Q: We bought a home that was sold ‘as is’ by the lender. The house sits on a 20-acre parcel of land. The home had been foreclosed upon.
We understand that the “as is” referred to the structural parts of the house. We accepted the condition and had a plumber come in to check things out. After we closed, our new neighbor came over and informed us of two easements he had on the property.
One easement is for the driveway, which isn’t a problem. The other easement is to share the water well that is on the property. Apparently, not only do we share the well, but the pump for the well and the pressurizer, which is in the basement. We basically supply water to our neighbor.
I’ve spoken with my real estate agent, who told me that she knew nothing of these easements. She said she did not see them listed on the title documents and must have “overlooked” them. Nothing was mentioned at the closing about these easements and now we are required to supply this neighbor with water.
Can I sue the agent and the title company for not disclosing these easements? If we had known about them, we would have either not bought the home, or revised our purchase offer.
We simply don’t want to either be dependent on our neighbors or have these people depend on me to pay my electric bill so that water continues to pump into their house.
A: Please see an attorney to help you figure out what sort of easements are attached to your property, if any. The neighbor may claim to have an easement but may have to back up his claim with written documentation. That documentation might even have to be recorded with the local recorder of deeds office or clerk’s office in order to be valid.
You may also have a title issue, but first ask the attorney to help you sort through the paperwork to determine what you are required to do for your neighbor. But in general, taking the property on an “as is” basis may also include any and all easements that are attached to the property, not just its physical condition.
However, your purchase contract would have had language relating to the condition of the title to the home and what exceptions to title you would have required to accept. If you obtained title insurance when you bought the home, the title company would have itemized all matters that affected the title to your home as of the day of your closing.
If at your closing, the easements were disclosed on your title insurance policy, you closed on the purchase of the home with those easements “disclosed” to you. If you did not purchase a title insurance policy and the easements are valid, you purchased the home and will have to take the home subject to the terms of the easement.
Lastly, if you purchased title insurance and the title insurance commitment did not disclose the easements, you might have a claim against the title company for their failure to raise the easements. A good real estate attorney should be able to help you in this regard.
Assuming that these easements are valid and you don’t have a claim against the title company, you have to decide how you want to handle them. If the easement requires you to supply water, but not pay for it, you may be able to bill your neighbor for the cost of providing him with water — even if the neighbor had never before been given a bill for these services. If the terms of the easement are in writing, your rights and responsibilities might be spelled out in that document.
Faced with such a bill, you might propose that the neighbor dig a new well for himself, on his own property. You may even want to contribute to the cost of the new well, in exchange for the neighbor agreeing to cancel the easement.
Once again, a competent real estate attorney should be able to identify any legal options you have and whether you were not provided with the proper disclosures.
Of course, the time to hire an attorney was before you made your offer on this foreclosed property, so that you could be sure you knew exactly what you were getting into before you closed.