I’d guess that something like sorting out the liability is what’s holding up their involvement.
But huh… if title insurance doesn’t protect your title from anything but routine mortgage and plat issues, it’s not nearly as useful as I’ve thought. I had the idea that it insured the purchase as presented, and covered faults in ownership or property declarations that arise after the sale. Including such illegal/quasi-legal problems such as the OP’s.
Frankly, I think I’d be out there having the pipe capped off at each property margin, and waiting with a smile for whoever shows up to complain.
Title companies are big and have good legal help to protect their company. I’d be surprised they would be so willing to cut a check about this situation.
I wouldn’t cap off anything, because it might just end up damaging your own property or the property of someone else near-by and you’d be liable for that.
Mortgage companies require title is done, which is why everyone does it. It is not set-up to protect the purchaser of the home. It protects the lender.
The primary one to go after in all this is the seller. They knew something was wrong and didn’t disclose it. But they likely don’t have the deep pockets compared to the golf course and the title company. Many times it isn’t even a matter of who is right, but who wants to continue to spend money to fight a legal battle so they sometimes settle. I would expect the title company to put up a good fight because they don’t want to set into motion others to come back to them for any problems with the property. But the golf course would like to have this resolved instead of defending themselves in court, because either way, once it becomes public the golf course doesn’t look like a good citizen to the community.
Granted, it was a decade ago and it was my first house so it was kind of a whirlwind, but I don’t remember getting a choice in a policy. It was just sort of a line item on the mortgage. I think, if anything, I may have signed something stating that I could farm it out myself should I choose to, but it was basically just one of a number of charges on all the things I signed during the approval and closing process. I know that I didn’t shop around for it or have to pick between different polices. It was just something like “Title insurance…$100”.
I agree with others that this is going to fall on the previous homeowner because, as I said, they’ve already received some kind of settlement for it and that means that A)They knew about it and B)the city isn’t going out to pay out twice on the same thing.
It’s not that you get a choice on the policy. It’s that some jurisdictions require title insurers to actually insure the title, while others allow them to be a sort of second line of deed review.
I believe it is state-specific, but in Kansas you can buy a “standard” or “extended” owner’s policy, and the extended policy costs more but covers unrecorded liens, easements not on public record, encroachments (e.g., your garage extends over your neighbor’s property line), violations of building codes or zoning rules (e.g., the city makes you move your garage because it’s too close to a property line), and other issues. If you don’t specify, you probably get only the standard policy (or possibly not even that–you may only be buying a policy that covers the lender).
Don’t forget the difference between lender’s title insurance and owner’s title insurance.
Whenever we’ve taken out / refinanced, the lender’s title insurance was mandatory. Insurance for ourselves was NOT. If we opted out, then 2 years later the property was discovered to be illegally transferred, we’d be SOL.
The lender would presumably specify their own insurer. I too never shopped around for the owners’ policy, it was just whomever the title transfer company picked, though presumably we could have done so.
For what it’s worth, I don’t know if an easement would be considered a disclosable problem. The fact that the basement had been flooded would need to be disclosed, but possibly not if it’s been remedied. A utility easement would probably not need to be disclosed - and the owners may have decided this counted as such. Of course, since it directly affects the usability of the property, I think they’re wrong.
The title insurance company got back to me, and has decided to cover it. The two options are to either move the pipe or compensate us for it. They’d prefer to compensate us, but want us to come up with a dollar amount and a justification for it.
We’re still on very good terms with our real estate agent, and her suggestion is that we should demand the pipe be moved (if it can, of course). I’m inclined to agree- she had a good point, that it’d be best if we didn’t have the easement at all. Also, this way we don’t have to worry about the title insurance company negotiating us down.
It’ll be a real hassle to have the pipe moved, I imagine- but boy it’d be nice if it’s not even something we have to worry about.
I’d have it moved. Have it moved well off the property, back on to city property and make sure that that your property is back to looking (more or less) untouched when they’re done. Sure, that might cost $100K, but they want to settle for a quick $25K, because they think you think that’s a lot of money. Also, I’d get a lawyer to help with this since to make sure any problems that arise because of the construction (or after it) aren’t your problem.
Furthermore, if you do go that route, you might want to talk to people that contractors that move the pipe and get a bid on doing whatever other work you want done (build a garage, right?). You’d have to pay for it, but it might be cheaper since they’re already there. That is, if you’re ready to pull the trigger on it now.
Yeah, let them take care of moving the pipe off your land. Like you say, that way you don’t have to worry about whether you’re being adequately compensated for the presence of the pipe; it’s just being removed.
The downside is that for a short time, you’ll have a yard full of mud. But grass will soon grow over the places where they had to dig (make sure they agree to restore the lawn after pipe removal!), and if you want to add onto your house, put a pool in the backyard, or whatever, you won’t have to worry about avoiding the damned pipe anymore.
You wanted to build something over the easement, right? It would seem like a third option would be to reinforce the pipe and fill ground to permit that construction, with the easement, modifications, location and permission to build-over all properly recorded. And the insurance picking up any special costs.
in any case, I don’t see the pipe relocation costs being the obligation of only the insurance company. I’d assume they’d go after all those who put it there without proper permits and easements.
I vote for not (necessarily) moving the pipe. Moving the pipe is likely going to cost substantially more than leaving it would reduce the market value. So while you might not feel fully compensated if it’s moved, you have a bargaining chip. The insurer will want to avoid paying for the full cost of removal if at all possible, and if that means paying you more than the market loss they will almost certainly do that (so long as it’s less than the removal cost).
Or you could try Amateur Barbarian’s idea, though whether that’s possible at all likely depends on the depth of the pipe and what you want to build. But yeah, you’ll still want an attorney.
Good news! I’ll join the chorus to encourage you to have the pipe moved rather than reach some kind of settlement where it remains in place - that’s really the only option compatible with your long-term plans for that home.
And a permanent easement on your lot that you’ll have to disclose to any potential future buyer. That kind of easement would have scared you away - it’ll scare off other buyers too.
If it were my house, I’d be reluctant to accept anything short of market value for the home (pre-easement), moving expenses, and closing costs on both this home and a new one as an alternative to moving the pipe. Having infrastructure in your yard comes with maintenance issues (for example, manholes accumulate sediment and have to be cleaned out somewhat regularly), to say nothing of the potential for failure. If they didn’t go through the proper procedure to secure an easement for the golf course drainage, who knows what other corners they cut in the construction process? The pipe just passes through the yard, but it’s part of a system that’s affected by the quality of the construction both upstream and downstream. Even if your section gets re-engineered to hell and back, that’s not going to do anything about the pipes it’s connected to.
You didn’t sign up for any of those problems when you bought the house, and there’s no reason for you to take any of them on now unless they make it worth your while… and I mean REALLY worth your while.
Not just that but also a flooded basement. As a future seller, I’d rather be able to say 'yes, the basement did once flood due to an old drainage pipe that ran through the backyard, but the city moved it out to the street so it’s not a concern anymore. (Also, they’ve agreed to fix the house if it ever causes any more problems)".
Rather than explaining that the basement once flooded because of that pipe (which is still there).
If the golf course is still operating, the Title Insurer may have recourse to them for not filing the amended Plat.
I suspect the permit for the work (and, if it was done within city limits WITHOUT permit…) woulod have specified that the new Plat be submitted to the Recorder.
If they have such recourse, they can pass their expenses onto the Course.
Good, I’m glad the title insurance company will cover it!
I agree, have it moved. This way it further prevents any future problems with the property and when you go to sell, you don’t have to scare off prospective buyers and possibly take a lower amount for the house because it has a “problem”.
Another option you might want to offer them is to have them abandon the pipe. That is, have them cap it off at the golf course (and maybe at the ‘other’ end) and route the drainage elsewhere. They would then give you (and anyone else it applies to) some kind of affidavit that it’s capped, it’ll never be used again, and if you ever do any kind of construction of your own you can pull it out at your own cost. But you can basically ignore it and not worry about any water ever moving through it.
This would probably cost them about the same as moving it out of your yard, but save them the headache and cost of moving it out of everyone’s yard when all the other neighbors hear about it.
Obviously, I don’t know the geography of the neighborhood or where it’s draining to, but is there someway they can drain the pond to another part of their property so it doesn’t run through your backyard? If it’s just connecting to a municipal sewer, I’m sure there’s another one nearby. If it’s going to a local lake, is there another way to get there?
Even ripping a six foot wide, 4 foot deep stretch of asphalt (in the street, in front of the houses) from the course to wherever it goes, to move the entire pipe might be easier than just routing your section of pipe and fixing your backyard. As long as I had something saying it was abandoned and basically ‘my’ pipe, I’d be okay with that.
Just spoke with the title insurance company again this morning, told them we’d rather have the pipe removed so that the easement (and potential damage) hanging over our heads (metaphorically speaking). I could tell the woman I’ve been dealing with was *not *happy with that idea (even though it was something she’d brought up, yesterday).
She said that they’ll look into the cost of moving it, but said that the company might not want to pay that much. She also wants me to come up with a compensation amount. I’d obviously prefer to wait 'til they do the survey, so I know how much money I’ll be saving them.
She also suggested that we look at the value of the land ($100k) and divide it by the percentage of the land that’s affected by the easement (eyeballing, looks to be about 20%). Twenty thousand seems really low for an easement straight across the back of my yard, though, especially since it’s exactly where any sort of garage or pool would go.
That last isn’t a valid way of estimating the damage to the property’s value.
If you built a garage, would that add more than 20K to the value of the house?
Some concerns (dunno how valid) with leaving the pipe in place and capping it off is that it’s still in the way - might it affect your own yard’s overall drainage? Unless it’s filled with dirt, it’s a hollow tube in the middle of your lawn, which I could see having issues at some point e.g. collapsing.
