Title Insurance Litigation

The firm provide clients with claims and policy coverage analysis, as well as title insurance litigation.  Our expertise in real estate transactions and litigation includes curing title defects and resolving title issues such as:

Legal Description Errors:  A legal description is a description of a parcel of real property such that a surveyor can distinguish that parcel from all other parcels of real property.  In Missouri, legal descriptions reflect a lot and block description referencing a plat recorded in the public records and a metes and bounds description which begins at a specified point and by references to a series of angles, curves, and distances describes the boundaries of the property.

A question sometimes arises about whether a street address is a sufficient legal description. A devise of property by street address has been held to be sufficient.  A transfer of property by street address in a final judgment of dissolution of marriage has been held to be sufficient.  A deed between two parties using a street address as a legal description may be sufficient.  While a court may uphold the use of a street address as a legal description, using such an address on a deed is not a good practice.

In lot and block descriptions, there may be typographical errors in the lot number, the block number, the plat book number, the page number, or the name of the plat. If the errors are relatively minor and the incorrect description does not describe a parcel of real property that actually exists, the error can be corrected by recording a scrivener’s affidavit explaining the typographical error.

If the error is major or if it describes another parcel of land, a corrective deed is necessary. The corrective deed should reference the recording information for the erroneous deed, explain the nature of the error and include the correct legal description. If the erroneous deed describes another parcel of land, it puts a cloud on the title to the other parcel of land which must be corrected by a deed from the grantee in the erroneous deed to the record title owner of the other parcel. Similarly, if the error is contained in the legal description of a deed of trust, a corrective deed of trust must be recorded and the property described in error must be released from the lien of that deed of trust.

Typographical errors in section land descriptions usually involve a missed or improper reference (for example, the “NE ¼” instead of the “NW ¼”) or an omitted reference. Because the section land description starts with a real piece of property and describes a portion of it, any erroneous description describes property that is owned by someone else. When correcting this type of error, you will need a corrective deed and a deed from the grantee in the incorrect deed to the record owner of the property that was described in the incorrect deed.

Sometimes in a section land description, the name of the county in which property is located is omitted from the description. This is not a fatal error. Since the reference is to the government survey of all of Florida, the county in which the property is located can be determined by reference to the government survey.

Metes and bounds descriptions are the types of descriptions prepared by surveyors. They involve multiple calls and distances (for example, “go N 15° 8’ 12” W from the point of beginning 375.86’ to a point on the north right of way for Shell Rock Rd.”). Errors in this type of description typically involve a missed call or a miscalculation by the surveyor resulting in a boundary description that does not close. Since a boundary description that does not close does not describe any land, only a correct deed is needed to correct an error in a metes and bounds description.

Occasionally, property will be described as “all my property.” This description has been held to be good between the parties, but is insufficient as to third parties.

Lien priority disputes:  A lien is a claim against a parcel of real property. The holder of lien has a money claim which, because of a specific law allowing it, is secured by the claim against the property. The lien does not give the holder of the lien any possessory interest in the real property.  There are many types of liens; however, all liens have several common characteristics:

• All liens must be perfected by strict compliance with legal requirements.
• Once perfected, valid liens create clouds on the title of the real property which they attach.
• Liens are not permanent but have only a limited duration.
• If there are multiple liens on a piece of property, there is a payment order in which the liens are satisfied.

The general rule is that liens have priority based on their time of recording – “first in time, first in right.” • In Missouri deeds of trust or mortgage liens as they are commonly referred to are generally enforced by a non- judicial proceedings by the trustee under the deed of trust.  The foreclosure action of a lien eliminates all off the liens with a lower priority, but does not affect liens of a higher priority.

Does the Lien Attach to the Property?
When a title examiner finds a document in the public records, the examiner’s first task is to determine whether or not the lien attaches to the property.  Liens are creatures of law. A lien cannot exist without some law authorizing it. People sometimes record items in the public records which purport to be liens but have no basis in law. For example, homeowners recorded “Constitutional Common Law Liens” on their property believing that such liens would relieve them of the obligation to pay their mortgage and prevent IRS from taking their property for unpaid taxes. Such claims of lien, which have no basis in law, can be ignored.

If a lien is a type of lien authorized by law, the next determination is to whether the lien has been perfected. To make this determination, the title examiner must compare the recorded document with the statutory requirements for the type of lien in question. If the lien does not comply with the statutory requirements, it can be ignored.

If the lien has been properly perfected, the final determination is whether the lien has expired. All liens are limited in duration. If the time limit for enforcing the lien has expired, it is no longer a cloud on the title and can be ignored.

Often when a lien is satisfied at a real estate closing, the release is not recorded with the other closing documents. This is because the lienor will not release the lien in advance and will execute the release document only after being paid out of the closing proceeds. It is important that the closing agent follow through and make sure that the documents necessary to release all liens are recorded in the public records as part of the closing process. Unrecorded satisfactions and releases cause problems for subsequent title examiners.

Specific Types of Liens:

Deed of Trust (Mortgage):  Since a deed of trust is a lien rather than a conveyance of real property, it must be executed by all those who own the property. While delivery is necessary for a deed of trust lien to be perfected, recording the document in the public records creates a presumption of delivery.  A deed of trust is based on an underlying debt obligation. The duration of the deed of trust (the limitation period within which the document is a lien and can be foreclosed) is dictated by the maturity date of the underlying obligation.

Judgment Liens:  A money judgment from the Circuit Court where the property is located automatically becomes a lien on the property.  If the judgment is from an Associate Circuit Court, then the judgment must be transcribed before it becomes a lien.  A judgment lien against one spouse only does not attach to property own by the two spouses as tenants by the entirety.  The duration of a judgment lien is ten years from the date of the entry of the judgment. However, it can then be renewed for an additional ten years.

Code Enforcement Liens:  Counties and municipalities have the authority to place liens on real property as an enforcement tool. Typically such liens reference one particular property.   Many municipalities have passed local ordinances giving code enforcement liens super priority. Because of these ordinances, a title examiner cannot always rely on foreclosures to wipe out code enforcement liens.

Adverse possession: Easements By Prescription – Under Missouri law, an easement by prescription may be proven by demonstrating that the claimant’s use of the property has been continuous, uninterrupted, visible, and adverse and that such use has continued for a period of ten years or more.  If the claimant’s use of the property is with the consent or permission of the landowner, an easement by prescription will not be found.

Encroachments:

Marital interests:  Quiet Title- Deed of Trust- Tenancy by Entirety:  Wife was not named a grantor or borrower of the deed of trust.  She did not make any covenants of title or otherwise convey an interest the property and thus the mortgage lien did not encumber the property held by the husband and wife as tenants by the entirety.  Federal National Mortgage Association v. Pace, Case No. 99061-62, Court of Appeals, Eastern District Missouri (2013).

Easements: While a precise legal description is necessary for the conveyance of a fee interest in real property, the same precision is not necessary for the conveyance of an easement. An easement whose location cannot be located precisely because the wording of the deed creating it is imprecise is still a cloud on the title.