Thursday, March 01, 2007

Action in Equity

I'm pretty busy today but the file I'm working on is one I feel compelled to share with you. It's a cash transaction. The buyer, thankfully, decided to purchase title insurance.

I am reviewing title and find an action in equity involving a private roadway. An action in equity is a lawsuit that is specifically tied to a the property identified in the suit. This means that any decision will affect the underlying property and not simply follow the people.

According to the complaint our seller obstructed an existing private right of way cutting off access to an adjacent landowner. The roadway in question used to be the neighbor's exclusive access but he has since acquired another means of getting to his property. He has not, however, relinquished his rights to use the secondary roadway.

Our sellers apparently placed top soil over the road and extended their sidewalk into the roadway. The plaintiff is requesting that the roadway be restored to the original shale surface and all obstructions be removed.

Interestingly, the buyer is not aware of the suit. The seller failed to include it in their disclosure. When queried, the selling agent recalls the seller mentioning a pending suit but she accepted their assurances that the buyer would not be impacted in any way.

This transaction is set to close on the 9th. I have a call into the buyer and will send her a full copy of the suit. I understand she has legal counsel to advise her.

Possible solutions? Well, besides walking away from the deal, she could require that the seller fix the road prior to closing. She could also obtain a contractor estimate of cost and require an escrow from the seller so the closing can move forward as planned. It's a cash deal, so the buyer is in the driver's seat. She could also just decide to buy the property and deal with the suit herself. In any event the suit is an exception on her owner policy.

Interesting, huh?

4 comments:

Anonymous said...

I recently discovered your blog Diane and love the work you do ... thank you. Keep up the good work and update more often!

Diane Cipa, The Closing Specialists® said...

Why, thank you. ;)

Diane Cipa, The Closing Specialists® said...

Why, thank you. ;)

Diane Cipa, The Closing Specialists® said...

Sorry, that must have been a hiccup.