Well, if it represents only a payout from the title company in recognition of their error (in failing to recognize the encroachment defect to your title of the unrecorded easement for the pipe) and neither the city nor the golf course are parties, you have to make a choice. Is fifty six grand enough compensation for your loss of use, your loss of value at resale, and all potential damages you may incur in the future as a result of maintenance and/or failure of the pipe, as many times as that may occur?
I think you need to get someone, city or golf course, to agree in writing to be responsible for those things. Otherwise, in the future they can argue that you are responsible, and your acceptance of payment demonstrates your agreement to bear that responsibility. At least, that’s what I’d argue if I was them a few years from now.
I’d be concerned about possible future problems from this pipe and having to disclose it to prospective buyers. I’d have them remove the pipe and repair the yard.
When the previous owners were having the house built, the builders found the pipe. There was no record of it, though, so they just reburied it. Apparently they’d damaged it, though, 'cause when the golf course drained the ponds in the spring, the pipe flooded the back yard… and quickly broke through one of the windows in the basement. The water got to about five feet deep down there before they could stop it. Made the local news and everything.
Anyway, the city paid for the repairs, landscaped the yard, reburied the pipe, and gave the owners five thousand dollars. In return the previous owners were supposed to file an amended plat… which they, of course, didn’t do. They told me about the basement flood, and said that the pipe had been rerouted… but didn’t bother to tell me that the pipe had been rerouted straight across the yard.
We knew that there was a pipe in the yard, but according to the plat we got, it looked like it just ran along the east property line, along the setback.
Since our next step is to figure out who’s responsible for the pipe, I’m going to bring that up… but the pipe either has to go across someone’s property or down the street- and it’s likely going to be *expensive *to move it to the street. The city isn’t likely going to want to do that. I’m not sure how much negotiating power we have.
I would think quite a bit since this whole thing was unauthorized to begin with. I would expect you pushing that aspect would also make the dollar offer much higher. But the reality is, they did all this under the table because they knew they wouldn’t get approval for it, and you can be very sure it wasn’t inspected. Which is likely why it flooded your basement and you have no indication that won’t continue to happen. If they approached you now and asked for the pipe to go across your property and you said no, they would have to find another way. If they could have gotten an easement to do this in the first place they would have, but they didn’t try because they knew they couldn’t get it.
As a prospective buyer on a home I would pass on property with this history, which is exactly why the seller didn’t disclose it to you. On the face of it now, you have to disclose two important damaging things to a seller if you put it on the market now as-is. One is that your basement has flooded, and the other is that the case of it is a permanent underground pipe that belongs to someone else running through the property that doesn’t have an easement and doesn’t appear on any map. Just having a history of flooding in the basement is enough to scare off most home owners. It is one of the first thing they look for, they go in the basement and look for evidence of flooding or if it has been concealed.
As for the higher costs to comply to make it right by moving the pipe off your property, honestly that’s their problem and they need to look into doing that. I don’t know what your attorney has explored here in options, but it would be much more costly for them if you filed a lawsuit to have the pipe moved. You might want to discuss this with another attorney. I think it’s a mistake to simply take a cash offer and leave things as is.
After the pipe has been moved and the property repaired, you could disclose to a prospective buyer that yes, there was a flood in the basement but the cause of it was this pipe, it has been removed and there has not been a reoccurrence of flooding since.
Hence my confusion - I knew you said the place had a basement, but then you said you were going to build one. Maybe you meant you were going to finish the basement?
Anyway…
I’d seriously consider making the title company buy the place from you, and move to a less-scary property, though obviously that’s a WHOLE lot easier to say than to do.
Also: I’m not sure I’d spend that 56K if you do stay. The loss in value might well mean you’re underwater (hah) on your mortgage. Unless the shed and basement add enough to the value to fix that, you’re still down some on the value.
Your bargaining power likely depends on the effect of an unregistered easement under your local land law. But, that’s why you have a lawyer who knows your local law.
Another idea. Could you ask the title company to indemnify you against any pipe related costs? So, even if it currently appears that the city is the responsible party, if at some point in the future some court decides that your’e liable, they will cover any costs.
I don’t think that’s how title companies work. They indemnify against title defects (like the presence of an undisclosed easement or an encroachment – I’m really not sure which the present case is) not against future expenses.
And selling at some future date won’t so much be difficult as it will be at a drastically reduced value. That’s why Lightnin’ needs to carefully consider this offered settlement. Be certain it is sufficient compensation for his loss of use and reduction in value. And he needs to obtain strong assurance that he will incur no additional loses.
He can sue the golf course and/or the city, demanding that they remove their encroachment from his property. There does not appear to be any record of any property owner granting permission for its presence. They certainly will not want to bear the expense of moving it, and will defend the suit. There are no guarantees in court actions but (recalling that IANAL) Lightnin’ has a pretty good case if the statements made here are accurate. He could then, if he wishes, offer to grant said permission in return for a sum of money and a written guarantee that said parties will save him harmless from any future damage or expense.
This, by the way, is separate from his settlement with the title company, which is merely his compensation for their fuckup. Lightnin’ old buddy, I sure hope your lawyer is pursuing both of these actions. If he hasn’t thought of them himself, you may want to be interviewing other lawyers. Just sayin’…
To be fair, it sounds like the title company is as much a victim in this as Lightnin’ is. They only have access to public records, and the pipe was never disclosed on any public records. As the insurer, the title company probably has a strong case against the golf course and/or city to recover their settlement.
Insurance is a hedged bet, its cost based upon an analysis of the odds. The title company examined the available evidence, made a guess about the probability of unknown issues – and lost. They own it. They don’t deserve blame, it was simply a business decision. Neither are they victims since no one set out to rob them. They just are not omniscient and an unforeseen circumstance will cost them some money this time. I doubt they can recover from the other entities though, unless there was some duty to disclose. Did they ask, and did those parties obfuscate rather than providing a truthful answer? Or did they just fail to broadcast the facts in such a manner that the title company would be likely to notice it? Any actual lawyers want to school me? I’ve been wrong before! Why, I remember a day back in '87…
We built a large garage/shed in the back yard, at the end of the RV pad, with an electrical line running out to it. This is now where we keep my motorcycle and most of our garden stuff. Additionally, we had the really ugly playground area at the top of the back yard into a nice gravel and pavestone garden area, and we had our front yard leveled and landscaped. It all looks pretty awesome now.
We haven’t yet approached the city about the pipe itself, which still isn’t on record with the county- we’re obviously going to have to disclose it when we sell the place, but we’re hoping that all of the improvements and the shed will make up for the location of the thing.
My job situation got really, really bad- basically, my studio was abruptly shut down, so money has gotten really tight (which is why we haven’t done anything about the city’s ownership of the pipe. Things might be settling down quite soon, though, so I’m planning on revisiting it again soon.
One particularly big annoyance, though: I reported the seller’s agent (her mother) to the Utah real estate board. I gave all the info I’d been given, and got one email asking for more information and clarification. Then a few months later, we got a response- the board found her to be not at fault for the whole, you know, fraud thing. Basically, she skated on it, and I can’t even protest it.
