Real Estate Journal — October 10 - 23, 2014 — 13A
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I nsurance /T itle
By Michael Smith, Conestoga Title Insurance Co. The use of title insurance to address a commercial development’s access issues
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650 (N. Y. 1981), subsequent appeal , 469 N.Y.Supp.2d 415 (N. Y. 1983). Complete lack of a right of access has rarely been the basis of a claim under a title insurance policy, as insureds have usually brought their claims alleging that they do not have actual access. The claimant asserts that the access to the land is not us- able, inconvenient, or not as anticipated by the insured. The policy does not assure a smooth ride and the courts have agreed. In other words, the policy insures that the
insured has a legal right of access, but the policy does not insure that the insured may actually be able to get there conveniently. Title & Trust Company of Florida v. Bar- rows , 381 So.2d 1088 (Fla. 1st Dist.Ct.App. 1979). Two reasons are frequently cited to support this position. First, the insured has the best oppor- tunity to inspect the property and observe physical limita- tions of the access. Krause v. Title & Trust Company of Florida , 390 So.2d 805 (Fla. 5th Dist.Ct.App. 1980). The second concept is that the
insured probably has another remedy arising from to the physical inadequacy of access, most likely in tort. Hocking v. Title Insurance & Trust Co. , 37 Cal.2d 644, 234 P.2d 625 (1951). While it is reasonable to conclude that the quality of access is not covered by the policy, the method of access may be. A restrictive covenant that prohibits vehicular in- gress and egress to the land would make any property undesirable. Also, the insured would be shocked to find that access to an adjacent street is
ccess” is one of the bundle of rights of ownership of real estate. It is the
limited to foot traffic. Lincoln Savings & Loan Association v. Title Insurance & Trust Co. , 120 Ca. Rptr. 219 (Cal. App. 1975). A right of pedestrian ac- cess only from a hotel site to a busy public street presented a compensable claim to a North Carolina court, holding that the lack of vehicular access did not meet a test of “ reason- able access under the circum- stances.” Marriott Financial Services, Inc. v. Capitol Funds , 288 N. C. 122, 217 S.E.2d 551, 565, 77 A. L. R. 3d 1036 (1975). The court held that the lack of continued on page 15A
“right vested in the owner of land which a d j o i n s a road or other highway to go and return from his own land to the h i g h w a y
Michael Smith
without obstruction.” Black’s Law Dictionary, Rev. 4th Ed., 1968. A right of access includes the privilege to travel upon and over the highway once accessed. The right of access was expanded in the Twentieth Century to include use of automobiles. The need to protect the safety of the public against those cars has created situations in which the right of access has been restricted. The title insurance industry has responded with coverage against loss due to a lack of a right of access. ALTA title insurance policy forms indemnify the insured against loss as a result of lack of a right of access for land that lacks direct access to a public thoroughfare or indirect access to same via a private ingress/egress easement. The title to such land is so im- paired as to be unmarketable: …When property completely lacks such access (to a public road), it is usually held that its title is unmarketable, ap- parently on the ground that the purchaser would be sub- jected to the risk of a lawsuit to establish an easement by necessity in order to gain a right of access… Stewart Title Guaranty Company v. West , 110Md.App. 114, 676 A.2d 953, 965 (1995). The title insurer is under no obligation to that there is access to a specific road. See, Phrazer v. Lawyers Title In- surance Corp. , 508 So.2d 731 (Fla. App. 1987). If there is no legal access to the property at the date of policy, the insured has a po- tential loss. The title insurer will have to establish a right of access by litigation or pur- chase an easement to resolve the claim. Even if the insured had actual knowledge of an impending loss of legal access, the underwriter would still be liable under the policy. See, L. Smirlock Realty Corp. v. Title Guaranty Co. , 418 N.E.2d
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CONSUMERS: Conestoga only appoints the industry’s highest quality agents and attorneys that will meet or exceed industry standards. In Pennsylvania Conestoga offers more competitive pricing than other underwriters for transactions over 1 million. Conestoga’s appointed agents and attorneys are committed to providing their clients with exceptional service. LENDERS: Conestoga has been awarded with a 2014 Financial Stability Rating ® of “A Prime” by Demotech, Inc., the title industry’s leading independent analyst. Conestoga does not compete for business with title agencies by opening branch offices. Conestoga is looking to appoint new independent title agents, affiliated title agencies, law firms and attorneys. If you’re looking to become an appointed agent or attorney for Conestoga give John M. Nikolaus, ALTP, President, Conestoga Title Insurance Co., a call at 1-800-272-3570 or email John at jnikolaus@contitle.com www.contitle.com Conestoga Title Insurance Co. 137 E. King St Lancaster Pa 17602 TITLE AGENCIES & ATTORNEYS: Conestoga provides exceptional underwriter support and service.
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