M has an interesting question about a shared retaining wall. Who is responsible for fixing it?

Hello Diane,

I just saw your blog and it caught my eye on a situation I am going through.

Last summer 2013 I closed on a house.  A couple months ago, my neighbor (who's backyard faces up to mine --- I'm on a hill, her yard is at the bottom of it) started complaining about a retaining wall that divides her backyard and mine.  This wall is deteriorating and buckling on her side.  She says the wall is 100% my property and I need to fix it.  The wall is made of concrete cinder block and runs from one end of the block/street to the other, dividing all the houses on my block from the houses on her block.  The wall is connected so there is no "stop and end" in each person's yard.

My survey didn't indicate this wall.  I contacted my surveyor about this and he revised it to show the wall.  He said it now shows the wall is on the property line both hers and mine.  My neighbor showed me her survey and hers shows the wall is all on my property.  (No history of this wall's construction can be found as it was built in the mid 1950's.)

I went back again to my surveyor and he is revising the survey yet again (for second time since my closing in 2013).  

My question is: who is responsible for fixing this wall if both surveys are different ? Regardless of this, wouldn't I be able to file a claim with surveyor or title insurance because my original survey did not represent this wall on it ?  Had I known about this wall before my closing, I would have waited on purchasing this house.

Trying to avoid an expensive lawsuit here and my neighbor is starting to get everyone involved that lives on both sides of both blocks.

Thank you,

M

Hi, M:  Thanks for sending your question.  I am always interested in these types of situations.If this is an old plan chances are that the developer constructed the retaining wall for the benefit of lot owners above and below the wall.  It may have been a requirement of the local government who approved the plans but in any event, I think you are unlikely to find someone to take responsibility for the maintenance of the retaining wall. It's just one of those things that no one pays attention to until there is a problem. It's sort of like a private road.  Many have no maintenance agreements, they are just there.  Once the road falls apart, then lot owners have to come to an agreement or let the road go to pot.

I would pursue - with the help of a competent attorney - finding an agreement amongst all of the lot owners above and below the wall.  Afterall, if the land slides, the houses on both sides will be damaged and it serves no good purpose to let the wall fall for lack of agreement when some shared cost of maintenance will help everyone.  I hope this helps and good luck.

Diane

We just finished our annual CPA audit and in the process heard an interesting title insurance claim story.

Yes, we pay to have our books audited annually by an independent CPA.  I wish it was a mandatory audit, but it's not.  I'm not a big government fan, in fact I'm an advocate for limited government - highly bent in the libertarian direction, BUT when a licensed entity has access to millions of dollars of other people's money, I think there ought to be some sort of formal audit standards which include 3rd party oversight.  That's not the purpose of this post, though, so let me switch gears.


The auditor sent out by our accountant this year is a nice young man who while asking some questions, mentioned that he was near the end of a multi-year title insurance claim.  I asked him to tell me the story because I always want to know how a consumer feels when faced with a title insurance claim and whether or not they are happy with the results.

In this case, he and his wife hired an attorney to handle the purchase of 20 acres of vacant land.  They SMARTLY decided to buy an owner title insurance policy.

This young couple bought the land with plans to build their dream home.  They are both accountants and so they are good planners.  When they purchased the land, they were childless and living in a small two bedroom house.  The plan was to build a four car garage with an apartment on top.  Eventually, when they started a family they would build a large addition which would become the main house.

The whole plan fell apart when they applied for a mortgage to do the first part of construction.  The bank used a different title agent to do the title examination for their loan title insurance policy.  This second title examination revealed that there was no legal recorded right of way to the land.  Though there was an old dirt road that looked like a right of way, it went over the land of the neighbor who when approached, refused to grant an easement.

They filed a claim with their title insurance company who then offered a nice chunk of change to the neighbor and met with another refusal.  Soooo....they went into arbitration and years later finally were set to go to court and on the eve of the trial, the neighbor finally agreed and accepted a paltry sum - much lower than the first offer and settled the matter.

Okay, well that shows the value of buying an owner title insurance policy, right?  The title company paid for all the legal work and the consumers eventually got their right of way.  On the surface, it all sounds peachy keen, however, this story helps to demonstrate the VALUE OF SELECTING A COMPETENT PROVIDER.

Now, I am not saying that we human beings do not make mistakes.  Everyone does, but we EARN OUR LIVING BY AVOIDING CLAIMS.  We do a full search and examination to ferret out details BEFORE the closing in an effort to help you avoid the entire claims process.  When you place an order for title insurance, pick your provider carefully.  Make certain you are getting a full search by a competent human being.  Keep your eyes open.  Read your title insurance commitment BEFORE you go to closing.  Complete your transaction with YOUR brain engaged.

WHY?  Well, let's discuss the rest of the story.  During the years this young couple's claim moved through the system, they had two children.  They had to buy a larger home and move on with their life, abandoning their plans for the dream home on their 20 acres.  Yes, in the end, they got their right of way.  Will they ever build there?  They don't know.  Life has moved on.  She is pregnant with their third child.  They are happy they bought title insurance.  In retrospect, they do wish they had paid more attention to the title work and not just trusted that the attorney did everything right.  They knew the dirt road was private but they presumed the attorney would check on the legality of the road.  Yes, the title insurance covered access but as you see from this case, the insurance is the safety net.  What you really want to do is avoid the problem in the first place.

;)