SETBACKS, EASEMENTS AND RESTRICTIONS

We want to emphasize that in regard to title insurance the Setbacks, easements and restrictions being dealt with are matters that have been recorded, usually in connection with the recording of the plat.  Title insurance does not insure zoning.  It does not insure whether a parcel is a legal lot as far as zoning requirements are concerned, or that the property is in conformity with the city or county zoning requirements for setbacks, lot size or use.

 Setbacks:  These are building set back lines that are shown on the plat.  Prior to the strict zoning requirements that we now have, the only way to insure that there was some kind of prohibition against someone building all the way to the property lines was to have a platted setback requirement.  The older subdivisions are full of them and sometimes the platted setbacks are more stringent than the city’s zoning requirements.

When you go get a building permit from the city, they don’t look at the platted setbacks; they only check to make sure the proposed construction is in compliance with their zoning ordinances.  So you can get a permit to build a structure that is in violation of the platted setbacks, and never know it until you try to sell the property

So what can be done about these violations?  Can you insure over them?

On an Owner’s Policy we cannot insure over anything that we know to be in violation.  A policy can be issued; however, the encroachment into the platted setback would be listed as an exception to the coverage.

It is possible to insure over the violation on the Mortgagee’s Policy, but it depends on many factors: How much of an encroachment is it?  How long has it been there?  How much equity does the Owner have in the property?  If it cannot be insured to the lender, there are very few lenders who will make the loan.

Easements:  An easement is a portion of the property that has been set aside for some special use, normally for use by the utility companies.  Some easements are on the plat, and some are recorded after the plat.  Some easements are active, meaning that the utility companies use them for their lines, and some are not.

 An easement can dramatically affect the way a property may be used.  As a general rule, driveways and fences are the only permitted structures in an easement.

If the encroachment into the easement is less than 10% of the width of the easement, we can usually insure over it on both the Owner's and Mortgagee’s Policies; again, however, it must be considered on a case by case basis.

It is not required that the surveyor show easements on the survey.  Usually, if the easement is shown on the Plat, or if the surveyor is made aware of the easements, they will be shown.  However, the surveyor is not liable for showing the easements and therefore should not be relied upon.

The only fully reliable place to see the easements is in the title insurance commitment, Schedule B, Section 2.

Restrictions:  When a developer platted a new subdivision, he may have wanted that neighborhood to achieve a certain look or maintain a distinctive quality.  This is not only true in the older sections that were created prior to stringent zoning requirements which are in place today, but are also common in the newer communities, especially planned developments.  As a result, either on the plat or by separate recorded documents, restrictions were comprised for the benefit and protection of the neighborhood. 

These restrictions may have been as simple as “only single family dwellings may be constructed” to restrictions that are over 100 pages long, dictating the color and size of each unit.  Restrictions may commonly include the setbacks and easements already discussed, the type of use (commercial or residential), they may restrict the parking of boats or mobile homes in the front drive, could prohibit temporary structures or detached buildings, etc.   Declarations of Condominium also fall under the heading of “Restrictions”.

Under the Marketable Records Title Act (MRTA – pronounced “Marta”), certain restrictions can expire automatically after 30 years.  Guidelines have been established and a full search of the conveyances over that period must be made to eliminate the restriction exception in the title policy.

Nevertheless, restrictions are intended to protect the neighborhood, and if there is a violation, especially in a neighborhood with an active association, the association can bring suit and can probably win.

 So is it important that the Buyer be made familiar with the Restrictions?

 We think it is.  In fact, we now send out a copy of the neighborhood restrictions when we send the commitment to the Buyer or the Buyer’s agent.  They should be thought of as Condo Docs – they may contain things that restrict the use of the property, and the Buyer’s should be made aware of those items.