Smith and Jones

[LS 4722]

Since 1971 I have been in surveying and I have never come across this situation before.

I will attempt to give a logical timeline on the events, I am on my first cup of coffee so the story may have a minor gap here and there.

Early this year a gentleman who owned two side by side improved lots passed away. His son was the trustee of the estate and put both lots on the market.

One title company handled both prelims and final guarantees. One realty company was also involved for both sales.

Escrow closed for both lots in mid May 2013. The improvements on both lots are circa 1923. Jones bought lot 'A', Smith bought lot 'B'.

At the end of May I was called upon to survey Jones lot. Very easy survey. 90° lines. Existing monument on the west line. Smiths occupation line on the east matches my survey.

Some excess between pre existing monuments along the block amounts to 5 inches in a block length of +/- 790 feet. That's another story and something a new math surveyor can deal with.

I have attached a picture of how the improvements of Smith and Jones are situate to the common line.


I do the survey and get paid. A corner record is filed and I move on.

Early this month Jones requests that I place additional monuments along the common line. This was not necessary, I had placed three monuments along the common line and one could stand on the south monument and see the north monument at the rear corner, but I did what was requested and placed two more monuments along the common line.

A few days later I visit Jones to show them what I had done and collect my fee. During that visit Jones tells me that the title company had asked them to 'approve' an easement that encumbered east 4 feet of thier lot. The easement, so called, was for 'ingress/egress and driveway purposes'. The driveway ended, naturally, at the south end of Smiths garage but the easement extended to the rear of Jones lot, an additional 44 feet. Jones refused to sign the approval.

Jones showed me the final title guarantee and and exception was listed in the policy, ' a four foot wide easement for ingress/egress and driveway purposes'. However, there was no recording reference to this easement.

I told Jones I would contact the issuing title company and find out what I could about this.


I wrote to the title office and requested the underlying document that created the easement. Shortly after I had sent the email, a vice president of the title company writes back and says (the following is verbatim) " There is no recorded document. It was disclosed because of a visual inspection."


Something is really wrong here.

I see a few things wrong with this.

The norm of the title companies in my area is to have a notation on the early prelims that say "An inspection of the land has been ordered, we will advise you of our findings".

The title company never advised Smith or Jones that something was very wrong with the improvements along the common line. In doing this, the title company denied both parties a negotiating item in the asking sale price of the lots.

The title company was biased in favor of Smith. The title company acted in a judicial capacity in this matter.

Well, that it for now. It's a shame that there is no type of governing body that regulates title companies, like our state board regulates us. If there is such an animal, someone please tell me what this governing body is called, I would really like to report this injustice.

[pls7809]

Hmmm. I have also never seen that kind of move before. Interesting.

CA does have an Insurance Commissioner office. Maybe there is someone to talk to there?

[Dave Karoly, PLS]

I'm assuming there is a driveway between the wall and the common boundary line.

Prescription is not possible since the lot was in common ownership until May of this year.

There could be an implied easement but that may depend upon the sequence of recording of the May deeds. The easement would only be over the ground actually used as a driveway.

The Title Company's actions are strange particularly in respect to specifying a uniform width and extending it all the way to the rear of the lot. They don't explain why they are making such a determination.

I'm more surprised the Title Company would slander someone's title like that, they must think they will get away with it.

[LS 4722]

So far, title has not been slandered. If the title company included this four foot strip in the recorded deeds, then title was slandered. I have ordered them and should have them shortly.

It is beyond me why a title company would go so far out on a limb like this, situations like this are covered in their standard exceptions. All a title report is useful for is if there are any outstanding liens on the properties and if the seller actually has the right to transfer the property, other than that, a title report is a waste of money.

Who really cares if there is an easement dated 1923 for flumes, ditches and conduits?

The water runs downhill and the sewer is in the street..

[Ric7308]

Paul,

As Ryan guessed, the California Department of Insurance regulates title companies in California. Here is the link:

http://www.clta.org/about-clta/faqs.html

Feel free to contact them and if you send BPELSG an inquiry on the situation, that would provide us with the means to contact the Department seeking information on your complaint.

[Dave Karoly, PLS]

I didn't know TCs do field inspections.

How do they know there is a problem without a survey?

[Dave Karoly, PLS]

Another possibility, since there is a common grantor involved, is The Doctrine of Practical Location.

See French v. Brinkman, 60 Cal. 2d 547, 1963.

[Jim Frame]

My question is if the "inspections" are being done by a LS? Sure sounds like ALTA certification type work does it not?

My guess is that the inspections are being conducted by a title company employee. If that's the case, then it's not surveying as defined in the B&P Code. They aren't determining boundary location, they're simply collecting risk assessment information.

.

[Anthony Maffia]

So the 4' easement was included in the report prior to sale? Weird - this sounds more like Smith made a claim to the title company post-sale. Perhaps the title officer read the RE disclosure form.

EDIT: Please report back to us how this turns out. Its no fair telling stories then deleting the thread.

[dmi]

"IT WAS A DARK AND STORMY NIGHT AROUND THE CAMPFIRE"ARE THE WORDS THAT WHISTLED PAST CHAPPY GRIZZLEY CHUCK WAGON BEARD. ssssh, NOW SAID CHAPPY THIS WAS FOLLOWED BY AN EERIE SILENCE AS THE STORY WAS REMOVED BY ADMIN......

[dmi]

NO. THE TITLE COMPANY DOES NOT HAVE AN OWNERSHIP STAKE.

[LS_8750]

Title company acting as owner, judge and jury? I have not personally encountered this to date.

Like you, I would be suspicious.

But hey, as you insinuated I have no understanding of your every day " practical aspects of land surveying."

Not that I desire such.

[LS 4722]

But hey, as you insinuated I have no understanding of your every day " practical aspects of land surveying."

My apologies to you Clark. My comment to you was wrong to begin with. Let's just move on OK

[LS 4722]

An insurance company has every right to exclude pre existing conditions from coverage in the policy.

A question does arise though about disclosure to both of the buyers. From what I have been told from Jones, the title company did nothing more than create a document showing a 4' wide easement over the lot they were interested in buying and asked Jones to sign and approve this document prior to close of escrow.

Jones refused.

According to Jones, they had no knowledge that the drive area of the adjacent lot was so far into the lot they wanted to buy, Jones discovered this after I had done my survey. This tells me that even though the title company had full knowledge that both properties had problems in this area, they kept quiet aside from the document they created for Jones to sign.

It makes no difference if the title company brokered out the inspection or had an employee do it. Anyone with basic knowledge of surveying practices and possessed a 50 foot hand carried tape could easily see where the common line should fall. A lead and nail was on the prod of Jones west line and a chain link fence/old river rock wall was on Smiths east line, the lots are 50 feet wide.

I have advised Jones not to push the issue about Smiths drive area from the sidewalk to Smiths garage because if push comes to shove, Jones would lose. I also did tell them that they should fence along the common line up to the face of Smiths garage and then angle the fence into their lot and keep the drive area open. Smiths garage is almost 90 years old and falling apart. If a new garage is constructed, then a five foot side yard will be required which will be from the common line and not from an easement, so called, line.

That the title company did not tell Smith/Jones about this, in detail, really bothers me. It deprived both parties of negotiating the price of the lot down.

I guess my final question is this:

If a title company discovers adverse situations about a property that would impact the buyers in the future, are they bound to disclose what was discovered?

My own opinion is that the title company simply did not want to say anything that would cause escrow to be delayed or even not happen because they do not want to lose future referrals.

[LS 4722]

An Title Insurance company has every right to exclude pre existing conditions from coverage in the policy. They do not have the right to create an 'easement' without the proper procedures being followed.

A question does arise though about disclosure to both of the buyers.

From what I have been told from Jones, the title company did nothing more than create a document showing a 4' wide easement over the lot they were interested in buying and asked Jones to sign and approve this document prior to close of escrow.

Jones refused.

According to Jones, Jones had no knowledge that the drive area of the adjacent lot was so far into the lot they wanted to buy, Jones discovered this after I had done my survey. This tells me that even though the title company had full knowledge that both properties had problems in this area, they kept quiet aside from the document they created for Jones to sign.

It makes no difference if the title company brokered out the inspection or had an employee do it. Anyone with basic knowledge of surveying practices and possessed a 50 foot hand carried tape could easily see where the common line should fall. A lead and nail was on the prod of Jones west line and a chain link fence/old river rock wall was on Smiths east line, the lots are 50 feet wide.

I have advised Jones not to push the issue about Smiths drive area from the sidewalk to Smiths garage because if push comes to shove, Jones would lose. I also did tell them that they should fence along the common line up to the face of Smiths garage and then angle the fence into their lot and keep the drive area open. Smiths garage is almost 90 years old and falling apart. If a new garage is constructed, then a five foot side yard will be required which will be from the common line and not from an easement line.

That the title company did not tell Smith/Jones about this, in detail, really bothers me. It deprived both parties of negotiating the price of the lot down.

I guess my final question is this:

If a title company discovers adverse situations about a property that would impact the buyers in the future, are they bound to disclose what was discovered?

My own opinion is that the title company simply did not want to say anything that would cause escrow to be delayed or even not happen because they do not want to lose future referrals.

[Dave Karoly, PLS]

Typically the TC is working for the lender in most residential transactions. Most buyers don't get their own policy.

It's weasily, I know, but maybe the TC doesn't have a duty to the buyer?

[LS 4722]

Jones called me tonight. I told Jones that my contact for the deeds will not be back from vacation until Sept. 30th. I also emailed Jones the link to this thread and specifically mentioned to take a look at Ric Moore's reply. Jones is sharp cookie.. not someone to be pushed around and set in corner. Jones also told me that a very close relative went to the county recorder and searched for a recorded easement, nothing was found. Not surprising since the VP of the title company said in an email there is no recording reference of the easment but was inserted into schedule B because it was discovered by inspection.

David...

Typically the TC is working for the lender in most residential transactions. Most buyers don't get their own policy

Jones did receive a final title guarantee. Jones paid a fee to the title company for the policy. The title company was working for Jones.

Jim..

... If that's the case, then it's not surveying as defined in the B&P Code. They aren't determining boundary location, they're simply collecting risk assessment information.

If the Title Company, employee or contract company, is not determining a boundary location, then why was the 4 foot easement, so called, made parallel with a common lot line within Jones land?

[Jim Frame]

If the Title Company, employee or contract company, is not determining a boundary location, then why was the 4 foot easement, so called, made parallel with a common lot line within Jones land?

To protect the title company's interest. The inspector doesn't have to establish the boundary to conclude that there's a potential risk to the title company due to conditions on the ground; all he has to do is determine that there's a credible possibility of risk, and determine what sort of change would be required (e.g. an easement) to eliminate that risk.

.