EASEMENTS - INSURING
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- Marilynn Harrison
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1 EASEMENTS - INSURING I. If the easement has been insured previously by the Company, skip to step VII. II. III. Consider an additional premium for the easement examination. SCHEDULE A - Verify that the legal description has been properly drafted. Add a note to Schedule A if you are making a significant change in the wording of the legal description provided by the customer. The easement should be an additional parcel the policy should also be insuring the land served by the easement (the dominant tenement). The description should read similar to the following: PARCEL ~ A NON-EXCLUSIVE EASEMENT FOR THE BENEFIT OF PARCEL ~ AS CREATED BY ~ DATED ~ AND RECORDED ~ AS DOCUMENT ~ FROM ~ TO ~ FOR THE PURPOSE OF ~ OVER THE FOLLOWING DESCRIBED LAND ~ ACCESS EASEMENTS ARE ONE OF OUR HIGHEST CLAIMS AREAS IN DOWNSTATE ILLINOIS. CONSULT WITH AN UNDERWRITER IF ACCESS IS QUESTIONABLE IN ANY WAY. Delete NON-EXCLUSIVE only if the instrument provides that the easement premises is for the exclusive use of the dominant estate and if the dominant estate has not been split or any portions thereof sold off in such a manner that those parts require the use of the easement for access. If the easement is temporary in nature (e.g., a construction easement), add TEMPORARY to the description and raise a Schedule B exception, such as: PROVISIONS CONTAINED IN THE INSTRUMENT CREATING THE EASEMENT DESCRIBED IN SCHEDULE A PROVIDING THAT SAID EASEMENT WILL CONTINUE ONLY FOR SO LONG AS... 1
2 If the easement was described in an easement agreement but was not actually created until a subsequent deed, it is preferred that the description reference both instruments, for example:...as SET FORTH IN THE DECLARATION OF COVENANTS AND EASEMENTS DATED ~ AND RECORDED ~ AS DOCUMENT ~ AND AS CREATED BY DEED FROM ~ RECORDED ~ AS DOCUMENT ~ FOR THE PURPOSE OF... The purpose of the easement should be taken verbatim from the instrument; do not paraphrase. IV. Review the instrument which created the easement. Has it been executed by the correct owner(s) of the servient tenement (land burdened by the easement)? Verify that title to the dominant and servient tenements was held by different parties on the date that the easement was created (or, for example, that the easements set forth in a declaration were properly created by a subsequent deed). Has it been executed by (or otherwise consented to by) all of the lienholders of the servient tenement? The status of title as of the date of the creation of the easement must be checked. In other words, an examination of the servient tenement dated prior to the creation of the easement and a chain of the servient tenement must be reviewed in order to determine the identities of the proper signatories of the easement grant. If a mortgage or lien existed prior to the date of creation of the easement, if it were foreclosed it could eliminate the easement. An exception would have to be raised for such a lien. Such a mortgage, executed and recorded after the easement could be shown on schedule B part II. Is the dominant tenement (that is, the land which has the benefit of the easement) described? Just because there is an easement adjacent to the land does not mean that the easement is for the benefit and can be used by the owner of the land. It must be specifically created to serve that particular piece of land. 2
3 Does the easement provide that it runs with the land and is for the benefit of the grantee and the grantees successors and assigns? If it does not run with the land, and terminates in the event that either party sells their property, it is a license and not insurable under the title insurance policy. What is the purpose of the easement? If it is for access, ingress, egress, drainage or parking, and the easement is contiguous to the dominant tenement, it normally may be viewed as being appurtenant. If it is for another purpose or is not contiguous, consult with a company underwriter. Verify that the purpose of the easement as contained in the legal description has been taken directly from the instrument. paraphrase. Do not Has the duration of the easement been stated? If the easement is of temporary duration, amend the legal description accordingly. Has the easement been properly executed, acknowledged and recorded? Consider issues relative to the authority of the signatories (that is, request corporate resolutions, partnership agreements, trust agreements, etc., if appropriate). APPURTENANT EASEMENTS ARE TRANSFERRED WITH THE DOMINANT TENEMENT EVEN IF NOT MENTIONED ON THE DEED. THEY DO NOT REQUIRE A WRITTEN DOCUMENT TO BE TRANSFERRED. HOWEVER, IT IS BETTER PRACTICE TO INCLUDE ON THE DEED. If examining a proposed easement agreement, raise an exception requesting its execution and recordation, such as: THIS COMMITMENT IS BASED ON THE ASSUMPTION THAT THE EASEMENT AGREEMENT DESCRIBED IN SCHEDULE A WILL BE PROPERLY EXECUTED AND RECORDED. AN EASEMENT FOR INGRESS AND EGRESS, WHICH CONTAINS DEFECTS, MAY STILL BE RELIED UPON IN ORDER TO INSURE ACCESS TO THE LAND EVEN IF WE DO NOT WISH TO INSURE THE EASEMENT ON SCHEDULE A OF THE POLICY. BY NOT INSURING THE EASEMENT WE DO NOT HAVE TO DEFEND IT AGAINST THE DEFECTS, AND WE HAVE THE ABILITY TO PROVIDE ALTERNATIVE MEANS OF INGRESS AND EGRESS IN THE EVENT OF A CLAIM. 3
4 V. SCHEDULE B - Whenever possible, exceptions should be combined or rephrased for purposes of clarity and customer-friendliness. Raise the following exception (if the easement is non-exclusive) (A) (B) TERMS, PROVISIONS, AND CONDITIONS RELATING TO THE EASEMENT DESCRIBED AS PARCEL ~ CONTAINED IN THE INSTRUMENT CREATING SAID EASEMENT. RIGHTS OF THE ADJOINING OWNER OR OWNERS TO THE CONCURRENT USE OF SAID EASEMENT. If the easement specifically provides that it is for the exclusive use of the grantee and the grantee s property, paragraph B above may be dropped at the request of the customer. Raise the following exception if the precise location or dimensions of the easement are not specified or are subject to change. The location of the easement must be such that you can determine what property to search and be able to determine who owns it. For example, the easement may be granted over my property in the northeast quarter along the existing roadway as it meanders along the west line of the creek. This easement description may be sufficient, if the entire northeast quarter was owned by the grantor. Whenever there is any doubt consult with an underwriter of the company. - CAUTION - THE EASEMENT MUST BE LOCATABLE BY THE INSTRUMENT. NOTHING CONTAINED HEREIN SHOULD BE CONSTRUED AS INSURING THE EXACT LOCATION OR DIMENSIONS OF THE EASEMENT DESCRIBED AS PARCEL ~ OF SCHEDULE A. If the instrument creating the easement also creates additional covenants, conditions, or restrictions, the details of such terms should be raised as a separate exception. If the instrument contains provisions regarding lienable assessments or right of first refusal provisions, specify such matters in the exception, and raise the appropriate exception(s) to obtain clearance documentation. 4
5 If the instrument provides for the termination of the easement upon the occurrence of a certain event, raise an exception requesting satisfactory evidence that such event has not occurred. If the instrument provides that the dominant estate is to pay the real estate taxes for the land underlying the easement parcel, raise an exception to that effect and perform a tax search of the tax number(s). Indicate on the tax information AFFECTS PARCEL ~ as additional information. NOTE: Easements, restrictions and other matters which affect the easement parcel must be raised. A full search must be performed for matters both prior and subsequent to the creation of the easement. Remember to include any appropriate AFFECTS language. VI. Before insuring an easement for the first time, the actual existence of the easement should be verified. Review an inspector s report/survey, as appropriate. You may rely upon old atlases showing the roadway, or the existence other insured parcels along the same road. It may be necessary to raise an exception such as the following: THIS COMMITMENT IS SUBJECT TO THE COMPLETION OF OUR INSPECTOR S REPORT. - or - WE SHOULD BE FURNISHED A SATISFACTORY SURVEY OF THE EASEMENT PARCEL DESCRIBED IN SCHEDULE A WHICH INDICATES THAT SAID EASEMENT IS OPEN AND IN USE. Upon receipt, verify that there are no barriers, obstructions or other matters which are incompatible with the purpose of the easement. Consult with a company underwriter with respect to any concerns. VII. If the easement has been created previously, verify that it has not been amended or terminated. 5
6 Review the chain of the servient tenement to check for merger. Merger would occur in the event the dominant and servient tenements were owned by the same party. If merger has occurred somewhere in the chain of title contact an underwriter of the company. If the dominant parcel has been resubdivided, split into multiple parcels or has undergone a change in use since the easement s creation, consult with an underwriter of the company. Easement can be rendered unenforceable if the burden on the servient land becomes greater than was intended at the time of creation. Thus, a access easement given in 1930 for farming may not be valid for use if the dominant tenement is subdivided into numerous residential lots. If the land underlying the easement comprises a separate tax number, perform a tax search and verify that there are no delinquencies. If, in fact, there are tax or special assessment delinquencies or a tax deed has issued on the servient tenement, consult with a company underwriter. It may be necessary to raise an exception such as the following: RELATIVE TO THE EASEMENT DESCRIBED IN SCHEDULE A, WE DRAW YOUR ATTENTION TO THE TAX SALE NOTED ABOVE AT EXCEPTION NO. ~. IN ORDER THAT WE MAY CONTINUE TO INSURE SAID EASEMENT, THE TAX SALE SHOULD BE REDEEMED. (AFFECTS PARCEL ~) 6
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