Real Estate Journal — October 10 - 23, 2014 — 15A
www.marejournal.com
M id A tlantic
I nsurance /T itle
By Michael Smith, Conestoga Title Insurance Co. The use of title insurance to address a commercial development’s access issues (cont.) continued from page 13A
Title insurers can offer some enhancement to the lack of a right of access coverage by an access endorsement. [Note: Will likely carry an ad- ditional insurance premium.] Although some states differ, the two ALTA endorsements available are the industry standards. The ALTA 17-06 provides affirmative cover- ages as to direct access (land abuts a named thoroughfare), as does the ALTA 17.1-06 as to indirect access (land has ac- cess to the named thorough- fare via an easement). Both provide coverage against loss
if (1) the land insured does not have actual vehicular and pedestrian access, (2) the named thoroughfare is not physically open and pub- lically maintained, and (3) the Insured has no right to use existing curb cuts. [Also available in some states is the ALTA 17.2-06 endorsement, the utility facilities endorse- ment.] Please contact Conestoga Title Insurance Co. or any other title underwriter for more information on title insurance answers to access questions. n
A title search done as part of contract due diligence on unimproved land will list any recorded ingress-egress easements appurtenant to the property. It will not nec- essarily show adjacent public highways which provide direct access as such roads are in a title chain outside the chain being searched. Nevertheless, a recorded plat showing the adjacent road or a current AL- TA-ACSM survey of the prop- erty will most likely be enough for a title insurer to extend the lack of access coverage. [Note: Highway department maps
are not routinely examined in a title search.] If not shown, an exception to access will be not- ed in the title report/commit- ment provided to the insured. Whether or not the legal right of access will support the actual intended purpose for the developed land is an issue the developer must address with governmental agencies. For example, a title search that reveals an appurtenant ingress-egress easement, 30’ wide, may be insufficient for paved highway requirements to service a planned highrise hotel.
a right of vehicular access was a lack of access. Direct access to the public way is subject to reasonable regulation by the state in the exercise of its police powers (an issue ignored by the Mar- riott Financial Services court). Wood v. City of Richmond , 148 Va. 400, 138 S.E. 560 (1927). Moreover, the property owner abutting a public way has the rights of light, air, view, and lateral support as to the road. State ex rel. Woods v. State Road Commission , 148 W.Va. 555, 136 S.E.2d 314 (1964). Liability policy may have a $1,000,000 per claim limit, the limit applies typically to both defense costs and any indemnity payment. Careful consideration should be given to whether $1,000,000 is suf- ficient. While the regulatory re- quirements are much more severe for certain industries such as the health care indus- try, the real estate industry is increasingly a target for hackers with an increasing amount of transactions occur- ring electronically. In the con- text of property management, there is frequently a debate about who may be liable for a breach, an owner or property manager. With many property management agreements be- ing silent on the issue of a data breach, the question about liability can be a complex one that usually revolves around who controls the database that was breached. That being said, it is possible to obtain policies that cover both property owner and property manager in the event of a breach so that such a cost, and limits, could be shared that that is a desirable approach. Ultimately, all operators should be considering the risks of data breach. This has become a boardroom issue for large companies, and an expensive exposure for small companies. Both risk manage- ment and proper insurance program design are crucial to ensure that one’s income statement and balance sheet is properly protected. n review of insurance program design . . . continued from page 12A New exposures require another
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they wrote the policy. we make sure they write the check.
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