Title Insurance: Access to a Public Street or Road & Subdivision Map Act Legality: The devils in the details for landlocked property
One of the “basic insuring clauses” (see below) of California Land Title Association (CLTA) and American Land Title Association (ALTA) Title Insurance Policies is access to a public street or road. Without that access, the property would be “landlocked”. Common sense tells most real estate buyers that buying a “landlocked” parcel is very not a good thing.
Yes, Dorothy, your parcel can be landlocked in California!
Simply put, the issue of legal access raises at least these questions:
- Is the road or driveway over which you drive your car or SUV to access your parcel located entirely on the parcel you are purchasing?
- For the answer to that question to be yes, then that road or driveway must “start” on a public road or public street for you to have access to a public road or street. So far so good, but see “physical access”, below.
- If the answer is “no”, then your driveway or road crosses another private parcel owned by a third-party, or even several parcels owned by several third parties. In other words, in this case from the nearest public street or road you access your new parcel by driving across one or more “private roads”.
- How do you know? How can you find out?
- If you find out the driveway starts on a “private road”, how do you know you have legal rights (aka, an easement) to access (aka ingress and egress) the nearest public road or public street.
- You can ask your real estate agent to ask the title company where your escrow is opened to research the issue and do a color-coded map to show you the access route and the one or more easements that provide you the legal rights to access your parcel.
The title company should research the access easements and should be able to provide the color-coded map with relative ease since its policy contains a basic insuring clause anyway.
Even so, I recommend clients consider purchasing a special “endorsement” to their basic title policy to insure the easements that are necessary for their parcel’s ingress and egress. This is over and above the basic insuring clause that insures access. Yes, this is a “belts and suspenders” approach, but the endorsement is cheap.
“CLTA Easements Providing Ingress & Egress Endorsement Guideline 103.4 Explanation: Provides an owner or a lender with assurance that an insured easement affords ingress and egress to a specified public street.”
But you might be a prospective owner of a parcel that requires further study and action to confirm the “physical reality” of the access that is being insured.
Let’s assume your parcel does not abut a public street or road or even if your parcel does abut a public street or road, this is the question: where does the actual physical access enter your parcel as contrasted to where the easement rights are located? Especially in rural areas, there may be a big difference between the physical location of a physical road and the physical location of an easement.
One example I ran into years and years ago was a large parcel overlooking Sacramento and the Sutter Buttes. The property abutted a public road. The problem was that to build a road to access the bulk of the property would have required the construction of $3 Million bridge. Sure, it could be done, but not economically.
Other examples I have encountered over the years occur where the easements are straight lines on Parcel Maps along property boundary lines, and the actual physical roads were “bladed” to follow the contours of the land. Such practical roadbuilding practices made sense in the “good old days” when the code enforcement officials were more “practically minded” then now. But now these meandering roads without “of record” easements can cause issues with lenders and with title insurers.
Perhaps it is wiser to spend some money before close of escrow on a survey of the existing road to compare with recorded easement rights. Perhaps the seller might contribute to fixing that problem prior to close of escrow. Perhaps not. But in either case it might be wise to know there is an issue.
Basic Title Insuring Clauses:
Here is sample language from Stewart Title Guaranty Company of the basic insuring clause that covers access to a public street or road:
STEWART TITLE GUARANTY COMPANY
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, STEWART TITLE GUARANTY COMPANY, a Texas corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of:
- Title to the estate or interest described in Schedule A being vested other than as stated therein;
- Any defect in or lien or encumbrance on the title;
- Unmarketability of the title;
- Lack of a right of access to and from the land; …. [and continues]
Finally, here is another devil in the details—Subdivision Map Act Compliance Endorsement:
To a title company “marketability of title” does not necessarily mean the parcel you are purchasing is a “legal” parcel that was created in compliance with California’s Subdivision Map Act.
This is a huge problem if you buy the parcel and it turns out to be an “illegal parcel” under the Map Act.
How can you tell if you might have a problem of “illegality” of the parcel?
If the legal description of your parcel is a “metes and bounds” description as opposed to a reference to parcel number on a recorded Subdivision Map or Parcel Map that was approved under the Subdivision Map Act, you may have a problem if the parcel was created after March 1972.
To solve this problem, prior to close of escrow ask for your title company to issue this endorsement to the Title Policy issued at COE:
“CLTA Subdivision Map Act Compliance (06-03-05) 116.7 The Company hereby insures the insured against loss or damage which the insured shall sustain by reason of the failure of the land described as Parcel in Schedule __to constitute a lawfully created parcel according to the Subdivision Map Act (Section 66410, et seq., of the California Government Code) and local ordinances adopted pursuant thereto.”
A word to the wise!
One of the added values a real estate attorney can add to your purchase transaction is to review your Preliminary Title Report and suggest some issues that might be lurking just below the surface.