Lessons from Losses - Access to the Property
Subdivision of Land and a Missing Access Easement
Subdivision of land can be used to distribute property amongst family members. TIAC previously summarized a claim scenario where a division of property led to a discovery of a missing easement and inevitably a payout from the title agent’s E&O insurance policy. Review the details below, and get in touch with your team about how this claim could have been avoided.
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Mr. and Mrs. Brown subdivided their six-acre lot into three 2 acre plots for their children. After college, their children took ownership of each lot and constructed their homes. Five years later, their son decided to relocate and get married and sold one of the new properties. ABC Title was retained to search the title and conduct the closing. This transaction was the first involving the newly created property, the search was clean, and the closing went off without a hitch.
The couple that purchased the property, The Millers, got along well with their neighbors, and never had any issues sharing a driveway. Unfortunately, Mr. Miller became ill and fell behind on their mortgage payments. Eventually, the property was foreclosed. During the foreclosure proceeding the bank questioned legal access to the home, as they could not locate an ingress/egress easement. The bank contacted ABC Title to review the need for this document to resell the property, and since it was missing would file a claim against the title insurance policy.
The title insurance company contacted Mr. and Mrs. Brown and explained an easement agreement would be needed, as each of the properties shares a common driveway. Once presented with this, it was decided that payment for the easement would be the responsibility of the insurance company. The Browns and the title insurance company came to an agreed amount, released payment, and provided verification to the bank.
ABC Title was notified that their mistake resulted in damages to another party and repayment to the title insurance company was requested. ABC Title’s E&O insurance policy reviewed the claim and settled on an amount to repay the title insurer for their loss.
TIAC thanks Jordan Rubinstein, Esquire, of Troutman Sanders LLP, for writing this article.
While Lessons From Losses draws upon the claims handling experience of TIAC’s claims counsel, Troutman Sanders, LLP, the circumstances described are for illustrative purposes only. This material is not intended to establish any standards of care or to serve as legal advice appropriate for any particular factual situation. Lessons From Losses also does not create an attorney-client relationship; please consult counsel for appropriate advice regarding the specific circumstances of any claim or transaction.
Copyright © 2023 Title Industry Assurance Company RRG. All rights reserved.
This information is provided for the purpose of illustration. The coverage provided is that set forth in the terms, conditions, and limitations of the policy of insurance.
