Title Insurance 101 – Covered Risk Number 4 – Access

Janice Carpi is the National Underwriting Counsel for GRS Group

Covered Risk Number 4 in both the ALTA Owner’s and Loan policies insures against loss suffered by the Insured in the event there is “No right of access to and from the Land.”  This seems to be a pretty simple concept, but the coverage is not as simple as it looks.  Covered Risk 4 only insures against loss if there is no legal access, nor does not insure that the access is suitable for the purposes the Insured intends.

Legal access is an old concept, and there are reported cases that have dealt with what type of access is legal.  For instance, in Virginia, I am told that a navigable river is considered the same as a public road, so if you have land abutting a navigable river, you have legal access to your property.  It doesn’t matter that the land is otherwise landlocked and there is no other pedestrian or vehicular access to your property.  While most landowners would feel that the lack of any kind of road to their riverfront property would be a title defect, under the language of this Covered Risk, there would technically be no loss suffered under this coverage in Virginia since there is, in fact, legal access.

In her treatise on Title Insurance Law, Professor Palomar uses an example from a 1979 Florida case where the road used for access was impassable each fall and spring due to flooding. [1] While this was not the type of access the purchaser intended, there was no liability under the policy because there was in fact, legal access according to the public records.  This is because the title policy does not insure the physical condition of the access, and it is the Insured’s obligation to inspect the property or obtain a survey to satisfy itself that access is adequate.[2]  While Professor Palomar states that “To satisfy the insurer’s obligations under the title insurance policy, the legal access that exists must be adequate and reasonable in light of the insured’s expectations,” that position seems to put the title company into the position of having to read the Insured’s mind regarding the Insured’s intent or proposed use of the property.   While Professor Palomar may be correct that courts (and perhaps even the title companies) are more willing to read some kind of reasonableness into this coverage, I would suggest that if there is any question as to the adequacy of access to the Land, it is best to deal with it at the time of purchase rather than in court later.

If the Land is part of a legally platted and adopted subdivision, there should be both pedestrian and vehicular access to each lot, since access to each lot is usually required for approval by the authorities.  Also, if a building has been constructed on the property within the past 10 to 20 years, it will, in all likelihood, have been subject to local procedures on planning and zoning, both of which deal with the access issue as a peripheral matter.  But, if you are planning on changing the nature of the use of the land, and require a different type of access, you will need to address the issue up front.  For example, a lot in a previously platted residential subdivision would generally have adequate access for residents and their guests.  However, it you were to change the use of that lot and turn it into a Wal-Mart, the original access approved under the subdivision plat may not be adequate to service the large number of 18-wheeler supply trucks or the increased number of vehicles using the road to get to the store.

If you are dealing with vacant or rural land, it is a good idea to get a survey of the land, and to require the surveyor to show the type of access to the land.  The surveyor would should any existing roads, indicating whether they are public or private, and describe the condition of the road, such as width, curb cuts, whether it is a limited access road, and whether it is a paved or dirt road.  If the property is improved with existing buildings, the survey will show the location of the buildings vis a vis the property boundaries and the road, and indicate whether there are any problems with the access.

In some cases, the only access to the property is an easement over adjoining property.  It is important to make sure the title company runs the title to the easement and the policy insures it as an additional parcel in Schedule A.  It is also important to make sure that your lawyers review the access easement agreement to determine that the access granted is sufficient for your intended use of the property because, except as mentioned below,  the title policy will not insure the adequacy of the access granted under the easement, only that it is legal.  If the proposed use of the easement will be for access to that Wal-Mart, the easement may not have anticipated that kind of increase in use of the easement, and may deny access to anyone except as originally intended under the easement.

The American Land Title Association has two endorsements that provide additional insurance regarding access.  The ALTA 17-06 insures against loss if at Date of Policy,

(i)                  the Land does not abut and have both actual vehicular and pedestrian access to and from _____ (the “Street”),

(ii)                the Street is not physically open and publicly maintained, or

(iii)               the Insured has no right to use existing curb cuts or entries along that portion of the Street abutting the Land.

The ALTA 17.1-06 deals with those situations where access is by way of an easement to and from the Land to a named Street, and provides essentially the same type of coverage as the 17-06.  In order to provide this coverage, the title company may be able to rely on the public records or may require the proposed Insured to provide a current survey showing the access.  As you can see, the endorsement does not insure the physical capacity or adequacy of the vehicular access.  It insures only that the access is available to and from the named street, that the street is physically open and maintained as of Date of Policy, and that the Insured has the right to use existing curb cuts or entries along that portion of the Land that abuts the named street.

                                                                                                                                                                                                                                           

As usual, here is my caveat:  The opinions stated in this blog are those of the writer, and should not be construed to be a statement of fact or conclusion of law.  Any statements herein should not be relied upon in any litigation, arbitration or mediation.  Statements herein have not been approved by the American Land Title Association, its officers or members.


[1] Title & Trust Co. of Florida v. Barrows, 381 So. 2d 1088 (Fla. Dist. Ct. App. 1st Dist.  1979), cited in Palomar, Title Insurance Law, 2006 Thomson/West.

[2] Krause v. Title & Trust Co. of Florida, 390 So. 2d 805 (Fla. Dist. Ct. App. 1st Dist. 1980), cited in Palomar, id.

 

 

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