay for a lawyer and I owe about 150k on the property that was just appraised for 200k. Would you tell your banker about the issue or would you just keep plugging away trying to correct it?
@David Finley Is there an easement for the line to run across the property ? Was it installed illegally?

You likely are going to Have to get a lawyer involved.

Can you tell us Why they decided this....a family argument or property issues?

@Chris Seveney no easement ever givin. It was my dad’s townhouses and the trailer park was my grandparents he took care of it for them. My dad died and I bout them from my siblings and step mother with no easement.
@Wayne Brooks my aunt and uncle are druggies and think because I have bought more that I’m rich and can offered to buy their junk for way to much money.

This issue is too complicated to get a "correct" answer in BP forums. It's time to talk to a Kentucky property law attorney about easements, prescriptive, by necessity, etc.  And not just for the utilities.

I see your comment about money for attorneys. A consultation and demand letter are not going to break you.

Hire an attorney. They can usually give you a free consultation to start and that might give you an indication of what it would cost to get this wrapped up.

The question would be would you tell your banker?

I don't know what purpose it would serve to speak with the lender. They may be able to loan you money to hire an attorney?

If your property is landlocked, you must have recorded easements. If there are no recorded easements, then you can fight for easements but that requires money and an attorney.

I would absolutely tell the bank. No utilities I assume means soon no rental income and eventual foreclosure. There may be potential title insurance claims here as well.

Originally posted by @David Finley :
I have a property that was landlocked and sewage lines crossed families property to the city. The issue the family has decided to cut my access to sewage access off and won’t even talk about turning it back on. I don’t have any savings to pay for a lawyer and I owe about 150k on the property that was just appraised for 200k. Would you tell your banker about the issue or would you just keep plugging away trying to correct it?

David

Something doesn't sound right and I would contact my lender and the title attorney who did the closing on your loan.  How did you get a landlocked property with sewage lines that cross other properties without a recorded easement?

As others have said, get an attorney to give you advice.  I'd go to my previous title attorney first and then the lender if you aren't able to break the deadlock.

Stephanie 

Originally posted by @Sam Hopkins :
@David Finley look up implied easement and prescriptive easements. You may have one or the other.

Thanks Sam Hopkins.  I learned today.

Stephanie 

@David Finley ,

Check out your state laws on adverse possession.   Even if it wasn't officially done, it may be a legal right now.

I would tell them, just because they will likely find out 1 way or another.

Going to the lender could Create problems, not solve them. Lenders don’t guarantee title.....they just lend money and get title insurance for themselves. 

Easement of Necessity: Your property exists with no access to a public roadway due to surrounding properties owned by others. However the situation may have been created in the first place, most states recognize that a property owner has a right to be able to enter and exit his property – called the right of ingress and egress. In this case, a court may issue an order creating an easement by necessity allowing the owner of the property with no access to cross the neighboring properties unrestricted. I don't believe this applies to the sewage access.

@Wayne Brooks Which do you think will get better results here... 

1) Owner does nothing OR 2) Owner alerts deep pocket lender that their investment may be in jeopardy, and why

If the initial scare from the attorney letter to the adjacent owner doesn't resolve this, the issue might still be resolved by a lenders title insurance claim. In these parts we cannot include a survey exception for lenders coverage even if a survey was not undertaken (and access is a covered risk). The issue might either need to be settled or litigated... by attorneys on behalf of the insurer and without OP lifting a finger.

My point is that getting others involved when the alternative is doing nothing can't possibly hurt.

@Tom Gimer Okay, I see....get the lender scared and they put pressure on their policy title insurer.  I’m guessing there was no survey done, hence no one discovered the “land locked” issue? Isn’t a survey typically required for  title I surance, or either there is an exception for any issues arising out of /missing in not having a survey?

I’m guessing the OP’s best shot is a prescriptive easement here, depending on state statautes,  But......I just got home after a night out  with a few martinis and scotches mixed in....

Why would you tell your banker, unless there would be some advantage/benefit doing so. 

In the first instance I would be getting legal advice.... asap

Originally posted by @Stephanie Potter :
Originally posted by @David Finley:
I have a property that was landlocked and sewage lines crossed families property to the city. The issue the family has decided to cut my access to sewage access off and won’t even talk about turning it back on. I don’t have any savings to pay for a lawyer and I owe about 150k on the property that was just appraised for 200k. Would you tell your banker about the issue or would you just keep plugging away trying to correct it?

David

Something doesn't sound right and I would contact my lender and the title attorney who did the closing on your loan.  How did you get a landlocked property with sewage lines that cross other properties without a recorded easement?

As others have said, get an attorney to give you advice.  I'd go to my previous title attorney first and then the lender if you aren't able to break the deadlock.

Stephanie 

this is the exact scenario where people landlock themselves  one family owns two separate proeprties they sell one and zone out on giving them selves and easement.. and the next thing you know its landlocked.. I have tried to fight this battle on the West coast and you can for sure landlock a property if  the person owned both properties and failed to give a together with easement when they sold one .

the easement by necessity sounds like the play here and then its up to a trier of fact and maybe the other party wont want to spend legal fee's defending. ??? who knows..

Originally posted by @Tom Gimer :

@Wayne Brooks Which do you think will get better results here... 

1) Owner does nothing OR 2) Owner alerts deep pocket lender that their investment may be in jeopardy, and why

If the initial scare from the attorney letter to the adjacent owner doesn't resolve this, the issue might still be resolved by a lenders title insurance claim. In these parts we cannot include a survey exception for lenders coverage even if a survey was not undertaken (and access is a covered risk). The issue might either need to be settled or litigated... by attorneys on behalf of the insurer and without OP lifting a finger.

My point is that getting others involved when the alternative is doing nothing can't possibly hurt.

 I get ingress egress to public road is a covered item in title insurance going through one right now.. but easement for utls.. Is that included if it is.. then your right this goes right to a title claim and let the title insurer duke it out.. plus the lender probably has a lenders policy.. ??? not sure how that plays in .

My landlock situation was quite complicated.. and Chicago missed it.. they have been 2 years battling to get it done for me.. 

we had a neighbor and a state owned trail to cross. turns out the state owned trail there is NO way to force that in Oregon.. but the buyer for the property is the local metro open space. so the state kind of rolled over .. but they did not have to.. then we had the neighbor that we had to sue..  and they finally caved since Metro is buying it and will use the property for perminant open space.. this is a 500k chunk of dirt.. out in the semi  boonies of Oregon.. LOL..   

@David Finley your lender will find out eventually so you may as well be honest upfront. They won't lend if the property doesn't have a functioning sewer system. But I agree with @Nathan G. you're putting the cart before the horse. There's no need to speak with a lender until you have this settled.  

@Christi Hawkins the issue is my lender is doing a refinance on the property at this time. What worries me is if I don’t tell them they will pull the note anyway.

@David Finley Oh im so sorry I didn’t realize that Has the appraisal been done yet? You have to tell them because it affects their collateral Title should reveal the property is landlocked with no easements and that should start the questioning  If you want to continue to build a relationship with this bank you tell them now before they find out you’ve been keeping this bit of information to yourself You might be surprised When I worked at a bank we used to help people try to solve stuff like this all the time 

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