Chicago Title Insurance Company



Easement Rejection - You Can't Get There From Here

Betty G., a real estate broker, purchased an undeveloped lot in a rural county in Northern California. She also purchased a title insurance policy protecting not only her title to the lot but also a road easement benefiting the lot across adjoining property. The lot was the northernmost of a four-lot subdivision. The original subdivider had attempted to reserve an easement over an existing north-south road that traversed the most westerly boundary of the three southerly lots. However, the document that attempted to serve the easement was defective because it did not contain the language necessary to give record notice that an easement was being created. When the owners of the three southerly lots found out that Betty G. intended to develop her parcel by dividing it into two lots and building homes for sale, they challenged her right to use the easement. Betty G. made a claim under her title policy.

It was determined that a successful reformation action to reform the document to correctly reflect the intention of the subdivider to create an easement could be successful. It was also determined that Betty G. had the right to an easement by implication, necessity and, arguably, prescription.

Following this analysis, contact was made with each of the owners of the three southerly properties. After an explanation that Betty G. was entitled to the easement on any one of several legal theories, two of the owners readily agreed to execute the documents necessary to grant Betty G. an easement over their property.

The most southerly property holder, however, still contested Betty G's right to an easement. They adamantly insisted that they would only execute easement documents if Betty G. agreed not to develop her property. Obviously, that was unacceptable. Through a series of correspondence it was made very clear to the most southerly property owners that the alternative to settlement necessarily would involve litigation or other dispute resolution mechanisms. After several weeks of dialogue and correspondence, the most southerly property holders agreed to a cash settlement in exchange for a clear and unambiguous easement grant deed.

This claim was resolved in a matter of weeks. Further, because of the facts Betty G was able to be assured that if she wished to sell her property during the time the claim was pending, title insurance would be available to her new buyer while efforts continued to resolve the easement problem.

Betty G. stated that, as a real estate broker, she had always considered title insurance to be simply a hurdle to delay a closing. However, after having her own claim with such a good result, she realized how important title insurance really is.