Lot Line Dispute Could Lead To Claim Against Title Company

Q: I am a Realtor who recently sold a home in Hinsdale, Illinois. The seller provided a survey which indicated that my buyer was purchasing a 50’ x 125’ lot.
 

The next door neighbor (who happens to be a real estate attorney) has informed my client that his survey indicates that he owns 52 feet and that my client’s lot is only 48 feet wide. He has put his house on the market and has threatened a lawsuit if my clients do not agree to his survey.

What should they do? A local real estate attorney told them the sellers of the home my buyers purchased did not have deep enough pockets to sue them. Does title insurance cover this?

A: This is a situation where everyone involved could be right – or at least they justifiably think they are right.

The neighbor says he has 52 feet of frontage on his lot and your client says he has 50 feet. Your client can go back to his surveyor and discuss the situation and determine if their original measurements are accurate.

In some old subdivisions, there can be differences between what was measured a hundred or so years ago and what is measured today. While two feet is a large number, if a mistake was made many years ago on the subdivision plat, the plat could have indicated that your client’s lot was 50 feet wide when in actuality the lot was only 48 feet wide.

Your client needs to research the issue further to determine what is at stake and how best to proceed. If your client’s lot is 50 feet wide but the neighbor has a claim against the lot for two feet, that boundary dispute could be a subject to a claim against the title company.

When you buy a property and obtain an owner’s title insurance policy, it protects the buyer of the property against problems in the title to the property. Some title problems may not be covered and some are always excluded by title insurance companies.

For example, in some states, title companies do not insure boundary issues. The title company does insure that the land you have purchased is yours, but not if there are claims against your title due to a boundary dispute.

Have your client take a look at his title insurance policy to see if survey and boundary issues have been excluded. If they have not been excluded, your client may be able to tender the defense of the claim by the neighbor to the title company and have them either compensate your client for the loss or, if the matter is litigated, to defend the title against the neighbor’s claim.

Before it gets to that, your client needs to do more digging. If nothing else, he should get a copy of the neighbor’s survey and determine if the neighbor’s surveyor made a mistake. If both lots are listed as having a 50 foot frontage on the street on the plat of subdivision and the plat was done within the last 50 years, it may be the neighbor surveyor was mistaken about the width of the neighbor’s lot.

If the neighbor’s surveyor was mistaken, the only way the neighbor could prove that he owns the extra two feet would be to claim that he acquired them through a legal concept called adverse possession. The neighbor would have to prove that he has claimed to own it for a great length of time, that he used it to the exclusion of the neighbor, that he paid taxes on what he claimed he owned, among other issues. With a boundary dispute of this type, it might be hard for the neighbor to prevail and get actual “ownership” of the two feet.

Your client should sit down with his attorney (making sure the attorney has sufficient knowledge about real estate law in Illinois) and walk through the situation. Once your client has more information, he can determine how to proceed.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com