Possible Title Insurance Claim

[PE_PLS]

I have a client who just purchased a piece of property. The grant deed and the title report both indicate "lot 12, block 2....." The only problem, is for the last 100 years or so the rear adjoiner has owned the rear 10 feet of lot 12. My client's deed does not except out the rear 10 feet. Without question, my client does not own the rear 10 feet. Would there be any chance of success with a claim against the title company since they insured an incorrect legal description? The excepted land in question is approximately 450 square feet, with land values in this area approx. $30/sf. Any insight would be appreciated.

[RAM]

what I have seen and my best guess, is your client's deed is based on the previous owners deed and that the previous owner owned lot 12 for a long time and deeded the 10 feet at some time in the past. By using the previous deed, it was missed from the title report. Maybe this is why we should always check adjoiners.

[btaylor]

I can never wrap my brain around the benefit of the title insurance. I see this type of stuff too. They just transcribe some old deed and never actually research, and they charge a pretty nice fee for doing this. I would like to be able to say I did a boundary survey by photocopying the subdivision map. Not a bad profit.

I just did one in the San Carlos Hills and there is a paper street across the center of the block. Clearly, the client and adjoiners owned and possessed half the street for many years. The title report only stated the Lot, and no mention of the street. They insisted the report was fine as described, since inherently people own to the middle of half of the street when abandoned. Shouldn't the legal make mention of that?? Bueller? Anyone?

Took me awhile to find the legal abandonment of the street, that also contained a reservation of a strip easement for the utilities, so I had something to hang my hat on, since the report was so "accurate".

[LS 4722]

....Would there be any chance of success with a claim against the title company since they insured an incorrect legal description?

Title companies pay out against loss. What loss was incurred by your client?

The answer is probably none. Even if the TC did pay out the payout will be limited to that amount (whichever is less) that is stated in the insurance company policy, not at a land value of 30$ a SF


450 Sq Feet is peanuts. Last year a TC over insured a client by two single family homes and half an improved and dedicated street, 20 ' x 255'. TC smoothed talked the client and nothing was paid out. The reason why? Simple, the client suffered no loss at all. It was just a CLERICAL ERROR.

[LS_8750]

Dylan,
It somewhat depends on the title company. Some will fight you tooth and nail and you will have to spend thousands of your client's dollars generating a report sufficient to justify the claim. Then your client's attorney will have to use your report and threaten a lawsuit to make the title company act. That has been my experience in a couple of cases.
In other cases, I have seen title companies simply fix the matter and be done with it.

From a survey perspective, where did your client believe the line to be when he/she took ownership of the property? Is occupation matching the correct configuration of the parcels? If so then you might be looking at a simple title company blunder, like a typo, and you won't be able to justify a claim.

Cheers.
Clark

[land butcher]

Title companies are almost useless these days.

My own lot is lot X of tract XXxx plus the 4 ft of each adjoiner. The initial title report was only lot X not the 4ft on each side. I discovered the error during escrow and they issued a new TP (toilet paper)

A client sent me her legal and TP for a flag lot. The TC left out a whole line of data, basically the dist on one PL, B&D on the next two PLs and Bearing on the 3rd. She never got back to me so I don't know what she did.

PE_PLS's issue is that the owner bought lot X not lot X less 10ft and the title company guaranteed him ALL of lot X. What the owner thought he was buying based on visual insp or other wise has no bearing on it. The TC screwed up.
How much would you be sued for if you staked Lot X and it was later found that your client owned lot x less the E 10ft.
Missetting a rear corner by one foot in Newport Beach cost one surveyor his company.

[dmi]

One of the very first things to be excluded from coverage in a typical insurance commitment is RIGHTS IN POSSESSION.....

On the other hand, if there is a deed in the chain of title, that ought to have been brought forward and it was not, then that could possibly be an issue for the title company.

[Anthony Maffia]

Did you pull the adjoiner's deed?

At the very least, a claim should move the title company to file a corrective deed.

And, of course the client suffered damages. Based on rear setback requirements and lot coverage restrictions, the proposed house addition will have to be scaled back substantially. :)

[LS 4722]

to re write the legal correctly and file an RS.

http://dpw.lacounty.gov/sur/nas/landrecords/survey/RS254/RS254-095.pdf