Claims Corner - Making Sure the House is on the Insured Land

Recently, Attorneys' Title Guaranty Fund, Inc. has seen an increase in the number of claims caused by an improvement, which was intended to be conveyed through a real estate transaction not being located wholly on the land described in the deed and insured under the Title Insurance Policy. These claims have involved more than an encroachment onto the adjoining property. Instead, the improvement is either straddling a lot line or located on an entirely different parcel of land. The claims have arisen due to an erroneous metes and bounds legal description or a sale pursuant to a foreclosure proceeding where the foreclosed mortgage did not encumber a full parcel of land.

Attorneys can take the following steps prior to the closing to prevent these types of claims:

  • Check the deeds in the chain of title. Attorneys should verify the legal descriptions in the chain of title match the legal description contained on the commitment.

    For REO transactions, the attorney should check the legal contained in the foreclosed owner’s vesting deed against the legal description on the commitment and judicial sales deed.

  • Obtain a survey prior to closing which shows all improvements on the land.

  • Check the dimensions on the sales contract and the county records, against the legal on the commitment. If the sales contract lists the property as being 50x100 feet in an area where the lots are 25x100, there may be two lots involved the transaction.

If you have any questions about legal description discrepancies or other related issues, contact the ATG Underwriting Department,, 217.403.0020 or 312.752.1990.

Posted on: Wed, 08/09/2017 - 2:18pm