Title insurance claim regarding Easement dispute

[Victor Valencia]

I purchased a short-term rental property a couple years ago that requires crossing another landowner's property for access. The landowner informed us that there is a no legal easement to our property, and we could possibly be land locked. This situation also affects two of our neighbors who purchased their homes around the same time. We all have the same title insurance company and have individually filed claims. Based on our coverage, it appears that we are protected.

My question is, what does title insurance typically cover in this situation? I believe constructing a new easement may be the only solution. We have consulted with a real estate attorney who suggested negotiating with the landowner. Does anyone have experience with a similar issue or insight to share on this matter?

[Russell Brazil]

You dont construct an easement. An easement is the right to cross their land to access yours. 

If there is no access, it sounds perhaps like an "easement by necessity" might be needed

Perhaps @Tom Gimer may have some input.

[Tom Gimer]

If the neighbor(s) will not execute an agreement allowing access, a lawsuit would be necessary. And it's definitely NOT a given that the court would award the relief sought. All of the elements of an easement by necessity (or prescriptive easement, depending upon the facts) would need to be satisfied... read SD case law to find out what would need to be proven. At some point that land was subdivided -- how, when and by who is crucial. Also the nature of the current "access" -- whether it has been hostile or permissive.

The good news is the title insurance carrier has allowed the claim and will likely pursue an agreement with the necessary property owners OR fight the legal battle if necessary. And it could cost many, many thousands of dollars in legal to eventually win or lose. The fact that title insurance includes defense expense is a great lesson in why chosing NOT to purchase owners coverage is stupid.

Of course if the court doesn't award the easement, the title insurer would likely pay out on the title claim based upon the lack of access. I would say that's not a total failure of title so not a full policy payout. It would be a good time for @Peter Walther to chime in on this. He'll probably correct some of my analysis as well!

[Chris Seveney]

@Victor Valencia

I just wanted to post on this so I can be reminded to follow this and here about the outcome - these types of situations I find intriguing

As others mentioned this is why title insurance is so important

7e

[Lynn McGeein]

@Victor Valencia standard contracts in our area have terms stating that it’s being sold with access to public road, and hopefully your title insurance will be an easy process. I had one that took about a year, full title search and expert witness testimony in court because even though the neighbors agreed to sign, one of their mortgage companies refused. It was an error in the deed two owners back not caught until my client sold. Luckily my clients had owners title insurance as it was an expensive process.

[Tom Gimer]

So I got a private message from @Peter Walther to the effect that he was not allowed to comment on this thread.

Do you really need to be a Pro/Premium member to comment on posts? If so that is complete bullsh*t and BP may have officially jumped the shark.

Here was his message:

Apparantly I'm not allowed to comment on the question unless I upgrade to Pro. If I could, I'd first write that I don't have a disagreement with anything you wrote. I would add the OP shouldn't do anything to prejudice the insurer's ability to resolve the claim, like negotiating with the neighbor. Let the insurer take whatever steps it finds are necessary up to and including payment for the loss which may or may not be as much as or more than the amount of insurance. I would also include a link to this access story that's still playing out.

Lac du Flambeau tribe won't lower payments for residents to access reservation properties (msn.com)

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I agree with Peter that once the claim is allowed you let the attorneys retained by the title insurer take over fully... getting yourself or your own attorney involved just increases the risk of screwing things up. If the insurer denies the claim that's another story... in that case only hire an attorney experienced with title insurance claims.

[Russell Brazil]

Quote from @Tom Gimer:

So I got a private message from @Peter Walther to the effect that he was not allowed to comment on this thread.

Do you really need to be a Pro/Premium member to comment on posts? If so that is complete bullsh*t and BP may have officially jumped the shark.

Here was his message:

Apparantly I'm not allowed to comment on the question unless I upgrade to Pro. If I could, I'd first write that I don't have a disagreement with anything you wrote. I would add the OP shouldn't do anything to prejudice the insurer's ability to resolve the claim, like negotiating with the neighbor. Let the insurer take whatever steps it finds are necessary up to and including payment for the loss which may or may not be as much as or more than the amount of insurance. I would also include a link to this access story that's still playing out.

Lac du Flambeau tribe won't lower payments for residents to access reservation properties (msn.com)

--------------------

I agree with Peter that once the claim is allowed you let the attorneys retained by the title insurer take over fully... getting yourself or your own attorney involved just increases the risk of screwing things up. If the insurer denies the claim that's another story... in that case only hire an attorney experienced with title insurance claims.

 They're use to be a Forum section for only Pro-members years back. But due to it not being used very often, it was discontinued. I suspect Peter merely ran into a glitch. I'd suggest he clear his cookies and re-login and if that doesn't work, to just email [email protected]

[Tom Gimer]

From OP @Victor Valencia

Hi Tom.

It seems I need 10 votes to reply to the discussion, which feels like a significant barrier. BP should consider improving this policy to encourage more inclusive participation. I appreciate everyone's valuable feedback. Peter, I apologize for missing a setting when I started this post. Here's some context: The access to our properties used to be the main road until the 1970s when the city rerouted it to build a highway around our homes, giving this access to the landowner at that time. In our historical town, agreements were often informal and not well-documented until the county began proper recording in the 1980s.
Despite extensive record searches, we haven't found a defined easement. Local input and city planning suggest this access has been in use since the highway was built, potentially supporting a claim for a prescriptive easement.
While this access previously held little value, recent developments have increased its significance. Negotiating with the current landowner is possible, but the terms and potential costs are critical considerations. Our concern is that fencing off property lines could restrict our access.
Based on feedback from Tom and Peter, it seems prudent to involve Title Insurance to negotiate on our behalf for a favorable resolution.