Anyone seen a title defect cured? How long did it take? (Sarasota: real estate, insurance)

[Cardiff by the Sea]

The house we are buying was supposed to close the day before Thanksgiving, but it didn't. The surveyor found a discrepancy between the monuments on the ground and the legal description of the property.

It is a "metes an bounds" survey which I had never heard of. These are verbal descriptions that say "start here, go X number of feet this way, then turn and go x number this way" as if you are walking the property.

The legal description says go 230 feet from the starting point, but the monument is 225 from the starting point. Monuments trump legal description.

The closing was being handled by seller's law firm so we hired Steven Greenburg to represent us. We got a second survey by someone he trusts. The second guy spent 5 hours and located the monuments for our intended property and the property on each side.

His conclusion is the legal description of our property should say go 225 feet instead of 230 and that the lot next door is only 70 feet wide instead of the 75 feet their legal description says. (Two wrongs don't make a right).

To make things worse, the law firm representing our sellers also represented the next door neighbor when they bought the property. Not they have to recuse themselves because they represent both sides of the conflict (our sellers and the next door neighbors). Yikes.

If the next door neighbors fight the corrections, we are told this could drag on for a long time. If we could be sure it would settle in 6 months, we would wait. But of course no one has any assurances.

Anyone dealt with anything like this? How long did it take? What was the remedy? Thanks for any insight.

[bbronston]

Sorry, I can't offer any first hand info to your question but I am curious if there are any structures on the disputed property? I would imagine that each of the two current owners can make a claim to their title insurers but I've never been through anything like this so I really don't know. Please keep us informed, though. I hope it is an easy fix for you but, in any case, it is an interesting situation.

You might want to post this in the real estate forum. You should receive some interesting answers.

[beninfl]

$$$$$$$ Discount time!

[Cardiff by the Sea]

Originally Posted by bbronston

Sorry, I can't offer any first hand info to your question but I am curious if there are any structures on the disputed property? I would imagine that each of the two current owners can make a claim to their title insurers.

My husband is the one talking to the attorney on the phone, so I only get what hubby repeats to me and what I can read the email traffic between the surveyors and the law firms.

I believe the surveyor says that both properties would still have valid setbacks if this were corrected.

There has been some discussion of the neighbors having to quit claim 5 feet to us, but this doesn't seem like a solution.

Our lot is the right size. Its location is mis-described. This error was introduced to our legal description about 10 years ago in response to the error in the neighbors legal description. Someone caught there was a problem but fixed the wrong thing. They should have fixed the next door neighbors lot size but instead "fixed" our lot starting point.

Their lot is in the right location but is 5 feet narrower than they thought. It is an imaginary 5 feet. The "understood" boundaries between the properties would not change. Their lot doesn't get any smaller. The description of their lot gets smaller.

It is like if someone thought they were 6'1'' but they are actually only 6' tall. Making a correction doesn't require them to chop an inch off their body. They don't lose anything. They just have to acknowledge they have been claiming an imaginary 5 feet that is not there.

This is a real mind bender.

As far as title insurance, I think there would have to be damages. I imagine that title insurance will pay the sellers expenses in correcting this, and I think a legal battle will ensue to force the correction.

I can understand our sellers damages, but I am not sure what the "loss or damages" is to the next door neighbors for learning they bought a lot that is not as big as the survey says. I don't think their property is really devalued. You would think they would want to get this straightened out so they can sell in the future with a title defect.

Boy I am sure glad our realtor suggested a survey!!! We have bought a lot of property in our lives and have only once gotten a survey. The survey was after we bought just so we could make sure we put the new fence on our property line. I am just blown away that this title defect was identified.

[Sunshine Rules]

Steve Greenberg is on my short list of real estate attorneys, he has resolved more than one title issues for customers of mine over the years. On one defect regarding a pool deck built in an easement, it took about 3 weeks to work out the issues and get a variance from the HOA. In another situation where the survey showed all of the lots on that side of the street were off by at least two feet, the buyer decided to throw in the towel after 4 months of lawyers trying to get several homeowners to cooperate with the required fix. I don't know how long it actually took to fix the survey and title issues. Without knowing how long it will take to resolve the issues, it probably comes down to how much you want this particular home and whether you are willing to wait out the title issues.

.
PS: The standard contracts we use do have specific language regarding title defects, most require the buyer to give the seller 30 days from notice of the defect to cure it. After the 30 days, if the defect is not cured, the buyer can cancel the contract.
Or the seller can give notice that the title defect can't be cured within the 30 days and let the buyer out before the 30 day window is up.

. Please let us know how things turn out for you.

[Cardiff by the Sea]

Originally Posted by Sunshine Rules

.
PS: The standard contracts we use do have specific language regarding title defects, most require the buyer to give the seller 30 days from notice of the defect to cure it. After the 30 days, if the defect is not cured, the buyer can cancel the contract.
Or the seller can give notice that the title defect can't be cured within the 30 days and let the buyer out before the 30 day window is up.

Thanks for the specific examples and thanks for the explanation of the time to cure. I knew that there was language about time to cure but I didn't know it was 30 days. That is helpful.

[Californianz]

Wow, that's kind of crazy. The imaginary line really probably wouldn't change the value of anyone's property at all - so it's a matter of finding out if the neighbor is going to have fits or not. Meanwhile keep an eye out in your desired market for other properties so if things don't resolve in a timely matter, you have alternatives.

OTOH, if you love the house and don't mind the legal entanglement, stick with it - you are buying the house after all - not an imaginary line.

[Cardiff by the Sea]

Originally Posted by Californianz

Wow, that's kind of crazy. The imaginary line really probably wouldn't change the value of anyone's property at all - so it's a matter of finding out if the neighbor is going to have fits or not. Meanwhile keep an eye out in your desired market for other properties so if things don't resolve in a timely matter, you have alternatives.

OTOH, if you love the house and don't mind the legal entanglement, stick with it - you are buying the house after all - not an imaginary line.

Exactly. I hope the sellers had a good relationship with those neighbors. Mrs. Seller is a little high strung and emotional, so who knows what is in their past. We don't want bad blood to go to a feud.

[Cardiff by the Sea]

Well, at this point, posting updates is therapy for me as hubby & I go through this gut wrenching experience.

Talked to attorney today and hubby put him on speaker phone so now I have more the straight scoop.

Steven Greenburg (totally awesome attorney) called the title company and talked to them directly. The title company takes his call because his is their biggest policy generator in Sarasota. The title company told him what remedy they want.

1. The neighbors have to quit claim 5 feet of land to us to correct their deed. This may or may not be difficult because it won't change the boundary "as occupied". There is a fence on the correct boundary and their landscaping shows they believe that they have 8 feet on that side rather than the 13 their deed says. So in effect they are giving up something they didn't know they owned.

2.The bigger problem is if they have a mortgage. The bank has to release their claim on that 5 feet as property used to secure the loan. We are waiting by the phone to find out if they have loan, but the realtor thinks they do. Getting a bank to do anything in a timely fashion is nothing but a fantasy if it is a national bank. If it is a community bank it might go faster.

3. If the next door neighbors throw a fit, then the sellers have to sue their next door neighbors. This could take a very long time. The advantage for the next door neighbors in not throwing a fit, is it would cost them a lot of money to fight and and their title is clouded until this is resolved. We don't know who is going to talk to the next door neighbors since the same law firm represents both the sellers and the next door neighbors. The law firm has to recuse itself from one or both because of the conflict of interest.

[bbronston]

If there is a big deal made of this, would it make sense for you to just purchase the property and cede the land to them? IOW, if the property boundary for your purchase were to be made legally narrower by 5 feet, would there be any structures or property that would then be on their side? Obviously, a quit claim correction is best but, if it can't be done and a lawsuit must follow to clear things up delaying your purchase, maybe you can negotiate a price adjustment and get it done. Not sure what affect that might have on setbacks, sprinkler lines, drainage, utilities, etc., though.