SURVEYORS become a title insurance expert in 2 hours.

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Jacob Nicholson
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SURVEYORS become a title insurance expert in 2 hours. (let s be real, who could take more than 2 hours of title talk?) Cheri Hipenbecker, General Counsel Knight Barry Title Group cah@knightbarry.

At its most basic level, title insurance insures the home buyer that they ve bought the home from the correct seller and insures the mortgage lender that they re making a loan to the right person.

1 SURVEYORS become a title insurance expert in 2 hours. (let s be real, who could take more than 2 hours of title talk?) Cheri Hipenbecker, General Counsel Knight Barry Title Group cah@knightbarry.com So, what is title insurance anyway? At its most basic level, title insurance insures the home buyer that they ve bought the home from the correct seller and insures the mortgage lender that they re making a loan to the right person. Title insurance looks backwards in time from the real estate closing back to land patent and is paid once, usually at the closing. For comparison, an auto policy looks forward from the policy date and protects against things may happen in the future and is paid annually, year after year after year. As with all insurance, the title insurance policy COVERS certain risks, but contains EXCLUSIONS and EXCEPTIONS from coverage. Title insurance can be issued to the buyer of real property (owners policy) and the new lender (the loan policy). What are some risks? Sometimes sellers lie. Sometimes buyers lie. Sometimes the public records are wrong. What if your new neighbor builds a wall over your property's access point? 1

2 What do I get with title insurance? The title insurance company has a duty to defend the insured in litigation. The duty to defend extends to any claim that could result in a claim the insurance company would have to pay but does not include claims that are clearly excluded from coverage. The title insurance company also has the right to prosecute a claim proactively to establish or quiet title. Or the title insurance company can write a check. The search is on. But where? County Register of Deeds Deeds - good for all time Easements and Restrictions years Mortgages 30 years Federal IRS Tax and US Marshals liens 10 and 20 years respectively, renewable Federal Judgments 20 years, renewable State and Federal Environmental Liens - Chapter 292 Wisconsin; Federal 42 U.S.C Commercial Broker's Liens - 2 years Medicaid Liens - good for???? Lis Pendens depends on the litigation County Clerk of Courts Money judgments 10 years Construction liens - 2 years State Tax Warrants varies depending on agency and when filed Foreign or transferred judgments possibly 10 years Condominium Liens - 3 years Homeowners Association liens arguable possibly 30 years Wage claim liens Divorces court equitable rights The search is on. But where? Federal courts. Afederaljudgmentinacivilactioncouldcreate a lien on the property of a judgment debtor. Properties in certain Wisconsin counties differ from other counties. Bankruptcy Court. In Wisconsin if the property is located in Milwaukee, Dane, Brown or Eau Claire County the filing of a bankruptcy will often automatically stop real estate transactions. Note that this topic alone could warrant a four hour presentation but in the interest of time, we ll leave it here. 2

The search is on. But where? Probate Court Probate cases vary from very informal in smaller uncontested probates to a full scale probate in larger and contested cases.

Upon death, the surviving spouse/joint tenant owns the property an an affidavit may be all that is needed.

Treasurer s Office The Treasurer's Office is the county government body which levies real estate taxes.

3 The search is on. But where? Probate Court Probate cases vary from very informal in smaller uncontested probates to a full scale probate in larger and contested cases. If real property is held in joint tenancy or survivorship marital property, court action may not be required. Upon death, the surviving spouse/joint tenant owns the property an an affidavit may be all that is needed. The probate court also administers guardianship actions (actions where someone is alive but not competent because of age or other infirmity). Treasurer s Office The Treasurer's Office is the county government body which levies real estate taxes. In Wisconsin when levied, real estate taxes are a lien upon the property AND are superior to all liens EXCEPT certain environmental liens. Properties EXEMPT from real estate taxes include government owned properties and churches. But note that church s can be assessed for water and sewer usage. If the county forgets to add a property to the tax roll (omitted taxes) the county can still collect those taxes for a period of 2 year thereafter. It could happen. The search is NOT on at least initially. Examine docs we can t find Gap endorsement helps Update title before closing Interview municipality Order assessment search Order utility readings Walk through the home We do not visually inspect the home for improvements The search is NOT on at least initially. Interview people at home Are they tenants? Do they stay after closing? Walk the property Is the house in the right place? Can the shed be built there? Is there drive-able access to the property? Who made that walking path? 3

4 Schedule A A snapshot in time The Commitment Date The buyer & purchase price The lender & loan amount The owner/seller The legal description Schedule A Interesting thoughts: Is the Commitment Date stale? If so, get an update in writing from the title company. (45-days or older in metro areas may not be stale) Is the owner/buyer s name how you expected it? Don t goof up your customer s title by starting a new alias or beginning a long chain of NKA s. Is there anything special about the property? Did they tell you they own the neighboring lot or that they share the driveway or anything else? Dead people. How do they sign documents? Schedule B, Part 1 Things we require to issue a policy: 1. Who else is out there? 2. Exchange money / have a closing. 3. Pay Knight Barry its fees. 4. Exchange documents. 4

5 Schedule B, Part 1 Who needs to show up to the closing in a pending divorce situation? If there is a pending divorce, how can the buyer/borrower bring a down payment to closing if the money is part of the marital estate? What if the sellers cannot agree on the split of the proceeds? Who needs to show up to the closing if one of the owners bought the property prior to being married? Ah, the good ole bachelors pad. What if someone cannot attend the closing and needs to use a POA? What if grandma holds a life estate? Does she need to come to the closing too? What if title is held in a corporation or an LLC? Son needs to add mom to title. Who can draft that deed for me? How can I record these documents the quickest? Schedule B, Part 2 The exceptions or clouds on title. Exceptions are standard and appear on all title commitments from farms to condos to malls. Schedule B, Part Consider a GAP endorsement to delete this exception. The concern does a lien or defect fall into the GAP between the Commitment Date and the closing? Do you trust the seller? 002 & 003 Consider asking the title company what it needs to remove this exception - typically obtaining special assessment information from the local municipality and seller/borrower indemnity will suffice. 004 Deals with construction liens. Whether the title company may be willing to delete this exception depends on the law of the state, the financial status of the seller (or borrower), whether construction has been done, is being done or is contemplated, the risk tolerance of the title insurer and the day of the week. Consider giving as much time as possible for the insurer to examine this. 5

Schedule B, Part 2 005 Consider asking the title company what it needs to remove this exception - typically a seller/borrower indemnity is part of the documentation required.

Consider asking the title company what the company needs to remove these survey exceptions. For an Owners Policy, typically a survey.

Schedule B, Part 2 100-109 Items found in a tax and assessment search in the records of the local municipality or county.

6 Schedule B, Part Consider asking the title company what it needs to remove this exception - typically a seller/borrower indemnity is part of the documentation required. 006, 007, 008 are all related to the physical layout of the land and improvements and are colloquially called the survey exceptions. Consider asking the title company what the company needs to remove these survey exceptions. For an Owners Policy, typically a survey. For a Loan Policy different insurers have different tolerance levels and may not require a survey to remove these survey exceptions. Schedule B, Part Items found in a tax and assessment search in the records of the local municipality or county Items such as easement rights for utility companies and restrictions and covenants for the use of the property Typically involuntary liens founds in a search of the court system described in an earlier slide Typically voluntary liens such as mortgages and leases Other matters found in either a search of the records or examination of the transaction. Surveys- what title companies look for TAKE 1 So we look for: Encroachments buildings/fences Encumbrances not quite certain what this means Violation set backs Variation platted legal is X but used property is Y Adverse circumstance neighbor yelling at surveyor Easements for ALTA/ACSM 2016 survey also recorded easements to be insured Claims of easements Claims of Adverse Possession Claims of Prescriptive Easement 6

Surveys- what title companies look for- TAKE 2 Wisconsin Certification residential properties (generally) Certifications agreed on by Wisconsin Land Title Association and the

of the property, its exterior boundaries, the location and dimensions of all structures thereon, fences, apparent easements and roadways and visible encroachments, if any.

hereof; and as to them I warrant the accuracy of said survey map. ALTA/NSPS Certification commercial properties (generally) Effective 2.23.

and the survey on which it is based were made in accordance with the 2016 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, jointly established and adopted by

7 Surveys- what title companies look for- TAKE 2 Wisconsin Certification residential properties (generally) Certifications agreed on by Wisconsin Land Title Association and the Wisconsin Society of Land Surveyors on April 1, 1974: I have surveyed the above-described property and the above map is a true representation thereof and shows the size and location of the property, its exterior boundaries, the location and dimensions of all structures thereon, fences, apparent easements and roadways and visible encroachments, if any. This survey is made for the exclusive use of the present owners of the property, and also those who purchase, mortgage, or insure the title thereto within one (1) year from date hereof; and as to them I warrant the accuracy of said survey map. ALTA/NSPS Certification commercial properties (generally) Effective To (name of insured, if known), (name of lender, if known), (name of insurer, if known), (names of others as negotiated with the client): This is to certify that this map or plat and the survey on which it is based were made in accordance with the 2016 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, jointly established and adopted by ALTA and NSPS, and includes Items of Table A thereof. The fieldwork was completed on [date]. Date of Plat or Map: (Surveyor s signature, printed name and seal with Registration/License Number) Survey Review What Knight Barry Title Reviews Survey Review Take 2 7

Survey Review Exceptions added to title com. Rights of utilities, municipalities and others to maintain their facilities as now located on the Land.

8 Survey Review Exceptions added to title com. Rights of utilities, municipalities and others to maintain their facilities as now located on the Land. (used when there are utility lines, pedestals, posts, etc. that are shown on the survey outside of recorded easement areas) Consequences, if any, due to the location of the fence that does not lie entirely on the east lot line. (used when a fence line or wall runs onto the neighbor's parcel, or when the neighbor's fence runs onto the subject property) Encroachment of the building upon the property to the west. (used when something lies partially on the subject property and partially on the neighbor's property - examples include: sign, building, concrete, asphalt, fences, walls) Encroachment of the shed into the street right-of-way to the south. (used when something lies partially on the subject property and partially in the public road) Apparent driveway/access easement as disclosed by the driveway located on the property to the east. (used when there appears to be a driveway used by the owner of the subject property that lies all or partially on the neighbor's parcel and there is no recorded easement for the drive) Encroachment of the garage upon the Easement recorded as Document No (used when there is something, such as a building, that lies within a portion of the land that is burdened by a recorded easement) Subsurface easements or claims of subsurface easements, if any, not shown by the Public Records. (used when "Digger's Hotline" was not called in and the surveyor did not include table item 11(b) in their ALTA survey) Encroachment of the garage upon the underground sewer line. (used when something encroaches onto the underground utility that was disclosed by "Digger's Hotline.") Endorsements surveys may be needed WHAT ENDORSEMENTS DO: Endorsements modify the title insurance per the specific terms of the endorsements, typically expanding the insurance and many times addressing an EXCLUSION or CONDITION to the title insurance policy (see the policy jacket) Common endorsements requested: ALTA 9.0 Restrictions, Encroachments, & Minerals ALTA 9.6 Private Rights ALTA 3.0/3.1 Zoning Endorsement (i.e. Classification, Parking Spaces, Structure Setback) ALTA 17.0 Series Access and Entry ALTA 19.0 Series Contiguity Single, Multiple, or Specified Parcels ALTA 25.0 Same as Survey ENDORSEMENTS CONSIDERATIONS: Endorsement to the owners or loan policy? Does the insurance coverage justify the endorsement fee? Does the policy already provide sufficient coverage? Is this an ALTA endorsement or a proprietary endorsement? Are additional affidavits required? Is a survey required? Anything else required? How long will it take to obtain the endorsement? Is the endorsement available in your jurisdiction? Is the use of the property critical to the purchase or loan? Endorsements How does this building get access to Mayfair Rd? 8

Endorsements What about this one? Can you install a car wash? Endorsements Contiguity do the parcels touch other parcels? HORROR STORY TIME Failed to Record?

For easements recorded before July 1, 1980, 60 years (see 893.33(8)); after July 1, 1980, 40 years (see 893.33(6)).

An easement dedicated on a certified or recorded plat approved by the appropriate governing body may be but not necessarily is sufficient to establish or

9 Endorsements What about this one? Can you install a car wash? Endorsements Contiguity do the parcels touch other parcels? HORROR STORY TIME Failed to Record? Your bad. Easement for WEST 10 feet - recorded in 1928; referenced in a 1945 deed; 1988 survey filed with the ROD identified and referenced the 1928 easement. For easements recorded before July 1, 1980, 60 years (see (8)); after July 1, 1980, 40 years (see (6)). To be enforceable, the easement or a document referencing the easement must be recorded not just filed in ROD. An easement dedicated on a certified or recorded plat approved by the appropriate governing body may be but not necessarily is sufficient to establish or re-establish the easement (see footnote #6 in the court of appeals opinion). Re-recording question what is an instrument expressly referring to the easements or covenants? (required to re-up for 40 years (6)). Record against both the burdened and benefitted parcels? 9

Umm.. How long do I have to throw down some asphalt? The easement was continuously recorded since 1936.

Court held It is of no legal consequence that the easement road has not been constructed and used in all the years from 1936 to present.

Under these circumstances, the circuit court correctly held that the easement had not been abandoned merely because it was not used for seventy years.

10 Umm.. How long do I have to throw down some asphalt? The easement was continuously recorded since The easement states excepting and reserving in the grantors, a right of way for road purposes across the lands hereinabove described. Court held It is of no legal consequence that the easement road has not been constructed and used in all the years from 1936 to present. The reservation of easement in 1936 was therefore in contemplation of a future need for legal access from the parcel to the town road. Under these circumstances, the circuit court correctly held that the easement had not been abandoned merely because it was not used for seventy years. Kosir contended that Spencer s acquiescence in the location of the home construction are affirmative acts establishing an intent to abandon the easement. The court disagreed and held the affirmative act required to demonstrate an intent to abandon must be that of the easement holder. Mere acquiescence is not an affirmative act. The easement did not have a specified width or location. The appellate court held that when the location of an easement is not defined, the court has the inherent power to affirmatively and specifically determine its location, after considering the rights and interests of both parties. Stuck between a rock and a railroad Commercial owners policy for $690,000 + CLTA Access Endorsement. CLTA insurance that Land does not have access to a physically open street known as County Trunk Highway C WisDOT s response can only use access for farm purposes END RESULT insured sued title insurer in Ozaukee County Case No 2016CV288. Insurer paid something BEST PRACTICE? Reprehensible Access issue garden variety access from the owners policy jacket (No right of access to and from the Land) Title insurer denied coverage; owners Kimble negotiated with neighbors to buy an easement. The jury awarded $50,000 in compensatory damages $1,000,000 in punitive damages to punish First American's bad faith. Supreme Court we must acknowledge that FirstAmerican'sconductinthecaseatissueis reprehensible. First American knew that the NorthEasementdidnotprovideaccesstothe Kimble Lot and that there was no reasonable alternative access point, and yet refused to honor its obligation to assist the Kimbles in defending their title. First American further withheld the information it had in its possession from the Kimbles, causing them to waste valuable time and resources. SC reduced award to $239, because the jury was out of line. 10

It starts with the language in the various deeds and conveyances referring to the roadway as it was laid out and running.

11 It said easement so I m good, right? Title Insurer insured the easement on an owners policy. Appellate court Rather than relying strictly on the grant documents, the Trust builds its case on the extrinsic evidence of the easement s use. It starts with the language in the various deeds and conveyances referring to the roadway as it was laid out and running. Relying heavily on Meyer s testimony, the Trust claims the undisputed evidence shows the entire drive existed in its current state for at least half a century. It also points to CSM 5047 showing the entire loop as a travelled roadway. Thus, the Trust reasons, the location of the easement was the full loop. Easement invalid description over the entire road. Oops mapping? No granting clause. Government Always Wins Survey issue old survey provided to title company for Owners Policy. Survey did not show underground parking garage encroaching into Frances Street. City demanded $3800 per year to lease the street. Survey exceptions removed. In the litigation the title insurer argued that the loss does not fall within the initial grant of coverage, as limited by the definition of land in Schedule A Supreme Court held We hold that a substantial encroachment, created by an improvement onto adjacent land, constitutes an encumbrance on the title of the insured property for the purpose of the title insurance contract at issue in this case. We further hold that such a substantial encroachment, and thus an encumbrance, is covered under the terms of the title insurance policy at issue. Best Practices review old survey why was the survey prepared, for what purposes, and does it meet our standards. SC In its willingness to delete the Survey exception, and rely on the accuracy of the Johnson survey, First American assumed the risk that it would be providing coverage for an encroachment not documented on the land survey Public Trust Doctrine - Circuit Court decision Article IX Section 1 Wisconsin Constitution - The state shall have concurrent jurisdiction on all rivers and lakes bordering on this state so far as such rivers or lakes shall form a common boundary to the state and any other state or territory now or hereafter to be formed, and bounded by the same; and the river Mississippi and the navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways and forever free, as well to the inhabitants of the state as to the citizens of the United States, without any tax, impost or duty therefor. Friends of the Sturgeon Bay Public Waterfront et al vs. City of Sturgeon Bay et al - Door County Case Number 2016CV Decision March 8, 2017 Parcel 100 City is enjoined from conveying Parcel 100 lying waterward of the OHWM as set forth in the DNR concurrence Parcel 92 The court was unable to determine the OHWM so the City was likewise enjoined from conveying Parcel 92 (subject to modification if the DNR identifies the OHWM) 11

Public Trust Doctrine historical maps affected Public Trust Doctrine Removed buildings?

City of Sturgeon Bay Appeal 2017AP800 City Argues: Statute of limitations and Laches buildings for 100 years; fill for more than 50 Court

violation of the public trust doctrine Is OHWM set forever at Wisconsin s Statehood in 1848?

2015 DNR s determination not clear on the OHWM location for Parcel 92 Bulkhead line does not transfer title of filled lands behind the

12 Public Trust Doctrine historical maps affected Public Trust Doctrine Removed buildings? Public Trust Doctrine Court of Appeals 2017AP800 Friends of the Sturgeon Bay Public Waterfront v. City of Sturgeon Bay Appeal 2017AP800 City Argues: Statute of limitations and Laches buildings for 100 years; fill for more than 50 Court failed to give proper deference to DNR determination of OHWM Friends failed to meet burden of proof as to the location of the OHWM and a violation of the public trust doctrine Is OHWM set forever at Wisconsin s Statehood in 1848? Friends Argue: Not time barred b/c Friends cause of action started when the City decided to sell the property for commercial development in 2015 DNR s determination not clear on the OHWM location for Parcel 92 Bulkhead line does not transfer title of filled lands behind the bulkhead to the riparian owner; rather filled lands behind the bulkhead is restricted to public and navigational purposes consistent with the public trust doctrine. Parcel 92 filling after 1848 did not remove the property from the public trust ont.com/ 12

13 Tribal Sovereignty Lac Du Flambeau access issue - 60 plus homeowners affected Thanks for attending. Knight Barry Title Group 13

Section 4.1 LAND TITLE

Section 4.1 LAND TITLE PURPOSE... 4-1-1 AUTHORITY... 4-1-1 SCOPE... 4-1-1 REFERENCES... 4-1-1 TRAINING... 4-1-2 FORMS... 4-1-2 DEFINITIONS... 4-1-2 4.1.1 QUALITY AND QUANTITY OF TITLE... 4-1-3 4.1.2 TITLE