Land ISSUES - Lawyers advise

[57_Stepside]

I would find your own real estate attorney. I had a title company settle with me once about an unrecorded easement. First, it is their fault and they will have to pay, so why let them investigate? It's a huge conflict of interest. As someone said, they will drag it out. Then they will finally make you a low ball offer. Good Luck.

 

[NWOhioChevyGuy]

Well, I told them that only two things will satisfy this issue with me. A) Lease is found null & void or B) Lease is bought out. That is between them / Fanny Mae and the farmer, I am only an innocent casualty to this all.

The lease for the two acres was $4600 for 30 years.

I'm not paying anything out of my pocket its not my job to clear this all up. If the title company comes back with a non-favorable solution then I will get a lawyer, but until then my money is staying in my pocket.

 

[jay50]

I would find your own real estate attorney. I had a title company settle with me once about an unrecorded easement. First, it is their fault and they will have to pay, so why let them investigate? It's a huge conflict of interest. As someone said, they will drag it out. Then they will finally make you a low ball offer. Good Luck.

Yeah, get a lawyer involved immediately. Keep reminding the BS title company that they are the ones who screwed up and you want it corrected immediately when they start whinning and dragging this out. I would also think you are entitle to some $ as compensation for being denied use of your land. Again, a good lawyer will be your best best.

 

[sam 8]

OhioChevy Guy;

Not an attorney, but a retired sheriff's sergeant who spent lots of time in my 25 years dealing with land related civil disputes. I wholeheartedly agree with the idea of trying to keep the farmer happy; it sounds like you plan to stay on the property for awhile, and you already appear to have started a decent neighborly relationship with them. There is no point in damaging that if you don't have to.
Free advice is worth what you pay.
But, FWIW I think you are moving in the right direction. In this state, if you were to start bargaining with the farmer you would instantly move this into an area where your "negotiations" would hinder any resolution that might be reached more quickly via the title co., and might actually conflict with the law. Also, your only recourse if he didn't hold up his end would be more court time. The first winners in court are always the attorneys.
Waiting until your title company contacts you and offers whatever resolution they are going to offer makes sense. If they are able to meet your requirements without you stepping into this, alls well that ends well. If that avenue fails, once they hear that you have retained counsel, they will crawl into a hole and drag the R.E. agents and all the other players with them, and they'll start paying attention to covering their own ****$ against potential litigation losses more than trying to solve the problem. Furthermore, once you retain counsel your face-to-face contact with them is over. Every communicaton will go through your lawyer to their legal dept.
If you can solve this without going that far, it'll be much cheaper and much less painful. I wish you the very best of luck.

 

[malibu101]

OhioChevy Guy;
..................................................
If that avenue fails, once they hear that you have retained counsel, they will crawl into a hole and drag the R.E. agents and all the other players with them, and they'll start paying attention to covering their own ****$ against potential litigation losses more than trying to solve the problem. Furthermore, once you retain counsel your face-to-face contact with them is over. Every communicaton will go through your lawyer to their legal dept.
If you can solve this without going that far, it'll be much cheaper and much less painful. I wish you the very best of luck.

VERY good free advice you've given there!
In another situation, I've seen just that play out before.

 

[BCRacing7469]

Most States Have Disclosure Laws, Most Likely You'll Have To Go Back On Previous Owner Or Owners, Possibly The Realtors Also.

 

[kbs2244]

It is amazing how a simple letter on an lawyer’s letter head saying he has been retained in the matter will speed up a process.
I believe there is an accounting side to all this also.
Once a transaction is in dispute the title co has to show it as a potential liability.
If that number starts getting high the state regulatory guys want to know why. So it becomes in their best interest to clear it up.

 

[PAToyota]

It is amazing how a simple letter on an lawyer’s letter head saying he has been retained in the matter will speed up a process.

Funny how that works! I was having problems getting a past employer to send me the check for my retirement plan to put into my IRA. After repeated calls, my last call basically started with "I want to get a couple pieces of information together so that I can send my attorney all the information so that he can contact you directly..."

Had the check the next day!

 

[vettezx-6]

Any updates on this scenario? I'm interested to find out how it works out.

 

[Kevin54]

However, it should have been disclosed to you prior to the sale, unless, there is the rule like in NY where the seller kicks money back to the buyer for not filling out the disclosure papers.

Get a lawyer. for failure to disclose from the previous owners you can go back on them. I had to do that with the property we own. They failed to disclose that the 3/4 acre pond was kept filled with a garden hose. So either they had to purchase the property back from us or settle for a certain amoun. We settled out of court in about a month. The reason they wanted to settle instead of buy the house back is that they were in the middle of building a new house in another state.

 

[bmwpower]

History is history, I'm dealing in the present with who I bought the property from.

And I'm not going to settle with where we are at currently. Reguardless of if the title company comes back favorably or not, I'll take my next step after I hear back from them.

And yes I'm paying the taxes on the property and have NO income from the lease for 22 years!

Subscribed. I'm dying to know what the title company comes back with... I mean isn't this type of thing something they're supposed to catch. Crazy.

Good luck!

 

[jay50]

Get a lawyer. for failure to disclose from the previous owners you can go back on them. I had to do that with the property we own. They failed to disclose that the 3/4 acre pond was kept filled with a garden hose. So either they had to purchase the property back from us or settle for a certain amoun. We settled out of court in about a month. The reason they wanted to settle instead of buy the house back is that they were in the middle of building a new house in another state.

Good luck on finding previous owner. They purposely failed to tell buyer about the lease and I bet they are long gone from the area. Makes me think this lease thing spoiled earlier sales so owner said the hell with it; buyer will find out later after they take the money and run....

 

[Junkman]

Good luck on finding previous owner. They purposely failed to tell buyer about the lease and I bet they are long gone from the area. Makes me think this lease thing spoiled earlier sales so owner said the hell with it; buyer will find out later after they take the money and run....

He actually would have to go against the immediate previous owner, which is the person that he purchased it from Fanny May. Problem that I see is that it was a foreclosure that gave Fanny May possession of the land, so there was no representation by them, since they were probably in the dark also about the lease. The person that lost the land due to a default has no obligation to disclose anything, so they are off the hook. This will fall on the shoulders of the people that did the title search for not finding it, and if they did, and disclosed it to the attorney, then it will be his problem for not disclosing it to the buyer. This problem will not be easily resolved without throwing a lot of cash at it. Who is going to be coming up with the cash is the real question. The present owner, and the farmer are not the persons that should be suffering, but in the end, either or both of them are going to come away with a bitter attitude, I'll bet.
I would bet that there is a clause in the sale agreement that lets Fanny May off the hook also. Would need to read all the paperwork to know all the facts.

 

[Jaguar Fan]

He actually would have to go against the immediate previous owner, which is the person that he purchased it from Fanny May. Problem that I see is that it was a foreclosure that gave Fanny May possession of the land, so there was no representation by them, since they were probably in the dark also about the lease. The person that lost the land due to a default has no obligation to disclose anything, so they are off the hook. This will fall on the shoulders of the people that did the title search for not finding it, and if they did, and disclosed it to the attorney, then it will be his problem for not disclosing it to the buyer. This problem will not be easily resolved without throwing a lot of cash at it. Who is going to be coming up with the cash is the real question. The present owner, and the farmer are not the persons that should be suffering, but in the end, either or both of them are going to come away with a bitter attitude, I'll bet.
I would bet that there is a clause in the sale agreement that lets Fanny May off the hook also. Would need to read all the paperwork to know all the facts.

Just curious... why would a lease ever need to be recorded in the 1st place? If it isn't recorded (just a private transaction between some previous owner and the farmer, with paperwork in a drawer), how could a title company or real estate lawyer ever find it in the first place? I've never been involved in a lease, but I just imagine it being as simple as a 1 paragraph document when it is between neighbors.

 

[Junkman]

Just curious... why would a lease ever need to be recorded in the 1st place? If it isn't recorded (just a private transaction between some previous owner and the farmer, with paperwork in a drawer), how could a title company or real estate lawyer ever find it in the first place? I've never been involved in a lease, but I just imagine it being as simple as a 1 paragraph document when it is between neighbors.

Not all transactions such as a lease are recorded, however, if the lease isn't recorded, then it becomes null and void in most jurisdictions upon the transfer of the real estate. The exception to this would be property that is customarily leased, such as a store in a shopping center. Those leases survive ownership transfers and usually are not recorded. Recording the lease preserves the transaction for both parties, but in particular the lease holder, since he is putting all future buyers on notice that he has a legal interest in the property. I presently lease some land, and the lease specifically prohibits the lease to be recorded. I don't want the terms of the lease to be public. It also expires upon sale of the land, and that is so noted in the lease. Easements and Right of Ways must be recorded so future owners of the land have proper notice of there existence. I bought a parcel of land that had a easement across the middle of it. That easement was recorded in the 1790's, but it was still a valid easement that prevented me from building on top of it. I was unable to locate any descendent's of the original easement owner to have them release the easement.

 

[tdkkart]

Just curious... why would a lease ever need to be recorded in the 1st place? If it isn't recorded (just a private transaction between some previous owner and the farmer, with paperwork in a drawer), how could a title company or real estate lawyer ever find it in the first place? I've never been involved in a lease, but I just imagine it being as simple as a 1 paragraph document when it is between neighbors.

Yes, entirely possible that it was a "handshake" deal way back when that never got recorded, and it's possible that at least one of the previous owners didn't even realize they were short 1/3 of the property they had paid for. Some(alot??) of people would buy a 6 acre property that with no intention or need for that much space and would never know or care that the land was "missing". Believe it or not, some peoplr are simply not that bright

So, the chain of communication got broken, and now the OP is stuck with fitting the links back together............

 

[jay50]

He actually would have to go against the immediate previous owner, which is the person that he purchased it from Fanny May. Problem that I see is that it was a foreclosure that gave Fanny May possession of the land, so there was no representation by them, since they were probably in the dark also about the lease. The person that lost the land due to a default has no obligation to disclose anything, so they are off the hook. This will fall on the shoulders of the people that did the title search for not finding it, and if they did, and disclosed it to the attorney, then it will be his problem for not disclosing it to the buyer. This problem will not be easily resolved without throwing a lot of cash at it. Who is going to be coming up with the cash is the real question. The present owner, and the farmer are not the persons that should be suffering, but in the end, either or both of them are going to come away with a bitter attitude, I'll bet.
I would bet that there is a clause in the sale agreement that lets Fanny May off the hook also. Would need to read all the paperwork to know all the facts.

OK, I missed the earlier posts about it being a foreclosure. I'm betting Fannie Mae sure has their *** cover; the buyer is basically buying it "as is" and FM gets off the hook.

 

[dho]

I am an attorney in Florida. The law regarding real property is different in each state. Your situation has complex legal issues regarding conveyances, title insurance polices, foreclosures and priorities of interest. The only person qualified to advise you of your rights, and the only person representing your interests, is an attorney you retain. You may be able to recover your attorney's fees, depending on the circumstances.

I hope you get the issues resolved satisfactorily.

dho

 

[NWOhioChevyGuy]

Been two weeks and nothing back from the Title company.

As I see it everything falls into the Title Company's lap for not disclosing the lease in their search as it was on file at the county court house. I just got done sending an email stating that I expect a call on this tomorrow with an update.

And yes as far as Fannie May is concerned the property is sold As Is in the condition it sets without any warranties or conditions. HOWEVER that was sold to us free and clear the AS IS is for the condition of the property.

Reguardless of who and when and where the lease was filed the Title Company should of found it. Period!

 

[Junkman]

What is the date that the lease was recorded, and is it cross referenced to your property deed? There is a lot of investigating that you can do on your own that will cost you only time. You seem dependent on getting the answers from the Title Search Company, and the Title Insurance company, which may or may not be the same. I feel that you would be better served if you were to learn as much about this matter first hand at the Register of Deeds, or whatever the name of the place is that keeps these records. Also try to get a copy of the lease from the farmer. There is an old saying, "never ask a question that you don't know the answer to.". In this case, that is more important than ever. If you decide to hire an attorney, if you do the research and get copies of the appropriate documents, it will save you money. Also, sending emails is not the preferred method of communication. You would be best to follow them up with a written document that is sent by certified mail, return receipt requested, so they can't deny the notice if it comes to that at a later date.

 

[NWOhioChevyGuy]

Already have a copy of the lease, recieved a copy of it from the farmer about 5 mins after I learned that it existed on May 17th, two weeks ago, it was signed the 5th and filed February 10th 1999 by the Register of Deeds.

I have a complete copy of what is on file including a site survey they did to determine what part of our property was "tillable", not all that space is included in the lease but 2 acres of it is.

A copy of the lease was Faxed to them on Monday the 19th of May, I will more than likely send a package of all documentation to them via Certified mail this week. Including copy of lease, my deed, title paperwork & our letter that was emailed.

 

[keperkey]

I am an attorney in Florida. The law regarding real property is different in each state. Your situation has complex legal issues regarding conveyances, title insurance polices, foreclosures and priorities of interest. The only person qualified to advise you of your rights, and the only person representing your interests, is an attorney you retain. You may be able to recover your attorney's fees, depending on the circumstances.

I hope you get the issues resolved satisfactorily.

dho

I second this post. I am also an attorney, but in another state. I simply cannot figure out why the OP has not hired an attorney to deal with this.

 

[kbs2244]

Just a thought, but lawyers don’t work for free.
(But that doesn’t mean you don’t need one.)
And this might all add up pretty high before you are done.
Can you and the farmer sit down, figure out how much he would make on the property in the remaining years of the lease?
(This will be fun with the way corn and soybeans have been climbing in price.)
Then if he is willing to be bought out of the lease, go to the title co with the dollar number.
Getting a couple years income and not haveing to work for it may have an appeal to him.
Remember, if this all goes to court, the title co is going to have a black mark on it’s record. That is not good for business.

 

[jay50]

Already have a copy of the lease, recieved a copy of it from the farmer about 5 mins after I learned that it existed on May 17th, two weeks ago, it was signed the 5th and filed February 10th 1999 by the Register of Deeds.

I have a complete copy of what is on file including a site survey they did to determine what part of our property was "tillable", not all that space is included in the lease but 2 acres of it is.

A copy of the lease was Faxed to them on Monday the 19th of May, I will more than likely send a package of all documentation to them via Certified mail this week. Including copy of lease, my deed, title paperwork & our letter that was emailed.

So it was filed by Reg of deeds and not one of these handshake type of deals that no one knew about...
Title company is in deep $hit for not finding this out.

I bet someone at title company is sweating over this one.

Another thing to keep in mine, if the title company drags their feet and does not keep in touch with you on this manner, you might want to contact the dept in your state that handles liscensing and regulations for title companies. There might even been some guides lines for reporting that they have to adher to in case of disputes.

 

[Junkman]

I agree that in the end he might need an attorney to represent him in this matter, if the title company starts to drag there feet, but that is going to cost him a large sum of money that he might not be able to recoup. My question still hasn't been answered. Did he have an attorney representing him prior to the closing of the property. Many people believe that they don't need representation, and this is the furtherest from the truth. The mortgage company has attorneys that draw up the paperwork, and the seller usually has an attorney that represents him/her so they know that they are going to get all the money that they deserve. Unfortunately, some real estate people lead buyers to believe that they don't need an attorney, because they know that a buyers attorney might wreck a deal in the making because they are paid to look everything over more closely to protect the buyer. If he had representation, then he should be talking to his attorney that represented him, since that attorney usually gets a piece of the fee for title insurance.

 

[NWOhioChevyGuy]

Junkman, sorry didn't see your question about having an attorney on the closing of the property. The answer is NO, even if we did unless he did his own more thorough title search would he have found anything.

I agree that this might result into me having to pay a lawyer to get this resolved, but first I am going to put it into the lap of who screwed it up ,the title company, that is why I paid my insurance on their services.

Not that I don't like lawyers (no offense) but I like my money even more, if I can get this resolved on someone elses dime before I empty my pockets I'm going to.

I really do appreciate all the input on the issue, I will keep on the title company this week and get some type of response and keep all you board junkies up to date.

 

[BrianAltenhofel]

Junkman, sorry didn't see your question about having an attorney on the closing of the property. The answer is NO, even if we did unless he did his own more thorough title search would he have found anything.

I've never seen an attorney for a buyer do more than the real estate broker and title company already had other than just take a larger cut from the buyer. But I would still consider one if I was slapping down a hundred grand or more (not the thirty I did for our 3 acres, trailer house, garage, and pool).

 

[NWOhioChevyGuy]

Just wanted to provide an update.

Title company agreed this morning that we have a claim. (NO S#!T)
It has been forwarded to their claims department for further handling this morning.
Almost three weeks to determine what we already knew for certain when we called them in the first place.

Hopefully we will see some prompt movement from the claims department.

 

[Jaguar Fan]

Hopefully we will see some prompt movement from the claims department.

maybe send them a bag of prunes... that should speed up the movement.

 

[JoeAE86]

maybe send them a bag of prunes... that should speed up the movement.

Given the apparent quality of what has come out of this company so far, this seems about right.

 

[Junkman]

Junkman, sorry didn't see your question about having an attorney on the closing of the property. The answer is NO, even if we did unless he did his own more thorough title search would he have found anything.
I agree that this might result into me having to pay a lawyer to get this resolved, but first I am going to put it into the lap of who screwed it up ,the title company, that is why I paid my insurance on their services.

Not that I don't like lawyers (no offense) but I like my money even more, if I can get this resolved on someone elses dime before I empty my pockets I'm going to.

I really do appreciate all the input on the issue, I will keep on the title company this week and get some type of response and keep all you board junkies up to date.

If you had an attorney, he probably would have been the one to contract with the title insurance company, since he would be making a commission on the sale of the title insurance. Then, you would have both the title insurance company on the hook, and the attorney, or his liability insurance company. He would be more inclined to help resolve the issue, since he also would have a financial stake in resolving this. I have never understood why people have a difficult time wanting to pay someone for their expert advise (attorneys), but will plunk down hundreds of thousands of dollars on a piece of land, trusting the people that represent the seller. A good attorney will review all paperwork, and protect your interests. This is a prime example of what can go wrong when you are not represented. He might not have found the mistake, but he certainly would have been working to resolve it for you now.

I've never seen an attorney for a buyer do more than the real estate broker and title company already had other than just take a larger cut from the buyer. But I would still consider one if I was slapping down a hundred grand or more (not the thirty I did for our 3 acres, trailer house, garage, and pool).

Just wanted to provide an update.

Title company agreed this morning that we have a claim. (NO S#!T)
It has been forwarded to their claims department for further handling this morning.
Almost three weeks to determine what we already knew for certain when we called them in the first place.

Hopefully we will see some prompt movement from the claims department.

What is the status of the claim at this point? I know that you don't want to spend any money on this issue, but it might be the best thing to do. Hire an attorney to represent you in the settlement. A good attorney will get you more money in the end than you might get negotiating on your own. What the attorney might cost, will be worth the cost. If you want to negotiate on your own, then get a figure from the title company, and then go to an attorney. Tell him what you have received as an offer, and tell him that you will pay 1/3 of any amount over this offer that he can get for you. This way, you will protect the original settlement offer from his fees, and still get 2/3 of any additional amount that he can squeeze out of them. If he doesn't think that he can do any better, then he will not take your case.
Good luck, and keep us posted.
PS........ I did what I described above and the attorney was able to more than triple the original settlement that I was able to negotiate. I got the original settlement 100%, plus 2/3 of the excess. By doing so, I saved a 5 figure amount|

 

[NWOhioChevyGuy]

Junkman:
Thanks for the advise, I actually just got done leaving a message for the title companies laywer this morning. I am going to give a laywer, to discuss if they can assist me in my claim, a call if I have not heard anything by Thursday.

And from how I understand it the Title company is not working for the seller, they are working for me the buyer in this transaction as I payed their fee and their work was performed on my behalf on the land transaction. Correct?

While this does not concern a large sum of money, it is 2 acres that I am out of for 21 years if they do not settle it. We purchased the house and property out of foreclosure and made a VERY sweet low investment payment for the property. Just to give you an idea, it was not far north of six figures that we paid for the whole property.

 

[PAToyota]

Yep, title company works solely for your interests in the transaction to guarantee that there are no problems with you assuming ownership for the property. Well, actually, they also work for the interests of the bank (or whatever lender) as you would be more likely to default on the loan if the property was not free and clear.

And on that note, if you do have a mortgage on it the lender could put some extra muscle behind things if you got them involved because they want to protect their interests.

 

[Junkman]

You are correct, the Title Insurance company does work for you, up to a point. They also work for their stockholders first, and will do everything possible to keep payments for mistakes to a minimum. It is no different that your car insurance. They will pay for your car if it is stolen, but they will pay as little as possible to settle the claim. If you don't agree with your insurance company, then your only recourse is to file for arbitration or file a law suit, depending on the terms of the policy. Just remember that your insurance company have their interests primary, and your interest is secondary, at all times. This is why I say that you need someone with experiance to represent you at all times, since they will know the "ropes".

 

[NWOhioChevyGuy]

I can't disagree or argue with anything you have said.

I will keep you posted.

 

[NWOhioChevyGuy]

Well, one further step taken. I met with a realestate lawyer last Thursday to have him review our problem and he agreed that the Title Insurance "should" take care of the problem.

He stated that one of two things will happen; A) Settled in 1.5 months - they step up and do what they should or B) Settled in 1.5-2 years after I sue them for what they should do.

The other discussion we had was that in Michigan they can "settle" in one of two ways; A) Pay off lease or B) Buy me out - paying me what the 2 acreas is worth for the 22 years that we have left on the lease.

At this point he recommended to give them until the middle of August to settle it, if they don't then we will look at the next step.

I just got done sending the Title Companies lawyer a letter if you care to read I have pasted it below. (Names removed for obvious reasions)
________________________________________
I have attempted to contact you twice since receiving your letter dated June 11th concerning our claim, with no response.

On Thursday July 3rd I met with a property lawyer about our case and he advised to give you until the middle of August to settle our claim. If no movement and/or an acceptable settlement is reached by that point we will take further legal actions to settle this issue.

As stated in my previous communications with XXXXX XXXXX at Fidelity National Title, the only acceptable settlement from our perspective is that the lease in question be bought out. If the lease had been discovered during the title search, this would have been required prior to our purchasing the property.

A prompt reply and action is requested to keep expenses for all parties involved to a minimum.
_____________________________________________

 

[Old Moparz]

Seems like a reasonable letter & approach, good luck to you.

 

[Junkman]

If they attempt to pay you off for the 2 acres, then tell them that you want diminished value compensation for the rest of the land. a 6 acre parcel is much more desirable than a 4 acre parcel. Tell them that had you known that it was a 4 acre parcel that you wouldn't have purchased the land. Be firm and reasonable, and don't get hostile. You will prevail in the end if you handle yourself properly... Anger gets you nothing... Junk...

 

[kbs2244]

Very good idea junkman.
But now that he has a lawyer involved, he should be making those points.
They just carry more weight on that kind of letterhead.

 

[jay50]

Well, one further step taken. I met with a realestate lawyer last Thursday to have him review our problem and he agreed that the Title Insurance "should" take care of the problem.

He stated that one of two things will happen; A) Settled in 1.5 months - they step up and do what they should or B) Settled in 1.5-2 years after I sue them for what they should do.

The other discussion we had was that in Michigan they can "settle" in one of two ways; A) Pay off lease or B) Buy me out - paying me what the 2 acreas is worth for the 22 years that we have left on the lease.

At this point he recommended to give them until the middle of August to settle it, if they don't then we will look at the next step.

I just got done sending the Title Companies lawyer a letter if you care to read I have pasted it below. (Names removed for obvious reasions)
________________________________________
I have attempted to contact you twice since receiving your letter dated June 11th concerning our claim, with no response.

On Thursday July 3rd I met with a property lawyer about our case and he advised to give you until the middle of August to settle our claim. If no movement and/or an acceptable settlement is reached by that point we will take further legal actions to settle this issue.

As stated in my previous communications with XXXXX XXXXX at Fidelity National Title, the only acceptable settlement from our perspective is that the lease in question be bought out. If the lease had been discovered during the title search, this would have been required prior to our purchasing the property.

A prompt reply and action is requested to keep expenses for all parties involved to a minimum.
_____________________________________________

I mentioned in an earlier post on this to check with state agency that regulates the title insurance companies. There might be some standards or accepted guidlines that they must adhere to for claims to be settled in good faith. Bring some heat on them at the state level also; they screwed up and are obviously dragging their feet on this matter..