Blog: R.E. Tales
(Hey, they all can't be pretty...)
I have been doing real estate since 1981 and still find deeds hard to understand. There are big differences in their comprehensibility. But then, I don’t spend a lot of time reading them either. Once in a while my suspicions get raised or there’ll be a question of some sort or another and I’ll do some research. But, unless there is a survey to base the description upon, I have found them generally less than perfectly accurate on the amount of land enclosed within the boundaries. Conversely, they are normally quite accurate on where these boundaries are located.
In real life, the process usually goes like this. Someone comes out, looks at several parcels, and finally decides which want they want. There is some bargaining, and then I draw up a Purchase Contract. Now, it goes to the attorneys. They will wait until contingencies are met before doing much work (things such as inspections, if any, mortgages, selling of property first, an so on) and then they examine the title. NY is an abstract state, meaning that we normally rely upon the abstract (sort of a history of ownership) of title. These are prepared by special abstracting companies. These companies are also called Title Companies.
Another thing they do is provide title insurance. Banks sometimes require title insurance. In some states, everyone gets title insurance, but not in NY. Most of my buyers do not get it unless required by their lender. Once in a while there is something that the attorneys do not like about the title and they require title insurance as a condition of signing off to close. Title insurance is an insurance policy that is paid for once and lasts as long as you own the property. The title company guarantees to defend you against all title claims, forever. That may render title “marketable”. A little advertised fact is that if your attorney says you have clear title and allows you to close on it and, later on, events prove that he is wrong, then you have the right to sue him for damages. They do not like this possibility of course, and it gives them incentive to do their job right. It is one reason some attorneys like to charge a percentage of the sale price. That used to be more common than it is now. Like doctors, they have malpractice insurance too.
I once sold a 211 acre place twice. The original owner had been there for many years. He showed me the boundaries. Later, I got an aerial map with the tax map boundaries super-imposed upon it (I generally rely upon such maps, as they have the most real information on them). It seemed to match correctly with the boundaries that I was shown, so no red flags went up. When we found a buyer and things were in the hands of the attorneys, the buyer’s attorney had a question about the boundary on a very large section of this land. The owner came in and explained where it was, but that was not enough to satisfy his concerns. Eventually they agreed to close first since neither wants to delay this, for other reasons, and to have a survey done (both parties were well-off financially) afterwards. If the survey showed a difference of more than 5%, each party agreed too make it right with the other at a set price per acre. In other words, it the survey showed, say 200 acres of land, the seller would reimburse the buyer for 11 acres (since this is more than 5% of 211 acres). If it showed 225 acres, then the buyer would pay for 14 more acres at the price they had determined. That seemed fair enough. When the survey was completed, no more money changed hands as the boundaries were indeed accurate, exactly the way we had believed them to be. Fast forward some years and the new owner has changed jobs, gone through a divorce and he needs to sell. We find a buyer and the process starts once again. And, sure enough, the same attorney brings up the same problem once again. And again, none of us could see what his objection was. To this day, I still don’t know. This is a man that I use frequently for closings so he is not one of those lawyers who makes waves solely to show his client that he is “working” for them (and collecting extra money as a result). He does good honest work but had forgotten the agreement made so many years ago . The survey had been completed after his work had been done that time so he never saw it. When I brought it in to him, all at once everything became clear and we proceeded forward with the closing.
Notice that the above paragraphs are concerned mostly about clear title. This is critical, as you may expect. But clear title does not necessarily address smaller things such as precisely where the boundary lies. If it is off a foot or two, or even 10-20 feet in large properties, generally no one worries. We have a lot of land in this area, which is why our prices are so low, and people do not argue over trifles. Adjoining owners generally work these things out among themselves if they have any differences. And most people recognize that you have to get along with neighbors. In the rare instances that this does not happen (really rare, but then we usually find no differences in the first place), they can bring in a surveyor. This is expensive. In the properties that I sell, the larger ones, this runs into the thousands of dollars – which is a good incentive for people to work out their own problems among themselves. A survey is a legal determination normally accepted by anyone, land owners, attorneys, and courts. And it may show that you own more, or less, land than you thought. It is a sword than can cut two ways. Generally the survey reinforces the historic boundaries. If a land owner is still not happy and thinks there are mistakes, he may go to court, but now you are talking higher sums of money and a huge potential for things to not go your way. This happens so rarely that I cannot think of a single case that I have been involved with where a dispute went this far. There was one that went to attorneys first because there were two pigheaded owners who refused to have a survey done, but that was settled without going to court.
Normally the surveyed properties are ones that are separated from a larger property, whether part of some subdivision or just the owner keeping a lot off of a farm he sold. In each case, a new land parcel is created and a new deed description must be worded. It is good practice to use a survey for this and that is what is normally done. It gives a more modern deed description, one which lawyers in the future will be happy to see. The old ones are frequently attached as well. They are still perfectly legal, even though not modern. It is still rare to find a surveyed large property whose historical boundaries have not changed though subdivision or the addition of additional land from a neighbor. The few times that I have run into this, I found a landowner who either intended to subdivide and changed his mind, or was someone from a large city who was comparatively wealthy and who, like city people do, worried about a foot or two here and there.
And that’s how we normally handle boundary and title concerns.
Some are merely amusing. some can help you immensely. All are interesting.
After 40 years, I've learned a lot, & acquired unforgettable experiences. Follow these long enough and you'll eventually get the whole book. (Names probably changed, for obvious reasons.)