Access issues cause real pain, but with due diligence, you can avoid claims.
By Amanda Berry, Senior Claims Counsel, Alliant National Title Insurance Company
Access issues in title insurance can be a particularly acute source of pain. In fact, some of the most challenging claims arise when someone assumes access because of a road or driveway. But remember: a visible route into a property is NOT always a valid route. Understanding this difference is key to preventing claims, delays, negotiations and especially litigation.
What access means in title
Preventing access-related claims hinges first on understanding what title insurance covers. Title insurance typically guards against the risk that the insured property lacks a legal right of access. In other words, just because there is a road does not necessarily mean there is legal access to the property. To properly protect customers, agents must avoid confusing the two.
Common access problems
Drawing this distinction within a title policy matters greatly because there are different types of transactions that can raise access problems. Here are some common culprits:
- Improper subdivision: When a large parcel of land is divided, sometimes the inner or rear parcels become landlocked and are sold without an access road or easement providing legal access.
- Unrecorded or invalid easements: Was the easement properly created or has it expired? The underlying easements, even older easements, need to be reviewed to confirm they are valid and do, in fact, provide easement to the property.
- Road abutting property is private: In some cases, the road adjacent to the property is privately owned. The seller may have been using the private road to access their property either on a handshake deal or even unknowingly, but there is no recorded easement allowing them to use the road. Unfortunately, this is not legal access and can create real access problems, especially if the goodwill of the neighbor is no longer extended.
- Common ownership: When an owner holds multiple parcels of land that only include one access point, that access can disappear if one parcel is sold.
Without careful examination confirming access to the property, buyers can find themselves in a difficult situation. Access issues can trigger claims, liability and disputes. These claims are often expensive and time-consuming to address, and the parties may find themselves having to go to court to restore access. These are all things we want to avoid whenever possible.
Your handy checklist for preventing access claims
Luckily, most access claims can be avoided with a little legwork and extra due diligence. Adhering closely to the following best practices won’t eliminate the prospect of an access claim, but they can certainly go a long way in reducing the risk.
Always:
- Confirm whether the transaction parcel is adjacent to a public road or is dependent on an indirect access point. If unsure whether a road is public, call the county or city to confirm.
- Check legal descriptions and Schedule B exceptions carefully. Remember, while some exceptions may be routine, “others can genuinely limit what you’re able to do with the property”[i] and could impact access.
- Always confirm that access easements are valid and tied to the property.
- Refrain from taking things at face value, as not all types of roads may automatically equal recorded legal access. “Driveways and, in some cases, private roads do not necessarily constitute legal access. Such access rights must be evidenced by a written, recorded easement.”[ii]
- Utilize ALTA surveys to properly assess property boundaries, easements and right of ways.
- Loop in your underwriter whenever you are in doubt. Whenever access appears indirect, unclear or limited, it is always best practice to get another pair of eyes on it.
- Keep an eye on red flags, such as:
- Private road with no easement in the file
- Access that is crossing neighboring land, railroads, water or other public areas
- A parcel that has been separated from a larger property
- Easement language that seems vague or incomplete
- Disparities between what the survey shows and what the commitment states
By using these as your guide, counsel then can correct the issue ahead of time and prevent unnecessary claims on the backend.
Slow and steady wins this race
Access issues may seem small, but they have the power to disrupt what should be seamless transactions. Agents can often prevent this from happening by verifying access in every file, every time, especially if there seems to be something off or amiss. Take the time to ask your questions up front and dig deeper into the access route to make sure your bases are covered. That’s the best way to catch these problems before a policy is issued and avoid major headaches in the process.
[i] https://legalclarity.org/what-is-a-title-commitment-and-how-do-you-review-it/
[ii] https://agentstitle.com/UM/NetHelp/WordDocuments/accessoverview.htm
