Fifty year old land chain. Do I pay for the extended search?

Question

Rural parcel, roughly 90 acres, and the abstract goes back further than anyone's institutional memory. The title company quoted me the standard search plus an extended examination that goes deeper on the chain, mineral reservations, and old road access instruments. The extended piece adds about $1,900 and around three weeks.

On land specifically I think the calculus is different from a house. Houses turn over every seven years and each turnover puts another set of eyes and another policy on the chain. Land like this may have moved three times since 1961, and the two intervening transfers may have been family deeds nobody examined carefully. Old reservations and unrecorded access arrangements are exactly the things that don't show up in a standard search window.

Against that: title insurance exists precisely so I don't have to pay for perfect knowledge. If the policy covers the defect, I've paid $1,900 to find out something the insurer would have paid to fix. And what mineral rights and access actually survive is a state law question, so my own reading of the instruments isn't the answer anyway.

The counterargument I keep coming back to is that insurance pays money and I want the land. A policy that writes me a check for a lost access easement doesn't give me the road.

I hold things for decades so my time horizon may be doing all the work here. Curious where others come out.

mikeoconnell7 · Answer

The distinction you drew at the end is the whole thing. Insurance is a money remedy. If the harm you're worried about is the land being useless without the road, money at policy limits doesn't restore use. I'd pay the $1,900 on that basis alone, and I'd pay it before I was contractually committed rather than during a 30 day window.

wendy_park48 · Answer

I read the exceptions page before I read anything else, and on old rural chains the interesting thing is usually what the company is refusing to insure rather than what it's insuring. Ask them for a preliminary commitment first, then decide about the extended search.

My guess is the commitment comes back with a general exception for anything a survey would show, an exception for mineral rights previously reserved, and possibly something about rights of parties in possession. Once those are excepted, the policy isn't covering the exact risks you're describing. So the extended search isn't buying you a better policy, it's buying you information you can't get any other way.

@orchard, one more thing. Does your quote include a plotting of the easements onto a survey, or just a written examination? Those are different products and the written one on its own has left me guessing more than once.

gregpowell66 · Answer

Access is the item that kills projects dead. I've watched a build stall because the recorded easement described a route that didn't match where the gravel actually was, and the fix took most of a year of negotiating with a neighbor who had no reason to be generous. Three weeks and $1,900 against that is nothing on a 90 acre hold.

chriswalton8 · Answer

Everyone's saying pay, so I'll take the other side badly. If $1,900 is meaningful against the parcel price, the extended search is a large percentage of your total transaction cost for a risk you're speculating about. Where's the line? If it were 900 acres nobody would blink. @fathom's commitment-first order seems like the actual answer, you spend the money after you've seen what's excepted, not before.

Fifty year old land chain. Do I pay for the extended search?

4 replies