Unmarketable title

[dee_dub]

I don't know anyone in Washington. The lawyer referral service at http://www.wsba.org/atj/contact/lawref.htm might help you find someone. The state bar association at http://pro.wsba.org/ also has a lawyer directory.

I'm glad to hear you're getting favourable opinions. This is a pretty thorny issue. Good luck!

 

[doubletrouble]

Thanks again, dee dub. I'm now wondering whether this is not so much a thorny real estate dispute; but rather more of a garden variety contract dispute regarding breach of "warranty". I wonder whether I should seek out an attorney whose expertise is real estate or contract law.

The two properties were conveyed to me by two separate "warranty deeds" and here's the text of the applicable law:
_________________________________________________________
RCW 64.04.030
Warranty deed — Form and effect.

Warranty deeds for the conveyance of land may be substantially in the following form, without express covenants:


The grantor (here insert the name or names and place or residence) for and in consideration of (here insert consideration) in hand paid, conveys and warrants to (here insert the grantee's name or names) the following described real estate (here insert description), situated in the county of . . . . . ., state of Washington. Dated this . . . . day of . . . . . ., 19. . .


Every deed in substance in the above form, when otherwise duly executed, shall be deemed and held a conveyance in fee simple to the grantee, his heirs and assigns, with covenants on the part of the grantor:

(1) That at the time of the making and delivery of such deed he was lawfully seized of an indefeasible estate in fee simple, in and to the premises therein described, and had good right and full power to convey the same;

(2) that the same were then free from all encumbrances; and

(3) that he warrants to the grantee, his heirs and assigns, the quiet and peaceable possession of such premises, and will defend the title thereto against all persons who may lawfully claim the same, and such covenants shall be obligatory upon any grantor, his heirs and personal representatives, as fully and with like effect as if written at full length in such deed.
______________________________________________________________

The title company prepared the deeds in standard form as described above and the seller signed them. So what do you think? Is this "warranty" a contract? And if the seller and the title company both take the position that this is now "my problem", does that appear to be a breach of contract?

 

[doubletrouble]

I thought I'd bump this discussion because there seems to be a lot of interest here and something really strange happened. I got really tired of this lie being spread about by my title insurer that I illegally subdivided the property when I sold one of the two insured parcels. So I wrote to the County where this lie got started and told them that this accusation was outright slander. I demanded that they retract it especially since the title company kept pointing out that "fact" as justification for denying my claim.

The County finally did respond (in writing). After a full year of being accused of illegally subdividing this property by both them and my oh so helpful title insurer, now they're saying I have a legal lot after all. And so does the adjoining owner that I sold to. Why? Simply because the two parcels were assigned seperate tax account numbers in 1971, before the current zoning law went into effect. Exactly what I pointed out to them on day one. They closed the letter by thanking me for my "patience". Isn't that wonderful?
Well, sorta.

 

[seniorjudge]

I bought a parcel of property in 2007 which had two separate tax parcel numbers from the same seller and they closed simultaneously. Seller is a licensed real estate agent. One parcel has a house on it the other is vacant. I financed the vacant lot with a construction loan in order to build a new house and obtained title insurance (as did the lender: same insurer). I bought the house using a different lender but the same title insurer (again, as did the lender). So there were four seperate title policies, two separate legal descriptions and two separate deed transfers. Several months later I sold the parcel with the house and again used the same title insurer (once again for both the buyer and their lender). So that's two more policies from the same insurer for a total of six. Then I went to apply for a building permit. I was told by the building department that if I could not prove that the parcels were never legally subdivided from each other that I couldn't get a permit. I filed a claim with the insurer wo did try very hard to do so, but ultimately failed to furnish that necessary proof. Even so, they denied my claim. Their reasoning (ya gotta love this): it was I who illegally subdivided the property when I sold a portion of it. And not only does the exclusions section releive them from responsibility to ensure that a particular parcel is "buildable", coverage is not provided for insureds that intentionally cause their own problems. And they're sticking to this conclusion. Now what? Sue? Wait to get sued by the folks who bought the house from me? I'd go broke fighting these guys if they just choose to refuse coverage forever. And of course, they know that.

This has nothing to do with the title nor do zoning problems render a title unmarketable legally (maybe practically but not legally).

 

[doubletrouble]

I agree. And I would have titled this thread differently if I was aware of that subtle distinction three months ago. Moot point now since both lots are now unquestionably "legal". It was a very messy process though and the title insurer was just no help whatsoever. A hinderance, in fact and I just need to decide if they have any liability for buying into this lie and spreading it around instead of coming to my defense.

 

[seniorjudge]

I agree. And I would have titled this thread differently if I was aware of that subtle distinction three months ago. Moot point now since both lots are now unquestionably "legal". It was a very messy process though and the title insurer was just no help whatsoever. A hinderance, in fact and I just need to decide if they have any liability for buying into this lie and spreading it around instead of coming to my defense.

No, the title insurance company had no duty to you in this matter.

 

[doubletrouble]

And the County? They're off the hook too, you think?

 

[seniorjudge]

And the County? They're off the hook too, you think?

I don't know about that.

 

[dee_dub]

Thanks for the update. I'm glad to hear it's resolved in your favour.

 

[doubletrouble]

Good question, huh? I took out a one-year construction loan to buy this property in October 2007. Got denied a permit in January 2008 because the County said the lot wasn't legal. Took them a full year and lot of pressure to finally admit they were wrong. During 2008, I paid 15k in interest, 3k in real estate taxes and 1k in legal fees. Of course the loan came due in full in October 2008 and at that time the County was still sticking to its guns. So selling it wasn't even an option because it was worthless except for maybe a Christmas tree farm. I'm a builder. Guess what that did to my relationship with my construction lender.