WHY DO WE NEED TITLE INSURANCE???--does that question ever come up for you ???
I had a sale here in Southampton Village recently where my buyer was insisting upon not buying title insurance. He felt that it was just another expense that he could choose NOT to buy...I was at my wits end trying to explain, as did his lawyer, why he NEEDED to have title insurance. We finally prevailed and he did get title insurance after all.
BUT, I AM STILL LEFT WITH THE FEELING THAT WE DO NOT REALLY UNDERSTAND THE FULL IMPORTANCE OF TITLE INSURANCE....
I am not a lawyer, so I have always left the explaination of this one to the real estate attorney---then I got a call from the owner of a listing that I have, just North of the Village that has gone to contract and is expected to close on the 22nd of this month.
It seems that the title search came back with an "adverse possession" alert. It was 5 years ago that the owner, my client, put in a pool and the fence that is required around the pool was installed at the perimeter of the 1 acre lot. It did not include a sizable part of the back of the property and the neighbor, who bought after the pool and the fence were installed, began mowing the property. Not only was there a fence, but there was a privet hedge planted in front of the fence as well!
My client was very depressed after talking to his attorney and he told me that we should not expect the deal to happen....all the bad news you could conjure up about the deal going south was brought up on that phone call.
I listened to him intently, asked numerous questions, i.e. did you see him mowing the lawn there? Does he have proof that he mowed the lawn for years?...all to find anything that may make it seem less of a problem for this worried man.
I had done some research on the law which covers adverse possession and found that there is a new law put in place by New York Governor Patterson a year ago that states something to the effect that the person claiming to own property that is held in deed to another, has to have proof that they are entitled to the property....this puts another light on the rights of someone who has done exactly what my client had done, accidentally, and the burden then goes to the neighbor to prove his right to ownership in the event that they challenge the current title.
Then it dawned on me: Why is his lawyer not telling him this? Why has he not explained that his title insurance should handle whatever cost he may incur....his lawyer had NOT explained anything about the fact that the title insurance has a function far more important than most of us understand. This was clearly an accident that happened--my client had told me he "walked-off" the lot line, where the fence was to go and obviously made a big mistake....
NOT ONLY THAT..... I am sure the neighbor has better things on his mind than to be out there trying to grab a corner of his neighbors property! So I explained what I know about adverse possession and how, unless he believes that the neighbor is trying to take his property, it would probably be a discussion he should have with this neighbor and convey to him the circumstances which he finds himself in....I don't think his neighbor is a thief!!!
Anyone have similar incidents??...Would love to hear them if you do.
**ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY. The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate
Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate
Southamtpon Village Real Estate Specialist since 1995; Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York
Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005
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